Patent Docs

Webinar on Prometheus v. Mayo

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar on the "Supreme Court Hearing in Prometheus v. Mayo" on Thursday, December 15, 2011 beginning at 2:00 PM (ET).  The IPO webinar will parse the Justices' questioning and try to predict the outcome.  The panel will include Courtenay Brinckerhoff of Foley & Lardner, Charles Doyle of Roche Molecular Systems, and Prof. Katherine Strandburg of the New York University School of Law.

The registration fee for the webinar is $120 (government and academic rates are available upon request).  Those interested in registering for the webinar can do so here.

Plaintiffs File Petition for Certiorari in AMP v. USPTO

By Kevin E. Noonan --

It should come as no surprise that the American Civil Liberties Union (ACLU) and the Public Patent Foundation (PubPat) filed a petition for certiorari with the Supreme Court on Tuesday.  Two questions were presented:

1. Are human genes patentable?

2. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court's decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally and directly threatened with an infringement action?

The basis for the petition can be gleaned (at first glance) from the listing of the reasons for granting the writ:

I. THE QUESTION OF WHETHER HUMAN GENES AND THE INFORMATION THEY CONVEY ARE PATENTABLE IS OF PARAMOUNT IMPORTANCE TO THE FUTURE OF PATENT LAW, THE ADVANCEMENT OF MEDICAL SCIENCE, AND PATIENTS' HEALTH.

II. PATENTS ON "ISOLATED" DNA ARE INVALID UNDER THIS COURT'S SECTION 101 JURISPRUDENCE AND THE U.S. CONSTITUTION.

III. BY HOLDING THAT PETITIONERS LACKED STANDING UNLESS THEY WERE PERSONALLY THREATENED BY MYRIAD, THE FEDERAL CIRCUIT IMPOSED A RIGID STANDING REQUIREMENT CONTRARY TO THIS COURT'S APPROACH

The first reason reiterates the plaintiffs (willful) conflation of the gene itself (patentable under current law) and the information it encodes (which is not patentable and is freely used by all).  The second reason presents grounds for the Supreme Court to overturn the Federal Circuit, insofar as the appellate court's grounds for reversing the District Court unconstitutionally extended the scope of patent eligibility under Section 101.

The second Question Presented, and the reasons for it, are a bit curious considering that the Federal Circuit found that at least one named plaintiff, Dr. Harry Ostrer, had standing to bring the lawsuit.  But it is clear that plaintiffs and their legal representatives are interested in not only reducing the scope of patent eligibility but in expanding the scope of declaratory judgment jurisdiction, so that members of the public affected by a patent but not threatened by suit would have standing.  In many ways, this argument is much more threatening to an effective patent regime in this country, since garnering Supreme Court agreement would make the recent spate of patent litigation (that has raised so many concerns across all technology sectors) look benign (for example, if every consumer who purchases a patented product had standing to challenge the patent).

Patent Docs will provide more in depth coverage of the petition after taking time to consider its implications more thoroughly.

Hat tip to Hal Wegner for alerting the patent community to the petition.

Teva Pharmaceutical Industries Ltd. v. AstraZeneca Pharmaceuticals LP (Fed. Cir. 2011)

By Andrew Williams --

Last week, in Teva Pharma. Indus. Ltd. v. AstraZeneca Pharma. LP, the Federal Circuit reiterated that, in the context of 35 U.S.C. § 102(g), "[t]o establish prior invention, the party asserting it must prove that it appreciated what it had made."  The complication is, however, how do you define what the invention is?  This is because the invention is not necessarily what is claimed -- "'[t]he invention is not the language of the [claim] but the subject matter thereby defined'"(citing Dow Chemical Co. v. Astro-Valcour, Inc., 267 F.3d 1334 (Fed. Cir. 2001)).  Therefore, in this case, because AstraZeneca "appreciated" that it had a formulation with a stable compound (the defined invention), and it knew what the components of the formulation were, it conceived and reduced to practice a stabilized pharmaceutical composition of rosuvastatin (a statin) before Teva's date of invention, even though AstraZeneca did not appreciate the stabilizing property of one of the components, which was a limitation found in Teva's claims.

The technology at issue in this case involved statin formulations, which are inherently unstable and as a result need to be stabilized to be medically viable.  Teva discovered that, among other things, amido-group containing polymeric compounds ("AGCP compound") can be used to stabilize statins, and obtained a patent (RE39,502) with the following representative claim:

1.  A stabilized pharmaceutical composition for the treatment of dyslipidemia, comprising
    an active component consisting essentially of one or more compounds selected from the group consisting of (i) an HMG-CoA reductase inhibiting ring-opened 7-substituted-3,5-dihydroxyheptafloic acid or a pharmaceutically acceptable acid salt thereof, and (ii) an HMG-CoA reductase inhibiting ring-opened 7-substituted-3,5-dihydroxyheptenoic acid or a pharmaceutically acceptable acid salt thereof, and
    a stabilizing effective amount of at least one amido-group containing polymeric compound or at least one amino-group containing polymeric compound, or combination thereof, wherein said stabilized pharmaceutical composition does not contain a stabilizing effective amount of another stabilizer or a combination of other stabilizers.

(emphasis as found in the opinion).  Teva's earliest effective filing date was April 10, 2000, and the earliest date that it alleges it could establish conception and reduction to practice was December 1, 1999.  Teva sued AstraZeneca for infringement in October 2008 for the stabilized statin (rosuvastatin calcium) formation that it was marketing for the treatment of dyslipidemia.  The relevant facts were uncontested, and AstraZeneca conceded infringement for the limited purpose of advancing its summary judgment motion (AstraZeneca appears to have been able to challenge infringement because its formulation contained a second stabilizer, tribasic calcium).  The facts related to AstraZeneca's prior invention allegation included:  (1) AstraZeneca had manufactured a 10,000-unit batch of the formulation with the same ingredients as its commercial drug in mid-1999, (2) it had made additional batches in the summer and fall of 1999, (3) it had disclosed the ingredients and quantities for the formulation that match all commercial drug dosage strengths, and (4) it included crospovidone, an AGCP-compound, as a disintegrant, but did not understand that it had a stabilizing effect on the statin.  As a result, the sole legal question for the Court was whether AstraZeneca conceived and reduced to practice the claimed invention before Teva.

It is clear that prior invention in the context of 102(g) requires a showing that the challenging party (1) reduced its invention to practice first, or (2) was the first to conceive and then exercised due diligence in reducing the invention to practice.  In order to conceive, the inventor needs a specific and settled idea, a particular solution to a problem at hand.  Reduction to practice, on the other hand, requires that the inventor constructed an embodiment that met all of the claim limitations, and determined that it would work for its intended purpose.  However, the inventor need not understand precisely how the invention worked.  There is another requirement that is relevant in the chemical and biotech arts -- conception of something reduced to practice requires more than an unrecognized accidental creation, but instead, the inventor must appreciate what he has invented.  In other words, "'a party who first reduced to practice, but who 'fail[ed] to recognize that he had produced a new form [of matter] . . . is indicative that he never conceived the invention''" (quoting Dow at 1341 (quoting Heard v. Burton, 333 F.2d 239, 243 (C.C.P.A. 1964)).

Teva argued that because AstraZeneca did not appreciate that crospovidone was a stabilizing agent, it could not have appreciated the invention of a formulation with "a stabilizing effective amount" of an AGCP.  The lower court, however, held that all AstraZeneca had to appreciate was the stabilization of its overall pharmaceutical composition that contained crospovidone.  On appeal, Teva complained that the District Court implicitly construed the claims to encompass stabilized statin formations that contained AGCP, without taking into account that AGCP had to act as a stabilizer.  However, the Federal Circuit pointed out, while quoting William Shakespeare, that AstraZeneca was not required to appreciate the invention in the same terms as those recited by the claims ("[T]hat which we call a rose [b]y any other name would smell as sweet.").  Therefore, because AstraZeneca appreciated that the statin in its formulation was stable, and because it appreciated what the components of the formation were, it appreciated the invention.

On its face, this outcome appears to be inequitable.  After all, reducing Teva's claim to "a stabilized [statin-containing] pharmaceutical composition" appears to ignore the rest of the claim, including Teva's alleged inventive contribution.  In fact, the panel questioned both sides during the hearing as to whether Teva should be entitled to this patent because it provided the public with something that it didn't have before the filing of the application -- the knowledge that AGCPs can act as stabilizing agent for statins.  Nevertheless, this line of reasoning has its limits, in part because Teva did not claim the use of AGCPs as stabilizing agents in this patent.  Instead, Teva claimed a composition that used such stabilizing agents.  The important thing to consider is that AstraZeneca was using its composition (the same one that Teva alleged infringed) before Teva's elucidation of the mechanism of action of AGCPs.  And, it is still true that, that which infringes after, anticipates before, even if the use before was without the benefit of the knowledge as to why it worked.  Teva should not be allowed to now take this composition out of the public domain just because it discovered why the composition was so successful -- specifically, because it determined the inherent stabilizing effect that crospovidone has on statins.  This case does have the flavor of inherent anticipation.  The panel was very clear in its opinion and during the hearing that the concept of inherency was not implicated in this case or its decision.  However, one cannot help think that this outcome smells a lot like inherency jurisprudence.  Perhaps this rose just has a different name.

Teva Pharmaceutical Industries Ltd. v. AstraZeneca Pharmaceuticals LP (Fed. Cir. 2011)
Panel: Chief Judge Rader and Circuit Judges Linn and Dyk
Opinion by Circuit Judge Linn

Mayo Collaborative Services v. Prometheus Laboratories at the Supreme Court: Oral Argument Tomorrow

By Kevin E. Noonan --

Tomorrow, the U.S. Supreme Court will hear oral argument in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  The case represents the "other side" of the current foment regarding patent eligibility for methods and reagents related to what can broadly be termed "life sciences" patenting (the other, of course, being the "Myriad gene patenting" case, AMP v. USPTO).  And at least some of the frisson that attends this case is the position taken by Justice Breyer (joined by departed Justices Stephens and Souter) in yet another case, Laboratory Corp. of America Holdings ("LabCorp") v. Metabolite Laboratories, Inc., that indicated a disquiet with patent claims that impinge those Justices' concept of medical practice.

As a reminder, the case involves claims directed to methods for determining whether an effective amount of a drug is being administered to a patient.  The claims of the patents-in-suit (U.S. Patent Nos. 6,355,623 and 6,680,302) were held invalid by the District Court as being outside the scope of patent-eligible subject matter under 35 U.S.C. § 101, based on its application of the "machine or transformation" test enunciated in In re Bilski.  These claims included claims that affirmatively recited an "administrative" step, exemplified by Claim 1 of the '623 patent:

1.  A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
    (a)  administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

    (b)  determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

    wherein the level of 6-thioguanine less than about 230 pmol per 8x10⁸ red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

    wherein the level of 6-thioguanine greater than about 400 pmol per 8x10⁸ red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

and claims that did not recite such a step, exemplified by Claim 46 of the '302 patent:

46.  A method of optimizing therapeutic efficacy and reducing toxicity associated with treatment of an immune-mediated gastrointestinal disorder, comprising:
    (a)  determining the level of 6-thioguanine or 6-methylmercaptopurine in a subject administered a drug selected from the group consisting of 6-mercaptopurine, azathiop[u]rine, 6-thioguanine, and 6-methyl-mercaptoriboside, said subject having said immune-mediated gastrointestinal disorder,
    wherein the level of 6-thioguanine less than about 230 pmol per 8x10⁸ red blood cells indicates a need to increase the[] amount of said drug subsequently administered to said subject, and
    wherein the level of 6-thioguanine greater than about 400 pmol per 8x10⁸ red blood cells or a level of 6-methylmercaptopurine greater than about 7000 pmol per 8x10⁸ red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

The Federal Circuit reversed, in turn this decision being reversed on petition for certiorari and remanded from the Supreme Court for consideration in view of the Supreme Court's intervening decision in Bilski v. Kappos.  The Federal Circuit again reversed the District Court, finding that the claims recited sufficiently transformative steps that they satisfied the Bilski "machine or transformation" test.  The Court rejected the District Court's characterization that the claims consisted of three steps:  (1) administering the drug to a subject, (2) determining metabolite levels, and (3) being warned that an adjustment in dosage may be required, wherein the first two steps were "data-gathering," leaving the third step as merely an unpatentable mental step, comprising the correlation, because no step requiring a change in administered dose.  The Court agreed that the last (comparison) step was a mental step, but maintained (as it had in the original opinion) that this by itself cannot provide legitimate grounds for invalidating the claims (because the claims must be considered in their entirety).

Review by the Supreme Court will test the panel's understanding of Bilski to have rejected the machine-or-transformation test as the "sole, definitive test," and to have "declined to adopt any categorical rules outside the well-established exceptions for laws of nature, physical phenomena, and abstract ideas, and resolved the case based on its decisions in Gottschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981)."  The Federal Circuit interpreted the entirety of Supreme Court precedent on patent eligibility to construe patent-eligibility broadly, limiting eligibility to exclude only laws of nature, physical phenomena, and abstract idea (based, the panel suggested, on historical precedent extending back to the 19th century; Le Roy v. Tatham, 55 U.S. (14 How.) 156, 174-75 (1853), continuing in the Court's most recent opinion on this issue (Bilski).  The panel also distinguished between finding patent eligible laws of nature, physical phenomena, and abstract ideas with finding specific applications thereof.  The Federal Circuit put this dichotomy expressly: do the Prometheus claims recite and preempt a natural phenomenon, alá Benson and Flook, or are they merely a particular application thereof, alá Diehr?  The Supreme Court's answer to this question should help flesh out the extent to which the Court is willing to permit the Federal Citcuit to interpret its precedent (as opposed to slavishly following it).

Of course, it is just as likely that the Court's attention will be distracted by the "practice of medicine" argument.  There is precedent for letting the political branch, Congress, make this decision:  almost a generation ago, 35 U.S.C. § 287(c) exempted from infringement liability the practice of surgical methods by doctors.  This remedy may be less apt in this instance, however, since the practice of many such methods is performed not by doctors but by medical laboratories (which are expressly exempted from the scope of § 287(c)).

Patent Docs will report on oral argument, and on selective portions of the parties' briefs and amici, in later posts.

News from Abroad: Construction of "Swiss" Medical Use Claims in Europe

By Christopher Bond --

In Ranbaxy (UK) Ltd v AstraZeneca AB, the England and Wales High Court considered the scope of "Swiss" medical use claims.  This important decision clarifies how these types of claims can be infringed.

Background: "Swiss" Claims

The European Patent Convention (EPC) expressly excludes methods of treatment from being patentable.  The reason for this is that healthcare professionals should not be prevented by patents from treating patients.  This exclusion is a major difference between the European and U.S. patent systems.

New and inventive pharmaceuticals are patentable, provided they are novel and inventive in their own right.  Under the original EPC, the first medical use of a known compound is also patentable, using a claim worded "Compound X for use in therapy."  However the original EPC only included the first medical use under this provision.

An early decision (G5/83) of the Enlarged Board of Appeal of the European Patent Office (EPO) considered the claim form that might protect a further inventive therapeutic use of a compound.  It decided that the wording "Compound X for the manufacture of a medicament for [the therapy]" would be valid.  This is known as a "Swiss" claim, and under the original EPC was used to patent a second medical use of a known pharmaceutical.

The Claims

AstraZeneca owned a patent (EP1020461) which contained a "Swiss" claim to the use of high purity magnesium esomeprazole for the inhibition of gastric acid secretion.

Proposed Importation

AstraZeneca was the only supplier of esomeprazole in the UK.  Ranbaxy sought a declaration that their generic product for the inhibition of gastric acid secretion would not infringe the patent.

Ranbaxy's product was to be manufactured in India and imported into the UK.  Neither side disputed that one of the starting materials for the product was magnesium omeprazole with the claimed purity, or that Ranbaxy's final product (which it wanted to import into the UK) did not have the claimed purity.

Construction of "Swiss" claims

The court considered whether, either:

• Ranbaxy infringed, because their product was the direct product of a process which used high purity magnesium esomeprazole to make a medicament; or,
• Ranbaxy did not infringe, because their product did not contain magnesium esomeprazole of the claimed purity.

The UK courts construe a patent claim by asking what meaning a skilled person would have given to the terms in the claim, in the context of the patent.

The High Court judge decided that the teaching of the whole specification was to the production of optically pure esomeprazole and its use in inhibiting gastric acid secretion.  As a result, the judge interpreted the "Swiss" claim as directed to the use of the pure magnesium esomeprazole in the manufacture of a medicament, which medicament contains the active ingredient at that level of purity.

The High Court declared that Ranbaxy would not infringe the "Swiss" claim, because the product it intended to import did not have the claimed purity.

This case provides interesting guidance on the scope of "Swiss" medical use claims in the UK.  The courts will construe these claims as covering a medicament, containing the claimed active ingredient, packaged for use in the claimed therapy.

The EPC 2000 came into force in 2007.  This updated European Patent Convention allows the previous "first medical use" claim form to protect any subsequent medical uses of a known pharmaceutical. We recently reported an EPO decision (G2/08), which stated that "Swiss" claims are redundant under EPC 2000.  We wait to see if the UK court interprets "Swiss" claims and the new "medical use" claims as having the same scope.

This article was reprinted with permission from the Forresters "Life sciences update" for Winter 2011.

Court Report

By Sherri Oslick --

About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

Ferring B.V. v. Watson Pharmaceuticals, Inc. et al.
3:11-cv-00853; filed November 25, 2011 in the District Court of Nevada

• Plaintiff:  Ferring B.V.
• Defendants:  Watson Pharmaceuticals, Inc.; Watson Laboratories, Inc.; Watson Laboratories, Inc. – Florida; Watson Pharma, Inc.

Ferring B.V. v. Apotex, Inc. et al.
3:11-cv-00854; filed November 25, 2011 in the District Court of Nevada

• Plaintiff:  Ferring B.V.
• Defendants:  Apotex, Inc.; Apotex Corp.

The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 8,022,106 ("Tranexamic Acid Formulations," issued September 20, 2011) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Ferring's Lysteda® (tranexamic acid, used to treat heavy menstrual bleeding).  View the Watson complaint here.

AntiCancer, Inc. v. Leica Microsystems, Inc. et al.
3:11-cv-02756; filed November 23, 2011 in the Southern District of California

• Plaintiff:  AntiCancer, Inc.
• Defendants:  Leica Microsystems, Inc.; DOES 1-10, inclusive

Infringement of U.S. Patent No. 6,649,159 ("Whole-body Optical Imaging of Gene Expression and Uses Thereof," issued November 18, 2003) based on Leica's use, manufacture and sale of its FCM1000 device.  View the complaint here.

Bristol-Myers Squibb Co. v. Apotex, Inc. et al.
3:11-cv-06918; filed November 23, 2011 in the District Court of New Jersey

• Plaintiff:  Bristol-Myers Squibb Co.
• Defendants:  Apotex, Inc.; Apotex Corp.

Infringement of U.S. Patent Nos. 6,596,746 ("Cyclic Protein Tyrosine Kinase Inhibitors," issued July 22, 2003), 7,125,875 (same title, issued October 24, 2006), 7,153,856 (same title, issued December 26, 2006), and 7,491,725 ("Process For Preparing 2-Aminothiazole-5-Aromatic Carboxamides As Kinase Inhibitors" duly and legally issued on February 17, 2009) following a Paragraph IV certification as part of Apotex's filing of a second ANDA to manufacture additional dosage forms of a generic version of Bristol-Myers' Sprycel® (dasatinib, used to treat adults chronic myeloid leukemia).  View the complaint here.

Conference & CLE Calendar

December 5, 2011 - 22nd Annual Conference on USPTO Law and Practice -- PTO Day (Intellectual Property Owners Association and U.S. Patent and Trademark Office) - Washington, D.C

December 5-7, 2011 - Drug and Medical Device Litigation*** (American Conference Institute) - New York, NY

December 6, 2011 - Biosimilars: Emerging Legal Challenges (Strafford) - 1:00 - 2:30 pm (EST)

December 6-7, 2011 - Paragraph IV Disputes*** (American Conference Institute) - San Francisco, CA

December 16, 2011 - A Review of the America Invents Act and Its Impact on the USPTO (Birch, Stewart, Kolasch & Birch, LLP and CONNECT) - San Diego, CA

January 4-8, 2012 - 29th Annual National CLE Conference (Law Education Institute) - Snowmass, CO

January 31 - February 1, 2012 - Patent Reform for Life Sciences Companies (American Conference Institute) - New York, NY

January 31 - February 1, 2012 - Pharma & Biotech Patent Litigation (C5) - Amsterdam, The Netherlands

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

Pfizer's Lipitor: A New Model for Delaying the Effects of Patent Expiration

By James DeGiulio --

Pfizer's exclusive right to sell atorvastatin, the active pharmaceutical ingredient in the blockbuster cholesterol drug Lipitor, ended yesterday, November 30, the day generic competitors are licensed to enter the market as agreed upon during settlement of past patent litigations.  It was a day the pharma giant has been dreading for quite some time.  This dread is well founded:  on average, once a drug goes off patent, the patent holder's market share typically falls by a staggering 89% in the first 6 months.  However, thanks to several innovative strategies, Pfizer's Lipitor, which has enjoyed a commanding 40% share in the cholesterol drug market, stands a good chance of being the exception to this trend, according to a recent article in The New York Times ("Facing Generic Lipitor Rivals, Pfizer Battles to Protect Its Cash Cow").  The sector outlook appears to be optimistic -- investor studies have upgraded Pfizer's rating, and expect the company to retain much of its market share even now that the patent has expired.  The strategies implemented by Pfizer, assuming they survive governmental scrutiny, may provide a model for brand companies facing blockbuster drugs going off-patent.

Pfizer has employed a multi-pronged approach to retain its position in the cholesterol market for these next critical 180 days.  First, Pfizer has several authorized generics deals in place.  For example, an authorized generic from Watson Pharmaceuticals went on sale yesterday.  However, Watson's drug is manufactured by Pfizer, and Watson has to give about 70 percent of its profits to Pfizer.

Perhaps more importantly, Pfizer has dropped the price of Lipitor considerably, and continues to aggressively discount the drug to match any price and maintain brand loyalty.  Pfizer's prices are currently undercutting most of the imminent generic competition on price.  Pfizer has also made it known that its new discounts can easily be adjusted to beat any responsive reduction in the expected generic pricing.  Pfizer has a huge margin because of the relatively low cost of materials for Lipitor.  And with their manufacturing and volume advantage over generic competitors who are just getting off the ground, Pfizer can afford to drop the price considerably and continue to profit off of Lipitor.

Pfizer is also providing incentives to customers to stay on the brand drug.  They have offered a reduced co-payment of $4 a month versus the $10 customers would pay for many generic prescriptions.  Pfizer's program, called "Lipitor for You," offers a $4 co-payment card and direct delivery of Lipitor.  The program is limited to privately insured customers.  However, the discounts can also be applied to many Medicare prescription drug plans, which have agreed to dispense Lipitor even if patients ask for generics.  Pharmacy benefit management company CVS/Caremark has notified pharmacies that the generic form of Lipitor would not be covered for 29 prescription drug plans it manages for Medicare Part D.  Instead, brand Lipitor will be filled, but only a generic co-pay will be applied.  Any prescription claims for generic atorvastatin will be rejected.  Pfizer, the benefit managers and some insurers insist all of the new discount will be passed along to consumers, companies and other payers.  While this remains to be seen, CVS/Caremark has already lowered its premiums for the government and Lipitor users.

Pfizer's tactics to protect its market share have naturally drawn scrutiny.  Many of these strategies may call into question the incentive system created to foster the development of generic drugs, as they arguably extend Pfizer's patent monopoly beyond its expiration.  The Federal Trade Commission and several Senators are investigating Pfizer's agreements with pharmaceutical benefit manager and generics companies.  Senators Max Baucus (D-MT), Chuck Grassley (R-IA) and Herb Kohl (D-WI) have written letters to Pfizer and those who have aligned with Pfizer, asking for information about agreements aimed at limiting the sale of generic atorvastatin.  According to these letters, the Senators believe that "just about everyone wins except consumers and taxpayers."

Not all companies have aligned with Pfizer -- some companies have rejected their advances.  Express Scripts and Medco Health Solutions, both large pharmacy benefit managers, are recommending that its clients not accept Pfizer's deals under the reasoning that it could cost them more in the long run.  However, these companies will still use Lipitor as a "house generic" because Pfizer has guaranteed to match the price and assured a supply.

Late yesterday, Ranbaxy Laboratories, the first filer against several patents covering Lipitor, was granted FDA approval for its avorstatin calcium, despite a federal investigation into falsifying records resulting in the production and sale of medications that failed to meet FDA standards.  Ranbaxy has a deal with Teva Pharmaceuticals, which already sells a generic Lipitor in Canada, to help supply the drug.  Once Ranbaxy's 180-day initial generic exclusivity has expired and all generics can produce avorstatin calcium, it may be inevitable that Pfizer finally loses its considerable market share.  Pfizer expects up to eight generics to compete for market share after the 180-day exclusivity period expires.

News from Abroad: The Gene Patents Debate in Australia -- An Update

By Martin O'Brien --

The patentability of genetic materials has been the subject of considerable community debate in Australia and elsewhere in recent years.  Several inquiries have been held in Australia, including the Senate Gene Patents Report (24 November 2010), the 2011 ACIP Report on Patentable Subject Matter, and the 2004 Australian Law Reform Commission's Report on Genes and Ingenuity: Gene Patenting and Human Health (ALRC 99 Report).  One of the recommendations of the Senate Gene Patents Report was that the Government provide a combined response to these Reports.

The Government accepted that recommendation and, on 23 November 2011, the Government's combined response to those Reports was released.  A copy of the full response can be accessed here.

In the Media Release accompanying the Government response, the Minister for Innovation stated that "the response is designed to give confidence to the significant investments in biotechnology innovation and research and development. It will also ensure that patients will not be denied reasonable access to affordable treatments and essential diagnostic tests through inappropriate use of the Patents Act."

The Government response addresses many aspects of the debate.  This article focuses on what, for some biotechnology companies, might be described as the ultimate question, namely whether genetic materials may properly be considered appropriate subject matter for patentability.  Recommendation 7-1 of the ALRC 99 Report was that "[t]he Patents Act 1990 (Cth) should not be amended: (a) to exclude genetic materials and technologies from patentable subject matter; (b) to exclude methods of diagnostic, therapeutic or surgical treatment from patentable subject matter."  In the Government response, Recommendation 7-1 (a) is accepted in principle and Recommendation 7-1 (b) is accepted in full.

During the course of the inquiries and public debates the desirability of a technology-neutral approach to patentability arose.  For example, the ALRC 99 Report recommended (6-1) that "[p]atent applications relating to genetic materials and technologies should be assessed according to the same legislative criteria for patentability that apply to patent applications relating to any other type of technology."  In accepting this recommendation the Government drew attention to Australia's obligations under TRIPS to maintain technology-neutral patentability criteria.

The Patent Amendment (Human Genes and Biological Materials) Bill 2010 seeks to exclude biological materials, including genetic materials, from patentability ("The Gene Patent Debate -- Bill Seeks to Exclude Biological Materials from Patentability").  That Bill remains pending.  Other than noting that the Senate Gene Patents Inquiry recommended that Bill be sent to the relevant Senate Committee for review and report, the Government's response to the three inquiries does not directly express an opinion on that Bill.  As we have previously reported, however, that Bill has now been the subject of a Senate Inquiry, the majority finding of which was that the Bill should not be passed.

With the Government response to the three inquiries now having stated agreement in principle with the ALRC 99 Report that the Patents Act should not be amended to explicitly exclude genetic materials from patentability, it is difficult to see how the Government could now support that Bill.

Dr. O'Brien is a Principal of Spruson & Ferguson in Sydney, Australia, specializing in molecular biology and biotechnology.

For additional information regarding this topic, please see:

• "Australian Senate Committee Issues Recommendation on Gene Patenting Bill," October 6, 2011
• "Australian Senate to Release Gene Patenting Findings Next Week," June 8, 2010
• "Gene Patenting: Australian Potpourri," December 28, 2009