Patent Docs

New York Times to Innovation: Drop Dead

    By Kevin E. Noonan --

The penchant for The New York Times' anti-innovation editorial policies to seamlessly blend into its "news" coverage (particularly on the Business page) has been noted by Patent Docs before.  Whether the latest example is more egregious than in the past is a matter of debate, but with apologies to President Reagan, "There they go again" in a piece published today under Robert Pear's byline on page 1 of the Business section (see "Patent Law Battle a Boon to Lobbyists").

The article goes wrong from the first sentence.  In writing about the fate of S. 1145, a bill with seventeen sections that proposes to modify U.S. patent law extensively (as previously reported by Patent Docs), Mr. Pear chose to bias the piece against patent stakeholders objecting to the bill:

A fight has erupted in Congress over whether drug makers and other companies should be allowed to keep patents they obtained by misrepresentation or cheating.

As Patent Docs readers know, this is not the issue, and "drug makers and other companies" are not trying to keep patents "obtained by misrepresentation or cheating."  Even ignoring that the issues with S. 1145 are more complicated than Mr. Pear recognizes, a fair statement of the inequitable conduct provisions of the bill is that they address the way courts determine if a patent was "obtained by misrepresentation or cheating."

Later in the piece, Mr. Pear acknowledges that the problem the bill proposes to address, inequitable conduct, has become "a plague on the patent system," pled in almost every patent case and arguably subject to abuse through ex post facto argument and occasional fanciful reconstruction of events.  Mr. Pear cited Robert Armitage (at left) of Eli Lilly and Company, that a finding of inequitable conduct is "like imposing the death penalty for relatively minor acts of misconduct."  He then misstates the position of innovator companies by asserting that "[b]rand-name drug companies are urging Congress to eliminate the penalty," which is not the case at all.

Of course, generics companies are more than happy to put their own spin, unquestioned, into the article.  Debra S. Barrett, a vice president of Teva Pharmaceuticals USA, is quoted as saying the changes supported by U.S. innovator companies "would make it easier for them to cheat and get away with it, easier for them to defend their patents and more difficult for us to get generic products onto the market in a timely way."  And the economics of the current drug regime are invoked, Mr. Pear citing the desire of AARP and other "consumer groups" to obtain generic drugs at prices "30 percent to 80 percent less than the equivalent brand-name drugs."  (There is nothing in the piece, of course, regarding the relative development costs between innovator and generic drug companies.)

Even then, Mr. Pear misses the point.  He states that "[i]n the last 15 years, the United States Court of Appeals for the Federal Circuit, which handles patent cases, has affirmed findings of inequitable conduct in at least 40 cases, including 14 that involved pharmaceutical or health care products."  But in view of the frequency with which inequitable conduct is alleged, the real story here is how infrequently inequitable conduct is found.  Showing an inability or unwillingness to do the necessary research (or, to be fair, the limitations of tight deadlines), Mr. Pear gins up his numbers by stating "[s]imilar findings have been issued by federal district judges in an unknown number of cases that were not appealed."

Unknown to Mr. Pear, perhaps, but not unknowable.  (A review of the Times list of Mr. Pear's recent articles reveals he is a reporter on general subjects, without any particular slant to business or technology stories.)  A Lexis search reveals that while inequitable conduct was alleged in over 2,100 patent cases between 1993 and 2008, accused infringers asserting inequitable conduct rarely prevailed.  And to complete the picture, while the Federal Circuit has affirmed inequitable conduct in 40 cases since 1993, it has not upheld inequitable conduct findings in 379 other cases.  These statistics bear our Judge Nichols' admonition twenty years ago in Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988), and recounted in the article as Congressional testimony from the Biotechnology Industry Organization, that the charge of inequitable conduct is a "plague on the patent system" that needs rectifying.  And ironically, the position advocated in the article is contrary to the results of a study done by Robert Shapiro, who concluded that the inequitable conduct provisions of S. 1145 would increase the frequency of inequitable conduct challenges (see "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part I").

Balance, to the extent there is any, can be found in the middle of the article, where James C. Greenwood (at left) from the Biotechnology Industry Organization; Robert Armitage; and Harry F. Manbeck Jr., Commissioner of Patents and Trademarks under President George H.W. Bush explain the competing influences between disclosing relevant information and trying to avoid inequitable conduct allegations by submitting to the Patent Office all the information that might be considered relevant to patentability.  Quoting Mr. Greenwood, "[t]he poor patent examiner gets a dump truck full of information that he has to pore over without any assistance from the applicant" under the current scheme, which would be modified under S. 1145 to try to avoid this situation.

All evidence of balance rapidly disappears, however, when Mr. Pear reports the contribution of Jon Dudas (at right), Undersecretary of Commerce for Intellectual Property.  Ostensibly tying the propensity to overdisclose less-than-relevant information to the backlog of unexamined patents, Mr. Dudas ignores the inequitable conduct issue entirely, alleging instead that "[w]e [the Patent Office] are getting more and more unpatentable ideas, worse and worse quality applications."  His "evidence":  falling allowance rates, which the cognoscenti will recognize are the result of changing examination standards (i.e., recalcitrance to patent allowances under the Dudas administration compared with cooperation with patent applicants under the Lehman administration).  Even if Mr. Dudas were correct, his evidence is the solution:  don't grant patents to applicants submitting unpatentable ideas or poor quality applications.

Only towards the end of the article does Mr. Pear discuss the purported subject of the piece:  how interest groups have spent millions lobbying Congress for or against S. 1145 (and the companion House bill, H.R. 1908, which passed last September).  At least Mr. Pear properly identifies the players:  the so-called Coalition for Patent Fairness, comprised of "high technology" companies like Intel and Cisco (not mentioned are the activities of Cisco's own Patent Troll tracker blogger, who tried to influence the debate more cost-effectively), and on the other side, the Coalition for 21st Century Patent Reform, whose members include several pharmaceutical and biotechnology companies.  Even in identifying these groups, Mr. Pear (and the Times) bias shines through:  while the motivations of "Patent Fairness" group are said to be to avoid "disputes [that] drain resources that could be better spent on research and innovation," the pharmaceutical companies "zealously guard their intellectual property and are more likely to file suit to protect their patents."  Mr. Pear either doesn't understand, or won't admit, that the reasons for the groups' different positions on patents and their value are directly linked to differences in development costs and obsolescence horizons between "high" tech companies (who can be tripped up by a clever teenager with a computer, a modem, and a good idea for a new Internet applet for social networking) and biotech/pharma companies, who face development and regulatory costs in the several hundreds of millions of dollars to get a new drug to market.  These differences have real consequences to the companies on either side of the debate.

What the Times doesn't consider, or refuses to mention, is that there will be consequences for the rest of us as well.  Will the American public be happy with an outcome that increases the number and decreases the costs of the newest electronic gadget, while at the same time decreasing the number of new drugs, especially biologic drugs that promise to address, for the first time, heretofore untreatable diseases?  It would be refreshing if the Times honestly set out what's really at stake in the debate over S. 1145.

Neuralstem Announces Grant of European Patent for Neural Stem Cells

    By Donald Zuhn --

On Monday, Neuralstem, Inc. announced that the European Patent Office had granted European Patent No. EP 0 915 968 to the Rockville, Maryland-based biotech company.  The '968 patent, entitled, "Isolation, Propagation and Directed Differentiation of Stem Cells from Embryonic and Adult Central Nervous System of Mammals," is directed to methods of expanding, culturing, and differentiating mammalian central nervous system stem cells in vitro; in vitro mammalian central nervous system (CNS) stem cell cultures produced from such methods; methods of generating mature neurons from mammalian multipotential CNS stem cells; and mature neurons generated from such methods.  According to Neuralstem's press release, the European patent has been validated in France, Germany, Ireland, Spain, Sweden, Switzerland, and the United Kingdom.

Neuralstem's technology allows for the production of commercial quantities of neural stem cells from the human brain and spinal cord, and for the differentiation of such cells into mature, physiologically relevant human neurons and glia.  Neuralstem is utilizing this technology to treat diseases of the major central nervous system, including ischemic paraplegia, traumatic spinal cord injury, and ALS (Lou Gehrig's disease).  According to Neuralstem's website, the company's technology has been used to extend the life of rats with ALS, as well as to reverse paralysis in rats with ischemic spastic paraplegia.

Neuralstem CEO Richard Garr called the '968 patent a "core technology patent," adding that "the European Patent Office has now joined with the U.S. Patent Office in rejecting any arguments that the body of Stem Cells Inc. patents and publications, noted in the [European] examinations, in any way prevents Neuralstem's patents from issuing."  As we reported last week, StemCells, Inc. filed a patent infringement suit against Neuralstem, asserting that Neuralstem had infringed four of StemCells' U.S. patents (see "StemCells' Patents Survive Reexam -- StemCells and Neuralstem Differ on Extent of Changes").  Neuralstem countered by seeking a reexamination of the asserted patents, and earlier this month, StemCells announced that the Patent Office had "upheld" two of the patents with "only minor amendments."  Neuralstem released its own statement, contending that StemCells had "completely mischaracterized the meaning of the US Patent and Trademark Office's most recent action."  While Mr. Garr's comments suggest that Neuralstem believes it has the better argument in its ongoing patent dispute with StemCells, StemCells has indicated that it plans to move forward with the case.

Independent claims 1, 6, 14, 17, and 24 of the '968 patent recite:

1.  A method for expansion and long-term culture in vitro of stem cells of the central nervous system of a mammal, wherein the stem cells maintain the multipotential capacity to differentiate into neurons, astrocytes, and oligodendrocytes, comprising the steps of:
    a) dissociating cells from central nervous system tissue by mechanical trituration;
    b) culturing the dissociated cells adhered onto a plate in a chemically defined serumfree culture medium;
    c) plating dissociated cells at a density not exceeding 20,000 cells/cm2 and, in subsequent passages, replating the cultured cells at a density not exceeding 10,000 cells/cm2;
    d) adding daily to the cultured cells a growth factor selected from the group consisting of
        i) bFGF at a concentration of at least 10 ng/ml,
        ii) EGF at a concentration of at least 10 ng/ml,
        iii) TGF-alpha at a concentration of at least 10 ng/ml, and
        iv) aFGF at a concentration of at least 10 ng/ml plus 1yg/ml heparin;
    e) replacing the culture medium with fresh medium within every two days;
    f) passaging the cultured cells within four days after plating so as not to exceed 50% confluence; and
    g) passaging the cultured cells by treating the cultured cells with saline solution and scraping cells from the plate.

6.  An in vitro culture of stem cells of the central nervous system of a mammal, wherein the stem cells maintain the multipotential capacity to differentiate into neurons, astrocytes, and oligodendrocytes.

14.  A method for differentiation of an in vitro culture of stem cells of the central nervous system of a mammal, wherein the stem cells maintain the multipotential capacity to differentiate into neurons, astrocytes, and oligodendrocytes, comprising the steps of:
    a) dissociating cells from central nervous system tissue by mechanical trituration;
    b) culturing the dissociated cells on a plate in complete absence of serum;
    c) adding daily to the cultured cells a first growth factor selected from the group consisting of
        i) bFGF at a concentration of at least 10 ng/ml,
        ii) EGF at a concentration of at least 10 ng/ml,
        iii) TGF-alpha at a concentration of at least 10 ng/ml, and
        iv) aFGF at a concentration of at least 10 ng/ml plus 1Hg/ml heparin;
    d) passaging the cultured cells by treating the cultured cells with saline solution and scraping the cells from the plate; and
    e) removing the first growth factor from the cultured cells.

17.  A method for in vitro generation of region-specific, terminally differentiated, mature neurons from cultures of mammalian multipotential
CNS stem cells, comprising the steps of:
    a) culturing multipotential CNS stem cells from a specific region in a chemically defined serum-free culture medium containing a growth factor;
    b) replacing the medium with growth factor-free medium;
    c) harvesting the stem cells by trypsinization;
    d) plating the stem cells at a density of between 100,000 to 250,000 cells per square centimeter; and
    e) culturing the cells in a glutamic acid-free chemically defined serum-free culture medium.

24.  An in vitro culture of region-specific, terminally differentiated, mature neurons derived from cultures of mammalian multipotential CNS stem cells from a specific region.

U.S. Continues Efforts to Protect Patent Rights Abroad

    By Kevin E. Noonan --

The U.S. Trade representative issued a "Special 301 Report" on Monday, pursuant to the provisions of the Trade Act of 1974.  This report, on the state of intellectual property rights worldwide, identifies twelve countries on a "priority watch list" and promises consultations with Congress, affected industry groups, and foreign governments to address IP issues.  The report "reflects the Administration's resolve to encourage and maintain effective IPR protection and enforcement worldwide."

The Report is promulgated pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994).  The Trade Representative is required under the Act to "identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection."  The Trade Representative has implemented these provisions by creating a "Priority Watch List" and "Watch List."  Placing a country on the Priority Watch List or Watch List is used to indicate that the country exhibits "particular problems . . . with respect to IPR protection, enforcement, or market access for persons relying on intellectual property."  These watch lists are reserved for countries having "the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products."

The Priority Watch List of the report lists China, Russia, Argentina, Chile, India, Israel, Pakistan, Thailand, Venezuela, and the Watch List names Algeria, Belarus, Bolivia, Brazil, Canada, Czech Republic, Ecuador, Egypt, Greece, Hungary, Indonesia, Italy, Jamaica, Kuwait, Lebanon, Malaysia, Mexico, Norway, Philippines, Poland, Romania, Saudi Arabia, Spain, Taiwan, Tajikistan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam; this is an upgrade for Egypt, Lebanon, Turkey, and the Ukraine, which were on the Priority Watch List in prior years.

As in prior years, the majority of the report focuses on software and entertainment piracy.  However, the report does address the problem of manufacturing and distributing counterfeit pharmaceuticals, singling out Brazil, China, India, Mexico, and Russia as countries where such incidents have "proliferated" and noting that counterfeit pharmaceuticals are sold and distributed in several countries.  The report also identifies both actual ("physical") and Internet-based ("virtual") markets for counterfeit goods.  The report also reviews the status of patent and other intellectual property rights country by country for all the countries on these two lists.  Some of the countries specifically examined in the report and listed on one of the Watch Lists are perennial delinquents with regard to patent and other IP rights, including Russia, China, Brazil, India and Thailand (and have been the focus of past Patent Docs articles).  Some of the others are more surprising, as they are U.S. trade partners or otherwise might be expected to respect IP rights.  These include Israel, placed on the Priority Watch List because "[t]he United States remains seriously concerned . . . with Israel's inadequate level of protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products, and Israel's laws that adversely affect the term of pharmaceutical patent protection by effectively reducing the time granted to compensate for delays in obtaining regulatory approval of a drug."  Canada is on the Watch List for failing to accede to the WIPO Internet Treaties, ineffective actions against counterfeit goods transshipped through Canada to the U.S. market, and Canada's "weak border methods."  Italy has been characterized by U.S. industries that rely on copyright as having "one of the highest overall piracy rates in Western Europe."  The Report includes Norway on the Watch List because "[t]he regulatory framework in Norway regarding process patents filed prior to 1992 denies adequate protection to nearly 75 percent of the pharmaceutical products currently on the Norwegian market," as reported to the U.S. government by U.S. pharmaceutical companies.

The U.S. Trade Representative Report provides insights into both the concerns of U.S. IP rights holders and the administration's intentions to work with, cajole, coerce, or threaten other countries to increase protection for IP rights of U.S. IP rights holders.  Western governments have been frustrated, particularly with regard to pharmaceutical products, in implementation of international trade treaties designed to increase IP rights protection.  The Report is in some ways the answer to the question, "What are we going to do about it?"

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

• "Thailand Continues Its Compulsory Licensing Practices," March 11, 2008
• "More on the Global Drug Patenting Crisis," August 14, 2007
• "EU Trade Commissioner Sends Warning Letter to Thailand," August 13, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007

USPTO News: USPTO and EPO to Implement Pilot Patent Prosecution Highway Program

    By Christopher P. Singer --

According to an April 28, 2008 press release, the U.S. Patent and Trademark Office (USPTO) and the European Patent Office (EPO) will implement a one-year long pilot Patent Prosecution Highway (PPH) program starting in September 2008.  Similar pilot programs with other countries have demonstrated the potential of the program for reducing application backlogs, eliminating redundant work, and leading to more efficient examination of applications.  According to USPTO Director Jon Dudas, the addition of this pilot PPH with the EPO "significantly expands the PPH network in the global patent office community."  Other participant countries in pilot PPH programs include Japan, Australia, Korea, the United Kingdom, and Canada (see links below for Patent Docs reports concerning these other pilot programs).  The program between the U.S. and Japan has moved from a pilot program to a full-time basis program.

The PPH gives applicants the option of requesting a fast track examination of a corresponding EP or US application when they receive a ruling from one or the other of the EPO or the USPTO that at least one claim in their application is patentable.  The prosecution in the second office is based on the patentable results from the first office, and thus, applicants can expect to obtain patents in both offices faster.  The requirements for participation in this pilot program will be published by both the USPTO and the EPO on each Office's website prior to the program's implementation.  We will provide more details concerning the pilot program as soon as they become available.

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

• "Patent Prosecution Highway Extended to IP Australia," April 2, 2008
• "Patent Prosecution Highway Network Expands to Canada & Korea," January 29, 2008
• "USPTO Announces Two Additional Partners in the Patent Prosecution Highway Pilot Program," January 17, 2008
• "USPTO and JPO to Implement Patent Prosecution Highway on Full-Time Basis," December 27, 2007
• "USPTO and UK IPO to Collaborate on Patent Prosecution Highway," September 14, 2007
• "Patent Prosecution Highway Pilot Program to Be Extended," June 28, 2007

GlaxoSmithKline to Acquire Sirtris Pharmaceuticals; Solvay Tenders Offer for Innogenetics

    By Donald Zuhn --

Last Tuesday, GlaxoSmithKline and Sirtris Pharmaceuticals announced that the companies had entered into a definitive agreement under which GlaxoSmithKline would acquire Sirtris Pharmaceuticals for approximately $720 million.  The acquisition is motivated by GSK's desire to enhance its metabolic, neurology, immunology, and inflammation research efforts by utilizing Sirtris' expertise in the field of sirtuins, a class of enzymes (NAD-dependent histone deacetylases) that are believed to be involved in the aging process.  According to a statement released by the companies, Sirtris has established a drug discovery capability that exploits sirtuin modulation for the treatment of human disease, and has been particularly focused on the development of SIRT1 activators for the treatment of Type 2 Diabetes Mellitus.

While Sirtris will become part of GSK’s Drug Discovery organization following the acquisition, the Cambridge, Massachusetts-based biopharmaceutical company will continue to operate as an autonomous drug discovery unit.  Sirtris was recently awarded U.S. Patent No. 7,345,178, which is directed to sirtuin-modulating compounds and methods of using such compounds.  The company also has at least nine U.S. patent publications, each of which is related to sirtuin-modulating compounds.

Last Friday, Solvay Pharmaceuticals, a subsidiary of the Solvay Group, and Innogenetics announced that Solvay Pharmaceuticals has launched a "friendly bid" to acquire Innogenetics for €177.6 million (or $276.9 million).  According to a statement released by the companies, Solvay began collaborating with Innogenetics in 1997 and has been utilizing Innogenetics' technologies in its own drug discovery efforts since that time.  Solvay Pharmaceuticals CEO Werner Cautreels explained that the tender offer was based on Solvay's "belief that the future of drug development lies in the design of personalized treatments with improved safety and efficacy," and that by adding Innogenetics' technologies, Solvay would be able to identify the best possible treatment for different patient groups.

Solvay intends to preserve the operational autonomy of Innogenetics, while continuing to develop and expand the company’s diagnostics business.  Innogenetics owns 118 U.S. patents and has at least 61 U.S. patent publications.

USPTO News: Patent Office Announces Common Application Format

    By Donald Zuhn --

Last fall, we reported on a memorandum of understanding that the U.S. Patent and Trademark Office (USPTO), European Patent Office (EPO), and Japan Patent Office (JPO) had reached during the 25th Annual Trilateral Conference.  One aspect of this agreement concerned a Common Application Format (CAF), which would allow applicants to prepare a single application that would be accepted by each Office.

At the time of the Conference, the CAF had not yet been disclosed.  The USPTO has now released additional information concerning the CAF.  With respect to the format itself, the USPTO provided an example of a format that complies with the CAF requirements:

Description
    Title of Invention
    Technical Field
        0001
    Background Art
        0002
    Summary of Invention
        Technical Problem
        0003
        Solution to Problem
        0004
        0005
        Advantageous Effects of Invention
        0006
    Brief Description of Drawings
        0007
            Fig. 1
            Fig. 2
    Description of Embodiments
        0008
        Examples
        0009
        0010
        Example 1
        0011
        Example 2
        0012
    Industrial Applicability
        0013
    Reference Signs List
        0014
    Reference to Deposited Biological Material
        0015
    Sequence Listing Free Text
        0016
    Citation List
        Patent Literature
        0017
        Non Patent Literature
        0018
Claims
    Claim 1
    Claim 2
Abstract
Drawings
    Fig. 1
    Fig. 2
Sequence Listing

The USPTO noted that while some of the requirements of the CAF go beyond current Patent Office rules and procedures, the new format was nevertheless consistent with such rules and procedures.  Therefore, the Office announced that it would accept applications that used the new format.  The USPTO also announced that the EPO would be implementing the CAF in early 2009, and that the JPO would be implementing most of the CAF requirements in early 2009 with the remainder of the requirements to be implemented in 2011.

The Patent Office announcement also contains links to information regarding the basic principles of the CAF, common requirements for documents under the CAF, and a comparative table of examples for applications.  With respect to the common requirements, some aspects of the CAF include the following:

• Applicants will not be required to remove National Legends (i.e., cross references to related applications and statements regarding federal funding) from the description.
• A statement of industrial applicability shall be included when it is not obvious from the description or nature of the invention.
• Applicants will not be required to remove any reference citation list from the description.
• Applicants shall use the International System of Units (SI) in the description, but may use additional alternative unit systems as long as SI units are placed in parentheses.
• Paragraphs of the description (but not the title or section headings) shall be numbered consecutively using Arabic numerals.
• Mathematical or chemical formulae shall be preceded by a sign indicating that the formula is mathematical ("Math.") or chemical ("Chem."), followed by a space, and then by an Arabic numeral (e.g., Chem. 1)
• Tables shall be preceded by a sign indicating that the table is a table ("Table"), followed by a space, and then by an Arabic numeral (e.g., Table 1)
• Claims shall be preceded by a sign indicating that the claim is a claim ("Claim"), followed by a space, and then by an Arabic numeral (e.g., Claim 1).

How to Avoid a Permanent Injunction: The Lessons of Amgen v. Hoffmann-LaRoche

    By Kevin E. Noonan --

In rendering its decision in eBay Inc. v. MercExchange, L.L.C. that the Federal Circuit's rubric that a patentee victory in a patent infringement lawsuit rendered the grant of a permanent injunction against the defendant almost "automatic," it is likely that the Supreme Court intended merely to adhere more closely to the distinction in statutory language between 35 U.S.C. §§ 283 and 284.  Specifically, Congress mandated that a prevailing patentee would be entitled to money damages for infringement ("the court shall award the claimant damages adequate to compensate for the infringement"), but left injunctive relief to the court's discretion ("[t]he several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity").  The Supreme Court's directive appeared merely to require the Federal Circuit to employ the conventional equitable considerations in granting injunctions under the patent statutes.  However, as related in a recent post, in its application the eBay decision appears to have other, likely unintended, consequences (see "Court Still Cannot Decide on Amgen's Permanent Injunction").

Hoffmann-LaRoche was the losing party last October in a jury verdict of infringement brought by Amgen, asserting four patents in its erythropoietin arsenal.  That verdict found Roche's Mircera® drug product (a form of recombinant EPO that has been covalently linked to polyethylene glycol) infringed claims 3, 7, and 8 of Amgen's U.S. Patent No. 5,547,933 (claim 12 was found not to be literally infringed but infringed under the Doctrine of Equivalents); claims 1 and 2 of U.S. Patent No. 5,441,868; and claims 6 through 9 of U.S. Patent No. 5,618,698 (see "Amgen Survives Another EPO Challenge").  Pursuant to that verdict, Amgen pursued a permanent injunction to prevent Roche from launching Mircera®, because the U.S. Food and Drug Administration granted approval for Roche to market Mircera® last November.

Instead of granting a permanent injunction, Judge Young of the District of Massachusetts granted a preliminary injunction on February 28, 2008, based on his application of the rubrics set forth by the Supreme Court in eBay for granting injunctions in patent cases.  In Amgen, Judge Young held that Amgen had clearly fulfilled three of the four factors mandated for consideration by the Supreme Court in eBay:  Amgen's asserted claims were infringed and not invalid; Amgen's injury would not be adequately compensated merely with money damages; and the balance of the hardships weighed in favor of granting the injunction.  However, the District Court did not decide in Amgen's favor as to the fourth prong, the public interest, particularly in view of Roche's representations of the advantages of its Mircera® product over Amgen's version of EPO (including inter alia less frequent dosing; see "Long-Acting Drug for Dialysis Anemia Equivalent to Weekly Agent").

On March 20, Roche complied with the requirements the District Court imposed in order for the Court to consider lifting the injunction (see "Court Still Cannot Decide on Amgen's Permanent Injunction").  These included that Roche would pay Amgen a royalty of 22.5%; Roche's sales to Medicare patients would be at a cost no more than the average sales price of Amgen's EPO products (a requirement that would prevent Roche from passing its royalty obligations onto patients, but would not prevent Roche from selling Mircera® at a bargain price relative); Roche would have to provide clinical evidence to permit the Court to determine a "dosage conversion factor" between Mircera® and Amgen's Epogen® product; Roche would pay for an independent agency to monitor sales and determine royalty payments owed to Amgen; and Roche would agree to supply Mircera® to any patient needing it, at or below the authorized price.  However, in the face of the District Court's continuing inability to resolve the fourth eBay injunction factor (as evidenced by the District Court's order that the parties submit a list of agreed candidates to be a "special master" to consider the scope of any injunction), Roche filed its notice of appeal to the Federal Circuit (see "Hoffmann-LaRoche Can't Wait, Files Notice of Appeal to the Federal Circuit").  The status of the injunction is thus in some doubt.  Amgen has informed the District Court that it would move to amend its complaint to seek damages, including enhanced damages for willful infringement, should Roche launch Mircera® before the case has been resolved.

As part of its brief indicating that it would comply with the conditions the District Court set for lifting the injunction, Roche advanced an argument that may resonate with other "generic" drug defendants.  Roche particularly argued that Mircera® had dosing and cost advantages that should be considered to be in the public interest, including a better dosing schedule (according to Roche, the difference between 12 (for Mircera®) and 156 (for Epogen®) injections per year for dialysis patients), concomitant reduced Medicare and Medicaid costs, and fewer adverse effects as well as meeting unmet medical needs (relating to Amgen's failure to secure FDA approval for monthly dosing for certain indications).

It will almost always be the case that a true generic drug manufacturer will be able to argue that the public has an interest in cheaper and more plentiful sources of drugs.  Even small decreases in drug prices can have a major impact, particularly in the public sector:  every cent saved on the cost of a patented drug disbursed through Medicare is a public savings, and with millions of Medicare recipients this rapidly becomes "real money."  The economics of this situation will only increase as more and more of the "baby boom" generation becomes eligible for (and begins to receive) Medicare benefits.  Thus, by mandating that courts apply conventional equitable principles in considering injunctions to prevailing patentees, the Supreme Court may have provided generic companies an avenue to convince a court that the public interest in cheaper drugs outweighs the patentee's (and the public's) interest in upholding patent rights.

At present, the statutory scheme grants a 30-month regulatory approval ban against a generic ANDA filer.  The ban is triggered by a patentee filing suit in response to receiving the generic drug company's Paragraph IV certification after filing an ANDA.  Since many pharmaceutical patent lawsuits take more than 30 months to be resolve, the FDA can grant approval to the generic before the Orange Book-listed patent has expired (35 U.S.C. § 271(e)(4)) or the outcome of the lawsuit has been determined.  However, particularly before resolution of an ANDA patent infringement lawsuit (which carries no entitlement to damages before a generic enters the market, and is triggered by the mere filing of an ANDA), generic drug companies are typically loathe to launch "at risk" of being liable not only for damages but enhanced damages for willful infringement (35 U.S.C. § 285).  Congress has amended the Hatch-Waxman Act before, however (most recently Medicare Modernization and Improvement Act of 2003).  The (favorable) economic consequences of permitting early generic entry (for the public, not the patentee) might be the occasion for additional modifications, including permitting an infringing generic drug maker to enter the market under the same type of "compulsory license" that Judge Young was considering in the Amgen case.  The fact that such a result would upset the balance of interests that motivated the Hatch-Waxman scheme may not be enough to forestall this result, particularly in view of the complete disregard for this balance evinced by the Supreme Court in Merck KGaA v. Integra Life Sciences (see "Merck v. Integra: The Supreme Court Misses a Golden Opportunity").

For additional information regarding this topic, please see:

• "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
• "Amgen Survives Another EPO Challenge," October 28, 2007

IPO Publishes Letter in Opposition to Proposed Rule Changes to Biological Deposits

    By Christopher P. Singer --

The Intellectual Property Owners Association (IPO) recently published a letter in opposition to the Federal Register Notice outlining proposed rule changes regarding biological deposits (see "Proposed Rule Change to Timing of Filing a Biological Deposit").  In particular, in its letter, signed by President Steven W. Miller, the IPO addresses the reasons why it believes the proposed rules are contrary to existing law and will have an adverse impact on applicants.  The IPO further urges that, in the event that the proposed rules changes are nevertheless adopted, certain additional protective rules be incorporated similar to those existing in the European Patent Office.

Briefly, the proposed rules would enact a requirement that applicants submit a deposit of biological materials prior to the publication of an application, and make it available to the public, without restriction.  In the Federal Register notice, the USPTO stated that its motivation for the rule changes included the AIPA, a desire to promote parity of disclosure across various technology areas, and to move toward international harmonization of rules regarding biological deposits.

The IPO first addresses and refutes the argument that the AIPA essentially requires these changes and that it overrules the CAFC's decision in In re Lundak.  In noting that the language of the AIPA fails to suggest the need for any deposit practice change, the IPO also cites to a GAO report that was commissioned by Congress during consideration of the AIPA.  Quoting from the report's conclusion that "the statute does not require an associated release of a biological deposit concurrent with 18-month publication," Deposits of Biological Materials in Support of Certain Patent Applications, GAO-01-49 (Oct. 2000) at 5, the IPO concludes that Congress was aware of the potential impact that the application publication rule could have on biological deposits.  Noting the lack of any language in the AIPA that addresses the need for changing the existing deposit practice, the IPO concludes that Congress in the AIPA did not overrule the controlling law (i.e., Lundak) for biological deposits.

Moving next to the PTO's argument that the rule changes would provide parity of treatment of inventions and disclosures across various technologies, the IPO again provides a persuasive argument that the proposed changes go too far.  The PTO's argument to this point is that a published application containing a reference to a biological deposit may not be adequately enabled for purposes of its use as a prior art reference under 35 U.S.C. § 102.  While conceding that published applications requiring a deposit of biological material for purposes of § 112 enablement would fail to qualify as prior art to another application with claims directed to the same biological material, the IPO argues that such situations would not be typical.  The IPO argues that the required enabling disclosure of a cited art reference is similar in scope to the enablement requirement of § 112 to support a claimed invention, citing to the PTO's use of non-patent literature and abstracts in art-based rejections.  Many such references fail to contain as much disclosure as a patent application, and fail to provide restriction-free access to the biological materials they describe.  In concluding this point, the IPO states that even with restricted access to a deposit during prosecution of an application, its eventual publication coupled with the existence of the deposit would likely qualify as prior art under 102(g).

As to harmonization, the IPO notes that while the proposed rules would encompass aspects of the deposit rules of the EPO, they completely fail to provide any of the protective rules also encompassed within the EPO's rules.

The IPO also argues that the rules changes would unfairly impact those applicants that make deposits, because a biological deposit effectively provides a mini, self-replicating factory for making an applicant's invention.  The IPO argues that while all inventions must contain adequate description for § 112 purposes, these rule changes would effectively require that a finished sample of the claimed invention be made available to any third party, without restricted use, prior to the issuance of the patent.  This situation creates a burden unique to those applicants making biological deposits.  While acknowledging that such potentially infringing activity could be curtailed by the threat of provisional rights that would provide a reasonable royalty for infringing acts, the IPO notes that such rights would exist only when the issued claim is substantially identical to the published claim.  Further, given that prosecution of a published application is publicly accessible using PAIR, third parties can feely monitor the course of prosecution and base their actions on amendments made to the application.

Hopefully, the USPTO will take the IPO's comments seriously and, if not abandon the changes entirely, consider at least amending the proposed rules to incorporate certain protections for applicants that make a biological deposit.

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.

UCB Inc. et al. v. KV Pharmaceutical Co.
1:08-cv-00223; filed April 18, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 6,344,215 ("Methylphenidate Modified Release Formulations," issued February 5, 2005) following a paragraph IV certification as part of KV's filing of an ANDA to manufacture a generic version of UCB's Metadate CD® (methylphenidate hydrochloride, used to treat attention deficit hyperactivity disorder).  View the complaint here.

Connetics Corp. et al. v. Pentech Pharmaceuticals Inc.
1:08-cv-02230; filed April 18, 2008 in the Northern District of Illinois

Infringement of U.S. Patent No. 6,126,920 ("Method of Treating a Skin Disease with a Corticosteroidcontaining Pharmaceutical Composition," issued October 3, 2000) following a paragraph IV certification as part of Pentech's filing of an ANDA to manufacture a generic version of Connectics' OLUX® (clobetasol propionate foam 0.05%, used to treat moderate to severe scalp dermatoses).  View the complaint here.

McNeil-PPC, Inc. v. Perrigo Co. et al.
3:08-cv-01909; filed April 18, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 6,153,635 ("Methods and Kits for Treating Vulvovaginal Candidiasis with Miconazole Nitrate," issued November 28, 2000) following a paragraph IV certification as part of Perrigo's filing of an ANDA to manufacture a generic version of McNeil's Monistat® 1 Combination Pack (miconazole nitrate vaginal cream and suppository, used to treat vaginal yeast infections).  View the complaint here.

Bayer Schering Pharma AG et al. v. Sandoz, Inc. et al.
1:08-cv-03710; filed April 18, 2008 in the Southern District of New York

Infringement of U.S. Patent No. 5,569,652 ("Dihydrospirorenone as an Antiandrogen," issued October 29, 1996) following a paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Bayer's Yasmin® (drospirenone and ethinyl estradiol, used as oral contraception).  View the complaint here.

Conference & CLE Calendar

April 25, 2008 - Patent Claim Construction (Law Seminars International) - Atlanta, GA

April 30, 2008 - Public PAIR and Data-Mining Requests Webcast (U.S. Patent and Trademark Office)

April 30-May 1, 2008 - Pharma/Biotech Collaborative Agreements (American Conference Institute) - San Francisco, CA

May 15, 2008 - The Federal Circuit: A National Court of Appeals: Addressing New Challenges (U.S. Court of Appeals for the Federal Circuit) - Washington, DC

May 28, 2008 - Advanced Patent Licensing 2008: What You Need to Know Before Licensing Your Patent (Practising Law Institute) - New York, NY

May 28-30, 2008 - PharmaBiotech IP Summit (Worldwide Business Research) - Philadelphia, PA

June 11, 2008 - Advanced Patent Licensing 2008: What You Need to Know Before Licensing Your Patent (Practising Law Institute) - San Francisco, CA

June 16, 2008 - Prior Art & Obviousness 2008: The PTO and CAFC Perspective on Patent Law Sections 102 & 103 (Practising Law Institute) - San Francisco, CA

June 17-20, 2008 - BIO International Convention (Biotechnology Industry Organization) - San Diego, CA

June 18-20, 2008 - Fundamentals of Patent Prosecution 2008: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) - New York, NY

June 23, 2008 - Multilateral Patents (Law Seminars International) - San Francisco, CA

July 1, 2008 - Prior Art & Obviousness 2008: The PTO and CAFC Perspective on Patent Law Sections 102 & 103 (Practising Law Institute) - New York, NY

July 9-11, 2008 - Fundamentals of Patent Prosecution 2008: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) - San Francisco, CA

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

PLI Advanced Patent Licensing Conference

Practising Law Institute (PLI) will be holding a conference entitled: "Advanced Patent Licensing 2008: What You Need to Know Before Licensing Your Patent" on May 28, 2008 in New York, NY and on June 11, 2008 in San Francisco, CA.  The conference will offer presentations on the following topics:

I.  What’s Hot in Patent Licensing Law

• MedImmune and SanDisk -- how licensors are trying to protect themselves from adverse case law
• What you really need to know about patents to license them
• What are the big issues facing patent owners trying to license their patents?
• The crucial patent reps and warranties
• What is a "reasonable royalty"?
• The licensee insists on indemnification.  What should you do?

II.  Critical Issues in Joint Development Agreements/Patent Purchases & Sales

• What is the best treatment of joint inventions in JDAs?  The worst?
• Can you keep your joint developer from becoming your competitor?
• Are patent assignments important in JDAs?
• The key provisions in a patent purchase agreement
• What are the landmines in purchasing patents?
• How to conduct due diligence in patent purchases
• Reservation of rights by seller
• Form of agreement:  IP (patent assignment) vs. corporate (asset purchase agreement)?

III.  Analysis of a Patent License Agreement

• The 30-page license agreement:  Where are the land mines?
• Are you a deal killer?  When to kill the deal
• What makes a patent license fair for both sides?
• What are the hot legal buttons?
• Are patent owners becoming more willing to indemnify against patent infringement?
• How far can a patent owner push before the potential licensee walks?
• Using fields of use and territorial restrictions to maximize revenues
• Learn from experienced licensing attorneys using clauses taken from actual agreements
• You want to pay me in what currency?  How to get royalties back to the States
• Does it matter which state's or country's law governs?
• Let's arbitrate in Hawaii!
• When licensees want to pay for prosecution of licensor's patents
• Your patents have expired;  Can you still collect royalties?

IV.  Mock Deal Negotiation of an International Patent License -- Learn the Key Issues from the Licensor & Licensee Points of View; Ethical Considerations in Licensing

• Perspectives of the licensor and licensee on key issues
• Negotiating international issues
• Hot issues in licensing
• Creating win-win negotiations
• Navigating through controversial provisions

V.  Intersection of Ethics & Lawyers Professional Liability in Connection with Patent Licensing Negotiations

• You doubt the validity of your client's patent.
• Any ethical obligation to the licensee?
• When does silence become fraud?
• The parties end up in litigation; Can your firm handle the case if you will have to testify about the negotiation?
• What are the implications of professional liability claims that allege ethical breaches in connection with:  Competence?  Confidentiality of information?  Conflicts of interest?  Declining or terminating representation?
• What adverse consequences are associated with conflicts of interest in patent licensing negotiations?  Disqualification motions and orders, disciplinary actions, forfeiture of fees and malpractice claims

A full program for the Advanced Patent Licensing conference can be found here (New York) and here (San Francisco).  The registration fee for the conference is $1,395. Those interested in registering for the conference can do so here (New York) or here (San Francisco).

PLI Fundamentals of Patent Prosecution Conference

Practising Law Institute (PLI) will be holding a conference entitled: "Fundamentals of Patent Prosecution 2008: A Boot Camp for Claim Drafting & Amendment Writing" on June 18-20, 2008 in New York, NY and on July 9-11, 2008 in San Francisco, CA.  The three-day program will consist of morning lectures followed by small clinic sessions in the afternoon.  The conference will offer presentations on the following topics:

• Taking invention disclosures
• Overview of claim drafting and preparation of patent application
• Claim drafting
• Review of model claims
• Patent prosecution
• Conducting the examiner interview
• Review of model amendment
• Litigation issues

A full program for the Fundamentals of Patent Prosecution conference can be found here (New York) and here (San Francisco).  The registration fee for the conference is $1,395. Those interested in registering for the conference can do so here (New York) or here (San Francisco).

PLI Prior Art & Obviousness Conference

Practising Law Institute (PLI) will be holding a conference entitled: "Prior Art & Obviousness 2008: The PTO and CAFC Perspective on Patent Law Sections 102 & 103" on July 1, 2008 in New York, NY.  The conference will offer presentations on the following topics:

I.  Overview of Sections 102 and 103

A.  Section 102 and the MPEP, from (a) to (g) (or what isn't in the statute but is in the law?)

• "Public knowledge" vs. "public use," "in this country"
• When is a patent a "patent": (a) vs. (b) vs. (d)
• Availability on the "web," on the shelf, and routine practices
• The "invention" and "experimental use"
• Date of "invention"
• Abandonment under (c) and (g)
• The foreign origin C.I.P. trap; "claimed or could have claimed"
• Derivation: "authorship" vs. "inventorship"
• 102(g): Inter partes and ex parte and NAFTA/WTO

B.  Section 103 and the PTO KSR Guidelines

• From Jefferson to Graham v. John Deere: A brief history -- how we got here
• The CAFC (Patents-R-Us, the result-oriented court) -- how we got there
• KSR -- our just deserts; can we recover? The PTO Guidelines

II.  Section 102(a) - (d)

A.  102(a) and (b) and the CAFC 2008

• "Public" availability is the vanguard of (a) and (b)
• When is a patent a "patent" under the statute?
• Prior art date for "cancelled" subject matter
• Public accessibility -- on the Web, on the shelf, in the mail, "routine" practices
• Effects of "confidentiality"
• Third-party public use of inventor's own work
• "On sale" by whom and under what circumstances

B.  102(c) and (d): Abandonment and the "Four Steps"

• "Abandonment" and intent of the inventor
• Deliberate surrender of rights
• Four steps to the abyss of (d)
• Do the foreign and U.S. claims have to be the same for (d) to apply?
• The C.I.P. trap
• "Allowed applications" vs. "patents" under (d)

III.  102(f) and (g): Joint Ventures and Co-Development

• Derivation
• "Authorship" vs. "inventorship"
• Conception and communication to "another"
• Ex parte 102(g); abandon, suppress, conceal
• Actual vs. constructive reduction to practice (where (e) trumps (g))
• Diligence
• 102(f) and (g) under 103(c)

IV.  35 USC 103 and the CAFC

• KSR in 2008 in the District Courts
• KSR as implemented by the CAFC
• Where do we go from here?

V. 102(e) and the 9 Most Common Timelines: Effects of Priority Under 119, 120, 121, 365

• What have they done to 102(e)?
• The issues raised by successive common owner filings
• The published U.S. application
• The published international application
• The issued U.S. patent
• Priority under 119, 120, or 365
• A walkthrough of the "guidelines" and "timelines"
• Ethical requirements under 102(a) through (g)

A full program for the Prior Art & Obviousness 2008 conference can be found here.  The registration fee for the conference is $1,395.  Those interested in registering for the conference can do so here.

Patent Profile: StemCells Announces Issuance of Human Neural Stem Cell Patent

    By Donald Zuhn --

Yesterday, StemCells, Inc. announced that the U.S. Patent and Trademark Office has issued U.S. Patent No. 7,361,505, which is directed to multipotent neural stem cell compositions.  While the '505 patent is assigned to Neurospheres Holdings Ltd., StemCells notes that it has exclusively licensed the patent.  As we reported earlier this week, StemCells is currently involved in a litigation with Neuralstem regarding four of StemCells' other multipotent neural stem cell patents (see "StemCells' Patents Survive Reexam -- StemCells and Neuralstem Differ on Extent of Changes").

According to StemCells' statement, the '505 patent contains "broad claims covering human neural stem cells derived from any tissue source, including embryonic, fetal, juvenile, or adult tissue."  StemCells President and CEO Martin McGlynn believes the issuance of the '505 patent "rounds out and strengthens" the Palo Alto-based biotech company's neural stem cell portfolio, which he called "unparalleled in its breadth, depth and completeness."  Mr. McGlynn added that StemCells was "confident that any third party wishing to commercialize neural stem cells as potential therapeutics or to use them as drug screening tools will have to seek a license from us irrespective of how they derive the cells."

The '505 patent issued from U.S. Application No. 08/480,172, filed June 7, 1995, which claims the benefit of series of continuation-in-part applications going back to July 8, 1991.  Independent claims 1, 9, 13, 14, 18, and 24-26 of the '505 patent recites:

1.  A pure in vitro cell culture composition derived from the embryonic or fetal mammalian CNS consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that are: nestin+ and; are glial fibrillary acidic protein (GFAP)-; neurofilament (NF)-; and myelin basic protein (MBP)-; and not nestin-.

9.  A purified population of multipotent neural stem cells derived from juvenile or adult mammalian CNS tissue that includes tissue from the subependymal region lining the ventricles in the forebrain, conus medullaris, thoracic spinal cord, brain stem, or hypothalamus.

13.  A pure in vitro cell culture composition derived from mammalian CNS consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that are: nestin+ and; are glial fibrillary acidic protein (GFAP)-; neurofilament (NF)-; and myelin basic protein (MBP)-; and not nestin-.

14.  A pure in vitro cell culture composition derived from juvenile or adult mammalian CNS tissue consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that are: nestin+ and; are glial fibrillary acidic protein (GFAP)-; neurofilament (NF)-; and myelin basic protein (MBP)-; and not nestin-.

18.  A pure in vitro cell culture composition derived from mammalian CNS tissue consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that stain positive for nestin and said neurospheres lack differentiated neural cells that do not stain positive for nestin but that stain positive for the differentiated neural cell markers neurofilament, glial fibrillary acidic protein and myelin basic protein.

24.  A purified population of multipotent neural stem cells isolated from the embryonic or fetal mammalian CNS, wherein the neural stem cells are human cells.

25.  A pure in vitro cell culture composition consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that are: nestin+ and; are glial fibrillary acidic protein (GFAP)-; neurofilament (NF)-; and myelin basic protein (MBP)-; and not nestin-.

26.  A pure in vitro cell culture composition consisting of neurospheres and culture medium, wherein said neurospheres consist of undifferentiated neural cells that stain positive for nestin and said neurospheres lack differentiated neural cells that do not stain positive for nestin but that stain positive for the differentiated neural cell markers neurofilament, glial fibrillary acidic protein and myelin basic protein.