Patent Docs

House Judiciary Committee Approves H.R. 1249

By Kevin E. Noonan --

The House of Representatives Committee on the Judiciary today approved H.R. 1249 (the "America Invents Act") and reported the bill to the House floor by a vote of 32-3, with Representatives John Conyers, Jr. (D-MI), Steve King (R-IA), and James Sensenbrenner, Jr. (R-WI) voting against the measure.  Along the way, 21 amendments were offered, of which thirteen were passed, five failed to gain passage, and three were withdrawn (the latter category including a public display of emotion by Rep. Debbie Wasserman Schultz (D-FL)).

The Manager's Amendment passed by the same vote as the bill overall (32-3), with one amendment passed by roll call vote (29-9 with 1 pass and 1 present).  This amendment, introduced by Rep. Bob Goodlatte (R-VA) amended the Supplementary Examination provisions to exclude "fraud on the [Patent] Office" by including subsection (C):

(C)  FRAUD. – No supplemental examination shall be commenced by the Director on, and any pending supplemental examination shall be immediately terminated regarding, an application or patent in connection with which fraud on the Office was practiced or attempted.  If the Director determines that such fraud on the Office was practiced or attempted, the Director shall also refer the matter to the Attorney General for such action as the Attorney General may deem appropriate.

This amendment appears to defeat the main purpose of the supplementary examination provisions, addressing a concern raised by the generic pharmaceutical industry (see "Reaction to Manager's Amendment to House Patent Reform Bill") and providing yet another difference from the Senate version of the bill (S. 23) that will need to be resolved.

Several amendments were passed by voice vote.  These included an amendment (introduced by Rep. Goodlatte) to the settlement section (§ 317) of the inter partes reexamination provisions of the statute, that permits "[a]t the request of a party to the proceeding, the agreement or shall be treated as business confidential information, shall be kept separate from the file of the involved patents, and shall be made available only to the Government agencies on written request, or to any person on a showing of good cause."  Rep. Conyers (D-MI) introduced an amendment that would correct the perceived procedural detects related to patent term extension of The Medicines Company's patent on Angiomax®:

CALCULATION OF 60-DAY PERIOD FOR APPLICATION OF PATENT TERM EXTENSION.

(a)  IN GENERAL. – Section 156(d)(1) of tile 35, United States Code, is amended by adding at the end the following flush sentence:

"For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive permission on the next business dy.  For purposes of the preceding sentence, the term "business day" means any Monday, Tuesday, Wednesday, Thursday or Friday, excluding any legal holiday under section 6103 of title 5."

(b)  APPLICABILITY. - The amendment made by subsection (a) shall apply to any application for extension of a patent term under section 156 of title 35, United States Code, that is pending on, that is filed after, or as to which a decision regarding the application is subject to judicial review on, the date of enactment of this Act.

Also adopted by voice vote were a series of "Sense of the Congress" amendments that fractured the syntax of Article I, section 8, clause 8 of the Constitution and evinced a studied misunderstanding of the structure and basis of the U.S. patent system.  Rep. Sheila Jackson Lee (D-TX) added the following amendments to the "first inventor to file" provisions:

(o)  SENSE OF CONGRESS. – It is the sense of the Congress that converting the United Stated Patent Registration System from "First Inventor to Use" to a system of "First Inventor to File" will promote the progress of science by securing for limited time to inventors the exclusive rights to their discoveries and provide inventors which greater certainty regarding the scope of protection granted by the exclusive rights to their discoveries.

(o)  SENSE OF CONGRESS. – It is the sense of the Congress that converting the United Stated Patent Registration System from "First Inventor to Use" to a system of "First Inventor to File" will harmonize the United States Patent Registration System with the patent registration systems commonly used in nearly all other countries throughout the world with whom the United States conducts trade and thereby promote a greater sense of international uniformity and certainty in the procedures used for securing the exclusive rights of Inventors to their discoveries.

Rep. Maxine Waters (D-CA) introduced an amendment requiring the U.S. Patent and Trademark Office to study implementation of the bill:

Sec. 27.  STUDY ON IMPLEMENTATION

(a)  PTO STUDY. – The Director of the United States Patent and Trademark Office shall conduct a study on the manner in which this Act and the amendments made by this Act is being implemented by the Patent and Trademark Office, and on such other aspects of the patent policies and practices of the Federal Government with respect to patent rights, innovation in the United States, competitive of United States markets, access by small businesses to capital for investment, and other such issues, as the Director deems appropriate.

(b)  REPORT TO CONGRESS. – The Director shall, not later than  the date that is 4 years after the date of the enactment of this Act, submit to the Committees of the Judiciary of the House of Representatives and the Senate a report on the results of the study conducted under subsection (a), including recommendations for any changes to laws and regulations that the Director considers appropriate.

And Rep. Judy Chu (D-CA) introduced an amendment to establish a "pro bono" patent program:

Sec. 27. PRO BONO PROGRAM.

The Director shall work with an support intellectual property law associations across the country in the establishment of pro bono programs designed to assist financially under-resourced independent inventors and small businesses.

Rep. Pedro Pierluisi (D-PR) introduced an amendment in the "STATE COURT JURISDICTION" provisions of Section 19 of the bill to include "any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, American Samoa, Guam, and the Northern Mariana Islands."

Several additional amendments to the Manager's Amendment were introduced and passed by voice vote prior to passage of the Amendment by the committee.  These included an amendment from Representatives Melvin Watt (D-NC), Goodlatte, and Howard Berman (D-CA) to extend the sunset provision of the Director's authority to set patent fees from four years to six years, and another amendment by Rep. Watt to soften the provisions of Section 2 regarding the negative impact of abusive patent litigation on the patent process to rather recite "any negative impact of patent litigation that was the subject of such study" on implementation of the first inventor to file provisions of the bill.  Rep. Goodlatte introduced amendments to include "trials" expressly in the "actions" that fall within the ambit of the Joinder of Parties in new § 298, that eliminated the provisions of § 298 that would have provided for a stay of civil actions to "non-manufacturing parties" or "additional parties," and reversed the provisions of the Manager's Amendment that permitted the Director to grant an inter partes reexamination without considering the patentee's response to the petition.  Rep. Goodlatte also introduced an amendment to revise the prior user rights amendment to exclude from such rights situations where:

(ii)  the claimed invention that is the subject of the defense was disclosed to the public in a manner that qualified for the exception from the prior art under section 102(b) and the commercialization date relied upon under paragraph (1) for establishing entitlement to the defense is less than 1 year from such disclosure to the public.

Rep. Zoe Lofgren (D-CA) introduced an amendment (that passed on voice vote) that undid all the changes to the first inventor to file provisions with regard to public use and on-sale, and eliminated the provisions commanding that the standard for determining the meaning of "public accessibility" to be used is "the criteria used by courts in addressing whether a disclosure constitutes a printed publication" (a related amendment introduced by Rep. Sensenbrenner was rejected by voice vote).

Several amendments failed, including an amendment by Rep. Conyers that would exempt patents that have "completed an ex parte or inter partes reexamination or been reissued with valid claims" from the reconsideration procedures for business method patents.  Also rejected was an amendment by Rep. Chu (D-CA) that attempted  to change inter partes reexamination to preclude institution of a reexamination "filed more than 30 days after the date on which a court of competent jurisdiction enters an order construing the claims of the patent in a civil action in which the petitioner, real party in interest, or privy of the petitioner is a party."  Rep. Chu's amendment to eliminate the first inventor to file changes and Rep. Lofgren's amendment to eliminate the supplemental examination provisions were also rejected by voice vote.

Three amendments were withdrawn.  Representatives Conyers and Chu withdrew their amendment that would have excluded pending cases from the provisions limiting assertion of the false marking statute.  Representatives Sensenbrenner and Mike Quigley (D-IL) withdrew their amendment that would have changed the revisions to the prior user rights section of the bill.  Finally, Rep. Wasserman Schultz tearfully withdrew her amendment that would have exempted from infringement a "genetic diagnostic tester's performance of a confirming generic diagnostic test activity" that would otherwise constitute infringement under §§ 271(a) or (b).  Interestingly, in the definitions section an exception to the exception includes "the practice of a process in violation of a biotechnology patent."

The bill next will be considered by the House in floor debate that has not yet been scheduled.  If the bill passes, it will either go to conference committee to be reconciled with the Senate's S. 23, or the Senate could simply bring H.R. 1249 to a vote.  In either event, the patent reform bill could be ready for the President's signature before the summer.

Biotech/Pharma Docket

By James DeGiulio --

Cordis Stent Found to Infringe Boston Scientific Patent

Boston Scientific Corp. secured a favorable ruling on summary judgment in its patent infringement suit against Cordis Corp. over one of its drug-eluting stents.  In 2003, Boston Scientific sued Cordis in the U.S. District Court for the District of Delaware for infringement of U.S. Patent No. 5,922,021, asserting that three sizes of Cordis' Cypher stent infringed the '021 patent.  In 2005, a jury agreed and returned a verdict in favor of Boston Scientific.  Cordis sought reexamination of the '021 patent in 2009.  Three claims of the '021 patent were rejected as obvious, but Boston Scientific was able to overcome this rejection.  Cordis filed a second request for reexamination in January 2011, which rejected one claim of the '021 patent as anticipated and obvious.  Following this rejection, Cordis asked the District Court to delay trial until the Patent Office finished its reexamination, while Boston Scientific moved for summary judgment of infringement.

On April 13, Judge Sue L. Robinson issued an opinion that denied Cordis' motion to delay the start of a trial, weighing the general factors for staying a trial.  Judge Robinson considered the stay improper, since discovery was complete, the trial for damages was set to start May 5, and the reexamination could take many months to complete.  Judge Robinson also granted Boston Scientific's motion for summary judgment, finding that the product at issue, Cordis' 2.25 mm Cypher stent, infringes the '012 patent since it has the same architecture as three other sizes of stent that were found to infringe the same claim of the patent in a previous case.  Judge Robinson also assigned a favorable date to Boston Scientific for damage calculation.  Finally, Judge Robinson denied Cordis' Daubert motion to exclude an expert in royalty calculations from testifying for Boston Scientific.  Cordis had previously challenged the expert's methodology, but the favorable damage calculation date assigned to Cordis significantly weakened its challenge.

Mylan, Barr and Anchen Blocked from Introducing Generic Amrix

Cephalon was able to extend an injunction ruling that generic drugmakers cannot release their own versions of Amrix until the Judge issues a ruling on the validity and enforceability of the patents.  Cephalon brought six cases against several generic manufacturers to block them from producing generic versions of the extended release drug Amrix after their ANDA filings.  These cases were consolidated in the U.S. District Court for the District of Delaware in December 2009.  A bench trial was held from September 29 through October 10, 2010, where Barr and Mylan challenged the validity of Cephalon's Amrix patents, arguing that cyclobenzaprine was well known in the art and anyone with ordinary skill could have made an extended release version with minimal effort.  They also asserted that the patents were unenforceable due to inequitable conduct.  After trial, Cephalon settled with Impax (see "Biotech/Pharma Docket," October 14, 2010).  On October 29, Cephalon, Mylan, Barr, and Anchen stipulated that the generic drugmakers would not enter the Amrix market until April 17, 2011, or the date of issuance of an opinion on Cephalon's patents, whichever is earlier.

On April 8, Judge Sue L. Robinson issued an order enjoining the generic manufacturers from launching their products until an opinion on the patents is issued in the case.  The 30-month automatic stay in this case is set to expire on April 17, and the generics have made it known that they intend to introduce their Amrix drugs to market on April 17, regardless of whether Judge Robinson issues her ruling, as per the stipulation.  While Judge Robinson intends to release her opinion on the patents soon, she did not guarantee that the opinion would come down before April 17.  Consequently, despite the parties' stipulation, the judge issued an injunction over all defendants in all the cases, keeping all generic Amrix off the market until she issues her ruling.

Galderma, Dermalogix Agree to End Clobex Suit with Paddock

As trial was set to begin, Galderma SA and Dermalogix Partners Inc. reached an agreement with Paddock Labs which ends their patent infringement suit over a generic version of the psoriasis spray Clobex.  In 2009, Galderma and Dermalogix brought suit in the U.S. District Court for the Northern District of Texas, alleging infringement of U.S. Patent No. 5,972,920 after Paddock submitted an ANDA seeking approval for a generic clobetasol propionate spray (see "Court Report," January 11, 2011).  Both parties moved for summary judgment, with the plaintiffs asking the District Court to rule that the proposed generic infringes the '920 patent and that the patent is not invalid.  The judge found that Paddock's proposed spray did infringe the '920 patent as a matter of law.  Paddock argued that the '920 patent was unenforceable due to inequitable conduct by the inventors and patent attorney.  However, the judge determined that there were genuine issues of material fact with respect to both infringement and inequitable conduct that must be established at trial, which was slated to start Monday.

Judge Terry R. Means signed off on the three companies' stipulation to dismiss the suit with prejudice, leaving each side to pay its own costs and attorneys' fees.  The stipulation was silent as to any settlement.