Patent Docs: December 2009

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December 31, 2009

December 30, 2009

Follow-on Biologics News Briefs - No. 11

Senate Passes Patient Protection and Affordable Care Act

On Christmas Eve, the Senate passed the Patient Protection and Affordable Care Act (H.R. 3590) by a 60-39 vote. Independent Senators Joe Lieberman (I-CT) and Bernard Sanders (I-VT) joined all 58 Democratic Senators in voting for the bill. All of the Republican members of the Senate -- with the exception of Senator Jim Bunning (R-KY), who did not vote -- voted against the bill. The Senate bill, which was officially renamed The Patient Protection and Affordable Care Act, expanded from 2,074 pages as introduced last month to 2,407 pages. One thing that did not change in the bill, however, was the section (§ 7002) providing for an approval pathway for biosimilar biological products. As reported on Patent Docs last month (see "Follow-on Biologics News Briefs - No. 10"), this provision would preclude a biosimilar application from being approved "until the date that is 12 years after the date on which the reference product was first licensed." In addition, the Senate bill would offer an additional 6 months of exclusivity for the use of reference products "in the pediatric population." On Tuesday, a message regarding the Senate's passage of the bill was sent to the House of Representatives.

Reaction to Senate Health Care Bill

In a statement released on Christmas, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood declared that the Patient Protection and Affordable Care Act passed by the Senate "includes many provisions which serve as early Christmas presents for patients living with debilitating diseases such as cancer, Multiple Sclerosis, HIV/AIDS and a host of rare diseases." Referring to the biosimilar provision of the bill, Mr. Greenwood noted that the legislation "establishes, for the first time ever, a pathway to allow for U.S. Food and Drug Administration approval of biosimilars, sometimes inaccurately referred to as 'biogenerics.'" He added that as a result of this provision, "patients with devastating diseases will have increased access to safe and effective life-saving advanced therapies and can take comfort in the knowledge that this bill will accelerate the biotechnology sector's drive toward discovering new treatments, therapies and cures for diseases that have plagued us for years." Mr. Greenwood also pledged the industry group's cooperation in working with the Senate to ensure that "the House provisions pertaining to patent resolution are included in the final bill."

One day earlier, Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued a statement applauding the Senate "for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially." While noting that "considerable work remains to be done in reconciling differences between the Senate and House bills," Mr. Johnson stated that the PhRMA was "convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation."

In a statement released on Christmas Eve, Generic Pharmaceutical Association (GPhA) President and CEO Kathleen Jaeger contended "[t]he bill passed by the Senate, unfortunately, amounts to a treasure trove to brand drug companies who stand to make enormous profits from health care reform -- putting brand drug profits over patients." Perhaps anticipating BIO's reaction to the bill's passage, Ms. Jaeger stated that bill was "no holiday present to American consumers." She also stated that "[r]eal reform should bend the pharmaceutical cost curve in the right direction," adding that "as it stands, brand drug companies are poised to receive gold nuggets in their stockings, whereas consumers are about to get a handful of coal."

In response to the Senate's passage of H.R. 3590, the Coalition for a Competitive Pharmaceutical Market (CCPM) -- which has 33 participating members including Apotex, Hospira, Momenta Pharmaceuticals, Mylan Labs, Ranbaxy Pharmaceuticals, Teva Pharmaceuticals USA, Watson Pharmaceuticals, and the Generic Pharmaceutical Association (GPhA) -- has begun a campaign on its website to "[s]how Congress that the gift to brand drug companies isn't all it's wrapped up to be." As part of that campaign, the CCPM is asking visitors to its site to call or write the White House to "[a]sk the President to tell Congress to fix health care reform legislation by putting patients over profits."

Washington Times Op-Ed Says Savings Claims Are Inflated

In an op-ed article appearing in The Washington Times less than a week before the Senate passed the Patient Protection and Affordable Care Act, Roland King, who served as the chief actuary for the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) for 16 years, notes that "[a] minority of legislators claim that changing [follow-on biologics] legislation to allow biosimilar manufacturers to copy another product as early as 7 years will result in an enormous additional savings to the government" ("Inflated savings claims: Not a prescription for a sound policy"). Mr. King, however, disputes this claim, asserting that "the facts simply do not bear this out." Noting that "[a] substantial majority of biologic drugs currently on the market are already at or near the end of the proposed 12-year protection period," Mr. King concludes that "lowering the data protection period would result in minimal additional savings." In addition, he contends that "the 12-year protection period is necessary so the legislation does not irreparably harm the uniquely American biotechnology industry and the future cures it will produce." Mr. King also believes that the bipartisan support the 12-year period received over the summer in the House Committee on Energy and Commerce (see "House Committee Approves Health Care Reform Bill Calling for 12-Year Exclusivity Period") and the Senate Health, Education, Labor and Pensions (HELP) Committee (see "Senators Champion 12-Year Data Exclusivity in Senate") another reason for retaining the 12-year data exclusivity period.

Pointing to his "almost 40 years of experience preparing cost estimates for federal health care programs," Mr. King states that "it's a great deal easier to project savings than to actually realize them." He contends that "the difficulty of the manufacture of biosimilar drugs, the number of likely biosimilar entrants in the market, the number of biologic products near the end of their patent life over the next decade, and the FDA review process that would be required to ensure the safety and effectiveness of biosimilar drugs, all lead to the conclusion that any savings from reducing the years of data protection would be insignificant." Admonishing opponents of the 12-year period who use cost savings to support their position, Mr. King asserts that this argument is "misleading [and] counter to the public's interest in having biotech companies retain sufficient incentives to continue investing billions of dollars in the research and development of vital new medicines." Instead, Mr. King concludes that "[m]oving from 12 years of data protection to seven years would not materially impact the savings, but would materially impact the incentives for innovator biotechnology companies to discover the next generation of treatments for such serious diseases as cancer and Parkinson's."

New York Times Reports on Lobbying Efforts Related to Biosimilar Provision of Health Care Legislation

In a report in last month's New York Times, the paper notes that statements by more than a dozen lawmakers added to the official record of the House debate on health care reform "were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech" ("In House, Many Spoke With One Voice: Lobbyists'"). The report also notes that "lobbyists drafted one statement for Democrats and another for Republicans," and that these statements were picked up (at least in part) by 22 Republicans and 20 Democrats. According to the Times, e-mail messages that the paper obtained showed that the statements were based on information supplied by Genentech employees to lobbyist Matthew Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok, who authored the statements, which were then distributed by lobbyists at another law firm (Sonnenschein Nath & Rosenthal). The Times report notes that the Democratic statement "emphasized the bill's potential to create jobs in health care, health information technology and clinical research on new drugs," and that the Republican statement "opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech."

In an editorial appearing in the Times two days later, the paper opines that "[i]t is disturbing that the [biotech] industry was able to so easily shape the official record to its liking" ("Puppets in Congress"). While acknowledging that "[t]he comforting news is that none of the ghostwritten material sought to change the contents of the bill, which was not open to much revision during the debate," the Times argues that it is "disturbing that so many members of Congress were willing to parrot the industry talking points." The paper also characterizes the House bill's 12-year data exclusivity provision as "a generous period by anyone's standards." (Our earlier series regarding the many papers, letters, and statements outlining positions taken by various players in the follow-on biologics data exclusivity debate contradicts the Times' characterization; see "Follow-on Biologics Data Exclusivity Debate Scorecard - Part III".)

Wall Street Journal Op-Ed Warns That Europe May Take Biologic Lead

In an op-ed appearing in The Wall Street Journal last month, a former member of the European Parliament argues that "European researchers are on the cusp of overtaking their American counterparts in biotechnology innovation, especially when it comes to the development of cutting-edge medicines known as 'biologics'" ("Washington's Gift to European Biotech"). According to the author, Della Vedova, a member of the Italian Chamber of Deputies, the European biotech industry has closed the gap in private financing and number of dedicated biotechnology firms over the past five years. Mr. Vedova notes that "just as the European biotech industry's substantial investments in research and development -- about a third of revenues in recent years -- is beginning to pay off, U.S. policy makers are considering legislation that would hamstring biotech research in their own country." In particular, Mr. Vedova refers to "[a] bill currently before the U.S. Congress [that] would allow drug companies to make knock-off versions of biologics much sooner than in Europe."

While Mr. Vedova is mistaken as to the actions of Congress since July -- House and Senate committees each passed 12-year data exclusivity provisions that are longer than Europe's 10-year period, and both the House and Senate have now passed health care bills providing for 12 years of exclusivity -- his point regarding the importance of longer exclusivity periods is well taken. For example, Mr. Vedova contends that "[w]ithout a significant exclusivity period, . . . biotech companies won't have enough time to recoup the huge sums they have invested." With regard to Europe's 10-year period, Mr. Vedova notes that "[t]he EU adopted this standard in 2003 to increase the competitiveness of the continent's pharmaceutical and biotech firms," adding that "it has paid off, as the recent success of European firms illustrates." Mr. Vedova concludes that a shorter exclusivity period in the U.S. "would mean more investment dollars, more jobs, and more research facilities on this side of the Atlantic," and would constitute "a historic shift" for U.S. biotech researchers, who have "[f]or much of the past few decades . . . left the Europeans in the dust."

Posted at 11:59 PM in Follow-on Biologics | Permalink | Comments (0) | TrackBack (0)

December 29, 2009

Biotech/Pharma Companies Look to Market for Capital

By Donald Zuhn --

Over the past five months, biotech and pharma companies have increasingly turned to the stock market for much needed infusions of capital. In August, Nashville-based Cumberland Pharmaceuticals snapped a two-year industry dry spell when it conducted an initial public offering (IPO) that raised $85 million (see "Is Biotech/Pharma Beginning to Bounce Back?"). And in October, Talecris Biotherapeutics and Omeros Corp. conducted their own IPOs, raising $950 million and $68.2 million, respectively (see "Biotech/Pharma IPO Binge"). Meanwhile, Inspire Pharmaceuticals and Seattle Genetics managed to raise $115 and $136 million, respectively, in public offerings of their common stock, and Anthera Pharmaceuticals announced plans for a $70 million IPO.

Coupled with the (slow) rebound of venture capital funding, the recent announcements of public offerings and registrations for public offerings are a possible indicator that the biotech/pharma industry has begun to bounce back after suffering through one of the worst economic downturns in history (see "NVCA Study Shows Increase in Third Quarter Venture Funding"). A number of other biotech/pharma companies have joined the IPO fray since our last report in October, including Trius Therapeutic, Ironwood Pharmaceuticals, AVEO Pharmaceuticals, China Nuokang Bio-Pharmaceutical, Rules-Based Medicine, Tengion, Codexis, Med BioGene, Alimera Sciences, and Aldagen.

• In early November, Trius Therapeutics announced that it filed a registration statement with the U.S. Securities and Exchange Commission (SEC) regarding a proposed initial public offering of shares of its common stock. According to a FierceBiotech report, the San Diego-based biopharmaceutical company, which focuses on the discovery, development, and commercialization of antibiotics, is looking to raise $86 million through its IPO.

• Late last month, Ironwood Pharmaceuticals announced that it filed a registration statement with the SEC relating to the proposed initial public offering of shares of its Class A common stock. According to a report in The Boston Globe, the Cambridge, MA-based pharmaceutical company has yet to announce the amount it expects to raise via the IPO.

• Earlier this month, AVEO Pharmaceuticals announced that it filed a registration statement with the SEC regarding the proposed initial public offering of shares of its common stock. The biopharmaceutical company, based in Cambridge, MA, focuses on discovering, developing and commercializing novel cancer therapeutics, including its lead product candidate, Tivozanib, a novel, highly potent and selective oral inhibitor of vascular endothelial growth factor (VEGF) receptors 1, 2 and 3. According to a report on StreetInsider.com, the company plans to raise $86.25 million through the IPO.

• On December 10th, China Nuokang Bio-Pharmaceutical, which offers a number of therapeutics for bleeding control and hematological, cardiovascular, and cerebrovascular disease diagnosis, treatment, and prevention, began trading on the Nasdaq Global Exchange under the ticker symbol NKBP. The company's shares, which opened at $8.24, closed at $7.78 today (see StreetInsider.com report).

• Last week, Rules-Based Medicine, which provides protein biomarker products and services based on its Multi-Analyte Profiling (MAP) technology platform, announced that it filed a registration statement with the SEC for an initial public offering of up to $90 million of its common stock (see StreetInsider.com report).

• On Christmas Eve, Tengion announced that it filed a registration statement with the SEC relating to the proposed initial public offering of shares of its common stock. The regenerative medicine company, based in East Norriton, PA, has developed the Autologous Organ Regeneration Platform in which biocompatible materials and a patient's own cells are combined to regenerate diseased and failing organs and tissues (i.e., neo-organs and neo-tissues). According to a report in The Philadelphia Inquirer, Tengion is looking to raise $42.25 million in the IPO.

• Yesterday, Codexis announced that it filed a registration statement with the SEC for a proposed initial public offering of shares of its common stock. According to a Reuters report, the Redwood City, CA company, which makes "super enzymes" for use in pharmaceutical, chemical, and transportation fuel manufacturing and air and water treatment, plans to raise $100 million in the IPO.

• According to a report on StreetInsider.com, Med BioGene filed a registration statement today with the SEC for an initial public offering of its common stock. Med BioGene, which is based in Vancouver, British Columbia, focuses on the development and commercialization of genomic-based clinical laboratory diagnostic tests.

• In addition to the above reports, Alimera Sciences and Aldagen have each announced that they have refiled earlier IPOs. According to a FierceBiotech report, Atlanta-based Alimera, which originally pulled a proposed $75 million IPO last spring, has now refiled an IPO seeking to raise $80 million. A report in The Wall Street Journal indicates that Aldagen, which tabled its earlier IPO in October 2008, has now refiled an IPO seeking to raise $80.5 million. The Durham, NC-based biopharmaceutical company develops regenerative cell therapies.

• Finally, Vertex Pharmaceuticals announced earlier this month that it had raised $500.5 million in a public offering of its common stock. The Cambridge, MA-based biotech company focuses on the discovery and development of small molecule drugs for treating viral diseases, cystic fibrosis, inflammation, autoimmune diseases, cancer, and pain.

For additional information regarding this and other related topics, please see:

• "Biotech/Pharma IPO Binge," October 9, 2009
• "Is Biotech/Pharma Beginning to Bounce Back?" August 12, 2009

Posted at 11:59 PM in Biotech/Pharma Business | Permalink | Comments (2) | TrackBack (0)

December 28, 2009

Gene Patenting: Australian Potpourri

By Kevin E. Noonan --

Gene patenting, and proposed bans on the practice, have garnered several newspaper reports and responses from professional groups around the world.

Australian Senate Panel Debates Gene Patenting

The Community Affairs Committee of the Australian Senate is investigating whether genes should be patentable in that country, according to a December 12th report in The Australian ("Patently tricky dispute drags on: who owns your genes"). The debate was sparked, according to a report, by a letter from Genetic Technologies (GTG), a Melbourne testing lab, to eight public pathology laboratories regarding its rights to testing the BRCA1 and BRCA2 genes, under an exclusive license from Myriad Genetics. The report notes that any aggressive enforcement of GTG's licensed rights under the Australian patents may have been stayed by a change in the company's board of directors, as well as the uncertainty created by the lawsuit in New York brought by the ACLU over the corresponding U.S. patents.

The Senate panel held six public "inquiries" from March through September 2009, and received 72 primary and several additional submissions from various individuals and groups. Predictably, the account reports that these submissions fall into two groups: those that contend that gene patenting under Australian law is proper and is having the desired effects of promoting investment and access, and those who contend that it is ethically wrong to permit genes to be patented. Another important aspect of the debate in Australia is its international commitments and agreements, which would prevent Australia from "going it alone."

The opposition bases its arguments on purported ethical concerns, and additionally proposes a "middle ground" based on copyright, wherein "[a]nyone who wants to use your IP must tell you and pay you," according to Luigi Palombi (at left), a gene patenting opponent and Australian National University patent law expert. Ironically, this idea is the reverse of the canard spouted by the late author Michael Crichton in the op-ed pages of The New York Times, to the effect that gene patent holders could ask individuals for infringement damages because their cells were using the patented genes. (For anyone not reading this space, that assertion is false.) It is hard to imagine how the scheme proposed by Professor Palombi would encourage or even permit development of genetic-based technologies in Australia.

One other academic is cited in the piece, Professor Laurie Zoloth (at right) of Northwestern University. Two quotations stand out: first, she asserts as an argument against gene patenting that it would be like "[p]atenting the sun." This phrase, the title of a biography of Dr. Jonas Salk and his development of the polio vaccine, loses some of its rhetorical force when one realizes that Dr. Salk tested his vaccine on the children in a local home for the mentally retarded, with little if any oversight and neither parental or any other kind of informed consent. One of the reasons genetic technologies are so cost-intensive is that such practices, as well as other, more well-known consequences of lax regulation like the Thalidomide and diethylstilbestrol disasters, resulted in more stringent regulatory oversight. Accordingly, the cost of bringing a new drug or therapy to market is much higher in view of these requirements, but the alternative is unthinkable. This is particularly the case for genetic testing having the consequences of detecting BRCA1 or BRCA2 mutations. Patents on genes support the investment needed to ensure that the genetic tests that come to market are reliable, and that we don't develop the genetic equivalent of "patent" medicines.

The other quote from Professor Zoloth that stands out is her assertion that genetic information should be part of a "creative commons" that is freely available to all comers, and that "[e]ventually the work will be commercialized," purportedly being the role of venture capitalists and philanthropy. The depths of misunderstanding in this statement are chilling: first, the information relating to genes is part of the "creative commons" insofar as anyone wants to use that information. The proof of this statement is in the nearly 3,500 scientific journal publications that can be accessed from public databases like PubMed merely by typing "BRCA1" or "BRCA2" into the search engine. The latest of these papers was published this fall, something directly contrary to the assertions that gene patenting inhibits basic research. If that were the case, the number of these publications would have decreased dramatically once the patents were granted. And if that were the case, it would not have been the conclusion of every single study done to date that patenting has not had an inhibiting effect on genetic research. And, of course, the blasé statement from Professor Zoloth that "[e]ventually the work will be commercialized" ignores the realities that nothing will be commercialized that cannot be protected (unless her use of the word "eventually" is in the historical sense). While it may be true that such things would "eventually" happen, it is undoubtedly true that under a gene patenting ban they would happen much more slowly, if at all. In human terms, that means less diagnostic and therapeutic advances and more suffering. Funny position for a bioethicist to be taking.

The Australian Senate panel has postponed its report, originally due in November until March 18, 2010. It's possible that the committee has realized that the issue is more complicated than simply deciding gene patenting is "wrong." Perhaps it will realize in the ensuing months that gene patenting is necessary, and beneficial, for Australia and the rest of the world.

Australian Patent Attorneys Attempt to Inject Rationality Into Gene Patenting Debate

A panel put on by the Institute of Patent and Trademark Attorneys of Australia (IPTA) strongly supported gene patenting in Australia, saying the ban proposed by opponents would "bring the Australian biotech industry to its knees," according to independent reports by the Australian AP and Australian Life Scientist ("Ban drives 'biotech industry to its knees'"). The reason: the difficulties in attracting investment without patent protection, according to Trevor Davies, IPTA councilor. "[I]f biological materials couldn't be patented . . . there is a likelihood that important advances in medicine would not be realized in Australia because there wouldn't be patent protection," he said.

The panel, made up of patent lawyers, biotech entrepreneurs, and academics, analogized the importance of patents for biotechnology with mining leases in the mining industry, and reminded listeners that the cost of "transforming a promising field of research into a market-ready product -- like a life-saving medical test -- was about a billion dollars." Without patent protection, the panel said that biotech or pharma companies simply would not support investment in this work. Banning gene patents would "remove the incentive for people to invest," according to University of Melbourne patent law professor Andrew Christie (at left). Professor Christie rebutted the frequently-heard complaint that patenting genes somehow gives patent-holders "control" over an individual's body, saying in effect nobody "owns you."

Dr. Tania Obranovich (at right), a patent attorney and former research scientist, stated that permitting gene patenting encourages private investment which facilitates bringing therapies to market. She reminded the audience that Gardisil, the cervical cancer vaccine, would not have gotten to market without protection of certain human papilloma virus genes. Dr. Obranovich also contended that gene patents do not inhibit basic research.

The panel made one concession to the protests of the anti-gene patenting crowd: they supported a change in Australian law to clarify that basic genetic research using patented genes would not constitute an infringing act, based on some uncertainty in how Australian law has been interpreted by the courts.

Australian Cancer Researcher Against Patenting Genes

Professor Ian Frazer (at right), President of Cancer Council Australia (as well as former Australian of the Year and inventor of the cervical cancer vaccine) wrote an article in The Australian in August critical of gene patents ("Sharing genes is patently obvious: gene patent inquiry"). Professor Frazer is entitled to his opinion, of course (although it is unlikely that the cervical cancer vaccine is unpatented), but his arguments would be more persuasive if fewer of his statements in support of them were less fantastical.

For example, Professor Frazer contends that "there is no more invention in isolating and characterising biological material that exists in our bodies, using existing research techniques, than in collecting and arranging a set of postage stamps." Even insofar as this statement can be interpreted as commenting on advances in biotechnology over the past twenty-five years, it ignores (even rhetorically) the difference between a gene in a chromosome and an isolated copy (typically a cDNA copy) of that gene. While the Human Genome Project has set forth thousands of previously-unknown open reading frames in chromosomal DNA (sections that could, but do not necessarily, encode for protein), the apt analogy is not with postage stamps. It is with a parts list for an automobile, in which you try to assemble it without being able to look under the hood. While the amount of genetic information obtained over the past decade has been monumental, it is inchoate with regard to the function, if any, of most of it. This will preclude patentability for many genes, but it should not preclude patent-eligibility. Second, Professor Frazer states, "claiming a monopoly on the use of a particular gene sequence in an already existing diagnostic test method can lead to restricted public access to vital diagnostic services." Ignoring the rhetorical flourish of "monopoly," there is no "already existing diagnostic test method" for diagnosing a particular disease, or propensity for contracting a disease, in the absence of the "particular gene sequence." Even then, the mere existence of the gene sequence is not enough: a sufficiently high correlation must be established so that the result of an assay for a particular mutation reliably indicates that a patient does, or does not, have a higher likelihood of disease than the "wildtype" population. Identifying the sequence, establishing the correlation and satisfying regulatory requirements that would prevent unreliable tests from coming to market requires investment, which requires some way to increase the likelihood for a return on that investment. Patents do that.

Professor Frazer's argument, as he develops it, is rooted in a mistaken belief that permitting genes to be patented will inhibit basic research. He alleges that permitting genes to be patented can eliminate "the competitiveness and information sharing essential to the development of genetic therapies," which therapies he conceded should be rewarded by a patent. He cautions against restricting use of patented genes in research, which could "delay the development and testing of truly inventive and practical uses of the gene and its protein product for diagnosis and therapy." The problem with this argument is there is no evidence for it: study after study has shown that patenting does not restrict research use of patented genes, and even the most notorious of the patented genes, BRCA1 and BRCA2, have been the subject of almost 3,500 research papers published in the scientific literature in the face of patents on those genes.

Professor Frazer also says that the "collegial tradition of sharing raw data among researchers must be allowed to continue unfettered so new technologies can be developed to benefit all." Maybe science is practiced differently in Australia, but the collegiality of data sharing in academia is typically severely limited to data already submitted to a scientific journal for publication. Ironically, patenting (including gene patenting) fosters collegiality since it establishes a legal priority date for an inventor's invention.

The Professor also cites "Pasteur's immunology discoveries" and "Florey's penicillin antibiotic" as examples of inventions "gifted to humankind for global benefit." On the contrary, Louis Pasteur patented what was commercially-valuable to him in the 19th century (improved yeast strains for winemaking) and the tragedy of Florey's "gift" of penicillin is well-know to have required World War II for its commercial development under government grants; prior to the war no pharmaceutical company would commercialize penicillin precisely because there was no patent protection to stimulate investment.

Professor Frazer ends his piece by recommending that, until gene patenting is banned in Australia, "non-commercial use of gene sequence information should be encouraged for research and diagnostic purposes." Ironically, if Australia bans gene patents such "non-commercial use" is all Australians are going to have.

Photograph of the Australian Senate Parliament House (above) by Chensiyuan, from the Wikipedia Commons under the Creative Commons license.

Posted at 05:21 PM in International IP, Patentable Subject Matter | Permalink | Comments (2) | TrackBack (0)

December 27, 2009

Court Report

By Sherri Oslick --

About Court Report: Each week we will report briefly on recently filed biotech and pharma cases, and a few interesting cases will be selected for periodic monitoring.

Abbott Laboratories, Inc. et al. v. Apotex Inc. et al.
1:09-cv-07968; filed December 22, 2009 in the Northern District of Illinois

• Plaintiff: Abbott Laboratories, Inc.; Abbott GmbH & Co. KG
• Defendants: Apotex Inc.; Apotex Corp.

Infringement of U.S. Patent No. 5,436,272 ("Treatment of Obesity, issued July 25, 1995) following a Paragraph IV Certification as part of Apotex's filing of an ANDA to manufacture a generic version of Abbott's Meridia® (sibutramine hydrochloride, used to treat obesity). View the compliant here.

Schering Corp. v. Apotex Inc. et al.
1:09-cv-07923; filed December 22, 2009 in the Northern District of Illinois

• Plaintiff: Schering Corp.
• Defendants: Apotex Inc.; Apotex Corp.

Schering Corp. v. Apotex Inc. et al.
3:09-cv-06373; filed December 18, 2009 in the District Court of New Jersey

• Plaintiff: Schering Corp.
• Defendants: Apotex Inc.; Apotex Corp.

The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. 5,837,699 ("Use of Mometasone Furoate for Treating Upper Airway Passage Diseases," issued November 17, 1998), 6,127,353 ("Mometasone Furoate Monohydrate, Process for Making Same and Pharmaceutical Compositions," issued October 3, 2000), and 6,723,713 ("Use of Mometasone Furoate for Treating Upper Airway Passage Diseases," issued April 20, 2004) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Schering's Nasonex® (mometasone furoate monohydrate metered nasal spray, used to treat diseases of the upper airways, including allergic and nonallergic rhinitis). View the N.D. Illinois complaint here.

Depomed, Inc v. Lupin Pharmaceuticals, Inc. et al.
1:09-cv-03406; filed December 21, 2009 in the District Court of Maryland

• Plaintiff: Depomed, Inc
• Defendants: Lupin Pharmaceuticals, Inc.; Lupin Ltd.

Infringement of U.S. Patent Nos. 6,723,340 ("Optimal Polymer Mixtures for Gastric Retentive Tablets," issued April 20, 2004), 6,635,280 ("Extending the Duration of Drug Release Within the Stomach During the Fed Mode," issued October 21, 2003), 6,488,962 ("Tablet Shapes to Enhance Gastric Retention of Swellable Controlled-Release Oral Dosage Forms, issued December 3, 2002), and 6,340,475 ("Extending the Duration of Drug Release Within the Stomach During the Fed Mode," issued January 22, 2002) following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of Depomed's Glumetza® (metformin hydrochloride extended release tablets, used to improve glycemic control in adults with type 2 diabetes mellitus). View the complaint here. [NB: Depomed previously filed suit for the same cause of action against Lupin in the Northern District of California, as noted in the December 7, 2009 edition of "Court Report."]

Abbott Laboratories v. Sandoz, Inc.
3:09-cv-06402; filed December 21, 2009 in the District Court of New Jersey

Abbott Laboratories v. Sandoz Inc.
1:09-cv-00972; filed December 18, 2009 in the District Court of Delaware

The complaints in these cases are substantially identical. Infringement of U.S. Patent No. 5,453,510 ("Neuromuscular Blocking Agents," issued September 26, 1995) following a Paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Abbott's Nimbex® (cisatracurium besylate, used as a skeletal muscle relaxant). View the Delaware complaint here.

Schering Corp. et al. v. Mylan Pharmaceuticals Inc. et al.
1:09-cv-00167; filed December 18, 2009 in the Northern District of West Virginia

• Plaintiffs: Schering Corp.; MSP Singapore Co. LLC
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.

Schering Corp. et al. v. Mylan Pharmaceuticals Inc. et al.
2:09-cv-06383; filed December 16, 2009 in the District Court of New Jersey

• Plaintiffs: Schering Corp.; MSP Singapore Co. LLC
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.

The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. RE37,721 ("Hydroxy-Substituted Azetidinone Compounds Useful as Hypocholesterolemic Agents," issued May 28, 2002) and 5,846,966 ("Combinations of Hydroxy-Aubstituted Azetidinone Compounds and HMG CoA Reductase Inhibitors," issued December 8, 1998) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of MSP's Vytorin® (ezetimibe and simvastatin, used to treat hyperlipidemia). View the New Jersey complaint here.

Hoffmann-La Roche Inc. v. Roxane Laboratories, Inc. et al.
2:09-cv-06335; filed December 15, 2009 in the District Court of New Jersey

• Plaintiff: Hoffmann-La Roche Inc.
• Defendants: Roxane Laboratories, Inc.; Boehringer Ingelheim Roxane, Inc.

Infringement of U.S. Patent No. 5,472,949 ("N4-(Substituted-Oxycarbonyl)-5'-Deoxy-5-Fluorocytidine Compounds, Compositions and Methods of Using Same," issued December 5, 1995) following a Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture a generic version of Roche's Xeloda® (capecitabine, used to treat breast and colorectal cancer and Dukes' C Stage III colon cancer). View the complaint here.

Posted at 10:32 PM in Court Report | Permalink | Comments (0) | TrackBack (0)

USPTO Launches Interactive Patent Pendency Model

By Sarah Fendrick --

On December 18, 2009, the U.S. Patent and Trademark Office announced the launch of an interactive patent pendency model (PPM). The PPM enables users to see how overall application pendency is affected by the number of examiner hires per year, the amount of overtime worked, and patent filing levels. In one example, the model shows that an additional 1,000 examiners hired between 2010-2012 could reduce the backlog from 719,000 to just over 470,000 by the end of 2012. Alternatively, if no new examiners were hired and no overtime was allowed, the current backlog could increase to 1,651,000, and the first action pendency would increase from 25 months to 67 months.

The PPM was established to further the USPTO's efforts to increase transparency and to reduce patent pendency. In the Office's press release regarding the launch of the PPM, USPTO Director David Kappos stated "[i]n our ongoing effort to operate with a high level of transparency, we are launching an interactive Patent Pendency Model so that our stakeholders can fully appreciate the variables that affect the pendency of applications."

The PPM webpage can be found in the Patent statistics area of the USPTO Web site.

Posted at 10:12 PM in Patent Office Rules & Procedures | Permalink | Comments (0) | TrackBack (0)

Conference & CLE Calendar

January 6-10, 2010 - 27th Annual National CLE Conference (Law Education Institute, Inc.) - Vail, CO

January 20-21, 2010 - Life Sciences IP Due Diligence (American Conference Institute) - New York, NY

January 25-26, 2010 - European Pharmaceutical Regulatory Law Boot Camp (American Conference Institute) - New York, NY

January 26-27, 2010 - Advanced In-House Counsel Forum on China IP Law (C5) - Shanghai, China

January 27-28, 2010 - Pharma & Biotech Patent Litigation (C5) - Amsterdam, Netherlands

February 9, 2010 - Patent Prosecution: Best Practices for Reducing Costs While Improving Patent Quality (Technology Transfer Tactics) - 1:00 - 2:30 PM (EST)

February 24-25, 2010 - 2nd Expert Forum on ITC Litigation & Enforcement (American Conference Institute) - New York, NY

March 2-4, 2010 - 6th Annual Biosimilars Conference (Visiongain) - Boston, MA

***Patent Docs is a media partner of this conference or CLE

Posted at 10:02 PM in Conferences & CLE's | Permalink | Comments (0) | TrackBack (0)

December 24, 2009

Happy Holidays from Patent Docs

Holiday_stars The authors and contributors of Patent Docs wish their readers and families a Happy Holidays. Publication of Patent Docs will resume on December 27th.

Posted at 06:58 PM in Miscellaneous | Permalink | Comments (3) | TrackBack (0)

December 23, 2009

Monsanto Announces New Policy Regarding Roundup Ready® Seeds

By Kevin E. Noonan --

In what may be considered a softening (or at least a change) in its approach to protecting its patented technology, Monsanto announced that it would not enforce any contractual provisions regarding its Roundup Ready® transgenic seed (that preclude growers from replanting genetically-engineered seeds) once the patents on that technology expire in 2014. Monsanto also announced that the company would stop collecting royalties from licensees at the same time. These actions, by a company renowned for stringently enforcing its intellectual property rights, may reflect a sober and prudent conformity with the current political and regulatory climate.

The announcement addresses, and alleviates, what farmers have expected (if not feared) regarding Monsanto's recombinant seeds, particularly soybeans. The situation facing Monsanto after 2014 is similar to one that has faced pharmaceutical companies when a company's main product goes off-patent. Generally the answer has been further innovation, which has sometimes taken the form of providing an improved version of the original drug. Examples include AstraZeneca's Nexium® that took the place of the related Prilosec® (S-omeprazole rather than racemic omeprazole), and several other drugs that have used this strategy for their drugs (albeit perhaps none so successfully).

Monsanto has pursued a similar strategy for its Roundup Ready® transgenic seed products. These seeds contain an exogenous bacterial gene, encoding an enol pyruvate shikimate-3-phosphate synthase (EPSPS) gene from the microbe Agrobacterium tumefaciens that confers resistance to glyphosate, an herbicide sold by Monsanto under the name Roundup®. Over 90% of all soybean acres planted in the U.S. use this herbicide to increase yield and as a consequence are planted with Roundup Ready® seed. For its soybean embodiments, Monsanto has developed a second-generation seed, termed Roundup Ready 2®, having a 7-11% higher yield per planted acre. The same gene has been introduced into these seeds but the transgene has integrated into a different chromosomal site. Until Monday's announcement, farmers feared that Monsanto would force them to switch to Roundup Ready 2® seeds, at a higher cost, in part by preventing them from using the original Roundup Ready® transgenic seeds.

The announcement was more significant than it might be otherwise (since a patentee's right to royalties typically ends with the expiration of its patents) because, in addition to its patent rights, Monsanto has also staunchly enforced contractual provisions protecting its seeds. Recombinant seed purchasers have been required to sign a "Technology Agreement" ("the Agreement"), agreeing to pay a one-time license fee of $6.50 per bag, and agreeing not to plant themselves, or supply to others, "saved" seeds, i.e., seeds produced from the originally purchased seeds. This system ensures that farmers purchase and license Roundup Ready® soybean seeds each planting seasons.

Over the past 10 years, Monsanto has filed suit 125 times against individual farmers it accused of infringing its patents, including U.S. Patent Nos. 5,352,605 and No. 5,633,435 (RE39,247) related to its recombinant seed technology. Only eight of these lawsuits have gone to trial, while in the remainder, the accused infringer agreed to settlements that generally included an admission of liability. Monsanto has been awarded $21.6 million in its victorious lawsuits, and The Center for Food Safety estimates that Monsanto has received between $85 million and $160 million in settlements, which remain confidential. Monsanto has said that it has donated these monies to charity.

One remaining concern are licenses required by certain countries to permit importation of recombinant grain and other foodstuffs, licenses maintained at present by Monsanto. The company has announced that it will maintain these until 2017, but should they be permitted to expire thereafter, these countries may not permit importation of Roundup Ready® soybeans.

Monsanto's actions come on the heals of a Department of Justice investigation into "potential anti-competitive conduct," due in part to allegations by DuPont in counterclaims asserted in lawsuits between the companies, to the effect that Monsanto has committed antitrust violations. The American Antitrust Institute has also recommended federal investigation of Monsanto's "anti-competitive" conduct. With the change of administration has come a more stringent attitude regarding investigation if not prosecution of such alleged conduct, even by patentees (whose exclusive rights are, by nature, anti-competitive); the current DOJ antitrust division no longer subscribes to the more patent-friendly (or at least patent-accommodating) stance taken by the Bush administration (see "U.S. FTC and DOJ Release Report on Relationship between Patent Law and Antitrust Law").

Or perhaps Monsanto is aware that, even if they are lawfully exercising the patent franchise, an argument can be made that at present patentees must tread lightly, since the tide (of public perception, Congressional understanding, and jurisprudential consistency) has turned against them. Every 30 years or so (the 1940's, 1970's, and today) we seem to forget the nature, value, and utility of patenting. We are in such a period now, which is ironic since the economy depends on patent protection today more than ever before, to protect nascent technology while at the same time promoting its disclosure. As things now stand, if Monsanto's actions prevent another distracting episode of patent-bashing it may be worth it for the company and the rest of us.

For additional information regarding this topic, please see:
• "Monsanto Announces Latest Lawsuit Settlement over Roundup Ready Soybean Seed," September 8, 2008
• "Monsanto Co. v. David (Fed. Cir. 2008)," February 6, 2008
• "Court Report," February 3, 2008
• "Court Report," January 28, 2008
• "Court Report," January 13, 2008
• "Court Report," January 7, 2008
• "Supreme Court Fails to Grant Certiorari in Monsanto Co. v. McFarling," January 7, 2008
• "Court Report," December 16, 2007
• "Court Report," November 18, 2007
• "Court Report," October 21, 2007
• "Court Report," July 1, 2007
• "Monsanto Co. v. McFarling (Fed. Cir. 2007)," June 4, 2007
• "Court Report," May 20, 2007
• "Court Report," May 7, 2007
• "Court Report," April 15, 2007
• "Court Report," March 11, 2007
• "Court Report," March 4, 2007
• "Court Report," February 28, 2007

Posted at 11:42 PM | Permalink | Comments (8) | TrackBack (0)

December 22, 2009

Amgen and Hoffman-LaRoche Settle Mircera® Litigation

By Kevin E. Noonan --

The latest challenge to Amgen's erythropoietin (EPO) franchise ended today, when Hoffman-La Roche agreed to keep its pegylated derivative of human EPO, Mircera®, off the market until July 1, 2014. The U.S. Food and Drug Administration granted approval for Roche to market Mircera® in November, 2007 (it has already been approved in Europe and is sold in Austria, Sweden, Germany, the United Kingdom, and Norway) but the company has been under an injunction issued by Federal District Court Judge William G. Young pursuant to a judgment of infringement against Roche at trial (see "Victory for Amgen in District Court Decision" - Part I, Part II, Part III). While the terms of the settlement are not public, according to Amgen there will be no payments from either company.

The parties stipulated to final judgment and a permanent injunction against Roche in a paper filed jointly with the District Court on Monday. In the stipulation, Roche agreed that the following claims of the patents-in-suit are "valid, enforceable and infringed by Roche's Mircera® product":

(i) U.S. Patent No. 5,756,349 (the '349 patent) claim 7,
(ii) U.S. Patent No. 5,547,933 (the '933 patent) claims 3, 7-8,
(iii) U.S. Patent No. 5,955,422 (the '422 patent) claim 1,
(iv) U.S. Patent No. 5,441,868 (the '868 patent) claims 1 and 2, and
(v) U.S. Patent No. 5,618,698 (the '698 patent) claims 6-9.

Roche also agreed to dismissal with prejudice of its "claims, defenses and counterclaims." The stipulation was entered by the court as an order, to which it appended the following:

Except as allowed under any license agreement reached between the parties, Roche, its agents, servants, employees, counsel, and all persons and entities acting in concert therewith, are hereby permanently enjoined for the life of U.S. Patent No. 5,441,868, U.S. Patent No. 5,547,933, U.S. Patent No. 5,618,698, U.S. Patent No. 5,955,422 and U.S. Patent No. 5,756,349 from infringing said patents by the manufacture, importation, sale, offer for sale or non-exempt use of pegylated Epoetin beta (otherwise referred to as "MIRCERA" or "CERA") in the United States.

Settlement eliminates risks for both parties. Amgen sued Roche in a declaratory judgment action in Massachusetts, asserting six patents: U.S. Patent Nos. 5,547,933; 5,441,868; 5,618,698; 5,955,422 (claim 1); 5,756,349 (claim 7); and 5,621,080 (the '080 patent) On October 23, 2007, a jury found that Mircera® infringed the '933 patent, the '868 patent, and the '698 patent, and that these patents, as well as the '422 patent and the '349 patent, were not invalid. (The jury reached neither infringement nor validity of the '080 patent). Specifically, the jury found that Roche's Mircera® infringed claims 3, 7, and 8 of the '933 patent (claim 12 was found not to be literally infringed but infringed under the Doctrine of Equivalents); claims 1 and 2 of the '868 patent; and claims 6 through 9 of the '698 patent. On October 1, 2008, Massachusetts District Court Judge William Young ruled (in Amgen's favor for each) on several post-trial motions, including: 1) affirming the jury's infringement decision by denying Roche's motion for judgment as a matter of law (JMOL); 2) reaffirming its pretrial decision to grant summary judgment regarding infringement of claim 1 of the '422 patent; 3) "explaining" its reasoning for ruling, also pretrial, that the claims of Amgen's patents-in-suit are not invalid for obviousness-type double patenting (despite the intervening Federal Circuit decision in Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc.); 4) denying Roche's motion for JMOL that claim 1 of the '422 patent and claims 3, 7, and 9 of the '933 patent are not invalid for indefiniteness for reciting the term "human erythropoietin"; and 5) granting Amgen a permanent injunction barring "Roche, its agents, servants, employees, counsel, and all persons and entities acting in concert therewith" from infringing the claims of the patents-in-suit for the remaining life of those patents.

The Federal Circuit affirmed most of the determinations by the District Court and the jury, including that the asserted claims of the '868 patent (claims 1 and 2) and the '698 patent (claims 6-9) are not invalid and were infringed, that claims 3, 7, and 8 of the '933 patent and claim 1 of the '422 patent were infringed, and that claims 9, 11, 12, and 14 of the '933 patent are not infringed by Mircera®. However, the panel opinion vacated Judge Young's decision that the '933 (claims 3, 7, and 8), '349 (claim 7), and '422 (claim 1) patents are not invalid under obviousness-type double patenting and remanded this issue to the trial court. The Federal Circuit also vacated the judgment that claim 7 of the '349 patent was not infringed and remanded for a new trial on that issue. This decision put several of Amgen's patents at risk for invalidation under the Federal Circuit's recent jurisprudence interpreting the scope of the "safe harbor" of 35 U.S.C. § 121 (Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2008) and Takeda Pharmaceutical Co. v. Doll (Fed. Cir. 2009)). Invalidation of the '933, '349, and '422 patents would have reduced Amgen's patent protection on its various EPO products (including Aranesp® and Epogen®) from May 2015 to August 2012 (more than 3 years), which would have a significant (negative) effect on the corporate bottom line. Thus, by settling, Amgen has avoided invalidation of these three patents, and Roche has avoided any damages or attorneys' fees Amgen may have pursued. Roche also has obtained a date certain for entering the U.S. market with its pegylated EPO product.

For additional information regarding this and other related topics, please see:
• "Obviousness-type Double Patenting after Amgen v. F. Hoffman-La Roche," September 27, 2009
• "Amgen Inc. v. Hoffman-La Roche Ltd. (Fd. Cir. 2009)," September 15, 2009
• "Amgen v. Hoffmann-LaRoche: Remaining Issues," October 13, 2008
• "Amgen v. Hoffmann-LaRoche: Back to the District Court," October 10, 2008
• "Victory for Amgen in District Court Decision - Part III," October 9, 2008
• "Victory for Amgen in District Court Decision - Part II," October 8, 2008
• "Victory for Amgen in District Court Decision - Part I," October 6, 2008
• "BIO Submits Amicus Brief in Amgen v. Hoffman-LaRoche," July 7, 2008
• "How to Avoid a Permanent Injunction: The Lessons of Amgen v. Hoffmann-LaRoche," April 28, 2008
• "Glasses Half-full or Half-empty: Hoffman-LaRoche's Different Interpretation of Pfizer v. Teva," April 15, 2008
• "Hoffmann-LaRoche Can't Wait, Files Notice of Appeal to the Federal Circuit," April 11, 2008
• "Will the Federal Circuit's Pfizer v. Teva Decision Spell the End of Amgen's Patent Rights to Recombinant Human Erythropoietin?" March 31, 2008
• "Court Still Cannot Decide on Amgen's Permanent Injunction," March 26, 2008
• "Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)," March 20, 2008
• "Roche Agrees to Court's Conditions for Modifying Preliminary Injunction," March 20, 2008
• "Roche's Mircera® Remains Off the Market (For Now)," March 2, 2008

Posted at 11:48 PM in Injunction, Patent Litigation | Permalink | Comments (2) | TrackBack (0)

December 21, 2009

Science Progress Article Examines Impact of Gene Patents on Research

By Donald Zuhn --

Gene patenting has been a hotly debated topic for at least the past three years. The subject moved back to the forefront when Chicago-Kent College of Professor of Law Lori Andrews and the late Michael Critchton published an article in the November 11, 2006 issue of Parade magazine, in which the two advocated for a Genetic Bill of Rights that would have included a prohibition on gene patents (see "Gene Patenting in the News Again"). The anti-gene patent baton was next passed to Rep. Xavier Becerra (D-CA), who in February 2007 introduced a bill (H.R. 977) in the House that would have prohibited patents from being granted for "a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies" (see "The Continuing Threat to Human Gene Patenting"). And the debate was renewed last May when a group of patients, physicians, academic researchers, and medical societies filed suit against the U.S. Patent and Trademark Office and Myriad Genetics, among others, over several patents claiming human BRCA1 and BRC2 genes and methods for detecting mutations in these genes to diagnose a predisposition to breast and ovarian cancer (see "Association for Molecular Pathology v. U.S. Patent and Trademark Office").

In a recent article in Science Progress entitled "Do Gene Patents Hurt Research?" Timothy Caulfield, the Canada Research Chair in Health Law and Policy and a Professor in the Faculty of Law and School of Public Health at the University of Alberta, added his voice to the discussion. Mr. Caulfield begins the article by asking what the controversy is all about, and responds that:

While the concerns associated with gene patents are varied, one has had the most policy traction: the idea that patents on sequences of genetic information hurt research, especially upstream, basic research. The worry is that patents will hurt science by making it difficult to acquire the rights to all necessary research inputs. Research will slow, become more inefficient and expensive -- or researchers will simply avoid doing research on patented, yet scientifically valuable, genes.

While Mr. Caulfield (at right) acknowledges that "[a]t first blush, all this [anti-gene patenting] policy activity seems to make sense: a logical response to a profound social problem [i.e., the impact of patent tickets or the anti-commons on research]," he quickly concludes that there is one hitch -- in particular, that "[t]here is little evidence that the problem exists." Thus, he writes that while "[t]here is lots of social angst," there is "no good data showing a widespread patent thicket/anti-commons phenomenon."

In support of his conclusion, Mr. Caulfield points to a 2007 study by the American Association for the Advancement of Science, which found "very little evidence of an 'anticommons problem'"; a 2005 study for the National Academy of Sciences, which found that only 1% of scientists surveyed reported suffering a project delay of more than one month due to patents; his own 2009 study of the Canadian genetic research community, which revealed "lots of researcher concern about gene patents, but little evidence that they are actually having a detrimental impact on the research environment"; and Prof. Chris Holman's 2007 paper on the impact of gene patents on innovation and access ("The Impact of Human Gene Patents on Innovation and Access: A Survey of Human Gene Patent Litigation").

Instead of a patent thicket/anti-commons problem, Mr. Caulfield finds that:

While the apparent disconnect between policy concern and evidence is a significant dilemma on its own, I think there is a bigger problem. By focusing on gene patents, we seem to be downplaying other concerns associated with the commercialization ethos that increasingly permeates the research environment.

Thus, he asserts that the real problem is "[c]ommercialization pressure, not patenting," adding that "at the current time, we need to recognize that despite all the noise, there is still no solid evidence that gene patents hurt basic research." Mr. Caulfield does not discount the possibility that such evidence may be generated in the future. But he insists that "arguments for reform must be based on an honest assessment of available evidence -- not on assertions that conflict with the facts." Thus, he sees a need for "more methodologically robust research on the true benefits and harms of patents," which he believes "will allow for a more informed debate on the fundamental patent tradeoff: that is, the granting of a limited-term monopoly for the benefit of society."

For additional information on this and other related topics, please see:
• "Gene Patenting Debate Continues - Round Three," December 17, 2009
• "BRCA Patent Suit to Continue in Southern District of New York," November 2, 2009
• "Empirical Research Fails to Support Gene Patenting Ban," October 22, 2009
• "Gene Patenting Debate Continues - Round Two," August 4, 2009
• "The Unwanted Consequences of Banning Gene Patenting," June 16, 2009
• "Falsehoods, Distortions and Outright Lies in the Gene Patenting Debate," June 15, 2009
• "Gene Patenting Debate Continues," June 9, 2009
• "Association for Molecular Pathology v. U.S. Patent and Trademark Office," May 17, 2009
• "Court Report: Special Edition," May 13, 2009
• "Gene Patenting and the Wisdom of Judge Lourie," April 12, 2009
• "Genetic Diagnostic Testing: The "Anti-Commons" Revisited?" March 25, 2009
• "Science Article Should Help Allay Gene Patenting Fears," December 17, 2008
• "The Continuing Threat to Human Gene Patenting," October 16, 2007
• "Science Fiction in The New York Times," February 13, 2007
• "The Continuing Value of Biotech Patenting," February 4, 2007
• "Anti-Patent (Sullivan?) Malice by The New York Times," January 29, 2007.
• "In Support of Gene Patents," December 6, 2006
• "Gene Patenting in the News Again," December 5, 2006

Posted at 11:59 PM in Patentable Subject Matter | Permalink | Comments (6) | TrackBack (0)

USPTO Announces Changes to PKI Certificate Usage Policy

By Christopher P. Singer --

In a Notice published in the December 17, 2009 Federal Register (74 Fed. Reg. 66955 ), the U.S. Patent and Trademark Office announced changes to its previously published procedures (October 27, 2009 Federal Register Notice, 74 Fed. Reg. 55200) relating to usage of public key infrastructure (PKI) certificates. According to the Notice, the revised procedures are effective as of December 17, 2009.

As background, the PKI certificate is the unique electronic code that is provided by the PTO's Electronic Business Center to registered practitioners and allows for access to Private PAIR and the filing of applications and follow-on documents through the EFS-Web. The prior PKI subscriber agreement allowed certificate holders to designate only a single employee or contractor to use the certificate "under the direction and control" of the holder. By the letter of this rule, it seemed that if more than one person other than the certificate owner and the single designee were using the certificate, such usage would be in violation of the user agreement. For practitioners employed by organizations of any size, or having a limited number of registered agents/attorneys, this could potentially present a significant bottleneck in EFS-Web and/or Private PAIR usage, or create an inadvertent violation of terms of the agreement. In response to the October publication, the Office received a number of responses, inquiries, and comments from current users of EFS-Web and Private PAIR. The Office, in response to the outcry, has decided to expand the PKI usage procedures to allow for the designation of more than one user other than the certificate holder.

In particular, the newly published procedures allow for a "reasonable number" of authorized users to have access to and use a single PKI certificate as long as the usage is under the direction and control of the PKI certificate holder. The Notice notes that designated users "should be paralegals or support staff of the certificate holder" specifying that the designee "must be either an employee of the holder's organization or an employee of a contractor." The overall motivation for the change in procedures arises from the desire to "provide users more flexibility and meet users' needs for multiple concurrent usage of the USPTO electronic systems." Nevertheless, it is important that each PKI certificate holder directs the usage of his or her individual certificate, as any submission associated with a PKI certificate is treated as though it was made by the holder.

One important consideration to keep in mind relates to restriction on technology export. Particularly technology and software in unpublished patent applications may be subject to export controls outlined in the Export Administration Regulations (15 C.F.R. §§ 730-774). The agreement explicitly states, "[i]f a designated employee is not a U.S. citizen, I understand that the designated employees' access to the technology and software constitutes an export" and that "[a]ccess to such technology and software by any person located outside the United States or by a foreign national inside the United States constitutes an export that may require a license from the U.S. Commerce Department's Bureau of Industry and Security ("BIS"). I agree not to use (and to make sure that each designated employee will not use) or permit the use of the USPTO certificate in a manner that would violate or circumvent the Export Administration Regulations."

The Federal Register Notice includes thirteen FAQs that describe certain hypothetical user arrangements and whether those arrangements are appropriate under this usage agreement. The Notice concludes by presenting the actual revised PKI subscriber agreement in full (about one and a half pages).

Posted at 11:55 PM in Patent Office Rules & Procedures | Permalink | Comments (0) | TrackBack (0)

December 20, 2009

USPTO Proposes New Procedure for Treating Rejected Claims That Are Not Appealed

By Sarah Fendrick --

Last week, the U.S. Patent and Trademark Office published a notice in the Federal Register (74 Fed. Reg. 66097) proposing changes in the procedure for handling notices of appeal and appeal briefs that identify fewer than all of the rejected claims as being appealed. Under the change, rejected claims that are identified as not appealed in a notice of appeal or appeal brief will automatically be deemed canceled.

Under current procedures, an applicant is not able to appeal only part of an examiner's decision. Under 37 C.F.R. § 1.113(c), a reply to a final Office action must include cancellation of each rejected claim or appeal from the rejection of each rejected claim. Similarly, a reply to a non-final action must cancel each rejected claim subject to any ground of rejection not addressed in the reply. See 37 C.F.R. § 1.111(b). Therefore, in order to comply with either provision, an applicant must file an amendment canceling the non-appealed claim separately from a notice of appeal or appeal brief. Failure to file an amendment separately will result in an appeal of the entire examiner's decision.

The change in procedure would allow applicants to appeal only some of the rejected claims without filing a separate amendment to cancel the non-appealed claims. The non-appealed rejected claims would be deemed canceled as of the date on which the notice of appeal or appeal brief was filed.

To have claims automatically canceled, an applicant must clearly limit the appeal to fewer than all of the rejected claims. If an applicant fails to clearly limit the appeal to only identified claims or there are inconsistencies regarding whether all of the rejected claims are appealed, the appeal will be treated as an appeal of the entire examiner's decision.

The proposed change will be applicable to any notice of appeal or appeal brief filed under 37 C.F.R. §§ 41.31 and 41.37.

Posted at 10:31 PM in Patent Office Rules & Procedures | Permalink | Comments (0) | TrackBack (0)

Court Report

By Sherri Oslick --

About Court Report: Each week we will report briefly on recently filed biotech and pharma cases, and a few interesting cases will be selected for periodic monitoring.

Eli Lilly and Company v. APP Pharmaceuticals, LLC et al.
1:09-cv-01551; filed December 16, 2009 in the Southern District of Indiana

• Plaintiff: Eli Lilly and Company
• Defendants: APP Pharmaceuticals, LLC; APP Pharmaceuticals, Inc.

Infringement of U.S. Patent No. 5,464,826 ("Method of Treating Tumors in Mammals with 2',2'-difluoronucleosides," issued November 7, 1995) following a Paragraph IV certification as part of APP Pharmaceutical's filing of an ANDA to manufacture a generic version of Lilly's Gemzar® (gemcitabine hydrochloride for injection, used to treat non-small cell lung cancer, pancreatic cancer, breast cancer, and ovarian cancer). View the complaint here.

Syngenta Seeds, Inc. v. Bayer Bioscience N.V.
1:09-cv-02370; filed December 15, 2009 in the District Court of the District of Columbia

Declaratory judgment of non-infringement and invalidity of U.S. Patent Nos. 5,866,784 ("Recombinant Plant Expressing Non-Competitively Binding Insecticidal Crystal Proteins," issued February 2, 1999), 5,908,970 ("Recombinant Plant Expressing Non-Competitively Binding BT Insecticidal Crystal Proteins," issued June 1, 1999), and 6,172,281 (same title, issued January 9, 2001) based on Syngenta's development and anticipated sales of corn containing combinations of insect resistance derived from the bacterium Bacillus thuringiensis. View the complaint here.

Cephalon France et al. v. Mylan Pharmaceticals, Inc. et al.
1:09-cv-00165; filed December 14, 2009 in the Northern District of West Virginia

• Plaintiffs: Cephalon France; Cephalon, Inc.
• Defendants: Mylan Pharmaceticals, Inc.; Mylan Inc.; Matrix Laboratories Ltd.; Matrix Laboratories Inc.

Cephalon Inc. et al. v. Mylan Pharmaceuticals Inc. et al.
1:09-cv-00954; filed December 11, 2009 in the District Court of Delaware

• Plaintiffs: Cephalon Inc.; Cephalon France
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.; Matrix Laboratories Ltd.; Matrix Laboratories Inc.

Cephalon, Inc. et al. v. Actavis Group et al.
2:09-cv-06239; filed December 10, 2009 in the District Court of New Jersey

• Plaintiffs: Cephalon, Inc.; Cephalon France
• Defendants: Actavis Group; Actavis Pharma Manufacturing Pvt. Ltd.; Actavis Inc.

The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. RE37,516 ("Acetamide Derivative Having Defined Particle Size," issued January 15, 2002) and 7,132,570 ("Method for the Production of Crystalline Forms of Optical Enantiomers of Modafinil," issued November 7, 2006) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Cephalon's Nuvigil® (armodafinil, used to improve wakefulness in patients with excessive sleepiness associated with obstructive sleep apnea/hypopnea syndrome, narcolepsy, and shift work sleep disorder). View the Delaware Mylan complaint here.

Wyeth Holdings Corp. et al. v. Sandoz Inc.
1:09-cv-00955; filed December 11, 2009 in the District Court of Delaware

• Plaintiffs: Wyeth Holdings Corp.: Wyeth-Ayerst Lederle LLC
• Defendant: Sandoz Inc.

Infringement of U.S. Patent No. RE40,183 ("7-Substituted-9-Substituted Amino-6-Demethyl-6-Deoxytetracyclines," issued March 25, 2008), licensed to Wyeth-Ayerst Lederle, following a Paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Wyeth's Tygacil® (tigecycline injectible, used for the treatment of complicated skin and skin structure infections, complicated intra-abdominal infections, and community-acquired bacterial pneumonia caused by susceptible strains of designated microorganisms). View the complaint here.

Seattle Children's Hospital et al. v. Teva Parenteral Medicines Inc. et al.
1:09-cv-00949; filed December 10, 2009 in the District Court of Delaware

• Plaintiffs: Seattle Children's Hospital; Novartis AG; Novartis Vaccines and Diagnostics Inc.; Novartis Pharmaceuticals Corp.
• Defendants: Teva Parenteral Medicines Inc.; Teva Pharmaceutical Industries Ltd.; Teva Pharmaceuticals USA, Inc.

Infringement of U.S. Patent No. 5,508,269 ("Aminoglycoside Formulation for Aerosolization," issued April 16, 1996) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Novartis' TOBI® (tobramycin inhalation solution, used in the management of cystic fibrosis patients with Pseudomonas aeruginosa). View the complaint here.

Posted at 10:16 PM in Court Report | Permalink | Comments (0) | TrackBack (0)

Conference & CLE Calendar

January 6-10, 2010 - 27th Annual National CLE Conference (Law Education Institute, Inc.) - Vail, CO

January 20-21, 2010 - Life Sciences IP Due Diligence (American Conference Institute) - New York, NY

January 25-26, 2010 - European Pharmaceutical Regulatory Law Boot Camp (American Conference Institute) - New York, NY

January 26-27, 2010 - Advanced In-House Counsel Forum on China IP Law (C5) - Shanghai, China

January 27-28, 2010 - Pharma & Biotech Patent Litigation (C5) - Amsterdam, Netherlands

February 9, 2010 - Patent Prosecution: Best Practices for Reducing Costs While Improving Patent Quality (Technology Transfer Tactics) - 1:00 - 2:30 PM (EST)

February 24-25, 2010 - 2nd Expert Forum on ITC Litigation & Enforcement (American Conference Institute) - New York, NY

March 2-4, 2010 - 6th Annual Biosimilars Conference (Visiongain) - Boston, MA

***Patent Docs is a media partner of this conference or CLE

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December 18, 2009

ITC Litigation & Enforcement Conference

American Conference Institute (ACI) will be holding its 2nd Expert Forum on ITC Litigation & Enforcement from February 24-25, 2010 in New York, NY. The conference will offer practical advice for seizing the opportunities and meeting the challenges offered by fast-paced ITC litigation and allow attendees to:

• Evaluate and compare the potential benefits of selecting ITC or another venue;
• Navigate the ITC's complex procedural rules;
• Understand and resolve questions relating to "domestic industry" standards;
• Meet the demands of accelerated motion practice and discovery;
• Implement effective defense and intervention strategies in a Section 337 action; and
• Enforce ITC exclusion orders.

In particular, ACI's faculty will offer presentations on the following topics:

• Evaluating where to litigate international IP disputes;
• Positioning complainants, respondents and intervenors in Section 337 cases;
• Successfully working the logistics of Section 337 litigation;
• Keynote address by Chief Judge Paul R. Michel of the U.S. Court of Appeals for the Federal Circuit;
• Coordinating related parties & proceedings;
• Managing litigation through discovery, claim construction, summary determination and trial;
• Meeting the challenge of the ITC’s unique trial procedures;
• View from the Bench -- Chief Administrative Law Judge Paul J. Luckern, Administrative Law Judge Theodore R. Essex, and Administrative Law Judge Robert K. Rogers of the U.S. International Trade Commission;
• Seeking commission review and modification of ALJ decisions;
• The year in review -- Commission and Federal Circuit decisions in Section 337 cases;
• Understanding and maximizing the available remedies in Section 337 ITC cases;
• Seeking enforcement of exclusion orders;
• Successfully appealing Section 337 determinations;
• A view from the ITC General Counsel's office;
• Keynote address by Shara Aranoff, Chairman of the International Trade Commission;
• Handling ITC ancillary proceedings and parties;
• Addressing downstream remedy strategies post-Kyocera;
• Meeting the challenges faced by in-house counsel in Section 337 cases; and
• Meeting the challenges raised when assisting foreign companies in the ITC with focus on Asian companies.

Two breakout sessions will be offered from 9:00 am to 12:00 pm on February 26. The first will address Section 337 complaints and responses, and the second will address enforcement of ITC exclusion orders.

A complete brochure for this conference, including an agenda, list of speakers, and registration form can be downloaded here. The registration fee for the conference ranges from $2,195 (conference alone) to $2,795 (conference and breakout session). Those registering by January 5, 2010 will receive a $300 discount off the registration fee and those registering by January 29, 2010 will receive a $200 discount off the registration fee. Those interested in registering for the conference can do so here, by calling 888-224-2480, or by faxing a registration form to 877-927-1563.

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Audioconference on Patent Prosecution Cost Reduction

Technology Transfer Tactics will be offering an audioconference entitled "Patent Prosecution: Best Practices for Reducing Costs While Improving Patent Quality" on February 9, 2010 from 1:00 - 2:30 PM (EST). Dr. Jean Baker and Jack Cook of Quarles & Brady will provide specific prosecution strategies that Technology Transfer Offices can adopted to significantly reduce legal bills while improving overall patent quality. The audioconference will address the following topics:

• Disclosure evaluation: Strategies for distinguishing what TTOs can patent from what TTOs should patent to avoid unnecessary filing costs;
• Strategies for increasing the probability of successful licensing at the disclosure stage
• Ten proven tips for TTOs to reduce patent preparation costs;
• Working with researchers to enhance disclosures and claims construction;
• Reducing unnecessary paperwork and associated attorney costs; and
• Structuring patent prosecution: Practical strategies for TTOs and licensees to increase the efficiency of prosecution, while reducing the cost and staff burden.

The registration fee for the seminar is $197. Those interested in registering for the seminar, can do so here.

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Biosimilars Conference

Visiongain will be holding its 6th Annual Biosimilars Conference on March 2-4, 2010 in Boston, MA. At the conference, Visiongain faculty will offer presentations on the following topics on March 3-4:

• Opportunities and challenges for biosimilars in the global market;
• Commercializing biosimilars: Will they really be able to compete?
• Demystifying the market aspects/implications of follow on biologics;
• The impact of a patient centric viewpoint on biosimilars;
• Strategies for process development/manufacturing of biosimilars (for global markets);
• Bioassays for biosimilars;
• Immunogenicity Programs -- Not just another box to check;
• Role of USP standards in the quality assessment of biological medicines;
• An overview on regulatory and scientific issues of biosimilars and follow-on biologics;
• Legislative and regulatory developments impacting the biologics and biosimilars marketplace;
• Trends and technical challenges for the development of biosimilars in China;
• Follow-on Biologics (Biosimilars) development with approval and market access;
• Biosimilars -- Succeeding in the market of the future; and
• Clinical Phase 1 PK/PD trials for biosimilar/follow-on products.

In addition, a pre-conference interactive biosimilars workshop entitled "Creating confidence in a new wave of biologics therapy -- Overcoming barriers to entry" will be offered on March 2. The agenda for the Biosimilars Conference can be found here. A complete brochure for this conference, including an agenda, list of speakers, and registration form can be downloaded here (free registration required).

The registration fee ranges from £1299 ($2,099.31) for the conference alone to £1699 ($2,745.75) for the conference and workshop; the fee for attending the workshop alone is £599 ($968.04). Those interested in registering for the conference can do so here.

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December 17, 2009

Gene Patenting Debate Continues - Round Three

By Donald Zuhn --

Last week, National Public Radio's Science Friday, which is broadcast nationwide as part of NPR's Talk of the Nation, examined the issue of gene patenting. The debate over gene patenting reignited in May as a result of the Association for Molecular Pathology v. United States Patent and Trademark Office case, in which a group of patients, physicians, academic researchers, and medical societies filed suit against the U.S. Patent and Trademark Office and Myriad Genetics, among others, over several patents claiming human BRCA1 and BRC2 genes and methods for detecting mutations in these genes to diagnose a predisposition to breast and ovarian cancer (see Patent Docs reports here and here). Since then, two public radio debates have focused on the issue.

In June, Dr. Hans Sauer, the Associate General Counsel for Intellectual Property for the Biotechnology Industry Organization (BIO); Joshua Sarnoff, Professor of the Practice of Law at American University's Washington College of Law; and Shobita Parthasarathy, Co-Director of the Science, Technology and Public Policy Program at the Ford School of Public Policy at the University of Michigan discussed the topic on WAMU, Washington, DC's leading public radio station (see "Gene Patenting Debate Continues"). And last August, Kevin Keenan, Executive Director of the ACLU for San Diego and Imperial Counties; Stacey Taylor, a partner at DLA Piper; and Dr. Leonard Deftos, Professor of Medicine in Residence at the University of California, San Diego, and Adjunct Professor of Law at California Western School of Law tackled the issue on San Diego's KPBS "These Days" program (see "Gene Patenting Debate Continues - Round Two"). This past Friday, Patent Docs author Dr. Kevin Noonan, a partner at McDonnell Boehnen Hulbert & Berghoff, and Daniel Ravicher, the Executive Director of the Public Patent Foundation (PUBPAT), which is serving as co-counsel in the Association for Molecular Pathology case, squared off in a third debate on the topic on NPR's Science Friday.

Science Friday host Ira Flatow (at right) began the program by asking Mr. Ravicher why the lawsuit was brought. Mr. Ravicher replied that the suit was "about whether or not the government has the right to grant exclusive rights to one company over our genes" as well as the knowledge of gene mutations that might relate to a predisposition for particular types of diseases. He added that the suit was filed because Myriad Genetics, which co-owns the seven patents-in-suit, had been asserting the patents in a way that "crack[s] down on anyone else doing any research" and "anyone else doing . . . second opinion testing." After Mr. Flatow noted that the PUBPAT website describes gene patent holders as having "the right to prevent anyone from studying, testing, or even looking at a [patented] gene," Mr. Ravicher declared that "there's absolutely conclusive ownership of the gene by the patent holder."

Mr. Flatow then turned to Dr. Noonan (at left) for a response, asking whether he agreed with Mr. Ravicher's assessment. Dr. Noonan conceded that Mr. Ravicher was "technically correct," but before he could opine further, Mr. Flatow asked whether it was true that "people aren't even able to look at the gene?" Noting that "[t]he National Library of Medicine has a list of most of the major scientific journals in the U.S. and abroad," Dr. Noonan revealed that a search of the collection for BRCA references yielded "almost 3,500 papers that have been published about these genes, some as recent as last month." (In addition, a search of the NCBI PubMed database yields 1,145 references containing "BRCA" in the title or abstract.) In view of the NLM search results, Dr. Noonan contended that "the idea that people are not doing scientific research on these genes is just wrong," explaining that "[w]hat people are not being [allowed] to do, and what some of the named plaintiffs in this lawsuit are trying to do, is provide clinical testing." According to Dr. Noonan, it was the commercial use of the BRCA sequences, and not the research use of the sequences, that was precluded. Mr. Ravicher, however, replied that he represented researchers at the University of Pennsylvania, Emory University, and the University of California-Los Angeles, all of whom had received "very nasty letters" from Myriad saying that "[w]e know that you are doing things with these genes that relate to breast and ovarian cancer, and you shall stop or pay us money." He added that "BRCA analysis at the University of Pennsylvania [had been] shut down because of Myriad's patent assertion."

Returning from a short break, Dr. Noonan noted that he was on the program to defend gene patenting (and not necessarily Myriad), stating that "it would be a mistake for the United States government -- whether through the courts, through Congress, or through the Patent Office -- to not allow genes to be patented." When asked why this would be a mistake, he replied that "[b]esides being contrary to 200 years of natural products patenting," a prohibition on gene patenting would adversely impact the disclosure of gene sequences and investment in biotechnology. Explaining that "in the biotechnology space, investment is critical," Dr. Noonan noted that "[m]ost of the companies that do this are small companies like Myriad, and unless there's some way for investors -- in something that's very high risk and [where] most of the products fail -- to get their investment back, you're not going to have investment." As a result, "you don't have the drugs and the diagnostics that the biotechnology industry has developed over the past 25 years, and I think that we're in worse shape if we don't have them."

In response, Mr. Ravicher (at right) argued that "[t]here are valid reasons to have patents on many things, but you can have patents on too many things, and there's a line that's been drawn by the Supreme Court, and we fully believe that these patents land on the wrong side of that line." When pressed by Mr. Flatow to discuss the impact of the lawsuit on investment, Mr. Ravicher noted that "patents have both an incentivizing and a chilling effect," and analogized gene patents with a patent on the law of gravity, stating that "the Supreme Court has said that you can't patent some things [that] are basic laws of nature because that would have such a dramatic, countervailing chilling effect on everyone else -- all 300 million other Americans and any research that they might do on that subject -- that granting a [patent] to that one party isn't worthwhile."

Mr. Flatow next asked Dr. Noonan whether he could patent a cure for cancer discovered in the course of doing research on a patented gene. After Mr. Flatow outlined a lengthy hypothetical involving Bill Gates, Dr. Noonan observed that "we could spin hypotheticals all day, but it gets down very much to what exactly is it that you're doing." Dr. Noonan added that "if you isolate [a patented] gene and use it, then you would be infringing," but "whether or not that would be something that you would be sued for . . . would depend on the circumstances." When Mr. Flatow asked whether a patent holder could bring suit for "any arbitrary reason," Dr. Noonan responded that Rule 11 of the Federal Rules of Civil Procedure precluded such a suit, and "[y]ou have to have a good faith belief that somebody has infringed your patent." Mr. Ravicher, however, noted that Rule 11 did not apply "to sending nasty letters." Explaining that a lot of researchers were either universities that have "very skittish university counsel offices" or small businesses that "could never afford to defend themselves," Mr. Ravicher argued that "[m]erely the threat of a lawsuit just through a letter, which doesn't have to meet Rule 11, often chills conduct that most reasonable people would agree would never be covered by a valid claim of any patent."

Turning to the impact of the claim term "isolated," Mr. Ravicher argued that:

[M]ost reasonable people would agree that if the patents were just on the BRCA genes, that would not be valid because that exists in our body -- the genes exist in our body. It's that these patents say an "isolated gene," and the Patent Office . . . said that . . . if you isolated the gene, then that's patentable. And we just think that's incorrect. That's like saying I can go out into nature, I can dig up some gold, I can isolate it from the mountain, and well now I deserve a patent on gold, and that's just not the law.

(Mr. Ravicher also contended that the decision to grant gene patents containing claims reciting "isolated" sequences was related to the "very pro-business, pro-patent Administration" under which authority the Office operated.) With regard to the patentability of natural products, Dr. Noonan countered that antibiotics made by bacteria and the anti-cancer drug taxol, which is produced in the bark of the yew tree, were both examples of patentable natural products. As for the BRCA genes, he contended that:

(a) they're not identical to what's in the chromosome, (b) they're not in the chromosome anymore, and (c) they are much more converted [or] changed as the Supreme Court would say by the "hand of man," than . . . taxol from the yew tree. So if you're going to use the traditional standards of what you have to do to change something that is found in nature to make it patentable, these genes satisfy that criteria hands down.

Acknowledging that "Kevin does an excellent job of presenting our opponent's point of view," Mr. Ravicher noted that the plaintiffs in the BRCA case nevertheless disagreed. According to Mr. Ravicher, "[a]ll those isolated natural product claims have never been upheld by the Supreme Court, and we think they would be invalid under binding precedent."

For the last portion of the program, Mr. Flatow took calls from listeners. The first caller stated that while she couldn't "fault the company Myriad, because they are the holders of the patent that was granted legally," and therefore she didn't "see any point in any lawsuits against them," she appeared to favor Mr. Ravicher's argument regarding the claim term "isolated," and thus saw "quite a bit of validity in complaints or suits against the U.S. Patent Office." Mr. Ravicher noted that he:

[W]ould disagree [with the caller] when she concedes that these patents are legal. There are many things done under our previous Administration that were not legal. Just because the Patent Office has granted a patent doesn't mean it's actually valid. In fact, about half of the patents granted by the Patent Office and that are later litigated in court are found to be invalid. They were wrongly granted by the Patent Office. That's because the Patent Office has been created to be a pure patent-issuing Office under previous Administrations. Under the new Administration, we expect that to change. So I would not concede that these patents are valid just because they were granted.

Unfortunately, Mr. Ravicher's attack on patent validity has some holes. As an initial matter, Mr. Ravicher provided no support for his assertion that "about half of the patents . . . litigated in court are found to be invalid." According to the Patstats.org, however, in cases where patent validity was at issue, the patent holder prevailed 59.8% of the time in 2008. Mr. Ravicher's comment about patent validity also glosses over the motivation of accused infringers to invalidate asserted patents, as well as the impact of recent Federal Circuit decisions (e.g., KSR International Co. v. Telflex Inc.) on patents that were examined and granted years ago. With respect to Mr. Ravicher's comment that the USPTO had been "created to be a pure patent-issuing Office under previous Administrations," one hopes that he was not referring to the most recent Administration, as the Office's efforts to push through the claims and continuations rules (among other rules packages) and "reject, reject, reject" mantra contradict such a characterization.

Turning to the cost of Myriad's test, Mr. Flatow asked Dr. Noonan whether there wasn't "something ethically, morally wrong with not allowing someone to come up with a cheaper test that potentially cancer patients can afford." Dr. Noonan responded that he didn't have "any evidence that Myriad is the most profitable company in the country, or that what they're charging is excessive," adding that if Myriad was "making money hand over fist and w[as] on Forbes' front cover as the most profitable biotechnology company, maybe you'd have an argument." He argued that Myriad appeared to be charging an amount that merely "justified the investment to [develop] the test in the first place."

The second caller to the program admitted that she was "still a little unclear on this isolating of the gene," and asked:

I have the gene, right? It's in me? So they've isolated it, but I have the gene, right? So, why don't I have the patent on the gene, or why can't I sue Myriad?

Agreeing with the caller, Mr. Flatow exclaimed that Myriad was "using your gene!" and asked Dr. Noonan for comment (while also accusing him of "trying to make light" of the caller's question). Dr. Noonan argued that he was not making light of the question, and added that the caller's (and Mr. Flatow's) comment was "the emotional crux of the ACLU lawsuit." He contended that:

[N]obody is going to knock on your door, like Michael Crichton said in a New York Times editorial a few years ago, and give you a bill for using your gene. That's just -- it's great -- it gets people all excited and all upset, but it's just -- frankly, at the end of the day, it's a lie.

The third (and final) caller observed that "the recommendation typically for women who test positive for the BRCA gene is to have a double mastectomy and their ovaries removed, and it's troubling that you can do this and you can't really get a second opinion," and noted that "[t]here's no other company you can go to get this test done before you have this very radical life changing surgery." Dr. Noonan replied that he had "spoken with some people at Myriad [who] say nobody ever asked them for the second diagnosis," and therefore speculated that "the second opinion option is one that may still be out there." Mr. Ravicher, however, asserted that he had "actually written a letter to Myriad on behalf of my client who has already paid [for one test]," and that Myriad had "refused to grant our client in this lawsuit the right to get a second opinion." Dr. Noonan asked Mr. Ravicher whether this letter had been sent to Myriad after the lawsuit was filed, and Mr. Ravicher acknowledged that it had.

After Mr. Ravicher suggested that an individual could get a second opinion outside the U.S. "because these gene patents are not allowed in most other countries in the world," Mr. Flatow compared such an option with the dilemma facing women prior to Roe v. Wade. Mr. Ravicher noted that he had "seen another analogy, which was with respect to patents on human embryonic stem cells in this country, which were granted [in the U.S.] but not granted in other countries." He suggested that these patents had forced "many researchers . . . to move their labs to foreign countries like Singapore because the [stem cell] patents didn't exist there." Exposing the flaw in Mr. Ravicher's analogy, Dr. Noonan pointed out that "the reason those labs moved offshore was the Bush Administration's restriction on the cell lines," rather than the assertion of stem cell patents.

While Mr. Flatow's guests found little common ground, they did agree on one thing at the conclusion of the debate: that the case would likely be appealed to the Federal Circuit regardless of who wins at the District Court level.

For additional information regarding this and other related topics, please see:
• "BRCA Patent Suit to Continue in Southern District of New York," November 2, 2009
• "Empirical Research Fails to Support Gene Patenting Ban," October 22, 2009
• "Gene Patenting Debate Continues - Round Two," August 4, 2009
• "The Unwanted Consequences of Banning Gene Patenting," June 16, 2009
• "Falsehoods, Distortions and Outright Lies in the Gene Patenting Debate," June 15, 2009
• "Gene Patenting Debate Continues," June 9, 2009
• "Association for Molecular Pathology v. U.S. Patent and Trademark Office," May 17, 2009
• "Court Report: Special Edition," May 13, 2009
• "Gene Patenting and the Wisdom of Judge Lourie," April 12, 2009
• "Science Article Should Help Allay Gene Patenting Fears," December 17, 2008

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December 16, 2009

Patent Reform Efforts Opposed by Small Business Group

By Kevin E. Noonan --

Until now, the major bones of contention over the Senate's patent "reform" bill (S. 515) have centered around two provisions: putting in place statutory language governing how damages are to be assessed, and instituting a post-grant review system modeled on the European opposition, and that will be more extensive than current re-examinations. These provisions have been the motivating force for a variety of "high-tech" companies (predominantly information technology companies like Cisco and Intel) and their lobbying arms (such as the Coalition for Patent Fairness (sic)), aimed at addressing "unconscionable" damages verdicts (typically but not always by juries) and the purportedly "low quality" of patents being granted by the U.S. Patent and Trademark Office. A major breakthrough in passing the bill from the Senate Judiciary Committee was a "compromise" worked out by Chairman Leahy (D-VT), Senator Feinstein (D-CA), and then ranking Republican member Specter (R-PA) (see "Senate 'Patent Reform' Bill (S. 515) Voted out of Judiciary Committee"). In that compromise, the judge in a patent infringement case would assume a "gatekeeper" role, purportedly to stem the worst excesses of easily-swayed juries.

The resulting bill enjoyed bipartisan but not universal support, with notable dissenting views voiced by Senators Hatch (R-UT) and Kyl (R-AZ); indeed, Senator Hatch stormed from the hearing room oblivious to Senator Leahy's entreaties not to go. Senator Kyl, as he has with regard to prior versions of the bill, objected that Patent Office representatives had not been consulted regarding whether the post-grant review provisions were realistic in terms of personnel and the Office's budget.

Missing from the fray has been any objection to some of the other aspects of the bill, specifically the change from a "first-to-invent" to a "first-to-file" (FTF) system, which reflects a major change in U.S. law. Another provision (not contained in S. 515 but contained in other versions) is the grant of substantive rulemaking authority to the Patent Office. Such provisions are a major goal of the new Commerce Secretary Gary Locke and (presumably) new USPTO Director David Kappos.

This situation changed this week, with the delivery of a letter and supporting materials to Karen G. Mills, administrator of the Small Business Administration, by the Small Business Coalition on Patent Legislation, a coalition of "early-stage start-up companies, small businesses, individuals, academic inventors, researchers and new innovative market entrants" (including the National Small Business Association, the National Association of Patent Practitioners, the Professional Inventors Alliance, the United Inventors Association, CONNECT, and IP Advocate. In their letter (copied to Penny Pickett and Susan Walthall of the SBA, as well as Secretary Locke, Director Kappos, and Rep. Nydia M. Velazquez (D-NY), Chairwoman of the House Small Business Committee, and Senator Mary L. Landrieu (D-LA), Chair of the Senate Committee on Small Business and Entrepreneurship), the group expresses their "concerns" about the bill, focusing primarily on the first-to-file and post-grant review provisions (although they also express reservations about the PTO rulemaking portions of the bill in supporting materials appended to the letter). The letter references Secretary Locke's earlier letter to the Judiciary Committee, where the Secretary expressed the support of the Obama Administration for these provisions, which this group's letter contends "will inflict unprecedented harm on small firms that rely on patented innovations," the "very segment of the economy that is responsible for most of America's new jobs." The group characterizes the Secretary's position as a departure from "a decades-long, bipartisan foreign intellectual property policy position," something that is accomplished, according to the group, not by addressing the "very small number of priority contests" (interferences), but that "rewrite[s] Section 102 in its entirety, redefining the prior art . . . and weakening the grace period." These changes have been proposed, they allege, without any study or evaluation of the expected effects of the change on U.S. patent practice, nor the effects (adverse, they claim) on patent quality of increased PTO workload. They cite a study from McGill University (Lo and Sutthiphisal, "Does It Matter Who Has the Right to Patent: First-to-Invent or First-to-File? Lessons from Canada," NBER Working Papers, No. W14926 (April 2009)) showing "adverse" effects on small businesses in Canada and "generally negative effects on patent quality" as a consequence of Canada's adoption of a first-to-file system in 1989.

The letter also refers to comments made by Director Kappos at the Independent Inventors' Conference (on November 5, 2009) purporting to base the Office's support for the change on the burden of interference practice. The group contests whether the "miniscule number of interference proceedings" have much to do with the harm they contend would follow from the change, from both harm to small businesses and decline in patent quality. They catalog these adverse consequences as follows (emphasis in original):

Focusing on applications that reach the USPTO misses the point. The harmful effects of FTF for small startups and early-stage patenting firms will be in losing patent protection on inventions for which applications will not, or could not, reach the USPTO. Harm will arise due to the "race to the patent office" whether or not an interference occurs with a competing application. Harm will be inflicted when inventors race to the patent office with the wrong application, for the wrong invention, and for the wrong reasons, exhausting precious resources in the process.

The letter also contests the argument that a first-to-file system would provide administrative convenience and increased certainty, contending instead that such a system would shift uncertainty onto small business to the advantage of "large patenting firms." The letter cites the lack of in-house patent prosecution resources, less or more inconsistent funding and the need to disclose technology to investors as putting small businesses at a disadvantage to such "large patenting firms." The letter references its supporting materials, particularly an "actual profile of a five-year R&D and invention effort of one startup member of [the] Coalition" in support of its contentions of differential harm to small businesses (slide 12):

The letter characterizes this slide as showing fifty important inventive ideas "conceived, evaluated and tested" over months or years, and that the majority of these inventions turned out to be "useless." Accordingly, during this time, the letter says that only six patent applications were filed. Under a first-to-file system, the letter contends that this company would have faced the "painful dilemma as to which of these inventions should be written up and filed," presumably without the benefit of the time to establish which of the fifty inventions were appropriate for filing. These "premature guesses" would in the main have been wrong, i.e., directed to inventions later shown to be "useless," resulting in patent protection being obtained (or at least applied for) for such inventions and other, ultimately more appropriate inventions failing to obtain patent protection.

The consequence of changing to a first-to-file system would be "great risks, costs, dilemmas and increased patent prosecution uncertainties" for small businesses, the letter contends. This will "undermine early-stage startups' ability to attract investment capital, an assertion supported by additional information in the supporting materials (see Slide 6). The letter makes the following argument regarding whether anyone has considered the consequences of the FTF change (emphasis in original):

A related practical problem with FTF is shown in Slide 23 [of the supporting materials], which shows that prior art published less than one year before the filing date is the most frequent source for invalidating patent applications in the European Patent Office (EPO), which operates under FTF law. This category of prior art currently cannot be used to block or invalidate patents, because the U.S. has a one-year "grace period." Yet, no one had studied the number of U.S. patents that will be invalidated by such prior art published after the invention date if FTF were adopted, or the chilling effect that this loss of U.S. patent protection would have on innovation. Initial detailed legal analysis of the proposed change in S. 515 reveals several of its flaws. The analysis shows that it creates strong incentives for making early nonenabling "springing public disclosures" in order to pre-empt later filed patent applications that are enabling from being granted as patents. Such "springing public disclosures" will also allow second inventors who file second to obtain the patent (citing B. Pedersen and J. Woo, "The 'Matrix' for First-Inventor-To-File: An Experimental Investigation into Proposed Changes in U.S. Patent Law", (December 4, 2009).

The letter characterizes as "a troubling aspect" of the Patent Office's "advocacy of the transition to FTF" the "apparent lack of data and models within its field of expertise" with regard to the "inevitable increase" of patent application filings that would result. The letter cites statistics from the European Patent Office that almost 60% of the applications filed in the EPO are abandoned prior to examination, in contrast to a 16% abandonment rate of U.S. patent applications prior to examination. The letter attributes this difference to the pressures accompanying the first-to-file regime, and concludes that under such a system "it takes more than two times the number of applications . . . in order to obtain one surviving application worthy of examination for patent protection" (emphasis in original). The USPTO has "totally ignored these costly inefficiencies," the letter contends.

The letter also predicts "dire financial collateral consequences" of a change to a first-to-file system. In contrast to the European system, where a search report is generated prior to examination on the merits (after which about one third of the applications are abandoned), in the U.S. a search is provided only after a first action on the merits. Thus, in the U.S., the PTO would be expending "search and examination resources on applications that would otherwise" never be examined. This would result in a "substantial increase" in the Office's upfront expenses without a concomitant increase in grant and maintenance fees, requiring "inevitable" increases in filing fees to account for these increased costs. The letter contrasts the percentage of total patent fees garnered at the initial phases of the patenting process in the U.S. (27%) and Canada (60%), contending that this increase in initial fees would disproportionally impact small businesses and startups which would otherwise be able to defer these costs until later in the commercial development cycle.

This portion of the letter concludes by disputing the assertions in Secretary Locke's letter suggesting that changing to a first-to-file system would "'simplify the patent system, reduce legal costs [and] improve fairness,'" and that the "'complex, time-consuming and resource intensive' costs of global patent procurement are the supposed target of this 'reform.'" There is simply no evidence for any of this, the letter asserts, and in fact there is "ample evidence" to the contrary. The letter also notes that this change merely "give[s] away one of the few 'negotiating chips' the U.S. retains to encourage foreign patenting authorities to move in directions helpful for U.S. small business."

With regard to post-grant review, the letter voices agreement with the concerns raised in the letter sent to Secretary Locke by 56 companies on September 14, 2009 (see "Tech Companies Send Letter on Patent Reform to Secretary Locke"). The letter particularly mentions the risks to small business of "infringers who make repeated challenges to patents after they issue," particularly with provisions that permit "serial" challenges by providing an "extremely low threshold" for obtaining post-grant review, citing Scott Shane, "Problems To Be Expected From Expanded Administrative Challenges To U.S. Patents," (July 20, 2009).

Patent reform has generally taken a back-burner to health care reform and follow-on biologics legislation since the bill was voted out of committee in the spring. In addition to these concerns, Congress has financial reform and global warming bills to contend with in its next session. But there is a real risk that this bill will eventually come to the floor for a vote, and in view of the political constitution of the Congress, it is also likely that the bill, or something very like it, will land on the President's desk before the 111th Congress ends. Insofar as the concerns voiced by the small business coalition resonate, it is once again incumbent that our representatives be made aware of the many flaws of S. 515.

Posted at 11:59 PM in Patent Legislation | Permalink | Comments (5) | TrackBack (0)

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