By Donald Zuhn --
In an eagerly awaited decision regarding the Federal Circuit's "teaching, suggestion, or motivation" (TSM) test for analyzing obviousness, the Supreme Court on Monday issued its ruling in KSR Int'l Co. v. Teleflex Inc. In a 24-page opinion, the Court reversed the Federal Circuit's determination of validity with respect to claim 4 of U.S. Patent No. 6,237,565 and found the claim to be invalid as obvious under 35 U.S.C. § 103.
Teleflex initiated the present litigation when it accused KSR of infringing claim 4 of the '565 patent. KSR, in turn, countered that this claim was invalid as obvious. The District Court granted summary judgment in KSR's favor, finding "little difference" between the combined teachings of the prior art and the asserted claim. In addition to analyzing the issue pursuant to Graham v. John Deere Co. of Kansas City, the District Court also found claim 4 to be obvious under the Federal Circuit's TSM test.
The Federal Circuit reversed, determining that the District Court had not been "strict enough" in applying the TSM test. In particular, the Federal Circuit found that the District Court had failed to make "finding[s] as to the specific understanding or principle within the knowledge of a skilled artisan that would have motivated one with no knowledge of [the] invention" to make the claimed combination.
The Supreme Court began its analysis by rejecting the Federal Circuit's "rigid" application of the TSM test in the present case, stating that "[t]hroughout this Court's engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here." After discussing three of its post-Graham decisions (United States v. Adams; Anderson's-Black Rock, Inc. v. Pavement Salvage Co.; and Sakraida v. AG Pro, Inc.), the Court concluded that its precedents make clear that a proper analysis "need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ."
It is important to note that while the Court rejected the Federal Circuit's "rigid" application of the TSM test in the present case, the Court did not discount that the test might serve as a useful analytical device in the context of a proper obviousness analysis. In fact, the Supreme Court observed that when the Federal Circuit's predecessor first established the TSM test, it had "captured a helpful insight," and further, that "[t]here is no necessary inconsistency between the idea underlying the TSM test and the Graham analysis." The Court concluded, however that "[h]elpful insights . . . need not become rigid and mandatory formulas; and when it is so applied, the TSM test is incompatible with our precedents."
Note: Patent Docs plans to provide additional commentary regarding this important Supreme Court decision and its impact on biotech/pharma patent prosecution and litigation in the coming days and weeks.
KSR Int'l Co. v. Teleflex Inc. (2007)
Opinion by Justice KennedyAdditional information regarding this case can be found at the Orange Book Blog and Patently-O.
On Thursday, CEL-SCI Corporation 
The sanctimony continues over the U.S. Patent and Trademark Office re-examination of the Thomson stem cell patents. This time, it is an 
The primary alleged offenses are two: first, that these patents impede scientific research, and second that commercial licenses are too high. The first allegation is supported by complaints from scientists about the material transfer agreements (MTAs) associated with licensing stem cells covered by the Thomson patents from the Wisconsin Alumni Research Foundation (WARF). Although the article acknowledges that "[m]ost scientists doing basic stem cell research in academic or government labs are minimally restricted by WARF's current policies, which require them to pay only $500 for a batch of Wisconsin cells," the process is burdened by too much "red tape." (This allegation is preciously illustrated by a toll booth labeled "WARF" through which nonprofit researchers can pass, but they are festooned with said red tape.) These allegations ignore the fact that the agreement used by WARF was developed with the participation of the National Institutes of Health (NIH) and is consistent with (and in some ways, more lenient than) MTAs commonly used between university tech transfer offices. It also ignores the amount of time and effort WARF spends in training recipients of its cells, which are notoriously difficult to handle and propagate to retain their "stemness." Also unspoken is any acknowledgement that WARF's program (in conjunction with the NIH) has permitted stem cell scientists in federally funded laboratories to continue to do their work in the face of the Bush administration's restrictive prohibitions on stem cell science. Significantly, WARF imposes no restrictions on patenting or publishing the results of basic academic research.
Martin Pera (at right) from the University of Southern California complains that "WARF's grip on 'basic platform technology critical to the future development' of the field is bound to impede progress," but that hasn't stopped him from obtaining three of his own human stem cell patents: U.S. Patent Nos. 6,875,607; 7,011,822; and 7,112,437. These patents claim:
The owner of these patents, ES Cell International of Singapore, provides the same human embryonic stem cells provided by WARF, but at a 
Predictably, the loudest complaints come from commercial interests, who cite licensing fees of (gasp!) "up to $400,000," according to Jonathan Auerbach of GlobalStem, Inc. (GlobalStem is reported to have avoided the Thomson patents by using stem cells having abnormal karyotypes.) Unspoken is the reality that these types of licensing fees are not particularly onerous for a commercial concern, particularly when licensing a patented reagent as potentially valuable as a stem cell. Also common are the types of "reach through" provisions for products made using stem cells contained in WARF's commercial licenses; since the commercial entities will typically be selling such products (be they 
biochemicals produced by the cells or differentiated cells or tissues made from stem cells), it would be unrealistic (and inequitable) for a company to obtain the cells for a simple licensing fee and insulate its commercial products from royalty obligations. Similar considerations apply to the complaints of Robert Lanza (at left) of Advanced Cell Technologies, Inc. (ACT), that WARF requires a $5,000 fee when ACT sells stem cells to third parties. Mr. Lanza ignores the fact that most MTAs preclude ownership, much less transfer, of the material by the licensee, or that ACT's cells benefit from being within the Federal government's stem cell ban as a result of WARF's provenance over these cell lines. (Unmentioned in the article is 
In an April 26, 2007 
With respect to the apixaban collaboration, Pfizer will be making an upfront payment of $250 million to Bristol-Myers Squibb and will be funding 60% of all future developmental costs. Under the terms of the agreement, Bristol-Myers Squibb could receive additional payments of up to $750 million from Pfizer depending on the attainment of development and regulatory milestones. With regard to the commercialization of apixaban, the companies will share expenses and profits/losses equally.
Unlike earlier incarnations of the dispute, which named several defendants, this case named generic pharmaceutical maker Andrx as the sole alleged infringer. The patent claims at issue recited AstraZeneca's formulation method for omeprazole. This formulation contains an alkaline reacting compound (ARC) to protect acid-sensitive omeprazole during transit through the stomach. The Federal Circuit affirmed the District Court's finding that Andrx infringed, but also affirmed the District Court's determination that AstraZeneca's claims were invalid for being either anticipated or obvious.
The claimed process was directed at the formation of a water-soluble separating layer between the acid-sensitive omeprazole core and the enteric coating, wherein the separating layer was formed in situ by a reaction between the ARC in the core and the enteric coating. As the Federal Circuit explained, "the '281 process produces an omeprazole formulation with three distinct layers, but starts with only two of the three layers," wherein the reaction produced a separating layer comprising a salt form of the enteric coating material. Independent claim 1 recited a minimum ARC concentration in the core required to form the separating layer, and dependent claims recited specific ARC compounds. Significant to the Federal Circuit's decision, the '281 specification contained process parameters (including temperature) not recited in the claims.
Luminex Corporation 
The license rights apply to technology that is included in the 
SinoBiomed 
The USPTO released this 
In the reverse situation, an applicant can also request that the EPO make a request to retrieve an electronic copy of a U.S. patent application to which an EP patent application claims priority. However, the EPO will only retrieve copies of a priority document when (1) the USPTO receives written authorization to "permit access" under 37 C.F.R. § 1.14(h) and 35 U.S.C. § 122, if the application is not published; or (2) the U.S. application is published or issued as a patent. The USPTO clarifies in the notice that form 
On Friday, April 27, 2007 at 9:00 am, the 
AS1404 is set enter Phase III clinical trials in patients with squamous non-small cell lung cancer in 2008 after showing positive results in Phase II trials; the compound extended median survival by five months in patients with non-small cell lung cancer when used in combination with paclitaxel and carboplatin. With the licensing of AS1404, Novartis now has seven cancer therapeutics in its pipeline, including: RAD001, for treating multiple tumors; SOM230, for treating Cushing's disease/refractory carcinoid tumors and acromegaly; LBH589, for treating chronic myeloid leukemia/cutaneous T-cell lymphoma; Tasigna, for treating chronic myeloid leukemia; EPO906, for treating ovarian cancer; and PKC 412, for treating acute myelogenous leukemia.
On Monday, the Intellectual Property Owners Association (IPO) released its 
Novozymes and Genencor (Danisco) reached a settlement involving Genencor's infringement of U.S. Patent No. 
According to news reports and a Novozymes press release, the settlement includes a $15.3 million cash payment. This amount includes damages for infringement and attorneys' fees. Both companies also waived rights to appeal the district court decision. Further details of the settlement remain secret. Therefore, it is unclear whether the agreement also includes an ongoing license of the Novozymes technology.
On Tuesday, the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) released an extensive (218 page) report on their analysis of the relationship between antitrust law and patent law (see "
From the beginning of the Introduction to the Report, the tone is positive for patent holders. The Report acknowledges that in the past, antitrust law and patent law were seen as being in conflict, but that the more enlightened view is to consider them both to be concerned with encouraging innovation and enhancing consumer welfare. The Report states that patent "monopolies" are not inherently antithetical to the antitrust regime, and that "it is well understood that exercise of monopoly power, including the charging of monopoly prices, through the exercise of a lawfully gained monopoly position will not run afoul of the antitrust laws," citing Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004). Further, "antitrust doctrine does not presume the existence of market power from the mere presence of an intellectual property right." Ill. Tool Works Inc. v. Indep. Ink, Inc., 126 S. Ct. 1281, 1284 (2006).
