Patent Docs

Complex IP & Technology Transactions Conference

Law Seminars International's second annual conference on Complex IP and Technology Transactions will be held on March 21-22, 2007 in Chicago, Illinois.  The conference will focus on the business factors that must be considered and the legal issues that can arise in complex licensing transactions.  In particular, the conference will offer presentations on the following topics:

• Initial Planning: Identifying the Work to be Done, and Setting Up an Organizational Structure for Accomplishing It
• A Key Foundational Element: Keeping Up-to-Date on the Latest Developments in Substantive Law
• Avoiding Antitrust Risks
• Transactions with Public Entities
• Selection, Design and Drafting of Complex Licensing Documents
• The Blurring of Technology Transactions and IP Transactions, and the Need to Keep Up with Privacy and Data Security Laws
• Special Issues Arising from the Geographic Scope of the Transaction
• Establishing a Due Diligence Process that Fits the Deal
• Special Issues Arising in Information Technology Transactions
• Special Issues Arising in Transactions Involving Use of Trademarks and Copyrighted Materials on the Internet
• Maximizing the Bottom Line and Receiving Full Value
• Ethics for Transactional Lawyers

The registration fee for the conference ranges from $497.50 to $995.  Those interested in registering for the conference can do so here.

Intellectual Property Valuation Teleconference

The National Constitution Center is offering an audio conference entitled: "Intellectual Property Valuation: What's Your IP Worth?" on February 22, 2007 from 1:00-2:00 PM (EST).  Speaker John O'Malley of Volpe and Koenig, P.C. will discuss specific practices for conducting effective IP due diligence and performing routine IP audits.  In particular, the conference will cover the following topics:

• Methods of valuation: Which type is right for you?
• Converting IP into a profit center
• Potential pitfalls: Preserving privilege and confidentiality
• Key concepts and methods to ensure you've covered everything
• Understanding the type of deal involved
• Strategies and checklists: Patents, trademarks, trade secrets and copyrights
• Tips for identifying and locating IP assets
• When should IP audits be conducted?
• Licenses and other agreements:  What to look for today
• Budget, timing and responsibilities for the audit

The registration fee for the audio conference is $199.  Those interested in registering for the audio conference can do so here.

NCIIA's Invention to Venture (I2V) Workshops

    By Mark Chael --

The National Collegiate Inventors & Innovators Alliance (NCIIA) co-produces the Invention to Venture (I2V) Workshop in association with various universities across the country throughout the year.  Upcoming I2V Workshops in February and March will be held at the University of Illinois at Urbana-Champaign, Valparaiso University, the University of Portland, Cornell University, and the University of Texas - El Paso.

According to the NCIIA, I2V Workshops are an introduction to the process and practice of technology entrepreneurship.  The workshops are geared toward businesses seeking to identify new technology opportunities, business people seeking connections with university faculty and students, investors seeking high growth potential companies, members of university communities who are entrepreneurially ambitious, as well as faculty and students interested in technology entrepreneurship and how to commercialize research.  A full schedule of upcoming workshops with links to additional information is available here.

House Passes "Patent Judge" Bill

    By Sherri Oslick

On February 12, 2007 the House of Representatives passed bill H.R. 34, designed to "encourage enhancement of expertise in patent cases among district judges."  The bill establishes a pilot program in certain district courts providing the judges of those districts with the opportunity to decline to hear patent cases.  Under the program, district court judges who request to hear patent cases must be so designated by the chief judge.  Patent cases will still be randomly assigned to one of the judges of the court, regardless of designation status, however a judge not designated to hear patent cases may decline to accept the case.  If a case is declined by a non-designated judge, it will be randomly assigned to one of the judges who has requested to hear patent cases.

It remains to be decided which district courts will participate in the program, however the bill provides for no fewer than five courts to participate, and they are to be selected from among the fifteen district courts in which the largest number of patent and plant variety protection cases were filed prior calendar year.  The bill also provides for the allocation of funds for educational and professional development of the district judges designated to hear patent cases in matters relating to patents and plant variety protection, as well as funds to compensate law clerks with technical expertise.

The bill now awaits senate approval.

Science Fiction in The New York Times

    By Kevin Noonan

Michael Crichton has always hated - or feared - technology.  In his novels The Andromeda Strain, The Terminal Man, and Jurassic Park, he has been a technology Cassandra, a modern-day Luddite warning that technology would get us if we weren't very careful.  And while space viruses, inhuman cyborgs, and thunder lizards are entertaining as fiction, they shouldn't inform national policy.

That is what Dr. Crichton has been trying to do recently, neatly dovetailing these efforts with promoting his latest book, Next.  The bogeyman this time is DNA patenting, which he assails in an OpEd piece in The New York Times today.  Unfortunately, the misstatements and exaggerations in the piece make it closer to fiction than it has any right to be, appearing in the pages of the "paper of record."

The problems begin with the title, "Patenting Life."  Patenting life isn't what he is concerned with - it is patenting DNA.  DNA is not life, any more than patenting Vitamin B12, proteins, or hormones isolated from animal (or human) material.  Writers like Dr. Crichton (particularly academics, who should know better) have created a "new vitalism;" in this philosophy DNA is "different" and patenting DNA should be prohibited.  One problem with their position is its intellectual dishonesty: as Dr. Crichton does here, they accuse gene patentees of having ownership rights to "your" DNA (the DNA in the cells of a person's body).  This is nonsense, since anyone familiar with this space or any other truthful description of DNA patenting knows that patented DNA must be "isolated" or "isolated and purified."  In short, no one has ownership rights over "your" DNA (or mine, or Dr. Crichton's).

Dr. Crichton chooses an easy target as "bad guys" in his fiction: the oft-maligned patent examiners that he holds responsible for gene patenting.  If there are culprits, of course, it would be the U.S. Supreme Court who in the Diamond v. Chakrabarty decision opened the doors for patenting genes and a host of other things that have been important components of the biotech industry.  Dr. Crichton would have you believe that the "good guys" are those commercial interests in the rest of the world who provide genetic testing using patented DNA more cheaply than in the U.S.  What Dr. Crichton doesn't say is that these "free-riders" on American innovation only exist due to their governments' tardiness in protecting biotechnology inventions.  Dr. Crichton characterizes as a "disaster" the decision to permit gene patents in the U.S.  The real disaster has been in the rest of the world, particularly Europe, where they are paying the price today of their political decisions that frustrated patent protection for biotechnology.  As recently reported in The Washington Post, European pharmaceutical companies have suffered both economically and in their drug product pipeline: where a generation ago the Europeans predominated, now it is American inventions and American companies that lead the world.  Much of this advantage stems directly from patent protection available for the biotechnology industry.

There are a host of other pertinent facts omitted from the piece.  Examples include: that the patent right is limited (to 20 years from the initial filing date), so that the invention becomes freely available to the public for eternity once the patent expires (the robust generic drug industry depends on this fact).  That DNA is both a patented chemical compound (that can be infringed) and genetic information, which information is freely available upon publication.  That no one "owns" a disease nor has inhibited research on a disease.  That DNA patenting has not encumbered research; indeed, despite fears (voiced, famously, by Rebecca Eisenberg) that patenting DNA would lead to a "tragedy of the anticommons," research shows that gene patents have not impeded DNA research in academia.  See "The 'Anti-Commons' Aren't So Tragic, After All."

What patents do is protect inventors from commercial infringement of their inventions, and permit small companies to obtain the financial backing necessary to develop the very genetic tests and therapeutic drugs Dr. Crichton complains about.  The pages of the Times recently provided stark evidence of the economic advantages of patents in the U.S., in a profile of Xoma Corporation.  The Times writer decried the amount of investment ($700 million) in a company that in 25 years had not developed a successful commercial product.  Paradoxically, this demonstrates the genius and strength of the patent system, since it is only with this type of investment that companies like Xoma (and a host of more successful biotechnology companies) have been able to survive.  What the piece shows is how difficult and expensive it is to develop a biotechnology product; no sane investor would place his bets on such companies without patent protection, and without investment the industry could not survive.

Dr. Crichton's attack is political, as is the bill introduced on Friday by Representatives Becerra of California and Weldon of Florida, which would ban gene patenting (more on that in a later post).  This is a mistake, and there is ample evidence from our recent history that it is a mistake.  At least one reason why the U.S. did not become the country Dr. Crichton described in another of his books, Rising Sun - an aging, rust-bucket, economic wreck that could not compete with the facile new democracies of Europe and Asia - is that America was quick to protect its innovators and innovative industries like telecommunications, computers and biotechnology.  Thirty years ago, everyone had a Sony Walkman, today it's an iPod.  And thirty years ago Europeans were producing most new drugs; today, it is America.  Whether the political motivations are "Green" or religious or merely careerism (by either novelists or academics), the mistake would be to ignore the lessons of history.  We shouldn't be killing the golden goose of American innovation.

    Dr. Noonan has written a number of Patent Docs articles on the issue of gene patenting, including:

• "In Support of Gene Patents," December 7, 2006.

• "Anti-Patent (Sullivan?) Malice by the New York Times," January 29, 2007.

• "The Continuing Value of Biotech Patenting," February 4, 2007.

New Report Discusses Biopartnering Strategies

    By Jason Derry

Reportlinker has announced the availability of a new report that covers strategies and information relating to creating successful licensing deals in the biotechnology industry.  The report, "Biopartnering Strategies: Maximizing returns from biotechnology deal-making," covers topics such as in-licensing and out-licensing biotechnologies, as well as biopartnering trends and strategies.  In addition, the report provides a number of relevant case studies.

Conference & CLE Calendar

February 14, 2007 - "MedImmune v. Genentech: Impact of the Supreme Court's Jan. 9 Decision on Patent Licenses" Teleconference (Strafford CLE Teleconferences)

February 16, 2007 - Patent Claim Construction Conference (Law Seminars International) - Chicago, IL

February 20, 2007 - "Potential Licensing Responses to MedImmune: The Supreme Court's Latest Word on Declaratory Judgment Actions Challenging Patent Validity" (ABA CLE)

February 27-28, 2007 - Patent Portfolio Management (American Conference Institute) - New York, NY

March 25-29, 2007 - American Chemical Society National Meeting - Chicago, IL

April 16-18, 2007 - Biotechnology: Patent Prosecution, Licensing, Litigation & Hatch-Waxman (Patent Resources Group) - Orlando, FL

April 27, 2007 - Patent Claim Construction Workshop (Law Seminars International) - Atlanta, GA

May 6-9, 2007 - BIO International Convention - Boston, MA

BIO International Convention

    By Donald Zuhn

The Biotechnology Industry Organization (BIO) will be holding its annual BIO International Convention on May 6-9, 2007 in Boston, MA.  Founded in 1993, BIO is a nonprofit association seeking supportive biotechnology policies on behalf of more than 1,100 biotechnology companies, state and international affiliates, and related organizations, as well as providing business development services for many emerging biotech companies.  According to BIO, the BIO International Convention serves to educate the public and policymakers about biotechnology, while fostering partnering meetings and other business development activities to keep the biotech industry growing.  A schedule of events for the Convention can be obtained here.  As part of the Convention, more than 1,700 biotech companies, organizations, and institutions will participate in the BIO Exhibition.  A list of exhibitors can be found here.  Information regarding registration pricing can be obtained here.

Postscript: When Flu Is for Sale, Who Should Pay?

    By Kevin Noonan

On first blush, it might appear that Indonesia's decision to stop supplying avian influenza virus samples to global public health organizations, such as the U.N's World Health Organization (WHO), is short-sighted or greedy or both (see "Virus for Sale").   However, the "rest of the story," at least in part, is supplied in today's New York Times.

An Op-Ed piece by Ruth R. Faden and Patrick S. Duggan from the Johns Hopkins Berman Institute of Bioethics and Ruth Karron from the Center for Immunization Research at the Johns Hopkins Bloomberg School of Public Health describes more about the economic consequences of bird flu in Indonesia. The biggest economic impact has been the result of Indonesia's only current response to a bird flu outbreak - killing the infected birds. The killing of birds is necessary because it is believed that persistence of the virus in bird populations, especially ones close to human populations, increases the chance that a strain capable of human-to-human transmission will arise, due to the high mutation rate of influenza viruses. Obviously, the benefits of these prophylactic measures are global insofar as they forestall a pandemic of this lethal flu strain (70% mortality for infected Indonesians).

According to the Hopkins authors, Indonesian Health Ministry officials have imposed a ban on household poultry farming in Jakarta, the capital. Indonesians were given a deadline of February 1 to "consume, sell or kill" approximately 1.3 million birds, and the ban was enforced by door-to-door inspections by officials empowered to kill any remaining birds.

While the government promised to pay a ransom of about $1.50 for each flu-infected bird (which is approximately its fair market value), the government will pay nothing for any healthy birds (the overwhelming majority).  Thus, thousands of Indonesians lost an inventory of substantial value from this edict. Moreover, it is the small local farmers, rather than multinational companies with poultry farms in Indonesia, that suffer disproportionately, since they cannot replace the destroyed birds.

Although the authors are part of a group attempting to influence governments, international organizations, and multinational corporations to provide compensation for the world's disadvantageous populations when the costs of avoiding (or at least postponing) a bird flu pandemic fall on their shoulders, there is no compensatory plan now in place.

The costs are daunting - about $2 million for the current program, which could expand to as much as $450 million should a similar program be needed throughout Indonesia. Indonesia has less than $50 million in its budget for all aspects of bird flu, so some form of assistance is necessary.

Under the circumstances, Indonesia's attempt to be compensated for providing avian flu samples to Western scientists, organizations, and in particular, vaccine-producing companies, may be justified. It is true that Indonesia, and many other Third World countries will be disproportionately affected by a flu pandemic, or even a localized epidemic. However it is also true that governments, global organizations and the world's population needs to be more willing to provide the funding necessary to prevent the pandemic. Poor countries like Indonesia cannot do it, and we are all in danger if the rest of the world does not step up to do our share.

Sanofi-Aventis Loses Patent Infringement Suit against Amphastar and Teva

    By Christopher P. Singer

In a February 9, 2007 press release, Sanofi-Aventis announced that it has lost its patent infringement suit against generic drugmakers Amphastar Pharmaceuticals, Inc. and Teva Pharmaceutical Industries Ltd., filed in the U.S. District Court for the Central District of California.  The suit relates to Sanofi-Aventis' blockbuster blood thinning drug, Lovenox®, which is covered by patent until February 2012.  According to its press release, Sanofi-Aventis is considering its legal options going forward.  The company also notes that while a number of manufacturers have requested FDA approval of purported generic versions of Lovenox®, the FDA has yet to approve any such request.

Virus for Sale

    By Kevin Noonan

Indonesia is a country of over 200 million encompassing more than 17,000 islands in the Malay archipelago.  It also has the largest number (81) of humans infected with the H5N1 strain of influenza virus (commonly called "bird flu"), with 63 fatalities.  And until recently, it was a principle source of virus and samples from infected humans for international agencies such as the World Health Organization (WHO), which provided Indonesia with no financial consideration for the samples.

But no more.  The Indonesian Health Ministry has decided that the country "cannot share samples for free."  A Ministry spokesperson, Ms. Lily Sulistyowati, said "There should be rules of the game for it.  Just imagine, they  [i.e., Westerners] could research, use and patent the Indonesia strain."

Some of the Indonesian government's concern relates to negotiations with Baxter Healthcare of Deerfield, IL for rights to the Indonesian strains.  Baxter asserts that it has not asked Indonesia to stop cooperating with the WHO, and the Baxter agreement is non-exclusive.  However, the contract is a commercial contract, and the company will pay the Indonesian Health Ministry for virus and related samples.

This issue is related to so-called "biopiracy," the practice of Western companies and governments obtaining biological materials from Third World countries and developing drugs, seeds, and other valuable products, typically with no compensation to the country's people or government.  It is also related to demands from aboriginal peoples for repatriation of relics and other valuable artifacts taken by Western explorers and adventurers over the past half-millennium.

The issue is also related to ownership concepts relating to whether compensation is due to patients when scientists use patient materials to develop treatments and therapeutic agents (for example, the dispute over Canavan disease) and Richard Epstein's position that individuals should have the right to sell their organs (and Lori Andrews' related property-right analysis: Body Bazaar: The Market for Human Tissue in the Biotechnology Age).

Fundamentaly, however, the underlying problem is the economic inequities between First World and Third World access to drugs, especially in cases such as AIDS where Third World populations are overwhelmingly affected by the disease.  These inequities are exacerbated with regard to influenza, since Western companies are able to produce enough vaccine in a "normal" year for less than a quarter of the world's population, and Indonesia's poverty prevents it from obtaining an affordable supply for its people.  But Indonesia's decision is particularly troubling because the bird flu virus, like all influenza viruses, mutates so rapidly that contemporaneous samples are critical to developing effective vaccines.  The most important mutation, permitting human-to-human transmission, has not yet occurred in this strain, and having virus with the enabling mutation is essential for developing a vaccine effective in preventing a pandemic.

A potential silver lining in this age of genomic sequence analysis is that the genetic complement of the H5N1 influenza strain is known, and this information is not dependent on any Indonesian demand for payment.  Moreover, Indonesia has in the past sent samples to the WHO, and these strains survive and can be the basis for on-going work.  If a human-to-human  transmission strain arises, Indonesia may change its mind in the face of the growing pandemic.  But for now, Western companies need to address what may be an increasingly-common tactic of Third World countries having biological resources essential to developing new agricultural and pharmaceutical products: a demand to be compensated for both their biological materials and their cooperation.  Western governments and the international community will need to decide whether such arrangements will be left to private commercial entities, or will be the subject of international agreements between governments.  It is unfortunate but likely that such arrangements will not be in place in time to effectively address these issues as they apply to an influenza pandemic.

Claim Construction Conference & Workshop

Law Seminars International's second annual conference on Patent Claim Construction will be held on February 16, 2007 in Chicago, Illinois.  The conference, entitled "New Developments in Patent Claim Construction," will focus on current case law updates, patent litigation strategies, effective advocacy tactics for presenting Markman Hearing cases, choosing and working with outside counsel, and handling claim construction on appeal.  The registration fee for the workshop ranges from $347.50 to $695.  Those interested in registering for the workshop, can do so here.

Law Seminars International will also be offering a workshop on Patent Claim Construction on April 27, 2007 in Atlanta, Georgia.  According to LSI, the workshop will provide tools and information on proper claim construction, including a case law overview and update, recent developments from the Federal Circuit, litigation strategies, and effective appellate advocacy.  The registration fee for the workshop ranges from $347.50 to $695.  Those interested in registering for the workshop, can do so here.

Sifting through the Wreckage: WSJ Article Highlights a Drug Development Strategy Utilized by Some Smaller R&D Firms

    By Christopher P. Singer --

In a February 7, 2007 Wall Street Journal article entitled: "Small Firms Seek to Profit From Drug Giants' Castoffs" (subscription required), Jeanne Whalen discusses a drug development strategy that is more frequently being employed by small drug companies.  In particular, smaller companies employing this strategy enter into agreements with larger companies to license the rights to drug candidate programs that have been discontinued.  In the hope of finding a potential blockbuster, the smaller firm attempts to overcome the hurdles that caused the larger company to halt work on the drug.  These hurdles typically involve costs associated with manufacturing the drug and/or difficulty formulating the drug.

This article presents several examples where this strategy has succeeded, as well as examples where it has failed.  In particular, Ms. Whalen focuses on the story of a renin-inhibitor drug candidate that was dropped by Novartis and picked up by Dr. Alice Huxley, a Novartis scientist originally involved with the discontinued Novartis project.  After Dr. Huxley learned that the project was to be shelved, she decided to leave Novartis, form her own company -- Speedel Holding AG -- and acquire the rights to the drug, now called aliskiren.  Speedel Holding eventually shepherded the hypertension drug to the clinic, overcoming the problems that had influenced Novartis to drop the program.  Under the terms of the original agreement, Novartis has repurchased the rights to the drug, and hopes that the drug's mechanism of action and efficacy will capture a sizeable chunk of the crowded hypertension drug market.  The financial reward for Dr. Huxley:  her Speedel stock holdings are estimated to be worth about $230 million.

Cell Genesys Secures $75M CEFF from Kingsbridge Capital Ltd.

    By Christopher P. Singer --

In a February 5, 2007 press release Cell Genesys announced that it has secured a Committed Equity Financing Facility (CEFF) of up to $75 million with institutional investor Kingsbridge Capital Limited.  The financing will derive from the sale of newly issued common shares of stock from Cell Genesys to Kingsbridge over the next three years.  During the term of the agreement Kingsbridge cannot short Cell Genesys stock.  Some additional details regarding this CEFF are provided at the link above.

According to the press release, this is the second CEFF between the parties, with funds from the first CEFF helping to advance Cell Genesys' GVAX® prostate immunotherapy into Phase 3 clinical trials.  For more information about Cell Genesys' clinical pipeline and development see this link.