Patent Docs

In re Omeprazole Patent Litigation (Fed. Cir. 2008)

    By Donald Zuhn --

Yesterday, the Federal Circuit affirmed the determination by the District Court for the Southern District of New York that Defendants-Appellees Mylan Laboratories, Inc., Mylan Pharmaceuticals, Incorporated, Esteve Quimica, S.A., and Laboratorios Dr. Esteve, S.A. (Mylan) did not infringe U.S. Patent Nos. 4,786,505 and 4,853,230, which relate to oral pharmaceutical preparations for omeprazole.  Omeprazole is the active ingredient in Prilosec®, which is marketed by Plaintiffs-Appellants Astrazeneca, AB, Aktiebolaget Hassle, KBI-E, Inc., KBI, Inc., and Astrazeneca LP (Astrazeneca) for the treatment of gastric and duodenal ulcers, and which acts by inhibiting the production of gastric acid.

Astrazeneca developed the omeprazole oral formulation claimed in the '505 and '230 patents in order to overcome formulation problems with omeprazole resulting from the compound's susceptiblity to degradation in acid-reacting and neutral media, and sensitivity to heat, organic solvents, moisture, and light.  In particular, the claimed oral formulation includes, inter alia, a core containing omeprazole and an alkaline reacting compound (ARC).

Seeking approval to market a generic version of Astrazeneca's omeprazole formulation, Mylan filed an Abbreviated New Drug Application (ANDA) with the FDA.  Mylan's formulation includes an inert sugar/starch core with an active coating of omeprazole, talc, and hydroxypropyl methylcellulose.

In response to Mylan's ANDA filing, Astrazeneca filed suit for infringement of the '505 and '230 patents.  Astrazeneca similarly filed infringement suits against a number of other generic drug manufacturers seeking to market generic omeprazole formulations.  These suits were consolidated with the action against Mylan in a multi-district litigation, and then tried in two waves.

During a 42-day bench trial, both Astrazeneca and Mylan presented evidence as to whether Mylan's formulation contained an ARC in the active core region, as required by the claims.  In particular, Astrazeneca argued that the talc in Mylan’s formulation was alkaline and that the source of this alkalinity was carbonates (i.e., the use of talc introduces carbonates into the active drug layer, and these carbonates are the ARCs required by the claims).  Astrazeneca's expert performed tests that indicated that carbonates were present in Mylan’s talc, and that these carbonates were the source of the alkalinity of the talc.  Mylan countered with tests that indicated that their talc contained no detectable amount of carbonates.  After weighing the competing evidence, the District Court determined that Astrazeneca failed to prove that Mylan's talc contained carbonates, and found for Mylan on the issue of infringement.

On appeal, the Federal Circuit rejected each of Astrazeneca's arguments for reversal.  The CAFC first rejected Astrazeneca's argument that the District Court had applied the wrong legal standard (i.e., something higher than a preponderance of the evidence), determining that the District Court "knew, understood, and applied the proper standard of proof."  The Federal Circuit next rejected Astrazeneca's argument that it had met its burden of proof since the District Court had "ignored vast amounts of evidence that showed the presence of carbonates in the talc."  The CAFC, however, noted that such an argument "amounts to mere disagreement with the court’s factual findings, which cannot serve as a basis for reversing the court."  As a result, the Federal Circuit affirmed the District Court's finding of noninfringement.

In re Omeprazole Patent Litigation (Fed. Cir. 2008)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Bryson, and Gajarsa
Opinion by Circuit Judge Lourie

Will Biotechnology Solve the World Food Crisis?

    By Kevin E. Noonan --

The current crises in energy and food have followed eerily similar paths.  The founding of OPEC and the exponential rise in crude oil prices during and after the 1973 Arab-Israeli conflict produced a short-lived emphasis in the U.S. with fuel efficiency and smaller automobiles.  These were predominantly imported from Japan and U.S. automakers were unable to compete despite government efforts to encourage conservation, such as mandated fuel efficiency standards, "gas guzzler" taxes, and the 55 mph speed limit.  But during the 1980's and 1990's, as the relative cost of gasoline in the U.S. fell, U.S. automakers and consumers returned to bigger automobiles, particularly SUVs, as safety and room for suburban soccer moms and their broods were more important considerations than fuel efficiency.  Indeed, the small trend towards more fuel-efficient cars since the turn of the century was motivated more by the threat from greenhouse gases and global warming than fuel costs per se.  Until recently.

Similarly, the last time world food supplies were threatened by world population growth was the 1960's, and the response was "The Green Revolution," a combination of technology transfer and agricultural subsidies by individual Western governments, including our own and institutions like the World Bank.  These efforts were so successful that by the 1980's an American government official scoffed at the idea that poor and developing nations should be concerned with local agriculture when they could just "buy American."

But today the world food supply is dwindling as an increasing number of the increasing populations in countries like China and India are becoming prosperous enough to pursue a greater percentage of the food supply.  This has led to food riots in some countries and calls for increased government cooperation and subsidies for food.  As reported in a May 18th article in The New York Times, the world may soon reap what it has sown over the past twenty years, as a result of severe neglect of the infrastructure research and development efforts in countries around the world (see "World's Poor Pay Price as Crop Research Is Cut").  The Times article documents how research institutions like the International Rice Research Institute in the Philippines and the International Maize and Wheat Improvement Center in Mexico, remnants of the Green Revolution efforts, have suffered years of underfunding and neglect.  Ironically, these institutes and others have made scientific developments in insect resistance and increased yields that could address some of the causes of reductions in food supply, but don't have the funds to transfer the technology to the farmers, mostly impoverished, that most need it.  One example discussed in the article is the brown plant hopper, a rice pest that threatens rice harvests throughout Asia.  Scientists at the Rice Institute "have identified 14 genetic traits that could help rice plants survive" infestation by this pest, but there are no funds to support the work of transferring these traits into the most common rice varieties.  Staffing has been drastically cut (from 5 entymologists supervising 200 employees to 1 entymologist with a staff of 8) and the physical plant of the institute neglected.  A similar situation exists in the Maize and Wheat Institute in Mexico, where scientists have developed drought-tolerant corn that could be used in Africa and disease-resistant wheat that could be grown in parts of Asia.  But without funding, these new varieties cannot be sent to the places that most need them.

And while Western governments are awakening to the problem, they have not reversed a decades-long trend to reduce agricultural aid.  As cited in the article, the U.S. under the Bush Administration has slashed 75% of the monies this country gives to global efforts (and the researchers manning those efforts) to improve crops grown in poor countries.  What makes the situation worse is the penny-wise/pound foolish nature of American policies, since at the same time the Administration has asked Congress for an "extra" $770 million in food aid for poor countries.  The Times sets forth a series of informative graphs showing the decline in agricultural aid over the past 20 years (click on graphs to enlarge).

Agricultural support from the World Bank, for example, has dropped from $7.7 billion in 1980 to 2 billion in 2004 (although this trend may be reversed under the new President, Robert B. Zoellick, who has proposed doubling agricultural lending to Africa).  On the whole, the article states that Western countries have reduced agricultural aid from $6 billion in 1980 to $2.8 billion in 2006; U.S. support in that time frame has fallen from $2.3 billion to $624 million according to the Times.

The frightening reality is that the food supply is always finely balanced between agriculture and nature i.e., pests and diseases that affect yield, much like the constant battle between disease-causing microorganisms and antibiotics.  Traditional plant breeding programs, because they can take several generations or growing seasons to establish useful traits are more vulnerable to variations in support and effort and operate best when the research is sufficient to stay abreast if not ahead of diseases, pest, environmental changes, and other yield reducing phenomenon.  This is precisely what the world has not done over the past 25 years, and one of the reasons why worldwide agriculture is lagging behind population growth for the first time in more than a generation.  As Robert S. Ziegler, director general of the Rice Institute is quoted in the article as saying, "[c]utting back on agricultural research today is pure folly."

This is where biotechnology might provide an antidote.  One of the advantages of biotechnology as compared with traditional agricultural research is that it can be more easily targeted and new traits more rapidly introduced, as a consequence inter alia of being able to assess genotype as well as phenotype.  The biotechnology approach also has the benefit of being part of private enterprise, which can avoid the bureaucratic and political inertia associated with government-run programs.  The fruits of agricultural biotechnology can also have a plurality of applications, so that applying the technology to profit-making ventures can subsidize technology transfer to countries without the ability to afford it.  (In some ways this is already happening in the pharmaceutical industry, where drug pricing is much lower even in developing countries like Brazil as a result of government policies that force Western drug companies to provide lower drug prices.  Ultimately, the differential costs are borne by Western consumers more able to pay the full price.)  Under these circumstances, initiatives like the ones announced by Monsanto last week, pledging to provide pest-, disease-, and drought-resistant varieties of important crop species may become an important solution to the world food problems.

Only the naïve would not recognize the potential for abuses under a system where a significant component of global food technology is in private hands.  But the reality is that biotechnology provides the only known solution with the potential to alleviate the results of decades of neglect of more traditional agricultural research in a time frame short enough to make a difference between starvation and survival for the world's poorest inhabitants.  It would be unconscionable to forego the potential of biotechnology in these efforts.

For additional information on this topic, please see:

• "Monsanto Moves to Address World Food Shortages," June 4, 2008

USPTO News: New Appeals Rules Published

    By Donald Zuhn --

As we reported yesterday, the U.S Patent and Trademark Office published a notice in the Federal Register today setting forth amended rules of practice before the Board of Patent Appeals and Interferences (BPAI) in ex parte appeals (new appeals rules).  The lengthy 41-page notice (73 Fed. Reg. 32938) is broken up into six sections:

• Background (page 1 of the notice), which summarizes the Office's rationale and objectives in amending the appeals rules;

• Explanation of New Rules (pages 1-12), which, as the heading suggests, provides an explanation for each of the changes to the rules;

• Changes Made to Rules as Proposed (pages 12-18), which shows how the new appeals rules as published in today's notice differ from the appeals rules as proposed in the Office's July 2007 notice of proposed rulemaking (additions to the proposed rules are indicated by brackets and deletions are indicated by braces);

• Discussion of Comments (pages 18-33), which provides the Patent Office's answers to the 109 comments it received;

• Rulemaking Considerations (pages 33-36), in which the Office certifies that the new appeals rules satisfy rulemaking considerations of the Administrative Procedure Act, Regulatory Flexibility Act, Executive Orders 13132 and 12866, and Paperwork Reduction Act; and

• List of Subjects in 37 CFR Part 41 (pages 36-41), which sets forth the text of the amended portions of 37 C.F.R. Chapter 1, part 41.

According to the notice, the new appeals rules were needed to address a rising number of ex parte appeals.  In particular, the Board received 4,639 ex parte appeals in FY 2007 -- an increase of more than 1,000 appeals from FY 2006 -- and the Office expects the Board to receive more than 6,000 ex parte appeals in FY 2008.  Thus, the Office's goal was to amend the rules in such a way that the Board would be better able to handle the increasing number of ex parte appeals in a timely manner.

The notice indicates that "[a] major objective of the amended rules is to avoid unnecessary returns to examiners by the Appeals Center and the Board, along with the resulting delays in application and appeal pendency."  The Patent Office contends that the requirements set forth in the new appeals rules are more objective, and as a result, "both appellants and examiners will have a better understanding of what is required, thereby minimizing, if not eliminating, a need to hold appeal briefs defective."

In support of the new appeals rules, the Office argues that a number of the changes to the rules have been modeled after the Federal Circuit rules.  In addition, the Office notes that some of the changes were made because the old appeals rules "turned out in practice to be too subjective."  As one example, the notice states that the requirement for a summary of the invention has been replaced with an analysis of the claims and drawings (and means or step plus function analysis if relevant).

According to the notice, one other objective of the new appeals rules is improved appellant briefing.  The Office contends that the 30-page limit for appeal briefs will help accomplish this objective by promoting "concise and precise writing."  While the 30-page limit excludes the statement of the real party in interest, statement of related cases, table of contents, table of authorities, status of amendments, jurisdictional statement, signature block, and appendix, it will cover a number of sections required under the new appeals rules.  These sections include a "statement of facts," in which the appellant must set out the material facts relevant to the rejections on appeal, and an "argument" section, in which the appellant must explain why the examiner is believed to have erred as to each rejection to be reviewed.  In the latter section, the appellant must "address all points made by the examiner with which the appellant disagrees and must identify where the argument was made in the first instance to the examiner or state that the argument has not previously been made to the examiner."

One other change to the new rules is the promulgation of new Rule 41.56, which allows for the imposition of sanctions against an appellant who fails to comply with an applicable rule.

As we noted in our report yesterday, the new appeals rules will apply to any appeal briefs filed on or after December 10, 2008.

While the new appeals rules are unlikely to have the impact the new continuation and claims rules would have had if allowed to stand or the impact the IDS or alternative claiming rules packages will have when (or if) the Office publishes final rules, Cantor Fitzgerald Vice President David Boundy (at left) sent us a note earlier today to let us know that he nevertheless found the new appeals rules to be quite problematic.  In addition to taking issue with the manner in which the Office "answered" a number of comments, Mr. Boundy also had problems with the section on Rulemaking Considerations.

With respect to the Office's answers, Mr. Boundy argued that the Office improperly paraphrased comments and then provided answers to the paraphrased comment rather than the actual comment.  He also contended that the Office made up facts out of thin air (e.g., stating, without any factual basis, that it takes only "10 to 15 minutes" to generate a Table of Contents and Authorities for an appeal brief).  Mr. Boundy further chastised the Office for ignoring comments that pointed out that the Federal Circuit permits the skipping of page numbers in the appendix (thus reducing the time required to prepare the appendix), and instead, adhering to rules that require an appendix to begin at page 1 and be consecutively numbered to the end.  Foreseeing the problems such a rule will cause, he offered a prayer for "the appellant who needs to insert an additional page in the last few days before filing the brief."

Mr. Boundy also found fault with the Office's "attempts" to comply with the Paperwork Reduction Act and Executive Order 12866.  In particular, he noted that even though substantial issues had been raised under the Paperwork Reduction Act and Executive Order 12866, "the PTO simply brushed the issues aside with no comment, except to baldly assert that the Appeal Rule imposes zero cost of compliance and zero sacrifice of rights."

Mr. Boundy concluded by stating that:

Since 2001, the PTO has regarded rules of procedure as expendable, to be ignored when constraining PTO action but enforceable when applicable to constrain applicants, and Due Process is something for dewey-eyed foreigners.  This Notice of Final Rulemaking appears to continue the trend.

Quanta Computer, Inc. v. LG Electronics, Inc. (2008)

    By Kevin E. Noonan --

The Supreme Court handed down its opinion in Quanta Computer, Inc. v. LG Electronics, Inc. today, deciding a question of patent exhaustion in the sale of computer components.  The decision, strengthening the patent exhaustion principle, was not really a surprise for a number of reasons.  First, it was consistent with Supreme Court precedent, most particularly United States v. Univis Lens Co., 316 U. S. 241 (1942).  Second, the decision is in keeping with the Supreme Court's longstanding antipathy to patent "monopolies" and anything that would result in extending them outside their most limited scope.  Finally, of course, the case represented another opportunity to reverse the Court of Appeals for the Federal Circuit; the Supreme Court has spent the last decade or so in establishing its own supremacy in patent law at the expense of whatever consistency the Federal Circuit has attempted (rightly or wrongly) to impose.

The case involved sales by Quanta and the other defendant computer makers of computers comprising both Intel and non-Intel produced components.  LG Electronics, who licensed the patents-in-suit (U.S. Patent Nos. 4,939,641; 5,379,379; and 5,077,733) to Intel, imposed a condition on its licenses with Intel that sales were not authorized to third parties that would mix Intel and non-Intel components, and further that Intel was under an affirmative obligation to inform its customers that such uses were not licensed.  The patents-in-suit claimed methods for organizing read/write requests in computer cache and random access memory (the '379 patent); methods for prioritizing access of peripheral devices to the microprocessor via the computer bus (the '733 patent); and a system for "ensuring that the most current data are retrieved from main [RAM] memory by monitoring data requests and updating main memory from the cache when stale data are requested" (the '641 patent).  It was undisputed that Quanta and the other defendants purchased patented microprocessors from Intel that fell within the scope of the LG patents, that they were aware of the restrictions and limitations placed on their use of these components by the license between LG and Intel and that the defendants sold computer systems comprising Intel components operatively linked to non-Intel components.  Although the District Court granted summary judgment in favor of Quanta, the Federal Circuit reversed in part and remanded, on the grounds that method claims were not subject to patent exhaustion or, in the alternative, that LG had not licensed Intel to sell components for use in computers having both Intel and non-Intel components.

In its decision reversing the Federal Circuit, a unanimous Court (in an opinion written by Justice Thomas) settled one unsettled question of patent exhaustion and reinforced its test for calculating the extent of the doctrine.  Directly reversing the Federal Circuit, the Court held that method claims are not exempt from patent exhaustion.  Citing previous Supreme Court cases that "rest on solid footing" (including Ethyl Gasoline Corp. v. United States, 309 U.S. 436 (1940), and Univis), the opinion asserted that it had never treated composition and method claims differently, applying the "substantial embodiment" test to apply the patent exhaustion principle to method claims.  The reasoning mirrored in some ways the District Court's reasoning in University of Rochester v. G. D. Searle on the composition/method distinction:  if method claims were not subject to exhaustion, all patents would contain (or all patent families would contain) method claims that could be used to coerce royalty payments otherwise exhausted for composition claims by sales of a patent-protected item.  The Supreme Court (reasonably) concluded that patent exhaustion must apply to method claims to prevent such shenanigans (characterized by the Court as an "end-run around exhaustion") from negating the value of the doctrine to the public. 

The Supreme Court reiterated the test for whether exhaustion applies that it enunciated in Univis:  sales that "substantially embody" the patents in suit will be sales that exhaust the patent right to obtain royalties.  The Univis case involved sales of eyeglass "blanks" for making patented compound lenses, and the products sold by the alleged infringers were the final eyeglasses containing lenses ground from the blanks sold by the patentee.  In Univis, the Court opined (albeit in an action brought by the United States under the antitrust laws, not the Patent Act) that the lens blanks embodied essential features of the patented lenses and thus sales of the blanks exhausted patent rights in the finished lenses. 

Here, the Supreme Court concluded that the components at issue, microprocessors and chipsets, "substantially embodied" the system and method claims of the patents-in-suit.  It analogized these components with the lens blanks in Univis, which it asserted "did not fully practice the patents at issue" because they needed to be ground into lenses, here the patented microprocessors and chipsets did not "function at all" until they were assembled into the final product (i.e., the computer comprising non-Intel components).  "If [the opinion states], as in Univis, patent rights are exhausted by the sale of the incomplete item, then LGE has no postsale right to require that the patents be practiced using only Intel parts."  The Court rejected the three LG arguments that attempted to distinguish this case from Univis.  First, according to LG, Univis is properly limited to cases where the products "contain all the physical aspects needed to practice the patent."  Second, this case can be distinguished from Univis because there was no "patentable distinction" between the lenses and lens blanks in Univis, and there are such distinctions here (inter alia, the existence of multiple patents for the alleged infringing articles).  Finally, LG invoked Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336 (1961) for the countervailing principle that "combination" patents should not be exhausted by the sale of one component of the combination. 

On the contrary, the Supreme Court found Univis controlling.  The "only reasonable and intended use [of the microprocessors and chipsets] was to practice the patent," said the Court, just as the only "reasonable and intended use" of the lens blanks in Univis was to make the patented eyeglasses.  Moreover, the microprocessors and chipsets embodied the essential features of the patented invention, since all that was required was to attach them to other conventional computer components in conventional ways (much as the lens blanks in Univis were converted to lenses using conventional grinding techniques not encompassed by the patent claims).  (Interestingly, the Court noted that Quanta was limited to using such conventional methods because the internal structure of the Intel microprocessors and chipsets were protected by Intel as trade secrets, and Quanta could not modify them.  "Intel all but practiced the patent itself by designing its products to practice the patents, lacking only the addition of standard parts.")  Finally, the Court rejected LG's reliance on Aro, distinguishing that case as involving replacement of a part of a combination and because Aro is limited to claims relying on the combination of elements and not any individual component of the combination.

Finally, the Supreme Court addressed the question of whether the license terms precluded application of the exhaustion doctrine and determined they did not.  Important in the Court's determination was that the license agreement did not contain the preclusive condition; a separate "Master Agreement" between the parties recited that provision.  But "Intel's authority to sell its products embodying the LGE Patents was not conditioned on the notice [that the mixed combination of components was an unauthorized use] or on Quanta's decision to abide by LGE's directions in that notice," because breach of the provisions of the Master Agreement precluding sale of Intel microprocessors and chipsets to third parties who combined them with non-Intel components did not constitute a breach of the licensing agreement.

The decision has important ramifications for biotechnology patent claims.  There are two immediately-evident examples:  cases where a patentee having method claims and composition claims limits by so-called "label license" the uses for a patented article; and cases where a patented article has the biological property of replication, where the license precludes use of replicates of the article after purchase.  An example of the first type of situation are the limits placed on the practice of the polymerase chain reaction, based on patents to the amplification method and the thermostable polymerase.  The restrictions were of two types:  first, licenses to the method were granted only upon purchase of the polymerase and use of an "authorized" thermocyler.  Second, the method (and for that matter, the polymerase) was not licensed for diagnostic uses, only for scientific research.  Under the patent exhaustion doctrine set forth in the Quanta opinion, it is likely that neither of these restrictions would be enforceable.  First, although the polymerase has other uses that would not infringe the claims of the PCR method patent, it is likely that sale of the thermostable polymerase would exhaust the method claims as well, since the thermostable characteristic of the polymerase embodies essential features of the claimed invention.  This is even more likely regarding the diagnostic use prohibition, since it represents the kind of restriction the Court prohibited in Adams v. Burke:  "when a patented item is 'once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee.'"  Adams, 17 Wall. 453, 457 (1873).

The second type of post-sale restrictions important to biotechnology are those that restrict use of a patented article that is capable of self-replication; the most (in)famous cases of this type are the Monsanto herbicide-resistant seed cases, where the "label license" prohibits replanting seed produced using the recombinant seed purchased from the company.  Monsanto has recently been the victor in a number of lawsuits against farmers who were found to have harvested recombinant seed from one years' planting and replanted it the following year; the Federal Circuit has upheld lower court determinations that this constituted patent infringement as activity falling outside the scope of the license (see, e.g., Patent Docs post on Monsanto Co. v. David).  Although critically important economically (since it is clear that Monsanto would not be in the seed business for very long in the absence of these restrictions), it is difficult to see how these restrictions could pass muster under the rubrics for applying patent exhaustion set forth in today's Quanta decision.  Certainly, it is without question that the seeds "embody" (figuratively and literally) the "essential features" of the patented invention, and thus the types of limitations Monsanto (and other seed producers) have placed on replanting of their patented seeds are unlikely to prevail if they try to assert them under the patent laws.

As has been the Supreme Court's penchant in several recent cases, there is an important caveat to its holding to be found in a footnote; here, it is footnote number 7:

We note that the authorized nature of the sale to Quanta does not necessarily limit LGE's other contract rights.  LGE's complaint does not include a breach-of-contract claim, and we express no opinion on whether contract damages might be available even though exhaustion operates to eliminate patent damages.  See Keeler v. Standard Folding Bed Co., 157 U. S. 659, 666 (1895) ("Whether a patentee may protect himself and his assignees by special contracts brought home to the purchasers is not a question before us, and upon which we express no opinion.  It is, however, obvious that such a question would arise as a question of contract, and not as one under the inherent meaning and effect of the patent laws.").

Monsanto also employs a contract to prohibit replanting of its seeds, and it is clear that a patentee could condition sale of a patented article on contractual provisions restricting its use.  Such an arrangement has clear disadvantages as compared with patent law claims, including variations in application of the law (and enforceability of the agreement) state-by-state, as well as the potential to implicate the antitrust laws.  But such agreements may be the only way remaining for biotechnology companies to protect their inventions in both the preceding types of situations.

The Quanta decision provides comfort to those many who have been battling seed producers over replanting restrictions.  It is also yet another example of the value of patent rights being eroded by Supreme Court decisions that run counter to the determinations of the Federal Circuit.

USPTO News: Patent Office to Publish New Appeals Rules on Tuesday

    By Donald Zuhn --

The U.S. Patent and Trademark Office announced today that new rules regarding ex parte appeals before the Board of Patent Appeals and Interferences will be published in the Federal Register on Tuesday, June 10, 2008.  According to the Office's press release, the new appeals rules "will add clarity and efficiency to the appeal process."  Commenting on the new rules, USPTO Director Jon Dudas said that the "[b]y exchanging information and crystallizing the issues of the dispute earlier in the process," the new appeals rules will result in a "more streamlined appeal process and more efficient decision-making."  In addition, the Office expects that the new appeals rules "will result in some appeals being resolved before they reach the Board."

Under the new appeals rules, examiners will no longer provide a response to the reply brief, new grounds of rejection will no longer be permitted in an examiner's answer, and a supplemental examiner's answer will no longer be permitted in response to a reply brief.  In addition, the new appeals rules will clearly set forth the requirements for briefs, with some requirements being eliminated (e.g., the "summary of the claimed subject matter").  According to the Patent Office, the page limitations that will be imposed under the new appeals rules will "ensure concise and clear arguments."

The Office noted that the new appeals rules reflect changes made to the notice of proposed rulemaking that was published in the Federal Register on July 30, 2007.  For example, the initial page limits set for the appeal brief and reply brief were increased by five pages to 30 and 20 pages, respectively.

The new appeals rules will go into effect on December 10, 2008, six months from the date the new rules are published in the Federal Register, and the new appeals rules will apply to all appeals in which an appeal brief is filed on or after that date.

Patent Docs will present a more comprehensive report on the new appeals rules following their publication on Tuesday.

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.

Lupin Limited et al. v. Sanofi-Aventis Deutschland GMBH et al.
2:08-cv-00258; filed June 5, 2008 in the Eastern District of Virginia

Declaratory judgment of non-infringement and invalidity of U.S. Patent No. 7,368,469 ("Use of Inhibitors of the Renin-Angiotensin System in the Prevention of Cardiovascular Events," issued on May 6, 2008), assigned to Sanofi-Aventis and licensed to King Pharmaceuticals, in conjunction with Lupin's filing of an ANDA to manufacture a generic version of King's Altace® (ramipril, used to lower cardiovascular risk and to treat hypertension).  View the complaint here.

Cephalon, Inc. et al. v. Watson Pharmaceuticals, Inc. et al.
3:08-cv-00308; filed June 3, 2008 in the District Court of Nevada

Cephalon, Inc. et al. v. Watson Pharmaceuticals, Inc. et al.
1:08-cv-00330; filed June 2, 2008 in the District Court of Delaware

The complaints in these cases are substantially identical.  Infringement of U.S. Patent Nos. 6,200,604 ("Sublingual Buccal Effervescent," issued March 13, 2001) and 6,974,590 (same title, issued December 13, 2005) following a paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Cephalon's Fentora® (fentanyl citrate buccal tablets, used to treat breakthrough pain in adult patients with cancer).  View the Delaware complaint here.

Sepracor Inc. et al. v. Sun Pharmaceutical Industries, Ltd.
2:08-cv-02705; filed May 30, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 5,698,558 ("Methods for Treating Allergic Disorders Using Optically Pure (-)Cetirizine," issued December 16, 1997), licensed to UCB, following a paragraph IV certification as part of Sun's filing of an ANDA to manufacture a generic version of UCB's XYZAL® (levocetirizine dihydrochloride, used to treat seasonal and perennial allergic rhinitis).  View the complaint here.

Otsuka Pharmaceutical Co., Ltd. v. Zydus Pharmaceuticals USA, Inc. et al.
3:08-cv-02675; filed May 30, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 5,006,528 ("Carbostyril Derivatives," issued April 9, 1991) following a paragraph IV certification as part of Zydus' filing of an ANDA to manufacture a generic version of Otsuka's Abilify® (aripiprazole, used to treat bipolar disorder and schizophrenia).  View the complaint here.

Sanofi-Aventis et al. v. Sandoz, Inc.
3:08-cv-02693; filed May 30, 2008 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,338,874 ("Cis oxalato (trans 1-1,2-cyclohexanediamine) PT(II) Having Optically High Purity," issued August 16, 1994) and 5,716,988 ("Pharmaceutically Stable Preparation of Oxaliplatinum," issued February 10, 1998) following a paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of plaintiffs' Eloxatin® (oxaliplatin for injection, used to treat colorectal cancer).  View the complaint here.

New Patent PDF Download Tool

    By Donald Zuhn --

Rolf Claessen, a patent attorney with Kreisler Selting Werner in Cologne, Germany, recently contacted Patent Docs to let us know about a new tool he is offering on his useful IP portal, IP Newsflash.  The new tool, Free Patent PDF Download, allows patent practitioners to download patents and published applications from, inter alia, the U.S., Europe, PCT, and Japan.  IP Newsflash offers a number of other free IP tools, including a patent family search tool that compiles INPADOC data from the European Patent Office, a prior art search that utilizes an artificial-intelligence engine developed by IPCentury, and a depository of EP caselaw.  In order to use the patent download tool, you will have to become a registered user at IP Newsflash, but the same holds true for another free patent download site that we find useful, FreePatentsOnline.  We encourage Patent Docs readers to to give these tools a test drive and let us know what you think.

Conference & CLE Calendar

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

July 16, 2008 - Patent Claim Construction Workshop (Law Seminars International) - Seattle, WA

July 24-25, 2008 - Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) - New York, NY

August 11-12, 2008 - Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) - San Francisco, CA

August 10-15, 2008 - Advanced Courses (Patent Resources Group) - Washington, DC

September 11, 2008 - Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) - New York, NY

September 11-12, 2008 - Current Issues in Complex IP Licensing (Law Seminars International) - Philadelphia, PA

September 15-16, 2008 - Biotech Patents*** (American Conference Institute)

September 22-23, 2008 - USPTO Boot Camp: Patent Edition*** (American Conference Institute) - Alexandria, VA

September 22-23, 2008 - FDA Boot Camp*** (American Conference Institute)

October 15, 2008 - Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) - San Francisco, CA

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

Espresso: New Technology Search Engine

    By Donald Zuhn --

Dr. Michael Wisz, the Chief Technical Officer of Emerjent, Inc., recently contacted Patent Docs to inform us about Espresso, a new web-based search application that Emerjent is touting as "the premier emerging technology information search engine."  The search engine, which requires a free registration to access, can be found here.

According to Emerjent's website, Espresso differs from search engines such as Google and Yahoo because it relies on more focused searches of document collections that are "essential to tracking emerging technologies, especially those in biotechnology, chemistry, biology, and medicine."  These collections include all issued U.S. patents and published U.S. patent applications; peer-reviewed research papers; NIH, NSF, and SBIR/STTR research grants; grant solicitation announcements; news stories from 1000 "trusted technology sources," and market and web search data.  Emerjent notes that "[m]any of these documents are not even accessible from today's web search engines."  Emerjent also notes that because Espresso's collection of documents is smaller, it can go beyond typical indexing to extract information about people, companies, and universities, and then map connections between these entities.

Biotech/Pharma Lobbying Scoreboard

    By Donald Zuhn --

Last month, we reported on the lobbying expenditures for a number of biotech and pharmaceutical companies in the first quarter of 2008.  Included on our list were Cephalon, Inc., which spent $512,000, Abbott Laboratories, which spent $880,000, and Amgen Inc., which spent $2.5 million.  That list continues to grow with additional reports regarding first quarter spending by three other companies.

Yesterday, Forbes.com reported that Novartis AG spent almost $1.3 million in the first quarter of 2008 on lobbying.  According to the Swiss pharmaceutical company's disclosure form filed with the House clerk's office, Novartis lobbied on follow-on biologics bills, as well as on bills related to the government's influenza vaccine stockpiles and free-trade agreements with Peru, Colombia, and Korea.

In late May, Forbes.com reported that Monsanto Co. also spent nearly $1.3 million on first quarter lobbying.  While a portion of that amount was spent to lobby on patent reform, the agricultural biotech company also lobbied on the theft of agricultural seeds, organic standards, endangered species, timber and greenhouse gas emissions legislation, international trade, and ethanol production.

Finally, BusinessWeek reported that Genentech, Inc. spent $591,000 on lobbying in the first quarter.  According to Genentech's lobbying disclosure, the money was spent to lobby on the patent reform and follow-on biologics bills.  In addition, Genentech lobbied against a bill that would have allowed the government to directly negotiate pharmaceuticals prices for drugs distributed through Medicare.

For additional information regarding this topic, please see:

• "Lobbying Spending Spree Continues," May 20, 2008
• "Abbott's First Quarter Lobbying Tab Hits $880,000," May 2, 2008

Patent Office Catch-22

    By Kevin E. Noonan --

There was a time not so long ago where the U.S. Patent and Trademark Office seemed to be sincere in trying to accommodate the needs of inventors and the public in providing fair examination of cutting-edge technologies.  This is particularly true in the biotechnology arts, with such innovations as the sequence listing database and (after some resistance) recognizing that nucleic acid claims were not prima facie obvious.  That has changed, with the Office seeming to be happy in many instances to play an advanced game of "gotcha" with its biotechnology customers.

This new attitude was illustrated once again in a presentation by Julie Burke, a "Quality Assurance Specialist" in Group 1600 at the Biotechnology/Chemistry/Pharmaceutical Customer Partnership meeting held at the Patent Office this Wednesday.  In her presentation she addressed "incorporation by reference," the sufficiency of disclosure requirements, and the standard for determining whether clarification of the identity of certain nucleic acids would be new matter.  The particular issue involved whether and under what circumstances it was sufficient to identify a nucleic acid by its GenBank Accession Number.  Ms. Burke sets out the "problem" in the very first substantive slide:

In patent specifications, every element or ingredient of the product should be set forth in positive, exact, intelligible language, so that there will be no uncertainty as to what is meant.

The relationship between sequence information submitted to a public database and the amino acid or nucleic acid product it identifies is sometimes indefinite, uncertain, and arbitrary.

She goes on to identify the bases for the "uncertainty":  sequence information in public databases can "change from time to time," and these changes can be made by third parties.  These changes can constitute new matter, according to Ms. Burke, and implicate the Office's "New Matter Guidance" to Examiners to sensitize them to the issue.  These considerations implicate the requirements for incorporating material by reference, which also is subject to new matter prohibitions, i.e., sequences that have been changed after an application incorporating them by reference has been filed.  The rationale is that only a sequence having one version has been "uniquely identified"; even prior to the filing date, when multiple sequences for the same gene are identified, the existence of these sequences means the gene "may not be uniquely identified."

Many of the examples in Ms. Burke's presentation involve claims to isolated nucleic acids, and insofar as the application of the "guidelines" are limited to such claims they may have some justification.  But the reality is that the 25,000-30,000 human genes found by the Human Genome Project have been disclosed in public databases for almost 10 years, and patent applications on these genes were filed at the turn of the century.  Ms. Burke's presentation also mentions that the Office has changed its former policy of examining up to 10 sequences in a single application, and will now only examine one sequence per application (OG Notice dated March 27, 2007; see Patent Docs report).  As a consequence, only a small percentage of human genes have been patented to date, and the likelihood is that the 20-year patent term limits will preclude most of the genes disclosed in most of the applications from ever being the subject of granted claims.  Moreover, the business and intellectual property of the next 50 years in biology will not be the identification of genes but rather how different genes are differentially expressed in disease (inter alia, for diagnostics) or in response to different physiological stimuli such as therapeutic drug administration.  These experiments take advantage of the information about these genes, using array technologies and other methods.  The issue thus is not the same as with claims to the genes themselves; all that is required is that the skilled worker understand which genes are differentially expressed.  Sequence variations, whether the results of allelic variation or sequencing disparities from different research groups thus would not create any ambiguity for the skilled worker as to the identity of the genes.  However, the current Patent Office focus on whether there are sequence variations that preclude these genes from being "uniquely identified" elevates the formalism of sequence identity (important for sequence claims) to another "bright line" rule having the potential for being indiscriminately applied.  And the proposed solution, including the sequence of genes in a sequence listing, merely increases the applicant's burden without improving the quality of the disclosure for known genes.

Which, unfortunately, is not a unique position for the Office to take in recent years.  Perhaps a change of administration will return the Office's attitude from confrontation back to cooperation.

USPTO News: USPTO e-Commerce Update

    By Christopher P. Singer --

The U.S. Patent and Trademark Office sent out an e-Commerce update today, June 5, 2008, that provided information regarding its new First Action Interview Pilot program (previously covered by Patent Docs here) and digital certificate maintenance tips (for EFS-Web and Private PAIR users).  Regarding digital certificates, the notice confirmed that it is common for digital certificates to expire if users fail to take steps to maintain them.  The USPTO suggests four tips (below) that should help to minimize the time required to fix any of the common expiration problems associated with digital certificates.

1.  Use the authorization code and reference number received from the Electronic Business Center (EBC) to create and download your digital certificate within 120 days of receipt.  After 120 days, the authorization code and reference number will expire and will need to be replaced.

2.  Immediately after downloading your digital certificate, you should create a set of digital certificate self-recovery codes, which can be done here.  Save these codes in a secure location.  These codes allow you to immediately recover your certificate should any problem occur.  If you do not create these self-recovery codes, the only recovery option you have is to contact the EBC and ask them to recover your certificate.  EBC-assisted recovery will likely take several business days.

3.  Active digital certificates are automatically renewed for indefinite access.  This renewal occurs automatically while you are using your certificate.  Therefore, it is important to use your certificate regularly, at least every 90 days.

4.  If you have copied your digital certificate on multiple computers, be sure to document the locations of each copy.  After automatic renewal, only the copy in use at that time of renewal will be valid; all other copies must be updated separately.  If you experience problems with one of the copies of your certificate, the EBC suggests that you try the following steps before contacting them:  (a) review the modification dates of all the copies of your digital certificate; (b) determine which copy is the most current; and (c) replace all outdated copies with a new copy of the most recent certificate.

The EBC Customer Service Center is also available to answer your specific questions about EFS-Web, PAIR, PKI, or any other aspect of the e-Commerce initiative.  You can contact the EBC by phone at 866-217-9197 (toll-free) or 571-272-4100 or by an e-mail: ebc@uspto.gov.

Monsanto Moves to Address World Food Shortages

    By Kevin E. Noonan --

American opinion has finally turned in support of the idea that global warming, and ecological concerns in general, are relevant and important to themselves and their children (despite years of opposition, both formal and informal, from the current Administration and its fellow-travelers from energy corporations and the right wing).  In what could turn out to be a fortuitous combination of good public relations and good corporate citizenship, Monsanto today announced its intentions to be part of the solution to ecological problems rather than part of the problem.  As reported by Andrew Pollack in The New York Times ("Monsanto Seeks Big Increase in Crop Yields"), Monsanto chief executive Hugh Grant "pledged" to work to develop seeds that would increase corn, soybean, and cotton yields by 100% by 2030 and would reduce the amount of water, land, and energy needed to grow them by 30%.  Monsanto made the announcement at a meeting in Rome where world leaders were discussing the current crises of rising food costs and increases in food shortages.  While the Times (predictably) noted that Monsanto would stand to benefit from the effort in increased acceptance of its genetically-modified food, not even the Times could gainsay the benefits to the world population by the efforts.

Monsanto evinced its eagerness for collaboration in noting that the company had consulted with "farmers, political leaders, academics and advocacy groups" in identifying the necessary technological steps required to increase food production in the face of rising world population and harsher growing environments, as well as competing needs for vegetation such as biofuels.  Monsanto's position that biotechnology provides both an approach and an opportunity to address these issues was supported by U.S. Undersecretary of Agriculture Edward T. Schafer; the United Nations and World Bank have less sanguine views, reflected in a recent review of agricultural technology.  And some experts, such as Dr. James E. Specht, a "soybean genetic expert" at the University of Nebraska believes that the "hype-to-reality ratio [of Monsanto's plans] is essentially infinity."  Monsanto countered by citing new technology, specifically marker-assisted selection which it contended could "double" the rate of improvements produced by breeding.  The approach also has the advantage on the world stage of not involving foreign gene introduction into crops, thereby avoiding the "Frankenfood" label that has inhibited acceptance of Monsanto's existing genetically-engineered crops in Europe and elsewhere.  And Monsanto admits that, to achieve its lofty goals it envisions producing genetically-engineered cotton and corn varieties that could grow with reduced water and fertilizer requirements, a key need for a drier future.

Another aspect of Monsanto's new "warm and fuzzy" approach is a commitment by the company to share its technology with farmers in distressed areas, presumably at greatly reduced or no cost.  The Times article specifically mentions initiatives in Africa where Monsanto will forego royalties from farmers using to-be-developed drought-resistant corn.  Moreover, Monsanto is donating $10 million over the next five years to public programs directed to improvements in wheat and rice yields, two crops that have recently experienced sharp increases in price and decreases in supply.  It is expected that this work would be performed by universities and government agencies, since these crops are not within Monsanto's current corporate focus.

These actions are in sharp contrast with Monsanto's track record for its principle generically-engineered Roundup Ready® crops, which are resistant to Monsanto's Roundup® herbicide.  Monsanto has made headlines over the past year or so in winning several patent infringement and breach of contract lawsuits against individual farmers in the U.S., based on replanting of seed produced from genetically-engineered plants (see links below).  And Monsanto's foray into genetic engineering approaches to drought-resistant and other crop varieties capable of thriving under harsher environmental conditions expected in the near future has been criticized by non-governmental organizations like the Erosion, Technology and Concentration (ETC) Group, who are generally opposed to patenting technology (see "ETC Group Opposes 'Climate Ready' Gene Patent 'Grab'").

Even if Monsanto's plans are in no way related to such criticisms, its actions are consistent with the company's appreciation of a continuing trend:  it can be just as important to win the political and public relations battle as the legal ones in technology areas that impact human health and well-being.  Western pharmaceutical companies have learned that the establishment of the WTO has not led to the hoped-for respect for their patent rights around the world; indeed, through the Doha declaration and actions of individual countries in the developing world in implementing the WTO treaty, pharmaceutical companies are in no better shape (and in some ways it is much worse) with respect to protecting their patented technologies that they were beforehand (see "Indian Generic Drug Maker Seeks to Invalidate Cancer Drug Patent").  Even in the U.S., drug companies risk adverse governmental action when their concern with return-on-investment for their investors is perceived as being contrary to the common good.  Monsanto has proactively thrown down the gauntlet to governments and NGOs more comfortable with criticizing than working with them, by boldly proposing to work with such groups to attempt to solve, or stave off, the coming food crisis.  Let's see which groups will be more interested in their own political agendas than finding a solution to the problem.

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

• "Monsanto and Syngenta Settle All Litigation Between the Companies," May 30, 2008
• "ETC Group Opposes 'Climate Ready' Gene Patent 'Grab,'" May 19, 2008
• "Monsanto Co. v. David (Fed. Cir. 2008)," February 6, 2008
• "Monsanto Co. v. Bayer Bioscience N.V. (Fed. Cir. 2008)," January 28, 2008
• "Supreme Court Fails to Grant Certiorari in Monsanto Co. v. McFarling," January 7, 2008
• "Monsanto Co. v. Syngenta Seeds, Inc. (Fed. Cir 2007)," October 7, 2007
• "Monsanto Co. v. McFarling (Fed. Cir. 2007)," June 4, 2007
• "Syngenta Seeds, Inc. v. Monsanto Co. (Fed. Cir. 2007)," May 7, 2007

Second Viread® Patent Survives Reexamination

    By Donald Zuhn --

Yesterday, Gilead Sciences, Inc. announced that the U.S. Patent and Trademark Office had issued a Notice of Intent to Issue an Ex Parte Reexamination Certificate for U.S. Patent No. 5,922,695.  The '695 patent became the second of Gilead's four Viread® (tenofovir disoproxil fumarate) patents to survive reexamination.  Last month, Gilead announced that U.S. Patent No. 6,043,230 had also survived reexamination.  Still in reexamination proceedings are Gilead's U.S. Patent Nos. 5,977,089 and 5,935,946.

The four reexamination proceedings were initiated in response to an ex parte reexamination request filed by the Public Patent Foundation (PUBPAT) on March 23, 2007.  While PUBPAT has devoted a page on its website to the Viread® patents, it has not yet posted a comment concerning either of the Patent Office's determinations regarding the '695 and '230 patents.

In the Notice of Intent issued with respect to the '695 patent, the Patent Office indicated that the patentee had overcome a 102(a) rejection of claim 1 over one reference by submitting a Rule 131 declaration showing that the inventors had prepared bis (isopropyloxy carbonyloxymethyl) PMPA in the United States prior to January 1997.  The Office also explained that a 103(a) rejection in view of three references and the patentee's own admission had been overcome by the patentee's arguments made during reexamination proceedings.  The Office further indicated that the patentee had established that bis carbonate prodrugs of PMPA are unexpectedly stable and useful, these prodrugs have satisfied a long felt need in the anti-HIV drug art, and that the invention is commercially successful.

The '695 patent is directed to a compound comprising an antiviral phosphonomethoxy nucleotide analog and the '230 patent is directed to a method comprising contacting a cell with such a compound.  In the company's press relaease, Gilead Senior Vice President and General Counsel Gregg Alton noted that the '695 patent was "the most integral to Viread's novel exclusivity," and stated that the company was "pleased with the PTO's swift analyses and actions, which have confirmed the strength of [Gilead's] patent position."

On Gilead's Viread® homepage, the drug is described as being a member of the nucleoside reverse transcriptase inhibitor (NRTI or "nuke") family of molecules.  Viread®, which helps to block reverse transcriptase by interfering with the replication process (as shown in an animation on the Viread® homepage), can be used in combination with other HIV medications for the treatment of HIV-1 infection.