Patent Docs

FDA Approves First Interchangeable Biological Product

By Kevin E. Noonan --

Last week the U.S. Food and Drug Administration approved an interchangeable biosimilar to insulin glargine, an approval notable because it is the first approved interchangeable biosimilar product.  The product is Semglee (insulin glargine-yfgn), produced by Mylan Pharmaceuticals, Inc., and under this approval, it is interchangeable with Lantus (insulin glargine) made by Sanofi.

The approval was based on the provisions of the Biological Price Competition and Innovation Act of 2009 (BPCIA), enacted with the Affordable Care Act (commonly known as "Obamacare") codified at 42 U.S.C. § 262 et seq.  Subsection (k) relates to the standards for biosimilarity; the FDA (and the statute itself) distinguish between biosimilarity and interchangeability inter alia by applying a heightened standard for interchangeability.  Specifically, the statute requires that an interchangeable product is biosimilar and can be expected to produce the same clinical result as the reference product in any given patient; and that for a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.  42 U.S.C. §§ 262(I)(3) and 262(k)(4).

Insulins are in a unique class of biologic drugs that, for historical reasons, were approved under the Food, Drug, and Cosmetics Act (codified at 21 U.S.C. § 301 et seq.).  The BPCIA provided a sunset date of March 23, 2020 for such approvals; the FDA finalized rulemaking on this change on February 20, 2020.  Under the revised rule, any protein having a defined amino acid sequence of 40 amino acids or longer falls within the statutory definition of the term "protein" and hence is considered to be a "biological product" as defined by the BPCIA (42 U.S.C. § 262(I)).

Semglee (insulin glargine-yfgn) was approved for treatment of Type 1 diabetes (i.e., the juvenile form) diabetes as well as Type 2 diabetes (i.e., the adult-onset form).  The FDA announcement prophesied that "[a]pproval of these insulin products can provide patients with additional safe, high-quality and potentially cost-effective options for treating diabetes."  Acting FDA Commissioner Janet Woodcock, M.D. stated that this approval has "the potential to greatly reduce healthcare costs" (a sentiment that, if true, would be a boon to the sometimes overheated debate over drug prices having insulin as a poster child; see, e.g., "Insulin's Out-Of-Pocket Cost Burden To Diabetic Patients Continues To Rise Despite Reduced Net Costs To PBMs").  This is clearly significant to the over 34 million individuals in the U.S. diagnosed with diabetes.  The Acting Commissioner also hailed FDA's "longstanding commitment to support a competitive marketplace for biological products and ultimately empowers patients by helping to increase access to safe, effective and high-quality medications at potentially lower cost."

As set forth in the FDA's announcement, Semglee (insulin glargine-yfgn) was approved for dispensing in 10 mL vials and 3 mL pens for administration twice daily.

It is not surprising, perhaps, that insulin, a biologically derived drug known since the 1930's would, in its modern embodiments, be the first molecule to satisfy FDA guidance on the standards for interchangeability (see "FDA Issues Final Guidance Regarding Biosimilar Interchangeability").  While there has been some concern with the perceived slow pace of biosimilar uptake by physicians and patients (see "FDA Issues Plan for Further Facilitating Biosimilar Development"), one of the benefits of interchangeability is that physicians' input (and approval) is not needed and can be implemented at the pharmacy level.  While this pathway for FDA approval is less advantageous than with small molecule drugs (which are typically administered by the patient herself as a pill, as opposed to biologic drugs which are infused by a physician or other healthcare provider), the FDA's exultations regarding Semglee's approval are well-taken as an indication not only that the FDA is willing (under the appropriate circumstances) to approve an interchangeable biological product but also as a teaching opportunity for other biosimilar drug makers on how to successfully navigate the FDA's pathway to interchangeability (desirable in addition for the exclusivity provisions only available to interchangeable biosimilar drugs).  Whether a dam-burst of interchangeable biosimilar drug products will now arise of course remains to be seen.

Epic Tech, LLC v. Fusion Skill, Inc. (S.D. Tex. 2021)

Electronic Gaming Patents Found Invalid under § 101

By Joseph Herndon --

In the U.S. District Court for the Southern District of Texas (Houston Division), Plaintiff Epic Tech, LLC (a seller of so-called "sweepstakes games") sued Defendants Fusion Skill, Inc. and Texas Wiz, LLC for infringement of U.S. Patent Nos. 9,589,423 and 8,545,315 with the distribution of gaming systems similar to Epic Tech's sweepstakes games.

The two patents at issue are related to the play of sweepstakes games.  The first patent (the '423 patent) is directed to a method of conducting a sweepstakes game in which a computer-based system operating the game immediately determines and credits a player's account with any prize earned before showing the user the results of the game.  According to Epic Tech, this method is beneficial because it "further reinforces to regulators that the prizes are predetermined and that there is no chance or skill involved in the simulated game."

This is important because gambling is illegal in many states, but various methods of evading this prohibition now exist, including converting a gambling-machine-like game into a lottery-like game.  In this method, the result of the game is not determined by random.  Instead, the system is loaded with a finite number of results—i.e., some number of winning tickets and a larger number of losing tickets—from which a ticket is randomly selected upon initiation of the game.  In other words, whereas in a traditional gambling machine game it would be mathematically possible for a player to lose—or win—one trillion times in a row, the precise number of winners and losers over the long run is predetermined in a lottery-based slot machine.  Further distinguishing these sweepstakes games from gambling-like games is the payment method.  Whereas a traditional gambling machine game is played by inserting a payment directly into the machine, a sweepstakes game might be initiated with a token that is given away for free along with an ostensibly unrelated purpose.  Because such a game does not technically require consideration on the part of the player, it can be defined as something other than gambling.

The second patent (the '315 patent) describes a method for conducting computer-based sweepstakes bonus games, or "game-in-games" in the patent's lexicology.  The '315 patent claims a method whereby the playing of a game-in-game is triggered automatically, without player interference, upon the selection of a winning ticket for the initial game.

The Defendants argued that each patent is invalid because it claims an abstract idea as proscribed by 35 U.S.C. § 101.

1.  The '423 patent

The '423 patent is directed to a method of dispensing prizes in an electronic sweepstakes game.  Its purported innovation is for the computer server on which the game is played to credit a player's account with the prize corresponding to the selected sweepstakes entry prior to displaying the results.  This innovation apparently makes the game more appealing to regulators.

Claim 1 of the '423 patent is set forth here:

1.  A method of providing a sweepstakes prize, the method comprising:
    a.  facilitating, by one or more processors, selection of a first plurality of sweepstakes tickets from a second finite plurality of sweepstakes tickets in response to a request from a user;
    b.  prior to a visual display of the results of the first plurality of tickets to a user account, determining, by the one or more processors, a prize associated with each of the first plurality of sweepstakes tickets and a total value for the prizes associated with the first plurality of sweepstakes tickets;
    c.  prior to a visual display of the results of the first plurality of tickets to a user account, crediting to an account for the user, by the one or more processors, the total prize value associated with the first plurality of sweepstakes tickets; and
    d.  providing to the user a visual display of the results of the first plurality of sweepstakes tickets.

The Court followed the two-step Alice test, asking first whether the patent is "directed to a patent-ineligible concept," such as an "abstract idea," and second whether, "if so, the particular elements of the claim, considered both individually and as an ordered combination, do not add enough to transform the nature of the claim into a patent-eligible application."

The Court stated that the '423 patent "flunks" Alice step one because it is directed to an abstract idea.  When computer-related patents are at issue, the critical distinction is whether the focus of the claims is on the specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool.

Here, the '423 patent claim merely deploys computers as a tool to implement a novel method of executing a sweepstakes game—specifically, in Epic Tech's own words, a new "method for awarding a sweepstakes prize developed by the patentee."  The '423 patent does not describe, and Epic Tech does not claim, any innovation in computer software; instead, the patent merely sets out a new method for using computers to award sweepstakes prizes.  Thus, the Court found the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.

Because the '423 patent was found to be directed to an abstract idea, the Court proceeded to step two of the Alice test.

The Court viewed step two as deciding whether this case is closer to DDR Holdings or Electric Power.  In DDR Holdings, the court held valid a patent that described a novel method for Internet advertising because its claims specified how interactions with the Internet are manipulated to yield a desired result—a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink.  DDR Holdings, LLC v. Hotels.com, LP, 773 F.3d 1245 (Fed. Cir. 2014).

In Electric Power, the patent claimed a method of gathering and displaying information for electric power grid operators, but lacked details for how to accomplish those functions.  The claims alternatively were directed to the solution itself.  Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350 (Fed. Cir. 2016).

The Court here found the '423 patent to be more like that in Electric Power.  The '423 patent was found to offer no "arguably inventive" method; rather, it simply instructs a computer to send information to another computer at an earlier step than it otherwise would in the normal course of a sweepstakes game.  The claims were found to lack meaningful details that would save them from § 101 destruction.

2.  The '315 patent

The '315 patent describes a method for operating sweepstakes bonus games, or "game-in-games."  The '315 patent describes its invention as "a method of playing a game-within-a-game" and "a method . . . providing a plurality of gaming terminals within a network."  Specifically, the '315 patent claims two networked computer terminals that simultaneously play a first game and, if the player wins the first game, trigger the playing of a second game.  Notably, the '315 patent does not claim any specific software or hardware necessary to implement this system.

Claim 1 of the '315 patent is set forth here:

1.  A computer-implemented method, comprising:
    a.  providing a plurality of gaming terminals linked together via a network, the plurality of gaming terminals comprising at least a first gaming terminal;
    b.  receiving a first request from a first player to play a first sweepstakes game on the first gaming terminal, wherein the first request qualifies the first player to be eligible to win an award associated with the first sweepstakes game;
    c.  in response to receiving the first request:
        i.  receiving a participation credit to play the first sweepstakes game;
        ii.  presenting an option to the first player to participate in a first sweepstakes game-in-game on the first gaming terminal so that the first player can play the first sweepstakes game and concurrently be eligible to win one or more prizes from the first sweepstakes game-in-game, wherein an outcome of the first sweepstakes game-in-game is independent of the outcome of the first sweepstakes game;
        iii.  receiving a second request; and
        iv.  in response to receiving the second request within a predetermined time limit, granting the first player eligibility to win one or more prizes from the first sweepstakes game-in-game;
    d.  triggering a play of the first sweepstakes game-in-game; and
    e.  notifying the first player of their eligibility to win one or more prizes from the play of the first sweepstakes game-in-game,
    wherein once the second sweepstakes game-in-game is triggered to play, the second sweepstakes game-in-game automatically plays on a server without input from the first gaming terminal.

Again, the Court found that the '315 patent "flunks" Alice step one.  Like the '423 patent, the '315 patent expressly describes itself as directed to methods, but does not claim any novel usage or configuration of computer hardware or software.

Next, under Alice step two, the Court found that the '315 patent cannot survive.  Here, the '315 patent merely describes a set of steps that could be performed by any computer—or a fast-moving store clerk—without adding any novel or inventive step.

The '315 patent claims a method of operating two games simultaneously in which the second game is triggered by certain conditions in the first game.  If the '315 patent described some technologically innovative mechanism by which the second game is triggered, it might well be inventive.  But, it does not.  Rather, it simply claims the idea of putting two computers next to each other and having the second computer initiate a game if the first computer produces a winning result.  That idea is abstract and thus unpatentable.

Epic Tech contended that the '315 patent's processes cannot be performed solely by humans because the patent claims a system that "independently control[s]" the game-in-game and "takes no input from the individual human players playing on the gaming terminals."

But the Court found that a human is perfectly capable of independently running a basic game of luck without taking input from a human player—in fact, that is what a casino's croupiers do every day.  In any event, the question is not whether the patent claims a process that cannot be performed by a human, but whether the patent claims a non-ordinary process.

Thus, Defendants' Motion for Partial Summary Judgment on Invalidity was granted as to both patents.

Epic Tech, LLC v. Fusion Skill, Inc. (S.D. Tex. 2021)
Memorandum and Order by U.S. District Judge Ellison

Broad Files Substantive Preliminary Motion No. 1 in CRISPR Interference

By Kevin E. Noonan --

On May 28th, Junior Party the Broad Institute, Harvard University, and MIT (collectively, "Broad") filed its Substantive Preliminary Motion No. 1 in CRISPR Interference No. 106,126 (where ToolGen is the Senior Party).  While this Motion shares many similarities to a similar motion filed in Broad's interference against the University of California, Berkeley, the University of Vienna, and Emmanuelle Charpentier; Junior Party and collectively, "CVC"), there are significant differences in the proposed Count 2 in this interference and the proposed Count 2 proposed in the '115 Interference (wherein the Board denied Broad's motion in that interference).

Broad filed this motion pursuant to 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(1).  The two proposed Counts 2 are set forth as follows:

Broad's argument, as it was unsuccessfully in the '115 interference, is that it would be unfair to preclude them from establishing conception of the "genus" of eukaryotic CRISPR claims by limiting the Count to sgRNA species (which here as in the '115 interference would be subject to CVC's arguments of prior conception), an argument the motion asserts is "consistent with Broad's proofs in [the '115 interference]" (see "CRISPR Motions Day at the PTAB: Broad Files Its Substantive Motion No. 2").

Broad further argues in the unfairness vein that losing this interference would invalidate its generic claims and could raise interference estoppel against the Party for claims reciting dual-molecule embodiments pursuant to MPEP § 2308.03.

As known from Broad's priority position in the '115 interference, they have asserted conception (at least) of dual-molecule embodiments prior to CVC's disclosure of single-molecule CRISPR configurations (which are the subject of CVC's claims that Broad had the benefit of communication from Dr. Marraffini and thus Broad should not be credited with conception thereof; see "CVC Files Reply to Broad's Opposition to CVC's Priority Motion").  Broad further argues that:

In this regard, it does not matter if Broad has only one involved claim directed to generic RNA systems or many such claims.  With even one of Broad's generic RNA claims involved in a priority contest based on the species of Count 1, an adverse ruling could wholesale deprive Broad of the ability to claim the generic RNA system as its invention, including future claims that Broad might prosecute.

Unlike in the '115 Interference, Broad here asserts that opponent (and Senior Party) ToolGen has itself pursued claims generic to the configuration of the RNA species.  Accordingly, Broad contends that "because both parties have laid claim to the eukaryotic invention regardless of whether dual-molecule RNA or single-molecule RNA is used, adopting a generic RNA count, Proposed Count 2, is the most just resolution, and the one that will properly reflect the full scope of the interfering subject matter."

In addition, Broad asks the Board to give them priority benefit to U.S. provisional application No. 61/736,527, filed December 12, 2012, reminding the Board that it conferred priority benefit to this application in the '115 interference which was limited to Count 1.  Finally, the motion asks the Board to designate the following claims as corresponding to Count 2 should the Board grant Broad's Substantive Motion No. 1:

[C]laims 15-20 of the '359 patent[,] claims 26-29 of the '945 patent, claims 26-30 of the '965 patent, claims 24-30 of the '356 patent, all claims 1-30 of the '616 patent, claims 21-28 of the '839 patent, and claims 15-17, 20-24, 26-28, 31-35, and 38-39 of the '713 patent, and, upon the grant of Broad Contingent Motion 2, claims 1, 40, and 41 of the '710 application and claims 74, 94, and 95 of the '260 application [reference to exhibits excluded].

In addition, Broad asks the Board to designate all ToolGen claims as corresponding to Count 2 on the basis that the '126 Interference as declare designated these claims to correspond to "narrower" Count 1.

As Broad had done as Senior Party in the '115 Interference, here they argue that the two different embodiments of the CRISPR invention, citing ToolGen's U.S. Patent Application Publication No. 2015/0344912 for that proposition.  Broad asserts that the two embodiments are "highly analogous" in eukaryotic cells, disregarding its rhetoric regarding how difficult eukaryotic CRISPR was to achieve (and the efficiencies introduced using sgRNA embodiments), citing experts (including CVC experts) in support of this proposition.  The brief sets forth a timeline of its dual-molecule eukaryotic CRISPR experiments, using the following diagram to illustrate conception on April 5, 2011:

Broad asserts continued efforts for dual-molecule CRISPR in eukaryotic cells in August, 2011 (and reduction to practice in October-November 2011) and submission of an NIH grant on January 12, 2012 containing the following diagram of "an entire mammalian CRISPR expression system":

It was only after these efforts involving "already engineered and tested dual-molecule RNA CRISPR-Cas9 systems in eukaryotic cells" that Broad asserts Inventor Zhang "conceived of and by July 20, 2012 actually reduced to practice a single-molecule RNA system using a GAAA linker."  The dual-molecule embodiments were first disclosed in a manuscript submitted on October 5, 2012 that published as the Le Cong et al. 2013 paper (Science 2013 Feb 15; 339:819-23), citing this passage:

To reconstitute the noncoding RNA components of the S. pyogenes type II CRISPR/Cas system, we expressed an 89-nucleotide (nt) tracrRNA (fig. S2) under the RNA polymerase III U6 promoter (Fig. 1B).  Similarly, we used the U6 promoter to drive the expression of a pre-crRNA array comprising a single guide spacer flanked by DRs (Fig. 1B).

Broad contends that similar disclosure can be found in the Zhang B1 application, to which Broad asserts it is entitled with regard to this priority chain:

illustrated in a portion of Figure 11B in that application:

Despite these arguments, Broad concedes that the Board came to the conclusion that "guide" RNA in the context of the '115 Interference was limited to sgRNA species, a conclusion Broad continues in that interference and this to dispute according to Broad's brief (see "PTAB Decides Parties' Motions in CRISPR Interference").

Broad then sets forth certain claims in its involved patents and applications that encompass dual-molecule CRISPR embodiments (e.g., claim 15 of US Patent No. 9,840,713; the brief notes that claim 16 dependent in claim 15 in the '713 patent is limited to sgRNA species), and claims 1 and 2-24 of Broad's U.S. Patent No. 8,889,418, as well as Broad's involved U.S. Application Nos. 15/670,710 and 15/430,260 (which are the subject of Broad's Substantive Preliminary Motion No. 2, which will be the subject of a later post).  The brief makes similar arguments with regard to the involved claims of U.S. Patent Nos. 8,697,359.

Broad exemplifies ToolGen's pursued claims "generic" to the RNA components of eukaryotic CRISPR, stating that the specification of ToolGen's involved '710 application recited the term "guide RNA" without restriction to sgRNA, and that "neither the involved ToolGen '510 application, nor any of the applications to which it claims priority, demonstrates or even suggests that single-molecule RNA is an improvement over dual-molecule RNA."

In explication of their argument, Broad expressly asserts it has been unfairly precluded from relying on some of the evidence set forth in this brief regarding conception and reduction to practice of dual-molecule CRISPR embodiments in the '115 Interference and asks the Board to avoid this consequence in this interference.  ToolGen would not be prejudiced (except, of course, to the extent that granting Broad's motion would establish an earlier conception date followed by diligent reduction to practice of eukaryotic CRISPR by Broad) Broad contends because ToolGen has itself pursued dual-molecule CRISPR embodiments.

Chemours Company FC, LLC v. Darkin Industries, Ltd. (Fed. Cir. 2021)

By Kevin E. Noonan --

The Federal Circuit, and the Court of Customs and Patent Appeals before it, generally reviewed decisions by the Patent and Trademark Office under the same standard applied to district court decisions, whether the factual basis for the decision was "clearly erroneous" (questions of law were, and are, decided de novo), acting as a check on the administrative agency's interpretations of its precedent and Congress's statutory mandates.  That changed when the Supreme Court decided, in Dickinson v. Zurko (1999), pursuant to the provisions of the Administrative Procedures Act (5 U.S.C. §§ 551 et seq.) and specifically 5 U.S.C. § 706, that factual determinations should be upheld if supported by substantial evidence.  This change in standard of review became even more important after enactment of the post-grant review procedures in the Leahy-Smith America Invents Act, and in particular the inter partes review (IPR) provisions (35 U.S.C. §§ 311 et seq.) with regard to obviousness determinations under 35 U.S.C. § 103.  This is because while obviousness is a legal determination, it is based on factual determinations that have been much more likely to pass muster under substantial evidence review and has led the Federal Circuit generally to affirm decisions by the Patent Trial and Appeal Board (PTAB) on that basis.  Not so in Chemours Company FC, LLC v. Darkin Industries, Ltd., decided last week, which showed perhaps the limits of deference the Court is willing to entertain in reviewing PTAB obviousness determinations.

The case arose over Darkin's challenge of two Chemour patents, U.S. Patent Nos. 7,122,609 and 8,076,431.  The technology was directed to extrusion coating of communications cables involving pulling said cables through melted polymers for form insulation.  Chemour's patents disclosed "a polymer with unique properties such that it can be formed at high extrusion speeds while still producing a high-quality coating on the communication cables" and specifically performing extrusion at 30±3g/10 min characterized as "a high melt flow rate."  The opinion recites Claim 1 of the '609 patent as being representative:

1.  A partially-crystalline copolymer comprising tetrafluoroethylene, hexafluoropropylene in an amount corresponding to a hexafluoropropylene index (HFPl) of from about 2.8 to 5.3, said copolymer being polymerized and isolated in the absence of added alkali metal salt, having a melt flow rate of within the range of about 30±3 g/10 min, and having no more than about 50 unstable endgroups/10⁶ carbon atoms.

The Board found all claims in both patents to be obvious over the disclosure of U.S. Patent No 6,541,588.  The basis for the determination was that the '588 patent teaches that cables can be insulated at speeds similar to the range recited in the '609 patent claims (in one example being 24 g/10 min, which is close to the lower limit of Chemour's range, 27 g/10 min).  Significantly, the '588 patent also teaches that it is important to maintain "a very narrow molecular weight distribution" in the polymer (which in a footnote the Court explains means "[a] polymer with a narrower molecular weight distribution has more polymer chains that are of similar lengths, while a broad molecular weight distribution fluorinated ethylene propylene ("FEP") has more variation in polymer chain lengths").  The Board found that "a skilled artisan would have been motivated to increase the melt flow rate of [the '588 patent]'s preferred embodiment to within the claimed range in order to coat wires faster."  Notwithstanding the narrow range teaching regarding polymer molecular weight in the '588 patent, the Board further found that "it is not clear on this fully developed record why the skilled artisan would have been motivated to maintain such a narrow molecular weight distribution when seeking to achieve even higher coating speeds" and that the '588 patent specification "lacked specificity" regarding the metes and bounds of "narrow" and "broad" molecular weight ranges.  This was enough for the Board to opine that "this purported discovery would not have prevented the skilled artisan, at the time of the invention of the '609 patent, from considering other techniques—such as broadening the polymer's molecular weight distribution—to achieve higher coating speeds . . . ."  Based on these factual determinations, the PTAB held the claims in the '609 and '431 patents were obvious, and Chemour appealed.

The Federal Circuit reversed, in an opinion by Judge Reyna joined by Judge Newman; Judge Dyk concurred with majority that the Board's decision was erroneous but not with reversal of the judgment.  The majority's opinion was based on its conclusion that while it was permissible for the Board "to inform itself of the state of the art at the time of the invention," "the Board appears to have ignored the express disclosure in [the '588 patent] that teaches away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems  [the '588 patent]  sought to solve.  In other words, the Board did not adequately grapple with why a skilled artisan would find it obvious to increase [the '588 patent]'s melt flow rate to the claimed range while retaining its critical "very narrow molecular-weight distribution."  Regarding the motivation to increase the melt flow rate to be within the range recited in the '609 and '431 patents, the opinion states the Board did not support with substantial evidence "why a POSA would be motivated to increase [the '588 patent]'s melt flow rate to the claimed range, when doing so would necessarily involve altering the inventive concept of a narrow molecular weight distribution polymer."  The majority perceived that the '588 patent taught away from broadening the molecular weight range to achieve the higher melt flow rates.  The '588 patent itself recited "numerous examples of processing techniques that are typically used to increase melt flow rate, which [the '588 patent] cautions should not be used due to the risk of obtaining a broader molecular weight distribution" (emphasis in opinion).  The majority agreed with Chemour that "the Board needed competent proof showing a skilled artisan would have been motivated to, and reasonably expected to be able to, increase the melt flow rate of [the '588 patent]'s polymer to the claimed range when all known methods for doing so would go against [the '588 patent]'s invention by broadening molecular weight distribution" which in the majority's view it did not.

The majority also opined on the Board's erroneous application of the objective indicia of non-obviousness; Judge Dyk joined his brethren in this portion of the opinion.  The issue involved the commercial success flavor of objective non-obviousness, where the panel held the Board erred for finding an insufficient nexus between said success and the patents at issue.  Chemour's argument on appeal on this issue was twofold: first, that the PTAB found no nexus on a limitation-by-limitation basis, and that the Board required Chemour to show market share data to establish commercial success.  The panel agreed with Chemour's first argument, stating that "the separate disclosure of individual limitations, where the invention is a unique combination of three interdependent properties, does not negate a nexus" because "[c]oncluding otherwise would mean that nexus could never exist where the claimed invention is a unique combination of known elements from the prior art," citing WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1332 (Fed. Cir. 2016).  With regard to Chemour's market data argument, the panel agreed that a showing of "significant sales in the relevant market" of a product "disclosed and claimed in the patent" provides a presumption "that the commercial success is due to the patented invention," citing J.T. Eaton & Co. v. Atl. Paste & Glue Co., 106 F.3d 1563, 1571 (Fed. Cir. 1997).  Market share data, "though potentially useful," is not required to satisfy the standard of commercial success according to the Court.

Finally, the panel assessed Chemour's argument that the PTAB erred in its finding that the patents-at-issue were so-called "blocking patents" that would have prevented competitors from entering the relevant market (and thus provide an alternative explanation for the purported commercial success; (see "Acorda Therapeutics, Inc. v. Roxane Laboratories, Inc. (Fed. Cir. 2018)").  The panel held that the Board erred in its determination, stating without analysis or explanation that the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent.

As a side note, the panel declined to consider Chemour's argument that the Board's decision was in violation of the Appointments Clause, after the Supreme Court's decision in U.S. v. Arthrex.

The basis for Judge Dyk's partial dissent was his disagreement with his colleagues that the '588 patent "taught away" from the claimed invention.  Specifically, the Judge thought the polymer disclosed in the '588 patent was "nearly identical" to the polymer recited in the patents-at-issue.  The only difference in Judge Dyk's apprehension of the claimed invention with the '588 patent is the extrusion rate, which is similar between the challenged claims and the reference.  In his view, the '588 patent disclosed that even though "a narrow molecular weight distribution performs better" it also acknowledged "the feasibility of using a broad molecular weight distribution to create polymers for high speed extrusion coating of wires."  This, in the Judge's opinion, was not a teaching away and "[t]he majority's approach impermissibly expands the teaching away doctrine such that it encompasses a reference's mere preference for a particular alternative."  Judge Dyk also believes that the distinction between narrow and broad molecular weight ranges was insufficiently disclosed in the '588 patent to support the majority's opinion.  Accordingly, Judge Dyk would remand for a determination of obviousness in view of the proper consideration of the secondary indicia as set forth in the majority opinion.

Chemours Company FC, LLC v. Darkin Industries, Ltd. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Dyk, and Reyna
Opinion by Circuit Judge Reyna; opinion concurring in part and dissenting in part by Circuit Judge Dyk

PTAB Denies Two CVC Requests Regarding Motions

By Kevin E. Noonan --

Recently, the Patent Trial and Appeal Board denied two requests by Junior Party University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (hereinafter, "CVC") in Interference No. 106,115.

In the first, CVC asked a conference call to discuss its renewed request for leave to file a motion against Senior Party The Broad Institute, Massachusetts Institute of Technology, and Harvard University (hereinafter, "Broad") that alleged inequitable conduct.  This is a motion for which leave had been requested in this interference (see "CRISPR Interference Parties Propose Motions") as well as in prior Interference No. 105,048 (see "CRISPR Interference Motions Set").  In that earlier interference, the matter was mooted by the Board's determination that there was no interference-in-fact between the parties (see "PTAB Decides CRISPR Interference -- No interference-in-fact" and PTAB Decides CRISPR Interference in Favor of Broad Institute -- Their Reasoning).  In this interference, the Board had deferred consideration of CVC's request until after the priority phase (see "PTAB Redeclares CRISPR Interference and Grants Leave for Some (But Not All) of Parties' Proposed Motions").  Nevertheless, CVC contended in its request that the Board should grant leave at this time because "the issues it would argue overlap with issues raised in the priority phase and that there are new justifications for a requested motion."

The Board concluded that there was no need for a conference call "at this time," maintaining its decision that consideration of CVC's motion, if appropriate, should be deferred until after conclusion of the priority phase and that CVC's request was premature, relying on the discretionary nature of its authorization of motions in an interference, citing 37 C.F.R. § 41.121 (a)(1), as is any other basis for patentability under 35 U.S.C. § 135(a).  The priority issues having been briefed by the parties and with Final Hearing on priority looming, the Board rejected CVC's request for a conference call to consider inequitable conduct.

In its other motion, CVC requested that the Board add Broad U.S. Patent Application No. 15/349,603 to this interference, on the grounds that the application contained claims corresponding to the Count of this interference and the Examiner had issued a Notice of Allowance.

The Board rejected this request because "[b]riefing in the current interference is complete, with authorized motions, oppositions, and replies in the second, priority, phase of the interference having been filed . . . [Accordingly, a]uthorization of a new motion at this time would be disruptive and could impede our goal of securing the just, speedy, and inexpensive resolution of the proceeding," citing 37 C.F.R. § 41.1.  The Board included a reminder (or perhaps an admonishment) that "[t]he parties have a duty to disclose to the Office all information known to be material to patentability, which may include information about and disclosures in this interference" under Rule 56, to the extent the Examiner granted these claims in any way improvidently or without understanding the status of this interference; a brief review of the file wrapper on PAIR indicated that the Examiner had been made aware of the Board's substantive decisions in this interference by way of Information Disclosure Statements submitted by the applicant.

Sensormatic Electronics, LLC v. Wyze Labs, Inc. (Fed. Cir. 2021)

By Michael Borella --

Sensormatic asserted U.S. Patents 7,730,534, 7,936,370, 7,954,129, 8,208,019, and 8,610,772 against Wyze in the District of Delaware, alleging infringement.  Wyze moved the District Court to dismiss under Rule 12(c), on the grounds that the claims are directed to ineligible subject matter.  The motion was granted.  Sensormatic appealed.

In Alice v. CLS Bank, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under 35 U.S.C. § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Last year, the Federal Circuit provided a major clue as to how to think about patent eligibility in practice.  In Dropbox Inc. v. Synchronoss Techs. Inc. the Court wrote that "an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art."  This suggests that in order for a claim that is otherwise directed to an abstract idea to be successful under § 101, it should have three qualities:  specificity, a technical solution that it provides, and some degree of novelty.  More particularly, there should be a nexus between these three factors -- specificity, technical character, and novelty should appear in the same claim element or at least be explicitly linked in some fashion in the recitation of the claim.

Claim 14 of the '129 patent was deemed representative:

A surveillance system for wireless communication between components comprising:
    a base system including at least two wireless input capture devices (ICDs), the ICDs having at least one sensor and at least one input component for detecting and recording inputs, a processor, a memory, a transmitter/receiver, all constructed and configured in electronic connection;
    wherein the ICDs are operable for direct wireless cross-communication with each other without requiring interaction with a remote server computer for operation; and
    wherein the ICDs are operable for direct wireless communication with a remote viewing device operable by an authorized user.

Here we have one of those cases where the Court's main concern appears to be a lack of specificity in the claims, which the Court describes as "abstractness".  As claims go, this one is mostly outcome-oriented, in that it recites what the inventors want the invention to do rather than how it achieves this goal.  In past cases, this factor alone has been used to establish that a claim can be abstract regardless of whether it recites physical components.

Applying the Alice test, the District Court "court concluded that the claims are directed to the abstract ideas of wireless communication and remote surveillance, and determined that none of the claim limitations take the claims beyond those abstract ideas."  Further, the District Court opined, "the claims do not recite an inventive concept sufficient to transform them into patent-eligible subject matter because they merely describe implementing abstract ideas using well-known, generic computer components and functionalities."  Thus, the claims were found ineligible.

The Federal Circuit agreed.  But first it attempted to shed a little bit of light on the scope of the legal concept of "abstractness".  The Court stated:

As patent eligibility case law has developed, the Supreme Court has had opportunities to declare that claims to a machine are de facto eligible.  In fact, the statute pro-vides that "[w]hoever invents or discovered any new and useful . . . machine . . . may obtain a patent therefore," subject to other patentability requirements set forth in Title 35 of the United States Code.  But the law has not developed that way.  Instead, the Court has noted that the machine-or-transformation test is a "useful and important clue" for determining patent eligibility, but that not all claims drafted as machine or system claims are patent-eligible.  In Alice, the Court confirmed that recitation of a tangible system, "(in § 101 terms, a 'machine')," does not end the eligibility inquiry.  What matters, according to the Court, is the reality behind the machine or system language, whether or not it simply clothes abstract concepts.  The district court correctly followed that precedent in determining that the patents asserted here claim ineligible subject matter.

In other words, an invention that is a concrete and tangible machine, and claimed as such, can be found to be "abstract" if the claimed subject matter is otherwise abstract.  While this makes sense to a point, it ultimately requires that the finder of fact (or of law -- patent eligibility is a strange amalgam of both) decide whether certain claim elements can be ignored for purposes of the § 101 inquiry.  Putting a power this subjective in the hands of even a federal judge, much less an examiner or a PTAB judge, can be problematic.

Indeed, the Court's statement quoted above may be in response to the recent case of Yu v. Apple, a controversial split decision that found a digital camera with a particular hardware arrangement performing particular functions to be ineligible.  While the Court may have made this statement for explanatory reasons, it is likely to be taken as a warning shot.  Whatever the Court is trying to say, patentees are likely to hear, "All Your Devices Belong to Us!"  This is a reminder that the term "abstract" is not meant to be taken literally, and any statutory category of claims can be abstract (even if you can drop it on your foot).

In any event, Sensormatic argued before the Federal Circuit that:

[T]he claims are directed to three non-abstract improvements in surveil-lance technology: (1) a configuration of ICDs (surveillance sensors) that communicate with each other, which improves wireless range and removes the need for a central server; (2) dual encoding of input data, which improves use of bandwidth and device compatibility; and (3) prioritization of ICD input data through distributed detection of trigger events, which improves storage and retention of significant input data.

Wyze pointed out that the dual encoding and trigger events were not actually claimed, and in the alternative were abstract as well.

The Court largely agreed with Wyze, noting that "the broad concept of communicating information wirelessly, without more, is an abstract idea."  The Court further wrote:

First, although Sensormatic argues that its claims are directed to a specific configuration of ICDs, Sensormatic fails to identify any particular non-abstract configuration.  Second, dual encoding is itself abstract.  The concept of encoding or decoding image data is abstract, even if for the purpose of transmitting files to devices with less memory or bandwidth or by transcoding data into multiple formats.  Third, prioritization of ICD input data through detection of trigger events is an aspect of the abstract idea of remote surveillance as well as drawn to the abstract idea of classifying and organizing images.  Accordingly, we conclude that the claims are directed to an abstract idea at Alice step one.

Moving on to part two of Alice, Sensormatic asserted that the claimed invention would "distribute functions previously carried out at a server computer to a cluster of interconnected ICDs, thereby eliminating the need for software and extending the system's range."  Wyze countered, and the Court agreed, that "Sensormatic fails to explain how any combination of elements provides an inventive concept," either in its briefs or at oral argument.  Since "[p]roviding generic devices that communicate with each other . . . is a conventional application of an abstract idea, the Court found that the claim also failed under part two, and therefore is ineligible.

Sensormatic Electronics, LLC v. Wyze Labs, Inc. (Fed. Cir. 2021)
Panel: Circuit Judges Newman, Lourie, and Dyk
Opinion by Circuit Judge Lourie

Is This the WTO Waiver End Game?

Pfizer and BioNTech Agree to Vaccine Technology Transfer with South Africa's Biovac Institute

By Kevin E. Noonan --

As reported by Reuters* on Wednesday (see "South African firm to help make Pfizer/BioNTech COVID vaccine"), Pfizer and BioNTech, manufacturers and developers of an mRNA-based vaccine against SARS-CoV-2, have agreed to help the South African drug maker Biovac Institute produce about 100 million doses per year of its vaccine, specifically to be targeted to African nations.

As described by the Reuters article, Biovac Institute is "a joint venture between the South African government and private sector partners"; it has an advantage as being the first company in Africa to use mRNA technology to make the vaccine.  The scope of the cooperative agreement is limited to "fill and finish" aspects of the vaccine, leaving Pfizer and BioNTech to produce the mRNA components of the vaccine in Europe (for a more detailed description of the vaccine making process, see Lowe, D. "Myths of Vaccine Manufacturing," Science Translational Medicine, February 2021).  Production is slated to begin "towards the second half of 2022" according to Biovac CEO Morena Makhoana, with the aspirational 100 million doses per year being achieved in "early" 2023.  The value of the agreement is 200 million South African rand ($13.6 million) according to South Africa President Cyril Ramaphosa, who as Reuters reported called the agreement "a breakthrough in efforts to overcome vaccine inequity."

Perhaps also relevant is the World Health Organization's establishment of a consortium (including Biovac) to be a "tech transfer hub" aimed at "giv[ing] poor and middle-income countries the knowledge and licences to produce COVID-19 vaccines.

This is not the first South African company to make such a deal; Aspen has a similar agreement with Johnson & Johnson for its more conventional adenovirus-based COVID-19 vaccine.  This is also not the first vaccine-related partnering agreement between Pfizer and Biovac, who in 2015 agreed to collaborate on Pfizer's pneumonia vaccine Prevnar; distribution of the vaccine has been delayed in South Africa due to regulatory approval requirements.

The WTO proposal (see Communication IP/C/W/669, "Waiver from certain provisions of the TRIPS agreement for the prevention, containment and treatment of COVID-19, 2 October 2020) has been vigorously promoted by many countries (most of which lack the production capacity to make the vaccine) and opposed predominantly by European countries, as illustrated by this map:

https://www.msf.org/countries-obstructing-covid-19-patent-waiver-must-allow-negotiations

The progress of approval of the waiver is uncertain (see "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?") and the wisdom even more so (see "Suspending IP Protection: A Bad Idea (That Won't Achieve Its Desired Goals").  In addition to the EU, most companies involved in producing vaccines and other pharmaceuticals have opposed the waiver (see "Pfizer CEO Pens Open Letter on COVID-19 Vaccine IP Waiver") as have IP and industry groups (see "IP Organizations Support Continued Opposition to Waiver Proposal; Industry Coalition Supports Continued Efforts to Oppose Waiver Proposal"; "BIO and PhRMA Urge Biden Administration to Oppose Proposed WTO TRIPS Waiver"; "Industry Coalition Supports Continued Efforts to Oppose Waiver Proposal"; and "IPO Sends Letter on IP Law and Policy to President-Elect and Vice President-Elect") and politicians and policymakers (see "Sen. Tillis Asks Biden Administration to Oppose WTO Waiver Proposal"; "GOP Legislators Write in Opposition to Proposed TRIPS Waiver"; "Sen. Daines Urges Biden Administration to Withdraw Support for COVID-19 IP Waiver"; Andrei Iancu, former U.S. Patent and Trademark Office Director, quoted in StatNews; Reto Hilty, Director at the Max Planck Institute for Innovation and Competition, https://www.mpg.de/16579491/patent-protection-vaccines-covid-10-reto-hilty).

The negative consequences of the inequities between the developed world and everyone else on both global public health and the intellectual property regime are not now just being appreciated (see, e.g., "A Modest Proposal Regarding Drug Pricing in Developing Countries"; "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries"; "Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing"; and "Worldwide Drug Pricing Regime in Chaos") but like many issues the COVID-19 pandemic has raised the temperature on the debate.  Perhaps the latest developments were the goal of the countries promoting the IP waiver at the WTO all along.  Also possible is that continued resistance from European countries to the waiver has convinced waiver proponents to use the leverage they have due to the pandemic to move the needle in the direction of technology transfer as far as they can (or at least create a precedent for it for vaccines).  Long term this development is likely to be more positive than merely having low- and middle-income countries rely on vaccine donations as the Biden Administration and others have pledged (such donations are put in context by the Kaiser Family Foundation in Michaud et al., "Putting U.S. Global COVID-19 Vaccine Donations in Context," May 25, 2021).  But whether this will be enough to reduce pressure on the industrialized world to reduce or eliminate the IP requirements on less economically developed countries created by the GATT/TRIPS/WTO regime remains to be seen.

*Reporting by Michael Erman, Wendell Roelf, and Alexander Winning; editing by Richard Pullin and Mark Potter