Patent Docs

Statistical Report on U.S. Courts Released

    By Kevin E. Noonan --

The annual report from the Director of the Administrative Office of the U.S. Courts, James C. Duff, was released last week.  Entitled "Judicial Business of the United States Courts," this document (weighing in at 416 pages and containing hundreds of pages of tabulated information) contained a few interesting items of information for anyone trying to assess whether the patent system is "broken" in the federal courts.

Appeals at the Federal Circuit are down 13%, a figure consistent with the decrease in appellate filings in the regional circuit courts of appeal (-12.3%).  In fact, filings for 2007 were at about the same level as in 2003.  This decrease is not due to patent filings, however, but rather to other areas of the Court's jurisdiction (like the Merit Systems Protection Board and Court of Appeals for Veterans Claims).  In the twelve month period ending September 30, 2007, the Court heard a total of 73 appeals, deciding 34 after oral hearing and 38 on the briefs.  The report also compared the Court's review of district court and BPAI decisions between 2006 and 2007:

Two thirds of CAFC appeals were decided within five months in 2007, and 100% of appeals decisions rendered within eight months of filing.

In the district courts there was an overall decrease in civil lawsuit filings of 0.8%.  Federal question jurisdiction cases rose by 3.4%, and cases with U.S. as plaintiff or defendant rose by 5.8%; diversity of citizenship cases fell by 9.6% (this mostly due to consolidation of personal injury lawsuits involving asbestos and diet drugs in the Eastern District of Pennsylvania).  In the district courts during this period, the following statistics for patent cases were reported:

Since 2003, all intellectual property lawsuits increased by 1,848 (which pales in comparison to the increase of 16,305 personal injury cases during the same period).  The report provides a historical comparison on the number of patent lawsuits commenced in each year since 2003:

Using the same statistics, the report shows the judicial districts having the most patent activity in 2007:

During the period, there were 2,762 pending patent lawsuits, of which 1,945 showed no court action during the reporting period.  Of the remaining cases, there were 409 actions after pretrial activities were complete, 31 bench trial verdicts, and 63 jury trial verdicts.  3.4% of all patent cases went to trial, compared with 1.7% of trademark cases, 1.0% of copyright cases, 46.7% of personal injury cases, and an overall rate of 4.1% of all civil litigation.  Interestingly, there were no patent cases reported in the 27 civil cases that took more than 20 trial days (the majority of civil cases, 1,227 of 3,387 total cases, took between four and nine trial days).

Finally, the number of patent cases pending more than three years increased, from 353 in 2006 to 408 in 2007; during the same period, trademark (113 in 2006, 121 in 207) and copyright (107 cases in each year) showed a substantially unchanged number of cases having greater than a three-year pendency.

The report confirms some generally-held opinions, such as the high number of patent cases brought in the Eastern District of Texas, but there are some results that run contrary to the prevailing wisdom.  Although Texas' Eastern District tops the list of pending patent dockets, there are significant numbers of suits pending in other jurisdictions.  The number of patent cases, at either the district court or appellate levels, is not exploding, nor has the case load of the Federal Circuit shown any dramatic increase; indeed, the number of cases considered by the Court has actually gone down.  It is also somewhat surprising that the reversal rate for decisions of the district court is as low as 17%, after there being years where the rate was in excess of 40%, and that the reversal rate of the BPAI is identically low.  The latter statistic may reflect the reality that the Federal Circuit appeals route under 35 U.S.C. § 141 is infrequently taken, or that the Board decides not to budge over issues that it believes it has sound arguments that will prevail on appeal.

The complete report can be downloaded here.

2008 World Stem Cell Summit

The Genetics Policy Institute will be holding the 2008 World Stem Cell Summit on September 22-23 in Madison, WI.  The Summit, which is being hosted by the University of Wisconsin Stem Cell & Regenerative Medicine Center and WiCell Research Institute, will bring together researchers, clinicians, business pathfinders, key policy-makers, regulators, advocates, and experts in law and ethics to give presentations, share information, and chart the future of regenerative medicine.  Among the presentations to be offered at the Summit will be:

• Reprogramming -- A New Vision for Creating Patient Specific Cells:  Keynote Presentation by Dr. James Thomson of the University of Wisconsin-Madison
• Stem Cell Law:  The Ultimate Road Map to Getting to "Go"
• The History and Future of Stem Cells -- Legal, Regulatory and Ethical Issues:  Keynote Presentation by Alta Charo of the University of Wisconsin-Madison
• Panel Discussion:  Legal, Regulatory and Ethical Issues

A complete agenda for the Summit can be found here, and an overview of the Summit's presentations and panel discussions can be found here.

In addition, the Summit will offer a series of table discussions by stem cell experts in the areas of ethics, law, science, business, politics, patient advocacy, philanthropy, and medicine.  Among the table discussions to be offered will be:

• Weeding the Patent Thicket
• Constitutional Battles Ahead
• The Law Firm and Client's Essential Guide to Stem Cell Law

A complete list of table discussions can be found here.

The registration fee ranges from $250 (for students) to $495 (for academic, government and non-profit attendees) or $995 (for industry & for-profit corporate attendees).  The registration fee for industry and for-profit corporate attendees after September 8, 2008 is $1,495.  Those interested in registering for the conference can do so here.

Patent Docs is a media partner of the 2008 World Stem Cell Summit.

USPTO News: Patent Office Puts End to Submission of Duplicate Copies of Forms

    By Christopher P. Singer --

In an August 27, 2008 notice, the U.S. Patent and Trademark Office (USPTO) announced that it is changing certain forms to remove language that requests a duplicate copy of the form be submitted for fee processing purposes.  Previously, the duplicate copy of forms that contained an authorization to charge fees to a deposit account allowed for faster processing, because hardcopy paper application files were maintained in one area of the Office, while fee processing was done in another area of the Office.  Currently, with the push to go paperless, the Office scans all incoming submissions into the Image File Wrapper (IFW) of an application, a reexamination proceeding, or a patent, including forms that contain an authorization to charge or credit a fee amount to a deposit account.  Because the form is scanned into IFW, it is available and viewable throughout the PTO for all purposes, including fee processing.  The Office is working on revising a number of forms in order to remove the "duplicate copy" language.  Going forward, even if a duplicate copy of a certain form is needed (if it is not scanned or under a secrecy order), the USPTO will make the required copy for fee processing purposes.

ABA Issues Opinion on Outsourcing

    By Donald Zuhn --

On Monday, the American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility released a statement regarding a new ethics opinion (Formal Opinion 08-451), which concludes that U.S. lawyers can outsource legal and nonlegal work provided that they adhere to ethics rules regarding competence, supervision, protection of confidential information, reasonable fees, and not assisting in the unauthorized practice of law.  The opinion, entitled "Lawyer’s Obligations When Outsourcing Legal and Nonlegal Support Services," outlines the ethics obligations of lawyers and firms that wish to utilize legal and nonlegal outsourcing.

Stating that "[a] lawyer may outsource legal or nonlegal support services provided the lawyer remains ultimately responsible for rendering competent legal services to the client," the opinion notes that lawyers and law firms engage lawyers and nonlawyers for various legal and nonlegal support services, ranging from "the use of a local photocopy shop for the reproduction of documents, to the retention of a document management company for the creation and maintenance of a database for complex litigation, . . . or even to the engagement of a group of foreign lawyers to draft patent applications."  The opinion acknowledges, however, that "[t]he challenge for an outsourcing lawyer is . . . to ensure that tasks are delegated to individuals who are competent to perform them, and then to oversee the execution of the project adequately and appropriately."

Notwithstanding the ABA opinion -- and its reference to the outsourcing of patent application drafting to foreign lawyers -- the U.S. Patent and Trademark Office recently reminded patent practitioners that the export of subject matter abroad pursuant to a USPTO-issue foreign filing license is limited to purposes related to the filing of foreign patent applications, and that the foreign filing license does not authorize exporting of subject matter abroad for the preparation of patent applications to be filed in the United States (see "PTO Issues Notice on Scope of Foreign Filing Licenses").  As the USPTO noted, U.S. patent practitioners wishing to outsource patent application drafting to foreign lawyers are not without recourse, as these practitioners can contact the Bureau of Industry and Security (BIS) at the Commerce Department in order to secure the appropriate clearances.

Thus, while the new ABA ethics opinion permits U.S. lawyers to outsource legal support services to foreign lawyers, patent practitioners would be wise to, at a minimum, refrain from outsourcing the drafting of patent applications to foreign lawyers.  Patent practitioners who intend to outsource other types of legal support tasks (e.g., document review) are advised to consult the ABA opinion before doing so.

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. (Fed. Cir. 2008)

    By Kevin E. Noonan --

We may have reached the high-water mark on the expansion of the inequitable conduct doctrine.  Recent decisions from the Federal Circuit seem to signal a retrenchment in the Court's treatment of the doctrine, and its willingness to affirm district court judgments finding inequitable conduct, particularly in the context of summary judgment decisions.  One of the first indications of this new direction came in the Eisai Co. v. Dr. Reddy's Laboratories, Inc. decision last month, where Judge Rader forcefully reminded us that finding inequitable conduct should be "a high bar," citing the Court's en banc decision in Kingsdown Medical Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988).  In doing so, the Court cast some doubt on the wisdom of recent decisions that expanded the inequitable conduct doctrine to encompass improperly claiming small entity status (Nilssen v. Osram Sylvania, Inc.), improperly filing a petition to make special (General Electro Music Corp. v. Samick Music Corp.), failing to disclose that a declarant had been a paid consultant prior to filing an expert declaration under 37 C.F.R. § 1.132 (Ferring B.V. v. Barr Laboratories, Inc.), misjoinder of inventorship (PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc.), and inaccuracies in an expert declaration (Aventis Pharma S.A. v. Amphastar Pharma, Inc.).  Indeed, the beginnings of the trend may have started with Judge Rader's spirited dissent in Aventis Pharma.  A determination of inequitable conduct, according to Judge Rader (at right) in the Eisai decision, should include evidence of affirmative instances of "culpable conduct" rather that mere omissions, citing the greater evidentiary difficulties that should attach when intent must be discerned from negligent conduct.  His opinion also emphasized that a defendant must establish intent by clear and convincing evidence.

This trend continues today in the Federal Circuit's decision reversing summary judgment of inequitable conduct against the patentee in Star Scientific, Inc. v. R.J. Reynolds Tobacco Co.  The patents-in-suit, U.S. Patent Nos. 6,202,649 and 6,425,401 (filed as a continuation of the '649 patent), were directed to methods for curing tobacco in a way that reduced the amount of a carcinogen, tobacco-specific nitrosamines (TSNAs), in the cured product used in cigarettes and other tobacco-containing products.  The undisclosed information was a letter from one of Star Scientific's consultants, Dr. Harold Burton, relating to curing methods used in China that resulted in low levels of TSNAs.  The attorney who prosecuted the '649 patent was aware of this letter, but "ultimately concluded that neither [the letter itself] nor its content was material to the contemplated patent application," after speaking with Dr. Burton.  Also undisclosed was experimental data generated by Dr. Burton relating to reduced TSNA levels in cured tobacco.

During prosecution of these patents, Star Scientific transferred responsibility from its first set of prosecuting attorneys at Sughrue, Mion, Zin, Macpeak & Seas to a second set at Banner and Witcoff.  The Banner attorneys also became aware of the Burton letter, from litigation counsel (Crowell & Moring) in Star Scientific's patent litigation in the District Court against R.J. Reynolds; litigation counsel opined that this information should be disclosed to the U.S. Patent and Trademark Office during prosecution of the '401 patent.  The Banner attorneys considered the Burton letter, and the experimental data, decided neither was material and did not need to be disclosed, and neither was disclosed during prosecution of the '401 patent.  The file transfer formed the basis for R.J. Reynolds' inequitable conduct theory, which posited that Star Scientific did not want the Banner attorneys to be aware of the Burton letter or experimental data so it could be concealed from the Patent Office during prosecution of the '401 patent.  The District Court agreed and granted summary judgment in favor of R.J. Reynolds that neither patent was enforceable due to inequitable conduct.

The Federal Circuit disagreed, in a unanimous decision by Chief Judge Michel joined by Judges Schall and Dyk.  The Court began its analysis by setting up the analytical framework:

To successfully prove inequitable conduct, the accused infringer must present "evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO]."  Further, at least a threshold level of each element -- i.e., both materiality and intent to deceive -- must be proven by clear and convincing evidence.  And even if this elevated evidentiary burden is met as to both elements, the district court must still balance the equities to determine whether the applicant's conduct before the PTO was egregious enough to warrant holding the entire patent unenforceable.  Thus, even if a threshold level of both materiality and intent to deceive are proven by clear and convincing evidence, the court may still decline to render the patent unenforceable [citations omitted].

The CAFC goes on to say that the "need to strictly enforce the burden of proof and elevated standard of proof in the inequitable conduct context is paramount," because the penalty, unenforceability, is "so severe."  The Court, ever mindful of the heightened levels of oversight scrutiny the Supreme Court is wont to exercise lately over its decisions, supported this sentiment by reminding us of Supreme Court precedent (specifically, Hazel-Atlas Glass Co. v. Hartford-Empire Co. and Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co.).  Courts must be "vigilant in not permitting the defense to be applied too lightly."  "Just as it is inequitable to permit a patentee who obtained his patent through deliberate misrepresentations or omissions of material information to enforce the patent against others, it is also inequitable to strike down an entire patent where the patentee only committed minor missteps or acted with minimal culpability or in good faith."

Specifically with regard to the deceptive intent prong, the Court noted that "materiality does not presume intent" (they are separate prongs of the analysis), and then cited Molins PLC v. Textron, Inc.:

[T]he alleged conduct must not amount merely to the improper performance of, or omission of, an act one ought to have performed.  Rather, clear and convincing evidence must prove that an applicant had the specific intent to . . . mislead[] or deceiv[e] the PTO.  In a case involving nondisclosure of information, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference.

What is required, said the Court, is a "specific intent to deceive the PTO."

Since the CAFC recognizes that "direct evidence of deceptive intent is rarely available," the required intent can be inferred from conduct and other "indirect and circumstantial evidence," citing Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1364 (Fed. Cir. 2007).  But this doesn't lower the evidentiary requirements; indeed, it appears the Court believes that it raises them.  If a court must deal with inferences, such inferences "must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing standard," citing Scanner Technologies Corp. v. ICOS Vision Systems Corp., 528 F.3d 1365 (Fed. Cir. 2008) (emphasis added).

With regard to the exercise of a court's equitable discretion in finding inequitable conduct, in the absence of clear and convincing evidence of both materiality and intent a court has no discretion -- it cannot find inequitable conduct, according to the Federal Circuit.  Even if a defendant establishes both intent and materiality by clear and convincing evidence, a finding of unenforceability on inequitable conduct grounds is not inevitable.  A court should "look to the equities" and balance all of these equities with the substance of the facts underlying the "clear and convincing" evidence of materiality and intent, "to determine whether the severe penalty of unenforceability should be imposed."  This determination is left to a court's sound discretion.

In this case, the Federal Circuit disagreed that Defendants had shown clear and convincing evidence of intent as to patentee's conduct in prosecuting the '649 patent, and also disagreed that the withheld information was material to the patentability of the '401 patent claims.  The Court found that R.J. Reynolds' "quarantine" theory (of preventing the Banner attorneys from knowing what the Sughrue attorneys knew about the Burton letter and experimental data) was not established by clear and convincing evidence.  The Court found that Star Scientific had proffered other, plausible explanations for changing counsel.  While acknowledging that credibility determinations were properly within the province of the district court and should not be second-guessed by an appellate court, the Federal Circuit also cautioned against shifting the burden from R.J. Reynolds to Star Scientific:  Star Scientific did not bear the burden of rebutting R.J. Reynolds' evidence unless and until Reynolds had established an intent to deceive by clear and convincing evidence.  "[A] patentee need not offer any good faith explanation unless the accused infringer first carried his burden to prove a threshold level of intent to deceive by clear and convincing evidence."  Here, the Federal Circuit found "major gaps" in the evidentiary bases for R.J. Reynolds' theory, and accordingly found that the Defendants had not established intent by clear and convincing evidence.

With regard to the '401 patent, the issue was materiality and here the CAFC found that Star Scientific had provided additional information and evidence, including evidence from the litigation, that rendered the Burton letter and experimental data cumulative.  Ironically, key evidence provided by Star Scientific that rendered the undisclosed Burton letter and data cumulative was R.J. Reynolds' response to one of Star Scientific's interrogatories, outlining that changing curing conditions to reduce TSNA concentrations in cured tobacco was known in the prior art.

So far, it has been the Court's veteran judges, like Judge Rader and Chef Judge Michel (at right), who have hewed more closely to the limitations on inequitable conduct set forth in Kingsdown and Molins.  The Court has shown a willingness in other areas, such as claim construction, to revisit and reaffirm its jurisprudence en banc when panels of the Court have significant drifted from those principles.  Perhaps the time is approaching when the Court will decide to revisit and reaffirm its Kingsdown and Molins principles for determining whether a patent should be deemed unenforceable for being improperly procured through inequitable conduct.

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. (Fed. Cir. 2008)
Panel: Chief Judge Michel and Circuit Judges Schall and Dyk
Opinion by Chief Judge Michel

Patent Profile: Helix BioMedix Announces Issuance of Patent for Antimicrobial Peptide

    By Donald Zuhn --

Helix BioMedix, Inc. announced that the U.S. Patent and Trademark Office has issued U.S. Patent No. 7,407,940, which is directed to hexapeptides that exhibit antimicrobial activity against infections caused by a variety of pathogens.  According to Helix Biomedix's statement, the '940 patent covers a family of hexapeptide antimicrobial agents, including the company's lead pre-clinical candidate HB1345, for use as broad spectrum topical anti-infectives.

The Bothell, WA-based biopharmaceutical company noted that HB1345 will be initially developed for dermatological indications such as acne, rosacea, and atopic dermatitis, and then subsequently for the prevention of hospital acquired infections such as those caused by MRSA and other multi-resistant pathogens.  Helix BioMedix President and CEO R. Stephen Beatty called the '940 patent "one of the most important patents in the company's history," adding that "HB1345 will serve as a pivotal step in the company's development and a key driver of the company's future growth."

The company's press release indicates that according to the American Academy of Dermatology, acne is the most common skin disorder in the United States, affecting 40 to 50 million Americans, and that the topical prescription acne market has been estimated to exceed $1.2 billion annually.  The US National Rosacea Society estimates that 14 million Americans are affected by rosacea.  Finally, according to the National Institutes of Health, 20% of infants and young children experience symptoms of atopic dermatitis and an estimated 15 million people in the U.S. have symptoms of the disease.  More than $1 billion per year is currently being spent to treat this disease.

Helix BioMedix possesses a library of bioactive peptides covering six distinct classes and hundreds of thousands of peptide sequences which it uses in the development of topically-applied health products.  The '940 patent was the ninth U.S. patent to be awarded to Helix BioMedix, which is also named as an assignee on two U.S. patent application publications.

The '940 patent issued from U.S. Application No. 11/350,192, filed February 8, 2006, which claims the benefit of U.S. Provisional Application No. 60/651,270, filed February 9, 2005.  Independent claims 1, 21, and 22 of the '940 patent recites:

1.  A hexapeptide comprising the amino acid sequence given by the formula XBXBOB, wherein X is selected from the group consisting of Arginine (R) and Lysine (K); B is selected from the group consisting of Phenylalanine (F) and Tryptophan (W); and O is selected from the group consisting of naphthylalanine (Nal), Proline (P), and Phenylalanine (F).

21.  A method of inhibiting the growth of a fungal cell comprising:
    contacting said fungal cell with an effective amount of a hexapeptide comprising the amino acid sequence given by the formula XBXBOB; wherein X is a charged residue, B is a hydrophobic residue, and O is a naphthylalanine, an aliphatic, or an aromatic residue; and wherein said fungal cell is a plant pathogen selected from the group consisting of Mycosphaerella brassicicola, Pyrenopeziza brassicae, Peronospora destructor, and Botrytis squamosa.

22.  A method of inhibiting the growth of a fungal cell comprising:
    contacting said fungal cell with an effective amount of a hexapeptide comprising the amino acid sequence given by the formula XBXBOB; wherein X is a charged residue, B is a hydrophobic residue, and 0 is a naphthylalanine, an aliphatic, or an aromatic residue; and wherein said fungal cell is selected from the group consisting of Trichophyton rubrum, and Trichophyton mentagrophytes.

National Medal of Technology and Innovation Winners Announced

    By Donald Zuhn --

The U.S. Patent and Trademark Office announced today that U.S. Secretary of Commerce Carlos Gutierrez joined President Bush last week in identifying the winners of the 2007 National Medal of Technology and Innovation.  The award, previously known as the National Medal of Technology, is the highest honor that the President can bestow on American innovators for technological achievement, and is administered by the Patent Office.  The 2007 laureates will receive their medals in a ceremony at the White House on September 29.

Among the 2007 recipients of the National Medal is Dr. Roscoe O. Brady (at left), a Senior Investigator at the National Institutes of Health.  According to the Department of Commerce release, Dr. Brady's discovery of the enzymatic defects in hereditary metabolic disorders such as Gaucher disease, Niemann-Pick disease, Fabry disease, and Tay-Sachs disease, led to the development of a highly effective enzyme replacement therapy to treat patients with many hereditary enzyme-deficiency disorders.

Also receiving the National Medal will be Dr. Adam Heller  (at right), a Research Professor and Professor Emeritus at the University of Texas at Austin College of Engineering.  According to the Department of Commerce release, Dr. Heller's contributions to electrochemistry and bioelectrochemistry led to the development of products that have improved the quality of life of millions, particularly in the area of human health and well-being.  Dr. Heller is a named inventor on nearly 100 U.S. patents.

Four other individuals and two corporations will receive medals in September.

Merck & Co. v. Apotex, Inc. (Fed. Cir. 2008)

    By Kevin E. Noonan --

The Federal Circuit has been redefining its declaratory judgment jurisdiction jurisprudence ever since the Supreme Court's Medimmune, Inc. v. Genentech, Inc. decision.  These cases have included SanDisk Corp. v. STMicroelectronics, Inc., Teva Pharmaceuticals USA, Inc. v. Novartis Pharmaceuticals Corp., Benitec Australia, Ltd. v. Nucleonics, Inc., Caraco Pharmaceutical Laboratories, Ltd. v. Forest Laboratories, Inc., and just last week, Prasco LLC v. Medicis Pharmaceutical Corp.  The trend continues, albeit in a nonprecedential opinion, in Merck & Co. v. Apotex Inc.  In a per curiam decision from a panel made up of CAFC Judges Mayer and Linn and Judge Susan Illston, district court judge from the Northern District of California, sitting by designation, the Federal Circuit affirmed dismissal of invalidity and non-infringement counterclaims against Orange Book patents that had been disclaimed by the patentee prior to a lawsuit triggered by Apotex's ANDA filing.  However, in making its determination the Court did not fully and definitively address whether disclaimer of the patents would preclude such an action from raising a "case or controversy" that admits of "specific relief through a decree of a conclusive character" sufficient for proper exercise of the district court's jurisdiction under Article III of the U.S. Constitution.

The patent dispute concerned generic market entry in competition with Merck's branded Trusopt® and Cosopt® glaucoma medications.  Merck, the NDA holder for these medications, had listed three patents -- U.S. Patent Nos. 4,797,413, 6,248,735, and 6,316,443 -- in the FDA's Orange Book.  Hi-Tech Pharmacal Co. was the first generic company to file an ANDA for these products, along with a Paragraph IV certification that the patents were invalid or would not be infringed by its generic drug, in accordance with the provisions of the Hatch-Waxman Act (35 U.S.C. §§ 156, 271, and 282).  Merck filed suit, pursuant to the provisions of 35 U.S.C. § 271(e)(2), asserting just the '413 patent; Merck, shortly after filing suit, disclaimed the '735 and '443 patents as provided in 35 U.S.C. § 253.  Merck prevailed against Hi-Tech, and the FDA barred allowance of Hi-Tech's ANDA until six months after expiration of the '413 patent, in accordance with Merck's six-month pediatric market exclusivity extension.  (Pursuant to 21 U.S.C. § 355(a), the FDA has the authority to request than an NDA holder perform pediatric studies on the effect of an approved drug.  If the NDA holder performs such studies, the Agency can extend the term of a patent-holder's exclusivity for an additional six months after Orange Book patents have expired.  In this case, that date was October 28, 2008).  Because it did not prevail, Hi-Tech lost its 180-day market exclusivity for being the first ANDA filer as to the '413 patent.  But because Merck chose to disclaim the other two Orange Book listed patents, Hi-Tech "prevailed" as to those patents and was thus entitled to market exclusivity as the only approved generic provider of Trusopt® and Cosopt®.  This exclusivity period would commence once Merck's extended market exclusivity period expires on October 28th.

However, the regulatory scheme embodied in the Hatch-Waxman Act was amended by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (21 U.S.C.§ 355(j()(5)(D)(i)) to provide for forfeiture of the 180 day market exclusivity period for a first ANDA filer who does not timely launch after all legal impediments have been cleared (see 21 U.S.C.§ 355(j()(5)(D)(i)(I)(aa) and (bb)).  Apotex filed its ANDA about 6 months after Hi-Tech filed its own, with its own Paragraph IV certification, and Merck filed suit under the statute.  Even though Merck based its lawsuit on assertion of the '413 patent alone, Apotex included counterclaims of non-infringement and invalidity for the '735 and '443 patents that Merck had already disclaimed.  Apotex also agreed to be bound by the final judgment in the Merck v. Hi-Tech action over the '413 patent, and thus is equally barred from launching its generic products until October 28, 2008.  In addition, provided Hi-Tech does not forfeit, Apotex will be prohibited from market entry for an additional 180 days in view of Hi-Tech's status as the first ANDA filer.

Apotex's strategy, according to the CAFC's opinion, was to provoke a forfeiture by Hi-Tech.  The forfeiture-triggering event would be a decision in Apotex's favor that the '735 and '443 patents are invalid and not infringed, and Hi-Tech's failure to launch (being precluded by FDA's court-mandated stay on regulatory approval until the pediatric extension of market exclusivity expires).  If Apotex prevailed, Hi-Tech would have only 75 days to market its generic products or lose exclusivity.  The critical date for this scenario to work was August 14, 2008.

The Federal Circuit upheld the District Court's dismissal of Apotex's counterclaims directed towards the '735 and '443 patents on both jurisdictional and practical grounds.  "As a practical matter," opined the Court, they were not in a position to provide "realistic relief."  In view of the timing of the appeal, and the necessity for the District Court to act in response to the CAFC's decisions, the Federal Circuit said that "[e]ven with prompt action, the final judgment sought by Apotex cannot be provided in time to be meaningful."  This practical limitation on the Court's ability to act in sufficient time to effect Apotex's strategy had as a jurisdictional consequence that there no longer remained a justiciable controversy between the parties that could be provide "specific relief through a decree of a conclusive character."  Thus, the judgment of dismissal was affirmed.

It is interesting to note that the Court did not address whether the disclaimer was by itself sufficient to destroy Article III justiciability over the case.  Presumably, this is because deciding whether the disclaimed patents were invalid or not infringed was still part of a "case or controversy" -- the problem, of course, is that it was not a controversy between the parties to the lawsuit, but between one party and a third-party competitor.  The Court did not have the inclination to hear this objection, and maybe it was never argued.  But it seems clear that the disclaimer here destroyed any case or controversy between either Merck and Hi-Tech or Merck and Apotex, and that the only remaining dispute was between the two defendants.

Merck & Co. v. Apotex, Inc. (Fed. Cir. 2008)
Nonprecedential disposition
Panel: Circuit Judges Mayer and Linn, and District Judge Illston
Per curiam

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.

Wyeth v. Apotex Inc. et al.
1:08-cv-22308; filed August 18, 2008 in the Southern District of Florida

Infringement of U.S. Patent Nos. 6,274,171 ("Extended release formulation of venlafaxine hydrochloride," issued August 14, 2001), 6,403,120 (same title, issued June 11, 2002), and 6,419,958 (same title, issued July 16, 2002) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Wyeth's EFFEXOR XR® (venlafaxine hydrochloride, extended release, used to treat depression).  View the complaint here.

Purdue Pharma Products LP et al. v. Impax Laboratories Inc.
1:08-cv-00519; filed August 15, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 6,254,887 ("Controlled Release Tramadol," issued July 3, 2001) following a Paragraph IV certification as part of Impax's filing of an ANDA to manufacture a generic version of plaintiffs' Ultram® ER (tramadol hydrochloride, used to treat moderate to moderately severe chronic pain).  View the complaint here.  [NB: as we reported here, essentially the same complaint was previously filed, however it was voluntarily dismissed without prejudice on August 18, 2008.]

Hoffman-La Roche, Inc. v. Cobalt Pharmaceutiacls Inc. et al.
2:08-cv-04054; filed August 12, 2008 in the District Court of New Jersey

Hoffmann-La Roche, Inc. v. Gate Pharmaceuticals et al.
2:08-cv-04058; filed August 12, 2008 in the District Court of New Jersey

Hoffmann-La Roche, Inc. v. Mutual Pharmaceutical Company, Inc.
2:08-cv-04060; filed August 12, 2008 in the District Court of New Jersey

Hoffmann-La Roche, Inc. v. Genpharm Inc. et al.
2:08-cv-04052; filed August 12, 2008 in the District Court of New Jersey

The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 7,410,957 ("Method of Treatment Using Bisphosphonic Acid," issued August 12, 2008) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Roche's Boniva® (150 mg once-monthly tablets) (ibandronate sodium, used to treat post-menopausal osteoporosis).  View the Cobalt Pharmaceuticals complaint here.

Conference & CLE Calendar

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 21-23, 2008 - 2008 Annual Meeting (Intellectual Property Owners Association) - San Diego, CA

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

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

September 22-23, 2008 - Patent Litigation 2008 (Practising Law Institute) - San Francisco, CA

September 23-24, 2008 - Biotech Patenting (C5) - London, England

October 6-7, 2008 - Patent Litigation 2008 (Practising Law Institute) - McLean, VA

October 7-8, 2008 - Global Patent Litigation*** (American Conference Institute) - New York, NY

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

October 15-16, 2008 - Pharmaceutical Congress on Paragraph IV Disputes*** (Center for Business Intelligence) - Philadelphia, PA

October 15-16, 2008 - Advanced Courses (Patent Resources Group) - Santa Ana Pueblo, NM

October 15-17, 2008 - Maximizing Pharmaceutical Patent Lifecycles*** (American Conference Institute) - New York, NY

October 23-24, 2008 - Patent Litigation 2008 (Practising Law Institute) - Chicago, IL

October 28-29, 2008 - Pharma/Biotech IP Due Diligence*** (C5) - Amsterdam, Netherlands

November 10-11, 2008 - Patent Litigation 2008 (Practising Law Institute) - Atlanta, GA

November 12-14, 2008 - Structuring, Negotiating and Managing Pharma/Biotech Collaborative Agreements (American Conference Institute) - New York, NY

November 17-18, 2008 - Patent Litigation 2008 (Practising Law Institute) - New York, NY

November 19-20, 2008 - Paragraph IV on Trial*** (American Conference Institute) - New York, NY

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

ACI Pharma/Biotech Collaborative Agreements Conference

American Conference Institute (ACI) will be holding its 11th Advanced Forum on Structuring, Negotiating and Managing Pharma/Biotech Collaborative Agreements from November 12-14, 2008 in New York.  The conference will allow attendees to:

• Leverage intellectual property and draft favorable exclusivity provisions;
• Anticipate the potential impact of M&A activity on your transaction;
• Negotiate co-development rights;
• Protect rights relating to future developments and improvements;
• Evaluate viable compensation structures;
• Minimize risks through partner selection and due diligence;
• Ensure effective alliance management;
• Negotiate hotly contested issues with universities; and
• Avoid the top pitfalls of international deals.

In particular, ACI's faculty will offer presentations on the following topics on November 12 and 13:

• Factoring takeaways from recent deals and trends into your collaborations strategy;
• Limiting the potential for litigation:  Best drafting practices after Quanta and MedImmune;
• Prelude to acquisition?  Incorporating M&A considerations into your collaboration strategy;
• Leveraging intellectual property:  Negotiating exclusivity, co-promotes and other critical terms to accelerate development and maximize profits;
• Incorporating international business strategies into collaborative agreements;
• Successfully negotiating collaborative research agreements with academic institutions;
• Alliance management:  Establishing governance structures for successful collaborations;
• Asset spin-outs:  Overcoming challenges in negotiating out licensing by pharma and big biotech;
• Setting the stage for success by choosing the right partner and conducting effective due diligence; and
• Defining critical termination rights.

Two additional master classes entitled: "Sustaining a Successful Collaboration Through Effective Alliance Management" and "The 'Win-Win' Collaborative Agreement:  Practical and Ethical Negotiating and Drafting Strategies" will be offered on November 13 and 14, respectively.  In the first master class, experts in making collaborations work will show you how to ensure that the alliance's objectives are met.  The second master class will walk attendees through the key aspects of negotiating and drafting that are essential to successful agreements.

The agenda for the Pharma/Biotech Collaborative Agreements conference can be found here.  A complete brochure for this conference, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee ranges from $2,195 (conference alone) to $2,795 (conference and one master class) to $3,395 (conference and two master classes).  Those registering on or before September 8, 2008 will receive a $300 discount off the registration fee and those registering on or before October 20, 2008 will receive a $200 discount off the registration fee.  Those interested in registering for the conference can do so here, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Biotech/Pharma Lobbying Scoreboard - Second Quarter Update

    By Donald Zuhn --

Regular Patent Docs readers have likely noticed that we have been paying close attention to the lobbying efforts of various players in the biotech/pharma industry.  Our interest in the lobbying expenditures of these companies and organizations stems from the push by Congress over the past year to pass patent reform and follow-on biologics legislation.  In previous reports, we noted that a handful of biotech/pharma companies and organizations spent significant amounts of money lobbying the federal government in the first quarter of 2008, including:

• The Pharmaceutical Research and Manufacturers of America (PhRMA) -- $3.6 million
• Pfizer, Inc. -- $2.8 million
• Amgen Inc. -- $2.5 million
• The Biotechnology Industry Organization (BIO) -- $1.9 million
• Barr Pharmaceuticals, Inc. -- $1.7 million
• Monsanto Co. -- $1.3 million
• Novartis AG -- $1.3 million
• Sanofi-Aventis -- $1.2 million
• Abbott Laboratories -- $880,000
• Bristol-Myers Squibb Co. -- $840,000
• AstraZeneca PLC -- $770,000
• Wyeth -- $700,000
• Teva Pharmaceutical Industries Ltd. -- $640,000
• Genentech, Inc. -- $591,000
• Schering-Plough Corp. -- $520,000
• Cephalon, Inc. -- $512,000
• The Generic Pharmaceutical Association (GPhA) -- $434,495
• Endo Pharmaceuticals -- $410,000
• Syngenta AG -- $400,000
• Biogen Idec Inc.: $200,000

Now that the reporting deadline for second quarter (April to June) lobbying has passed, additional reports are coming out regarding the expenditures of a number of biotech/pharma companies and organizations, including:

• The Pharmaceutical Research and Manufacturers of America (PhRMA), whose members include Pfizer, Amgen Inc., and Eli Lilly & Co., spent $5 million on second quarter lobbying (see Pharmaceutical Online report).  According to PhRMA's July 21 filing with the House clerk's office, the trade group's lobbying efforts were directed in part at patent reform legislation, which the group opposed, and follow-on biologics legislation.

• Pfizer Inc. spent nearly $3.1 million on second quarter lobbying (see Forbes.com report).  According to Pfizer's July 21 filing with the House clerk's office, the drugmaker's lobbying efforts were directed in part at follow-on biologics legislation and the importance of protecting pharmaceutical patents internationally.

• Eli Lilly & Co. spent $2.9 million on second quarter lobbying (see MSN Money report).  According to the Lilly's lobbying disclosure, the Indianapolis, IN-based drugmaker's lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Amgen Inc. spent nearly $2.9 million on second quarter lobbying (see Forbes.com report).  According to the biotech drugmaker's July 21 filing with the House clerk's office, the Thousand Oaks, CA-based company's lobbying efforts were directed in part at follow-on biologics legislation.

• GlaxoSmithKline PLC spent $1.8 million on second quarter lobbying (see Forbes.com report).  According to GSK's July 21 filing with the House clerk's office, the drugmaker's lobbying efforts were directed in part at patent reform legislation, which the company opposed, and follow-on biologics legislation.

• Barr Pharmaceuticals Inc. spent over $1.5 million on second quarter lobbying (see CNNMoney.com report).  According to the generic drugmaker's July 21 filing with the House clerk's office, the Montvale, NJ-based company's lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• AstraZeneca PLC spent more than $1.3 million on second quarter lobbying (see Forbes.com report).  According to the pharmaceutical maker's July 21 filing with the House clerk's office, the London-based company's lobbying efforts were directed in part at patent reform legislation.

• Novartis AG spent over $1.3 million on second quarter lobbying (see Forbes.com report).  According to Novartis' July 21 filing with the House clerk's office, the pharmaceutical company's lobbying efforts were directed in part at patent reform legislation, which the group opposed, and follow-on biologics legislation.

• Merck & Co. Inc. spent nearly $1.2 million on second quarter lobbying (see Forbes.com report).  According to Merck's July 18 filing with the House clerk's office, the drugmaker's lobbying efforts were directed in part at patent reform legislation, which the Whitehouse Station, NJ-based company opposed.

• Abbott Laboratories spent just over $1 million on second quarter lobbying (see Forbes.com report).  According to the drug and medical device maker's July 21 filing with the House clerk's office, the Abbott Park, IL-based company's lobbying efforts were directed in part at patent reform legislation, which the company opposed, and follow-on biologics legislation.

• Baxter International Inc. spent $900,000 on second quarter lobbying (see Forbes.com report).  According to Baxter's July 21 filing with the House clerk's office, the drug and medical device maker's lobbying efforts were directed in part at patent reform legislation, which the company opposed.

• Bristol-Myers Squibb Co. spent almost $830,000 on second quarter lobbying (see Forbes.com report).  According to the pharmaceutical maker's July 21 filing with the House clerk's office, the company's lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Wyeth spent more than $801,000 on second quarter lobbying (see Forbes.com report).  According to Wyeth's July 28 filing with the House clerk's office, the Madison, NJ-based drugmaker's lobbying efforts were directed in part at follow-on biologics legislation and the importance of protecting pharmaceutical patents internationally.

• Cephalon spent nearly $516,000 on second quarter lobbying (see Forbes.com report).  According to the biotech drugmaker's July 21 filing with the House clerk's office, the Frazer, PA-based company's lobbying efforts were directed in part at patent reform legislation.

In response to our last report on biotech/pharma lobbying, one Patent Docs reader inquired about the lobbying costs of IT companies and organizations, which unlike their biotech/pharma counterparts, favor more "radical" patent reform.  An online search revealed that a number of IT companies and organizations disclosed equally significant second quarter lobbying expenditures, including:

• General Electric Co. -- $5.4 million (see Forbes.com report)
• Comcast Corp. -- $2.8 million (see Forbes.com report)
• Microsoft Corp. -- $2.3 million (see Forbes.com report)
• Dell Inc. -- $770,000 (see Forbes.com report)
• Google Inc. -- $730,000 (see Forbes.com report)
• Yahoo Inc. -- $630,000 (see Forbes.com report)
• Alcatel-Lucent -- $621,313 (see Forbes.com report)
• eBay Inc. -- $568,500 (see Forbes.com report)
• Hewlett-Packard Co. -- $450,000 (see Forbes.com report)
• The Business Software Alliance (BSA), a trade group that includes Microsoft Corp., McAfee Inc., and Hewlett-Packard Co. -- $360,000 (see Forbes.com report)
• Apple Inc. -- $450,000 (see Forbes.com report)
• Amazon.com Inc. -- $300,000 (see Forbes.com report)
• Cisco Systems Inc. -- $300,000 (see Forbes.com report)
• Adobe Systems Inc. -- $98,849 (see Forbes.com report)

All of the above entities disclosed that their second quarter lobbying expenses were directed in part at patent reform legislation.

For additional information regarding this topic, please see:

• "Biotech/Pharma Lobbying Scoreboard - Part II," June 30, 2008
• "Biotech/Pharma Lobbying Scoreboard" June 6, 2008
• "Lobbying Spending Spree Continues," May 20, 2008
• "Abbott's First Quarter Lobbying Tab Hits $880,000," May 2, 2008

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

    By Kevin E. Noonan --

The Federal Circuit today affirmed AstraZeneca's latest victory in its long-running battle against generic drug companies who filed ANDAs for its (former) blockbuster drug, Prilosec®.  The Court affirmed in toto the decisions of Judge Barbara S. Jones, the District Court judge sitting in the Southern District of New York who has handled the consolidated infringement actions brought by AstraZeneca under 35 U.S.C. § 271(e)(2)(A).  The two sets of defendants, Apotex Corp., Apotex, Inc., and Torpharm Inc. on the one hand and Impax Laboratories on the other, were found to infringe the patents in suit, and neither defendant had established that these patents were invalid by clear and convincing evidence.

The Federal Circuit characterized the decision appealed from in this case as the "second wave" of the consolidated, multidistrict litigation involving these patents and various generic company ANDA filers who filed Paragraph IV certifications that AstraZeneca's patents were invalid.  The Court had heard and affirmed the first wave decisions in In re Omeprazole Patent Litigation, 86 Fed. App'x. 76 (Fed. Cir. 2003) and In re Omeprazole Patent Litigation, 483 F.3d 1364 (Fed. Cir. 2007).  In this case, the Court addressed separately and rejected the contentions of each of the two parties defendant, in a unanimous decision by Judge Bryson, Judges Lourie and Gajarsa concurring.

There were two patents in suit, U.S. Patent Nos. 4,786,505 and 4,853,230.  Claim 1 of the '505 patent reads as follows:

An oral pharmaceutical preparation comprising:
    (a) a core region comprising an effective amount of a material selected from the group consisting of omeprazole plus an alkaline reacting compound, an alkaline omeprazole salt plus an alkaline reacting compound and an alkaline omeprazole salt alone;
    (b) an inert subcoating which is soluble or rapidly disintegrating in water disposed on said core region, said subcoating comprising one or more layers of materials selected from among tablet excipients and polymeric film-forming compounds; and
    (c) an outer layer disposed on said subcoating comprising an enteric coating.

And claim 1 of the '230 patent reads as follows:

A pharmaceutical preparation comprising:
    (a) an alkaline reacting core comprising an acid-labile pharmaceutically active substance and an alkaline reacting compound different from said active substance, an alkaline salt of an acid labile pharmaceutically active substance, or an alkaline salt of an acid labile pharmaceutically active substance and an alkaline reacting compound different from said active substance;
    (b) an inert subcoating which rapidly dissolves or disintegrates in water disposed on said core region, said subcoating comprising one or more layers comprising materials selected from the group consisting of tablet excipients, film-forming compounds and alkaline compounds; and
    (c) an enteric coating layer surrounding said subcoating layer, wherein the subcoating layer isolates the alkaline reacting core from the enteric coating layer such that the stability of the preparation is enhanced.

Impax challenged the District Court's decisions on both procedural and substantive grounds.  Procedurally, Impax asserted error in each of the District Court decisions regarding jurisdiction over the action after AstraZeneca's patents-in-suit had expired and denying its demand for a jury trial.  (The District Court dealt with the latter ground summarily, stating that it had once before rejected Impax's contentions with regard to its petition for a writ of mandamus, and upholding its prior determination as "the law of the case.")  On the jurisdictional question, the patents-in suit expired between the end of the bench trial and when the District Court entered judgment, and according to Impax, patent expiry eliminated any "case or controversy" between the parties.  The District Court also extended the time that the FDA was prohibited from allowing Impax's ANDA for six months from the date of patent expiry, as a consequence of the Agency's granting AstraZeneca a six-month period of pediatric exclusivity.  (Pursuant to 21 U.S.C. § 355(a), the FDA has the authority to request that an NDA holder perform pediatric studies on the effect of an approved drug.  If the NDA holder performs such studies, the Agency can extend the term of a patent-holder's exclusivity for an additional six months after Orange Book listed patents have expired.  In this case, that date was October 20, 2007.)

The Federal Circuit affirmed the District Court's interpretation of the statute, saying that the relevant provisions clearly give the District Court the authority to extend a patentee's period of exclusivity for the six-month additional period provided as a reward for performing pediatric testing at the FDA's behest.  The CAFC pointed to the express words of the statute, that "the period during which an ANDA may not be approved under section 355(j)(5)(B) 'shall be extended by a period of six months [i.e., the period of pediatric or market exclusivity] after the date the patent expires (including any patent extensions).'"  The Federal Circuit also rejected Impax's underlying basis for its argument, that patent expiry removed the District Court's jurisdictional basis under Article III's "case or controversy" requirement.  Stating the principle that what is required for a case to be justiciable is "a real and substantial controversy," the CAFC refused to permit patent expiry to be a ground for destroying jurisdiction when there clearly remained a "real and substantial controversy" between the parties (since Impax conceded that, even as they construed the situation, the District Court would have retained its authority if it had rendered its decision before the patents expired).  The Federal Circuit also rejected Impax's reliance on Kearns v. Chrysler Corp. and Roche Palo Alto v. Apotex, saying that the Kearns case concerned injunctive relief under 35 U.S.C. § 283 not § 271(e)(4)(A), and that in Roche, the dispute was on "the particular terms of the district court's order" (i.e., how the court worded its order), not a challenge on whether relief was available under the statute.

Impax's appeal of the District Court's decision that its ANDA product infringed the patents-in-suit was based on whether AstraZeneca had introduced sufficient and relevant evidence that each of the claim elements could be identified in its product.  First, Impax attacked the District Court's finding that the Impax formulation contains an "effective amount" of omeprazole and an alkaline reactive compound (ARC).  Second, Impax argued that there was insufficient evidence that its formulation contained an inert subcoating.  Since this appeal was from the District Court's decision after a bench trial, Impax had the burden of showing clear error in the District Court's decisions, a burden the Federal Circuit held it did not carry on either ground of appeal.  The CAFC had construed the meaning of the term "effective amount" in the so-called "first wave" phase of the litigation, to require the limitation applied to both the amount of omeprazole and the amount of the ARC.  Further, the CAFC had construed the meaning of the term "alkaline reacting compound" to mean "(1) a pharmaceutically acceptable alkaline, or basic, substance having a pH greater than 7 that (2) stabilizes the omeprazole or other acid-labile compound by (3) reacting to create a micro-pH of not less than 7 around the particle of omeprazole or other acid-labile compound."  Impax contended that this construction required AstraZeneca to introduce evidence of comparative stability testing to show that Impax's formulation fell within the scope of the claim.

The Federal Circuit rejected this contention, saying that the evidence AstraZeneca did introduce established that the ARC created the recited "'micro-pH' in the drug core," which the CAFC said was "the same evidentiary burden that the district court placed on Astra" in the first wave of the litigation.  Accordingly, the CAFC found no clear error in the District Court's determination that AstraZeneca had established infringement by a preponderance of the evidence.  Similarly, the CAFC rejected Impax's contention that, absent affirmative evidence that its formulation showed "enhanced stability," the District Court had "read [the limitation] out of the claims entirely" of the '230 patent.  All that was required, according to the Federal Circuit, was that AstraZeneca establish "the presence of an inert subcoating and a drug core having a micro-pH of not less than 7," and the CAFC found no clear error in the District Court's reliance on AstraZeneca's evidence in this regard.  Finally, the CAFC rejected Impax's contention that its decision in Warner-Lambert Co. v. Teva Pharmaceuticals USA, Inc. mandated a different result, since in that case the Federal Circuit reversed a summary judgment determination (where its review of the District Court's decision was de novo), while here it was reviewing a final judgment (requiring evidence of clear error).

The Federal Circuit also rejected Impax's second contention, that its formulation did not satisfy the "inert subcoating" limitation of the patents-in-suit, and that the District Court was in error for crediting AstraZeneca's expert testimony that the subcoating was formed "in situ," i.e., as a consequence of reaction between the components of the formulation rather than being introduced as a discrete step during formulation.  The Federal Circuit found no clear error in the District Court's determination that AstraZeneca's expert testimony and evidence was more credible than Impax's contrary interpretation of that expert testimony.

Finally, although disagreeing with the District Court's determination that AstraZeneca's Phase III clinical trials were an "experimental use" rather than a "public use," the Federal Circuit nonetheless upheld the District Court's decision that the patents-in-suit were not invalid based on public use prior to one year before their earliest priority date(s) under 35 U.S.C. § 102(b).  The basis for the CAFC's decision was evidence that AstraZeneca's invention was not "ready for patenting," as required by the Supreme Court's decision in Pfaff v. Wells Electronics, Inc.  The inventors testified that, although they had produced certain embodiments of the claimed invention prior to the Phase III clinical trials (and prior to the critical date), they did not (indeed, could not) know whether these embodiments would work for their intended purpose until receiving the results of the clinical trials.  Thus, according to the District Court, the claimed invention had not been reduced to practice until the clinical trials were over and thus were not "ready for patenting" during the clinical trials.  The Federal Circuit affirmed this determination, based on evidence of the uncertainty during development of the formulations and that the clinical trials were required to establish that the claimed invention had been reduced to practice.

Apotex also appealed the District Court's determination that its ANDA formulations infringed, as well as the District Court's rejection of its anticipation and obviousness challenges to the validity of the patents-in-suit.  Since the Federal Circuit characterized the infringement appeal as a dispute between the evidence presented by each side's experts, it found no clear error in the District Court's decision to credit AstraZeneca's expert testimony over the contrary expert testimony of the Apotex experts.  The CAFC also affirmed the District Court's determination that the patents-in-suit were not anticipated by two U.S. and one European prior art patent; here, the challenge was on claim construction, specifically the meaning of the term "alkaline salt" and "acid labile."  The CAFC rejected Apotex's contention that an "alkaline salt" was limited to salts comprising an element from Groups I and II of the periodic table, finding that it was contrary to the specification of the '230 patent and claim 8, which included within the scope of the term ammonium salts (which do not contain any Group I or Group II elements).  Regarding the term "acid labile," the Court interpreted the cited prior art to disclose acid-stable compounds that did not anticipate the claims at issue.

Apotex also asserted a large number of references to support its contention that the claims of the patents-in-suit were obvious.  The basis for the District Court's rejection of Apotex's obviousness claim is that the prior art did not recognize the need for a subcoating between the omeprazole/ARC-containing core and the enteric coating.  Even if the skilled worker in the art had recognized the need (i.e., that there would be a "negative interaction" between the core and the enteric coating), the District Court provided "multiple paths" that the worker of ordinary skill could consider in addressing the problem.  In this regard, Apotex raised the Supreme Court's discussion of the "obvious to try" standard set forth in the KSR Int'l. Co. v. Teleflex, Inc. decision.  The Federal Circuit distinguished on the grounds that the District Court "found that a person of skill in the art would not have seen a reason to insert a subcoating in the prior art formulation."  The District Court's finding of non-obviousness, affirmed by the Federal Circuit, "was based on Apotex's failure to demonstrate that a person of skill in the art would conclude that a negative interaction would take place between the enteric coating and the drug core," i.e., that the skilled worker would not have recognized that there was a problem to be solved in the first place, thus removing a necessary predicate to employing the "obvious to try" analysis.

This decision represents the latest (and perhaps the final) victory for AstraZeneca over its Prilosec® franchise.  These victories have about them, however, something of a Pyrrhic quality in view of events that have occurred since these suits were initiated almost ten years ago.  The most important of these is that AstraZeneca has transferred its focus from Prilosec® to Nexium®, the purified S-enantiomer of omeprazole.  Second, one ANDA filer, Kremers Urban Development Co., was found not to infringe AstraZeneca's patents and launched a generic omeprazole product almost five years ago; this launch was followed by others, and indeed AstraZeneca partnered with Proctor & Gamble to put an over-the-counter form of omeprazole on the market.  In this case, once Impax launched "at risk" prior to patent expiry, AstraZeneca amended its complaint to request damages, but before trial it stipulated for the District Court to dismiss its damages claims with prejudice in order for the Court to join Impax in the consolidated bench trial.  Accordingly, it appears that AstraZeneca actually gained very little, in market share, damages, or exclusivity, as a result of its participation in this protracted litigation.  This result provides a cautionary tale and to some degree refutes those who mischaracterize patent litigation as a "jackpot" or an impediment to innovation.  AstraZeneca protected its Prilosec® franchise at great cost, but it is reasonable to ask, to what end and for what benefit?  It doesn't appear to be an easy question to answer.

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

USPTO News: Latest Version of M.P.E.P. Released

    By Donald Zuhn --

The U.S. Patent and Trademark Office announced today that the latest version of the Manual of Patent Examining Procedure (M.P.E.P.) -- 8th Edition, Revision 7 -- is now available.  The new version replaces Revision 6, which was released in October, 2007.  The parts of the latest version of the M.P.E.P. that have been updated are the Blue Pages (a complete list of changes to the latest version of the M.P.E.P.); the Title Page; Chapter 600 (Parts, Form, and Content of Application), Chapter 1400 (Correction of Patents), Chapter 1800 (Patent Cooperation Treaty), Chapter 2200 (Citation of Prior Art and Ex Parte Reexamination of Patents), Chapter 2500 (Maintenance Fees), and Chapter 2600 (Optional Inter Partes Reexamination); Appendix II (List of Decisions Cited), Appendix R (Patent Rules; 37 C.F.R.), Appendix T (Patent Cooperation Treaty), and Appendix AI (Administrative Instructions Under the PCT); and the Index.  Adobe Acrobat versions of the changed sections can be obtained by clicking on the title of the desired sections listed above.  Other formats of the above sections (as well as Acrobat versions of unchanged sections) can be obtained here.