Patent Docs

Webinar on Supplemental Examination

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar on "Supplemental Examination: Rules and Strategy" on September 18, 2012 beginning at 2:00 pm (ET).  A panel consisting of Robert Bahr, Deputy Commissioner for Patent Examination Policy, USPTO; Courtenay Brinckerhoff of Foley & Lardner LLP; and Kurtis MacFerrin of Google, Inc. will discuss the final rules and when a patent holder would be well advised to ask for supplemental examination, balancing the risks and benefits.

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.

Webinar on Inter Partes Review

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar on "Inter Partes Review: Rules and Strategy" on September 5, 2012 beginning at 2:00 pm (ET).  A panel consisting of the Hon. Sally Medley, Administrative Patent Judge, USPTO; Kevin Laurence of Stoel Rives, LLP; and Scott Markow of Stanley Black & Decker, Inc. will focus on the final rules and such topics as estoppel, costs, and related stays in litigation.  The panel will also discuss when to launch an inter partes review in light of other alternatives, the nature of the trial at the PTAB, how to defend the patent, and how to manage teams that include litigators who have not previously practiced at the USPTO.

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.

Solicitor General Recommends the Supreme Court Deny Cert in Bowman v. Monsanto

By Kevin E. Noonan --

Earlier this year, the Supreme Court asked the Solicitor General for his views on whether the Court should grant certiorari in Bowman v. Monsanto.  The Solicitor has now given the Court his views, and they are that the Court should not grant cert.  Although the Court does not always follow the Solicitor's recommendations (and sometimes regrets not doing so; see Laboratory Corp. v. Metabolite Labs., Inc. ("LabCorp")), in this case the rationales in the Solicitor's brief make it unlikely that the Court will not agree.

To recap, the case arose as the result of a farmer replanting Monsanto's patented Roundup Ready® seed.  The patents-in-suit are (as they have been in other cases) U.S. Patent Nos. 5,352,605 and RE39,247 (a reissue of 5,633,435).  Claims 1 and 4 of the '605 patent are representative:

1.  A chimeric gene which is expressed in plant cells comprising a promoter from a cauliflower mosaic virus, said promoter selected from the group consisting of a CaMV (35S) promoter isolated from CaMV protein-encoding DNA sequences and a CaMV (19S) promoter isolated from CaMV protein-encoding DNA sequences, and a structural sequence which is heterologous with respect to the promoter.

4.  A plant cell which comprises a chimeric gene that contains a promoter from cauliflower mosaic virus . . . .

Claims 103, 116, 122, 128, 129, and 130 of the '247 patent are representative:

103.  A recombinant, double-stranded DNA molecule comprising in sequence:

    (a)  a promoter which functions in plant cells to cause the production of an RNA sequence;
    (b)  a structural DNA sequence that causes the production of an RNA sequence which encodes an EPSPS enzyme having the sequence of SEQ ID NO:70; and

    (c)  a 3' non-translated region that functions in plant cells to cause the addition of a stretch of polyadenyl nucleotides to the 3' end of the RNA sequence;
    where the promoter is heterologous with respect to the structural DNA sequence and adapted to cause sufficient expression of the encoded EPSPS enzyme to enhance the glyphosate tolerance of a plant cell transformed with the DNA molecule.

116.  A glyphosate-tolerant plant cell comprising a DNA sequence encoding and EPSPS enzyme having the sequence of SEQ ID NO: 70.

122.  A seed of the plant of claim 116, wherein the seed comprises the DNA sequence encoding an EPSPS enzyme having the sequence of SEQ ID NO: 70.

128.  A glyphosate[-]tolerant plant cell comprising the recombinant DNA molecule of claim 103.

129.  A plant comprising the glyphosate[-]tolerant plant cell of claim 128.

130.  A method for selectively controlling weeds in a field containing a crop having planted crop seeds or plants comprising the steps of:

    (a)  planting the crop seeds or plants which are glyphosate-tolerant as a result of a recombinant double-stranded DNA molecule being inserted into the crop seed or plant . . .

    (b)  applying to the crop and weeds in the field a sufficient amount of glyphosate herbicide to control the weeds without significantly affecting the crop.

Pioneer Hi-Bred (Pioneer), one of Monsanto's licensed seed producers, sold seed to Bowman; these sales were subject to a Technology Agreement similar to the Agreements Monsanto typically requires for farmers who purchase its seed.  Under the Technology Agreement, the licensed grower agreed: (1) "to use the seed containing Monsanto gene technologies for planting a commercial crop only in a single season"; (2) "to not supply any of this seed to any other person or entity for planting"; (3) "to not save any crop produced from this seed for replanting, or supply saved seed to anyone for replanting"; and (4) "to not use this seed or provide it to anyone for crop breeding, research, generation of herbicide registration data, or seed production."  It was undisputed that Bowman complied with these provisions as to its "first planting" each year.  Monsanto's complaint arose from farmer Bowman's "second planting," which was made using so-called "commodity seed" obtained from local grain elevators.  Farmers under the Technology Agreement could freely sell seed to grain elevators for commodity use (for example, as cattle feed), which did not include replanting.  However, since Farmer Bowman's "second planting" was riskier (in terms of potential yield) he decided to use commodity seed because it was significantly cheaper than Roundup Ready® seed.  After planting this seed, Farmer Bowman tested this second crop for Roundup® resistance, and finding that substantial amounts of the seed were resistant, used Roundup® on these plantings and replanted this seed.

The District Court granted summary judgment of patent infringement and entered judgment against Farmer Bowman in the amount of $84,456.20.  The Federal Circuit rejected Bowman's arguments that were predicated directly on the Supreme Court's Quanta decision.  In Quanta, the Supreme Court reiterated its "substantial embodiment" test to apply the patent exhaustion principle, which applied to both composition and method claims (reversing the Federal Circuit as to method claim exhaustion), citing Ethyl Gasoline Corp. v. United States, 309 U.S. 436 (1940), and United States v. Univis Lens Co., 316 U. S. 241 (1942).  Specifically, the Court stated the standard that sales that "substantially embody" the patents in suit will be sales that exhaust the patent right to obtain royalties, citing Univis.  The immediately evident application of this decision to biotechnology patent claims include cases, as in Monsanto, where a patented article has the biological property of replication, where the license precludes use of replicates of the article after purchase.  Although critically important economically (since it is clear that Monsanto would not be in the seed business for very long in the absence of these restrictions), the rubrics for applying patent exhaustion set forth in the Court's Quanta decision could be applied to Monsanto's claim, and Bowman argued that they should be so applied.  It is without question that the seeds "embody" (figuratively and literally) the "essential features" of the patented invention, and thus the types of limitations Monsanto (and other seed producers) have placed on replanting of their patented seeds implicate the application of these standards to Monsanto's claims.

The Federal Circuit did not see it this way.  Farmer Bowman argued that exhaustion applied to all Roundup Ready® soybean seeds, including those present in grain elevators as undifferentiated commodity.  "Sales of second-generation seeds by growers to grain elevators, and then from grain elevators to purchasers (like Bowman) are authorized according to the terms of Monsanto's [T]echnology [A]greement[], and are thus exhausting sales . . . under the Supreme Court's analysis in Quanta [Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008)]," according to Bowman.

In response, Monsanto argued that sale of soybeans are not "authorized" when those soybeans are replanted (i.e., used as seed rather than as commodity grain).  Monsanto further argued that, even if sale to grain elevators resulted in exhaustion, infringement occurred when the seed was replanted because "patent protection 'is independently applicable to each generation of soybeans (or other crops) that contains the patented trait,'" arguments Monsanto had previously (successfully) made in other infringement actions.  Monsanto also urged that J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124 (2001), was controlling for patent exhaustion in seeds, specifically that exhaustion "must be limited to the seeds sold."  In this regard, Monsanto urged the portion of the J.E.M. opinion that stated that "there are no exemptions for research or saving seed under a utility patent."  Id. at 143 (emphases added).

The Federal Circuit agreed that patent exhaustion did not apply.  Citing the McFarling opinion, the panel stated that "[t]he 'first sale' doctrine of patent exhaustion . . . [wa]s not implicated, as the new seeds grown from the original batch had never been sold.  The price paid by the purchaser 'reflects only the value of the 'use' rights conferred by the patentee.'"  Id. at 1299 (citing B. Braun Med., Inc. v. Abbott Labs., 124 F.3d 1419, 1426 (Fed. Cir. 1997)).  Turning to the specific facts in this case, the Court stated that the important consideration is that "the grower has created a newly infringing article" when commodity seed was planted by Bowman and the "next generation" of seeds comprising Monsanto's Roundup Ready® technology were produced.  "The fact that a patented technology can replicate itself does not give a purchaser the right to use replicated copies of the technology," according to the opinion, and "[a]pplying the first sale doctrine to subsequent generations of self-replicating technology would eviscerate the rights of the patent holder," citing Monsanto Co. v. Scruggs, 459 F.3d 1328, 1336 (Fed. Cir. 2006), cert. denied, 549 U.S. 1342 (2007).  According to the opinion, the right to use patented technology upon purchase "do[es] not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee," citing Jazz Photo Corp. v. Int'l Trade Comm'n, 264 F.3d 1094, 1102 (Fed. Cir. 2001), cert. denied, 536 U.S. 950 (2002).  The opinion applied the "substantial embodiment" test with regard to separate generations of seed, stating that present seed does not "substantially embody" "all later generation seeds," because with regard to the commodity seeds "nothing in the record indicates that the 'only reasonable and intended use' of commodity seeds is for replanting them to create new seeds, citing Quanta, 553 U.S. at 631 and noting that other uses for commodity seed existed (such as use as feed).  "While farmers, like Bowman, may have the right to use commodity seeds as feed, or for any other conceivable use, they cannot 'replicate' Monsanto's patented technology by planting it in the ground to create newly infringing genetic material, seeds, and plants.  Bowman's certiorari petition followed the adverse decision by the Federal Circuit.

The Solicitor's brief acknowledges that the Federal Circuit's treatment of so-called "conditional" sales has not been entirely consistent with the Supreme Court's views on patent exhaustion; this contrary jurisprudence was corrected by the Court in Quanta and thus does not warrant further correction.  More importantly, the Solicitor contends that conditional exhaustion was not the basis for the Federal Circuit's decision in this case.  Rather, the Solicitor's brief quotes the Federal Circuit as saying that "'[e]ven if [respondent's] patent rights in the commodity seeds are exhausted, such a conclusion would be of no consequence because once a grower, like [petitioner], plants the commodity seeds containing [respondent's] Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article."  In addition, "[t]he right to use [] do[es] not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee.'"  The Solicitor further notes that the Court rejected the argument that replanting was the only use for the "commodity seed," noting that the seed was useful, inter alia, as animal feed.

The Solicitor's brief notes that a majority (pp. 9-16) of petitioner's brief is focused on the Federal Circuit's "conditional sale" jurisprudence.  The brief sets forth these cases, beginning with Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 976 F.2d 700, 706-08 (1992), where the Federal Circuit held that a patent was not exhausted if the patentee conditioned the sale of a patented article to "unilateral or bilateral restrictions on the use or resale of the purchased article."  The Federal Circuit had justified these restraints under conditions where the restriction was "within the patent grant" (i.e., it did not exceed or be unrelated to subject matter within the scope of the claims) and did not have "anticompetitive effects extending beyond the patentee's statutory right to exclude" or was in violation of the antitrust laws.  These line of cases was relevant to the instant case, the Solicitor wrote, because other cases (significantly, ones for which the Court had denied certiorari) were based (at least in part) on the conditional sale doctrine, including Monsanto Co. v. McFarling, 302 F.3d 1291 (2002), cert, denied, 537 U.S. 1232 (2003), and Monsanto Co. v. Scruggs.  But these cases were all decided prior to the Supreme Court's Quanta decision; perhaps somewhat tongue in cheek, the brief states that "[i]t is not clear, however, whether the Federal Circuit will continue to adhere to the Mallinckrodt line of cases after Quanta.  What is clear is that the court did not do so here," thus avoiding this issue as a basis for a certiorari grant (which may arise by implication if the Federal Circuit does not follow the Court's lead from Quanta).

Here, the Solicitor affirms that the Federal Circuit rejected the patent exhaustion defense as point of "no consequence" because "'[e]ven if' exhaustion had occurred [] petitioner would still be liable because he had 'created a newly infringing article' when he 'plant[ed] the commodity seeds containing respondent's Roundup Ready technology and the next generation of seed develop[ed].'"  In other words, even if the petitioner had a "right to use" the seed for any "conceivable use," the one right that he did not have was the "'right to construct an essentially new article on the template of the original.'"  The brief casts the issue as one of the patent law giving a patentee "separate rights" to exclude others from "making, using, offering for sale, and selling [or importing] a patented invention," rights that can be separately alienated.  Separate from the rights to use and (re)-sell a patented article (which rights are exhausted upon first sale) is the right to make a new infringing article, something the Solicitor's brief contends was never the subject of the patent exhaustion doctrine.  Citing Quanta and other Supreme Court case law (including Mitchell v. Hawley, 83 U.S. (16 Wall.) 544, 547 (1872); United States v. Univis Lens Co., and Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336,346 (1961)), the Solicitor argues that exhaustion is particular to the article sold.  This issue has arisen in the past when courts have been asked to determine the distinction between repair of a purchased patented article (which is permitted) and reconstruction (which is not); this principle is a long-standing one according to the brief, hieing from cases like Wilson v. Simpson, 50 U.S. (9 How.) 109, 123-125 (1850), and American Cotton-Tie Co. v. Simmons, 106 U.S. 89, 93-94 (1882).  Quoting the Federal Circuit, "the rights of ownership do not include the right to construct an essentially new article on the template of the original, for the right to make the article remains with the patentee" says the Solicitor, citing Jazz Photo Corp. v. Int'l Trade Comm'n.

The Solicitor's brief recognizes that the case presents something of a novelty, because this invention is capable of making replicas of itself (although later in the brief the Solicitor rejects petitioner's contention that this self-replicating property absolves him of infringement liability).  The brief rejects petitioner's contention that planting new seed is a "use" of the seed and does not constitute "making" new seed, because while planting see is certainly a use, "the planting and harvesting of soybeans also constitutes the 'making' of newly infringing seed" (emphasis in original).  The brief also rejects petitioner's argument that new Roundup Ready seeds are "made" only "'when they artificially insert patented germplasm into naturally occurring soybean seeds.'"  This is also a making, according to the brief, but is does not negate that planting and harvesting seed is also a "making" of seed.  (Here, the brief relies on a dictionary definition of the word "make," in the absence of any special definition of the word in the Patent Act, unlike, for example, the definition of the word "process" at 35 U.S.C. § 100(b).)  "Petitioner 'cause[d] [the progeny seed] to exist,'" according to the Solicitor, and it was immaterial that how that was accomplished differed from how the patentee had created the recombinant seed in the first place.

Turning to the argument that seeds "self-replicate without farmer assistance" (and thus, presumably, somehow absolve the farmer from responsibility for infringement), the Solicitor states that:

[P]etitioner did not simply leave the seed "untended on a field."  . . .  Rather, he intentionally planted the commodity seed in order to create a new crop of soybeans; he saved some of that new crop to replant the next growing season; he continued to plant, harvest, and save seed for eight successive years; and he exploited the known glyphosate-resistant properties of the progeny seed by treating his crops with a glyphosate-based herbicide.

All these are acts presumably raising infringement liability.

The brief also relied upon the Court's decision in J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc. in support of its argument that planting seeds constituted "making" under the patent statute.  There, the Supreme Court held that the Patent Act provided utility patent protection (that endowed patent holders with "greater rights of exclusion" than patents under the Plant Variety Protection Act).  The PVPA provides an affirmative exemption for farmers to save seed that can be used for replanting, and the J.E.M. Court noted that there was no such exemption for utility patents.  The Solicitor's brief argues that there would be "no practical significance" for this distinction (between plant and utility patents) "if the unauthorized creation of new seed was treated as non-infringing under 35 U.S.C. 154 and 271 [] based on the patent-exhaustion doctrine.  Petitioner would effectively read a seed-saving exemption into the Patent Act."  This aspect of the difference between the extent of the exclusionary right conferred by utility versus plant patents also distinguished Asgrow Seed Co. v. Winterboer, 513 U.S. 179 (1995), another case involving the seed-saving exemption of the PVPA:

If, as petitioner contends, the authorized sale of patented seed exhausts a patentee's rights in that seed, as well as in its progeny, then a grower could save second-generation seed and sell that seed commercially without infringing the patent.  That would, in turn, afford greater rights of exclusion to holders of a PVPA certificate than to utility patent holders, contrary to this Court's understanding in J.E.M.

The Solicitor also notes that recombinant seed are not exempt from the patent exhaustion doctrine.  The question is for which seed does patent exhaustion apply, and the Solicitor answers that it is the seed that is sold, and not progeny seed, that is subject to exhaustion.  "But the sale of patented seed never authorizes a purchaser to create a new generation; the right to make is a distinct, exclusive right that remains with the patentee," says the brief.

The Solicitor ends his brief by addressing the policy issues raised by petitioner:  "that the court of appeals' decision will eliminate commodity soybeans as a low-cost alternative for second-crop plantings, and will otherwise alter traditional farming practices."  These are decisions best left for Congress, according to the Solicitor.  In addition, a decision by the Court on recombinant seeds "could also affect the enforcement of patents for man-made cell lines, DNA molecules, nanotechnologies, organic computers, and other technologies that involve self-replicating features."  Instead of deciding this issue in this case, "[t]he Court should allow the case law to develop further before considering whether to adopt a more restrictive definition of 'making' that could have unforeseen consequences for other present and future self-replicating technologies, citing the Court's own cautionary statements in this regard in Bilski v. Kappos, 130 S. Ct. 3218, 3227 (2010).

The Court will schedule a conference to discuss whether to grant certiorari in due course after the summer recess.

News from Abroad: Australia Reforms Its Patents Act 1990

By Craig Humphris & David McCarthy --

Australia is attempting to raise its patentability threshold and specification requirements.  Significant amendments have been made to Australia's patent laws through enactment of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.  Most provisions will take effect from 15 April 2013.

The Raising the Bar Act, which was enacted on 15 April 2012, seeks to raise the quality of granted patents to a level that is more consistent with the standards set with Australia's major trading partners, including the U.S., Japan, and Europe.  Prior to this Act, concerns were expressed in the 2008 review of the national innovation system (entitled 'Venturous Australia') and the Government's response to this review (Powering Ideas: the innovation agenda for the 21st century, 12 May 2009), that the thresholds set for the grant of a patent in Australia are too low, patents are granted for inventions that are not sufficiently inventive, and that the details of inventions are not sufficiently disclosed to the public.

The Raising the Bar Act intends to raise the requirements for patentability and the requirements for patent specifications for all applications filed after 15 April 2013, and for patent applications filed prior to that date for which an examination request has not been filed prior to 15 April 2013.

A number of actions are available to patent applicants to ensure that the current and perhaps more lenient patentability and specification requirements apply to their applications and future patent grants.

• File patent applications, including national phase applications, and request examination before 15 April 2013.

• If a PCT application has not been filed, consider filing a Convention application in Australia and request examination before 15 April 2013.

• Instead of filing a provisional application to obtain a priority date, file a complete application and request examination before 15 April 2013.

• Add all new subject matter to description/examples before 15 April 2013.

• File divisional applications and a request for examination before 15 April 2013.

• File divisional applications from opposed applications before 15 April 2013.

• If desired, convert pending applications to a divisional application before 15 April 2013

Future granted patents will still be litigated under the current patentability and specification requirements if the application was filed and had examination requested before 15 April 2013.

FURTHER INFORMATION

The key amendments made by the Raising the Bar Act are as follows:

Schedule 1 – Raising the quality of granted patents

Inventive Step

Currently, only common general knowledge from Australia is taken into account in determining what is common general knowledge for the purposes of assessing inventive step.  Under the Raising the Bar Act, common general knowledge from overseas (that is, without a territorial limitation) can also be taken into account and this will permit the use of foreign experts who have given evidence in overseas proceedings.

Previously, only information 'ascertained, understood and regarded as relevant' was considered in a review of prior art for the assessment of inventive step.  Under the Raising the Bar Act, all information in existence in Australia or overseas can be considered prior art, provided it is capable of being understood and regarded as relevant.  This should increase the volume of prior art taken into account when assessing inventive step.

Sufficiency

The level of disclosure required for provisional applications will be increased and will require a similar level of disclosure required for complete specifications, although provisional applications need not disclose the best method of performance of the invention.

Complete applications will have their disclosure requirements changed.  The law will be amended to conform substantially to the corresponding United Kingdom provision and the new provision states that the complete specification must "disclose the invention in a manner which is clear enough and complete enough for an invention to be performed by a person skilled in the relevant art".  The explanatory memorandum to the Raising the Bar Act, indicates that the subject matter of a claim should be enabled across its "whole width".

Fair Basis

Australia's requirement that a claim needs to be 'fairly based' on matter disclosed in the specification will be replaced with a 'supported by' requirement.

Under the new law, there must be basis in the description for each claim.  Further, the scope of the claims must not be broader than is justified by the extent of the description, drawings, and contribution to the art.  This second aspect of the support requirement appears to be intended to provide a means for rejecting unduly speculative claims.

Currently, it appears settled by the Australian High Court (the supreme court in Australia's court hierarchy) following its decision in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2004) 217 CLR 274, that there is no link between claim scope and technical contribution in the art.  The Raising the Bar Act attempts to change this and seeks to import a link between these two elements.

Utility

The Raising the Bar Act introduces a new provision which will require a complete specification to disclose a "specific, substantial and credible use" for the invention.  This provision was based substantially on the corresponding US section.  This requirement for a specification to disclose a use for the invention is additional to the requirement for the invention itself to be useful, in the sense of meeting the promise of the invention as described in the specification.

Examination

Under the new system, patent examiners will be able to consider utility and prior use at the examination stage.  These grounds are not available to examiners under the current system.

The standard of proof to be applied by an examiner for all examination tests will be raised to the civil standard (balance of probabilities).  Currently, an Examiner is required to accept a patent application 'unless it appears practically certain' or 'clear' that the patent would be invalid.  Under the new laws, the Examiner will need to be satisfied on the balance of probabilities that a patent would be valid.  These changes will shift more burden on the applicant to show patentability.

Re-Examination

Australia's ex parte re-examination procedure before the patent office (IP Australia) will be modified.  Currently, re-examination only considers the grounds of novelty and inventive step.  However, from 15 April 2013, re-examination will be extended to include the grounds of best method, clarity, fair basis, manner of manufacture, and utility.

Amendments

The amendment provisions will be modified to prevent applicants from adding subject matter to their applications, except when the amendment is to correct an obvious mistake or clerical error.  Whether subject matter has been added is made with reference to the complete specification as filed, as well as "other prescribed documents (if any)".

Schedule 2 – Free access to patented inventions for regulatory approvals and research

Regulatory Exemption

Under the current system, exemption from patent infringement is allowed for use of a patented invention solely connected with generating information for submission to a drug regulation authority for seeking regulatory approval of a pharmaceutical.

From 15 April 2013, exemptions from patent infringement will be broadened beyond pharmaceutical products and will be provided for use solely connected with generating information for seeking regulatory approval for any product.  These changes will be most relevant to certain medical device products and agricultural products that require regulatory approval before market launch.

Experimental use exemption

Australia has now codified an experimental use exemption to patent infringement.

The provision was made effective on 15 April 2012 and applies to acts done for experimental purposes relating to the subject matter of the invention, including:

• Determining the properties of an invention;

• Determining the scope of a claim relating to the invention;

• Improving or modifying the invention;

• Determining the validity of a patent or of a claim relating to the invention; or

• Determining whether the patent would be/has been infringed by the doing of an act.

Schedule 3 – Reducing delays in resolution of patent applications

Divisional Applications

Other significant amendments introduced by the Raising the Bar Act, include changes to practice on divisional applications (Australian divisional applications are often seen as equivalent to U.S. continuation applications).

(1)   Under the current system, it is possible to file divisional applications from applications under opposition (Australia has a post acceptance, pre-grant, third party opposition procedure).  The practice of filing divisionals from applications under opposition is a useful tactic by patent applicants who want to maintain a live application in case the parent application is successfully opposed or substantially narrowed.  From 15 April 2013, it will no longer be possible to file divisional applications from applications under opposition or at the end of the opposition period (3 months from advertisement of acceptance).

Furthermore, under the current system, it is possible to withdraw an opposed application at any time and pursue a divisional application.  The applicant can also wait to see the evidence from the opponent before making a decision to pursue this option and withdraw.  However, under the new system, patent applicants will require the Commissioner's consent to withdraw an opposed application and consent is likely to be withheld if all other divisional applications are removed.

(2)   From 15 April 2013, it will also no longer be possible to convert an application to a divisional or innovation patent off an earlier filed application, e.g., to overcome novelty or inventive step rejections from own application.

Under the current system, where a novelty objection is raised against an applicant's invention citing their own earlier application, the applicant could overcome the objection by converting the later application to make it a divisional of the earlier application.  The Raising the Bar Act will close this option.

Mr. Humphris is a Senior Associate with Wrays and team leader of Wrays' Adelaide office.  Dr. McCarthy is an Associate with Wrays.

Merck Asks Supreme Court to Review Third Circuit K–Dur Decision

By Kevin E. Noonan --

Last month, the Federal Trade Commission accomplished a decade-long goal:  getting a Federal Circuit Court of Appeal (the 3rd Circuit) to support its position that so-called "reverse payments" (also known as "pay-for-delay" arrangements) between innovator pharmaceutical companies and generic drugmakers in ANDA litigation brought under 35 U.S.C. § 271(e)(2) are anticompetitve and barred by Federal antitrust law, in In re K-Dur Antitrust Litigation.  Such a ban on these agreements have been part of the Obama Administration's budget for the past few years, but neither Congress nor the courts have been willing to adopt the FTC's stance on their purported anticompetitiveness.  Indeed, most courts that have considered the issue disagreed with the FTC's position, based on their assessment that, on average, generic drugs actually come on the market sooner than they would if the patentee retained its exclusivity for the full scope of the patent term.  This rationale has been applied, in varying degrees, by the Second, Eleventh, and Federal Circuits, in Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 344 F.3d 1294 (11th Cir. 2003); Schering-Plough Corp. v. Federal Trade Commission, 402 F.3d 1056 (11th Cir. 2005); In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187 (2d Cir. 2006), Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 105 (2d Cir. 2010); and In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008).  Where a court has found a reverse payment agreement to be anticompetitive, In re Cardizem CD Antitrust Litigation, 332 F.3d 896 (6th Cir. 2003), the facts of the case distinguished the behavior of these parties from the behavior of the other parties involved in such agreements.

To recap, the K-Dur case involved the drug K-Dur 20, a specific formulation of potassium chloride sold by Schering-Plough Co. and protected by a formulation patent, U.S. Patent No. 4,863,743.  Upsher filed its ANDA as first-filer with a Paragraph IV certification of non-infringement based on alleged chemical differences between Upsher's generic drug and Schering's branded drug product.  Schering filed suit and settlement negotiations ultimately resulted in an agreement, entered into on June 18, 1997, wherein Upsher would "refrain from marketing its generic potassium chloride supplement or any similar product until September 1, 2001."  In return, Schering agreed to grant Upsher a "non-royalty [bearing] non-exclusive license" and Upsher granted Schering non-exclusive licenses on several of its products (although Schering never marketed any Upsher products).  Schering agreed to pay Upsher sixty million dollars over three years, plus additional amounts tied to its marketing of Upsher's products under the non-exclusive license.  Finally, the agreement called for Upsher to dismiss the patent litigation and not to enter the market with its KCl product until September 1, 2001, thus forming the predicate for allegations that this was at heart a "pay for delay" agreement.

A second ANDA filer, ESI Lederle, was also involved in a separate litigation that was settled (under the supervision of a magistrate judge) with an agreement wherein ESI agreed not to market its generic KCl formulation (which, like Upsher, it alleged was not infringing) in return for a $5 million upfront payment and additional payments depending on when ESI's ANDA was approved by the FDA (an amount the District Court said varied from $10 million to $625,000 depending on the ANDA approval date); as it turns out, ESI obtained FDA approval of its ANDA in sufficient time to be entitled to $10 million, which it received from Schering.

An FTC action ensued, with the Commission alleging that the agreements between Schering, Upsher, and ESI amounted to an unlawful restraint of trade under Section 5 of the FTC act.  The Administrative Law Judge dismissed, based on his determination that the agreements included separate licensing terms that fell outside a simple "pay for delay" arrangement.  The Commission reversed the ALJ's determination, finding a "direct nexus between Schering's payment and Upsher's agreement to delay its competitive entry" and that this agreement "unreasonably restrain[ed] commerce," and that the Schering-ESI agreement violated the antitrust laws (wherein the Commission rejected the parties' contention that "judicial pressure to settle" was involved in their agreement).  The Commission did not review or rule on the merits of the underlying patent suits, creating a per se rule that:

[W]here a name brand pharmaceutical maker pays a generic manufacturer as part of a settlement, "[a]bsent proof of other offsetting consideration, it is logical to conclude that the quid pro quo for the payment was an agreement by the generic to defer entry beyond the date that represents an otherwise reasonable litigation compromise."

Under a "rule of reason" analysis, the Commission found that "the possible existence of a reverse payment raises a red flag and can give rise to a prima facie case that an agreement was anticompetitive."  Schering appealed in the Eleventh Circuit, which overturned the FTC.

This action named as plaintiffs drug wholesalers (Louisiana Wholesale Drug Co.) and retailers (CVS Pharmacy, Rite Aid, Walgreens, Eckerd, Safeway, Kroger, Albertson's, Hy-Vee and Maxi Drug) against Merck & Co. (the successor-in-interest to Schering-Plough) and Upsher-Smith Laboratories.  Characterized as "separate from the FTCs challenge" (but no doubt motivated by it), the plaintiffs here filed various lawsuits that were consolidated in the District of New Jersey by the Judicial Panel on Multidistrict Litigation (fortuitously for plaintiffs and the FTC, in an appellate circuit that had not ruled on the reverse payment practice).  A Special Master appointed by the Court filed a Report and Recommendation that the lawsuits be dismissed, based on Schering's right under the patents to "exclude infringing products until the end of [the patent's] term," and that reverse payment agreements warrant antitrust scrutiny only if they either exceeded the scope of the underlying patents or if the patent infringement lawsuits brought under the authority of the patents were objectively baseless (grounds that other appellate circuits had also considered in assessing the legality of reverse payment agreements).

The Third Circuit rejected the precedent of its sister circuits, finding reverse payment agreements to be presumptively illegal.  The opinion sets forth its view of antitrust law and its application to the reverse payment agreements before it.  The Court set forth its opinion that the proper approach is to evaluate any agreement alleged to be one that restrains trade by the "rule of reason," following its appreciation of applicable Supreme Court precedents.  In doing so, the opinion states that "the finder of fact must decide whether the questioned practice imposes an unreasonable restraint on competition, taking into account a variety of factors, including specific information about the relevant business, its condition before and after the restraint was imposed, and the restraint's history, nature, and effect," citing State Oil Co. v. Khan, 522 U.S. 3, 10 (1997).  This inquiry has three parts, according to the Third Circuit:  there must be a showing of an anticompetitive effect on the market, which (if established) "shifts the burden to the defendant to show that the challenged conduct promotes a sufficiently pro-competitive effect."  The antitrust plaintiff can rebut this showing if it can establish that the restraint on trade is not "reasonably necessary to achieve the [purportedly] pro-competitive objective" asserted by the antitrust defendant.  The opinion also notes that there is a class of activities that have been deemed "unlawful per se" that includes "horizontal price fixing, output limitations, market allocation, and group boycotts," citing Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768 (1984).

The opinion rejected what it termed "precedent from other Circuits," namely the cases noted above that have almost unanimously found reverse payment agreements to be lawful.  The opinion noted that in each case, the appellate court found the reverse payments to be lawful based on the patent's presumption of validity and the patentee's right to exclude, and that the agreements did not involve an improper extension of that exclusionary right (as well as the policy considerations involving favoring settlements).  The panel opinion termed these considerations the "scope of the patent" test, which it identified from the Second Circuit's In re Tamoxifen Antitrust Litigation decision.  In a footnote, the panel acknowledged these decisions but, finding that they are persuasive and not binding authority and that the panel does not find the arguments persuasive, they "decline to follow [them]."

The panel then explained its analysis of this case law and why it is unpersuaded.  Put simply, the panel does not believe that the "scope of the patent" test is the appropriate test and should not entitle reverse payments to avoid antitrust scrutiny.  The opinion forms this conclusion because "that test [in the panel's view] improperly restricts the application of antitrust law and is contrary to the policies underlying the Hatch-Waxman Act and a long line of Supreme Court precedent on patent litigation and competition."  The opinion provides three grounds for this conclusion.  First, the opinion stated that it creates "an almost unrebuttable presumption of patent validity," due to the fact that the settlement "forces a presumption that the patent holder would have prevailed" in the underlying (and settled) ANDA litigation.  This presumption has (or should have) no substantive vitality, according to the panel, because it is merely 'a procedural device and is not a substantive right of the patent holder," citing Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 (Fed. Cir. 1983).  The opinion also believed using the presumption of validity to uphold reverse payment agreements was "particularly misguided" when the basis for the underlying patent infringement defense is non-infringement (as it was in this case), because the burden is properly on the patentee, not the challenger, to prove infringement.  The panel opinion also "question[ed] the assumption" that subsequent ANDA filers will come forward to challenge "weak" patents.

The Third Circuit panel considered perceived pernicious effects on reverse settlements as being directed to first ANDA filers, which it asserts are the "most motivated" due to the promise of 180 days of market exclusivity.  The panel also cites several Supreme Court cases for the proposition that patent rights are "a limited exception to a general rule of the free exploitation of ideas" that indicate that "the public interest supports judicial testing and elimination of weak patents" (this in contrast to the 11th Circuit's recognition that:

No matter how valid a patent is -- no matter how often it has been upheld in other litigation or successfully reexamined -- it is still a gamble to place a technology case in the hands of a lay judge or jury.  Even the confident patent owner knows that the chances of prevailing in patent litigation rarely exceed seventy percent.  Thus, there are risks involved even in that rare case with great prospects.

The panel explicitly limited the scope of its decision to "reverse payments between patent holders and would be generic competitors in the pharmaceutical industry." It is clear that the panel was motivated at least in part by its perception, as argued by the FTC, that reverse payment settlement agreements were contrary to and in contravention of Congressional goals of "increase[ing] the availability of low cost generic drugs" (despite findings in other circuits that in some circumstances reverse payment settlements do just that).  Nevertheless, the panel found that "[t]he line that Congress drew between these competing objectives [of stimulating innovation and furthering the public interest] strongly supports the application of rule of reason scrutiny of reverse payment settlements in the pharmaceutical industry."  And the panel limits the scope of its decision only to settlements that involve payments from the patentee to the putative generic competitor:  "[n]othing in the rule of reason test that we adopt here limits the ability of the parties to reach settlements based on a negotiated entry date for marketing of the generic drug:  the only settlements subject to antitrust scrutiny are those involving a reverse payment from the name brand manufacturer to the generic challenger."  According to the Court, "the vast majority of pharmaceutical patent settlement [will be] unaffected" by its ruling.

The proper procedure under Third Circuit law is thus to use a "quick look" rule of reason analysis "based on the economic realities of the reverse payment settlement rather than the labels applied by the settling parties" and that "any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade."  In doing so, the Court also "agrees [] with the FTC that there is no need to consider the merits of the underlying patent suit because '[a]bsent proof of other offsetting consideration, it is logical to conclude that the quid pro quo for the payment was an agreement by the generic to defer entry beyond the date that represents an otherwise reasonable litigation compromise,'" citing the Commission's Final Order in this matter that was overturned by the 11th Circuit.

Merck has now petitioned for certiorari; the Question Presented is:

Whether the federal antitrust laws permit a brandname manufacturer that holds the patent for a drug to enter into a settlement of patent litigation with a prospective generic manufacturer, where the settlement includes a payment from the brand manufacturer to the generic manufacturer but does not exclude competition beyond the scope of the patent.

According to the petition, there are three reasons why certiorari should be granted.  First, the Third Circuit's decision creates a "circuit split" below regarding the "appropriate standard" to be applied in assessing antitrust liability for settlements of ANDA litigation between branded and generic drug makers.  Second, this case is an "ideal vehicle" for the Court to consider the question.  The "divergent legal standard" applied by the Third and Eleventh Circuits were applied "in reviewing the very settlements at issue [in this case]" (emphasis in petition), a circumstance where "the Court can be not only confident, but certain, that a circuit conflict concerning the appropriate legal standard is squarely implicated, because two courts of appeals have applied different legal standards to the same facts," citing United States v. American Can Co., 280 U.S. 412, 415-16 (1930).  In addition, in this case the Court would have the benefits of an extensive record, including the proceedings before the FTC, the District Court and two appellate courts.  Finally, the petition asserts that the Court will hear from all interested parties -- branded and generic drug makers, private plaintiffs including wholesale and retail drug stores, and the government.  Third, the petition characterizes the Question Presented as "an exceptionally important and recurring one" with great "legal and practical significance."  Moreover, "[f]urther percolation [] would serve no useful purpose."  And, "if left undisturbed, the decision of the Third Circuit -- a circuit with jurisdiction over many of the Nation's major pharmaceutical companies -- promises to have a chilling effect on patent settlements between brand manufacturers and generic manufacturers."  But while the Third Circuit's decision may appear to be limited to settlements where there is an actual payment from the branded drug maker to one or more generic companies, the petition notes that, "[s]eemingly emboldened by the Third Circuit's decision, however, the FTC has recently taken the position in litigation that 'payments'  include terms of settlements that cannot meaningfully be characterized as payments at all, such as terms concerning the entry of brand manufacturers' own generic versions, citing the FTC Brief in In re Effexor XR Antitrust Litig., Civ. No. 11-5479 (D.N.J.) (filed Aug. 10, 2012).

It is unlikely that any of the parties -- or the government -- will oppose this petition, making it likely for that reason alone that the Court will grant cert.  And insofar as this is in many respects a "patent" case, it seems even less likely that the Court will resist the siren call of another opportunity to consider this area of the law.

USPTO News Briefs

By Donald Zuhn --

USPTO to Hold Roundtable on AIA First Inventor to File Provisions

Earlier this month, the U.S. Patent and Trademark Office published a notice in the Federal Register (77 Fed. Reg. 49427) announcing that the Office will be hosting a roundtable on September 6, 2012 to obtain public input from organizations and individuals on issues relating to the USPTO's proposed implementation of the first-inventor-to-file provisions of the AIA.  On July 26, the Office published a notice of proposed rulemaking regarding "Changes to Implement the First Inventor to File Provisions of the Leahy-Smith America Invents Act" (77 Fed. Reg. 43742) and a request for comments regarding "Examination Guidelines for Implementing the First-Inventor-to-File Provisions of the Leahy-Smith America Invents Act" (77 Fed. Reg. 43759).  The roundtable will focus on the above documents.

The roundtable will be held from 1:30 to 4:30 (EDT) in the Madison Auditorium at 600 Dulany Street in Alexandria, Virginia, and is open to the public.  The Office indicated that it plans to invite a number of roundtable participants from among patent user groups, practitioners, industry, independent inventor organizations, academia, and the government.  An agenda for the roundtable can be found here.  The roundtable will be available via WebEx webinar (event number: 997 151 983; password: 123456) or teleconference at +1-408-600-3600 (access code: 997 151 983).

USPTO to Hold Eight AIA Roadshows on Final Rules

The U.S. Patent and Trademark Office has announced that it will be hosting eight roadshows in September to share information about the new final rules for implementing the provisions of the Leahy-Smith America Invents Act that take effect on September 16, 2012.  The final rules to be covered at the roadshows relate to the inventor's oath/declaration, preissuance submissions, citation of patent owner statements, supplemental examination, inter partes review, post grant review, and covered business method review provisions of the AIA.  The roadshows will be free and open to the public.  While pre-registration is not required, seating will be available on a first-come, first-served basis.  The Office notes that the roadshows in Minneapolis, Alexandria, and Los Angeles will be webcast.  The eight roadshows include:

Monday, September 10
Hennepin County Library
Minneapolis, MN

Wednesday, September 12
USPTO Campus
Alexandria, VA

Friday, September 14
Los Angeles Public Library
Los Angeles, CA

Monday, September 17
Denver Public Library
Denver, CO

Thursday, September 20
Detroit Public Library
Detroit, MI

Monday, September 24
Georgia Institute of Technology Library
Atlanta, GA

Wednesday, September 26
Rice University Fondren Library
Houston, TX

Friday, September 28
New York Public Library
New York, NY

According to the USPTO's AIA Roadshow webpage, the agenda of the roadshows will be as follows:

10:30 am -- Opening Remarks

11:00 am -- Patents: Final Rules for Inventor's Oath/Declaration, Pre-issuance Submission, Miscellaneous Post Patent Provisions, and Supplemental Examination

12:30 pm -- Lunch Break

1:30 pm -- Board: Umbrella Final Rules and Specific Final Rules for Post Grant Review, Inter Partes Review, and Covered Business Method Review

3:15 pm -- Break

3:30 pm -- Finance: Proposed Rules for Fees

4:10 pm -- Patents: Proposed Rules for First-Inventor-to-File

4:50 pm -- Closing Remarks

USPTO Expands Patent Law School Clinic Certification Pilot Program

Last month, the U.S. Patent and Trademark Office announced the further expansion of the Patent Law School Clinic Certification Pilot Program to include an additional eleven schools for the upcoming academic year.  Under the pilot program, law students are permitted to practice patent law before the Office under the guidance of a law school faculty clinic supervisor.  In particular, students in the program can expect to draft and file a patent application and respond to an office action.

The Patent Law School Clinic Certification Pilot Program was begun in 2008 with six law schools, was expanded to include ten more schools in 2010 (some of the participating schools allow students to practice before the Office in both patents and trademarks and others allow students to practice before the Office in trademarks only).  The eleven new participating schools are Arizona State University Sandra Day O'Connor College of Law, Case Western Reserve University School of Law, University of Colorado Law School, Fordham University School of Law, University of Maryland Francis Carey School of Law, North Carolina Central University School of Law, University of Notre Dame Law School, University of Puerto Rico Law School, Thomas Jefferson School of Law, University of Washington School of Law, and Wayne State University Law School.  The above schools join the sixteen prior participating law schools -- University of Akron School of Law; American University, Washington College of Law; University of Connecticut School of Law; The George Washington University School of Law; Howard University School of Law; The John Marshall School of Law; University of Maine School of Law; University of Maryland School of Law; University of New Hampshire School of Law; North Carolina Central University School of Law; University of Puerto Rico School of Law; University of Richmond – Richmond School of Law; Rutgers Law School – Newark Vanderbilt College of Law; West Virginia University School of Law; and William Mitchell College of Law.

Eli Lilly & Co. v. Teva Parenteral Medicines, Inc. (Fed. Cir. 2012)

By Kevin E. Noonan --

A three judge Federal Circuit panel went a long way towards disentangling its jurisprudence on the question of obviousness-type double patenting, in affirming a District Court finding that the doctrine did not apply to the patent claims at issue in Eli Lilly & Co. v. Teva.  In what seems to becoming a penchant of this Court (see "Momenta Pharmaceuticals Inc. v. Amphastar Pharmaceuticals, Inc.: 'The Rest of the Story'"), the panel distinguished its decision rather than simply finding the Court's most recent spate of decisions to have gone astray (see "Cert. Denied in Eli Lilly v. Sun Pharmaceuticals").

The present case concerns pemetrexed, a folate metabolism inhibitor synthesized by Professor Ed Taylor at Princeton University and developed by Eli Lilly & Co., sold as the anticancer drug Alimta® for treating mesothelioma and small cell lung cancer.  Pemetrexed's biological activity, as with earlier folate inhibitors like methotrexate, is understood to result from its structural similarity to naturally occurring folic acid, which is needed for DNA and RNA synthesis:

Earlier embodiments of folate inhibitors, like methotrexate, were disadvantageous because their effects on nucleic acid metabolism were felt by non-cancerous as well as cancer cells, due to their ability to inhibit cellular enzymes like dihydrofolate reductase (DHFR) that were needed for both DNA and RNA production.  Pemetrexed was able to specifically inhibit DNA synthesis by virtue of its specificity for enzymes such as thymidylate synthetase (because the nucleotide thymidine is incorporated into DNA but not RNA).

Princeton University obtained (and Eli Lilly licensed) three patents related to pemetrexed:  U.S. Patent No. 5,344,932 (the patent-in-suit); U.S. Patent No. 5,028,608 and U.S. Patent No. 5,248,775.  The '608 patent disclosed and claimed a related but structurally distinct antifolate compound, and the '775 patent disclosed a "family of chemical intermediates that can be used to make a variety of antifolates"; important for the issues on appeal, the '775 patent disclosed an intermediate in antifolate synthesis that can be used to make pemetrexed (along with a variety of other antifolate molecules).  The '608 and '775 patents expired prior to the instant suit, while expiration of the '932 patent was delayed until July 14, 2016 pursuant to patent term extension under 35 U.S.C. § 156.

Eli Lilly sued Teva, Barr Laboratories and APP Pharmaceuticals after each filed an ANDA, pursuant to 35 U.S.C. § 271(e)(2), asserting claims 1, 2, 3 and 7 of the '932 patent.  At the district court, the defendants asserted as a defense that the claims of the '932 patent were invalid under the judicially established doctrine of obviousness-type double patenting over claim 3 of the '608 patent (claiming a related but structurally distinct antifolate molecule) and claim 7 of the 775 patent (that claims the intermediate).  With regard to the '608 patent, Teva contended at trial that pemetrexed was related to the compound claimed by claim 3 of the '608 patent by substitution of a thienyl group with a phenyl group, something Teva asserted was "consistent with 'conventional wisdom' in the field [of the pharmaceutical arts]" and thus rendered the claims invalid.  As for the '775 patent, Teva's argument was that the pemetrexed compounds claimed in the '932 patent were a "use" of the intermediate compound disclosed in the '775 patent, and were invalid for double patenting under a line of Federal Circuit cases, the most recent of which was Sun Pharmaceuticals Industries, Ltd. v. Eli Lilly & Co.  In the alternative, Teva argued that pemetrexed was merely an obvious end product for the '775 patent intermediate.

The District Court found none of these arguments persuasive.  The Court rejected Teva's "focus" on the particular portion of pemetrexed that differed from the compound disclosed in the '608 patent, saying that the weight of the evidence was that the skilled worker would have "pursued changes outside of the aryl region to improve TS inhibition and would have avoided introducing a phenyl group into the '608 Compound based on previous reports of toxicity with analogous antifolate structures."  The basis for the District Court's rejection of Teva's obviousness-type double patenting argument over the disclosure of the '775 patent intermediate was that the intermediate was not claimed ("so the teachings from the '775 patent's specification were inapplicable to its obviousness-type double patenting analysis") and that there were many possible end products that could have been produced from the '775 patent intermediate and no reasoned basis for the skilled worker to have produced pemetrexed as the end product.

The Federal Circuit agreed, in an opinion by Judge Lourie joined by Judges Dyk and Wallach.  The panel rejected Teva's argument on appeal, that Federal Circuit precedent (specifically, Amgen Inc. v. Hoffmann-La Roche Ltd., 580 F.3d 1340 (Fed. Cir. 2009)), mandated that a court look only at the differences between the claims at issue and the earlier claims, "so that any features held in common between the claims -- in this case, all but the aryl regions of the '608 Compound and pemetrexed -- would be excluded from consideration."  The panel acknowledged that Amgen directs a court to identify the differences, but asserts that Amgen then requires that the claims at issue be considered "as a whole" and not "the differences [] in isolation."  The basis for this analytical framework is the rubric reasserted in Amgen that obviousness-type double patenting is assessed "analogous to an obviousness analysis under 35 U.S.C. §103."  And as in a § 103 analysis, claims must be considered "as a whole" in an obviousness-type double patenting analysis says the panel, citing General Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272 (Fed. Cir. 1992).  "On the merits," the panel found no basis for finding clear error in the District Court's factual determinations underlying its judgment, and "absent any motivation to derive pemetrexed from the '608 Compound or reason to expect success in doing so," the panel concluded that the District Court had not erred in finding against Teva that the asserted claims of the '932 patent were not invalid for obviousness-type double patenting over the claims of the '608 patent.

Turning to Teva's obviousness-type double patenting arguments based on the teachings of the '775 patent, the panel noted that these argument's were rooted in earlier precedent, specifically citing In re Byck, 48 F.2d 665 (CCPA 1931), and Sun Pharmaceutical Industries, Ltd. v. Eli Lilly & Co., 611 F.3d 1381 (Fed. Cir. 2010).  But the panel found this reliance on these cases "unsound" and proceeded to distinguish this case from that precedent.  The panel began by citing the "general rule" that obviousness-type double patenting depends on a comparison with what is claimed in an earlier patent, "with the earlier patent's written description considered only to the extent necessary to construe its claims," citing In re Avery, 518 F.2d 1228, 1232 (CCPA 1975).  The panel then further reaffirmed the fundamental principles that the doctrine of obviousness-type double patenting is concerned with what is claimed, not what is disclosed, because the goal of the doctrine is to prevent separate patenting of merely obvious variants of a previously patented invention.

The opinion then characterized the line of cases relied upon by Teva as "a limited exception" to this rule.  The basis for this exception was set forth in Byck, wherein:

It would shock one's sense of justice if an inventor could receive a patent upon a composition of matter, setting out at length in the specification the useful purposes of such composition, manufacture and sell it to the public, and then prevent the public from making any beneficial use of such product by securing patents upon each of the uses to which it may be adapted.

Next, the Court turned to a "trio" of recent cases:  Sun Pharma, Geneva Pharm., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373 (Fed. Cir. 2003), and Pfizer, Inc. v. Teva Pharm. USA, Inc., 518 F.3d 1353 (Fed. Cir. 2008).  Each of these cases, according to the panel, resulted from situations where the second patent claimed a use of a composition claimed in an earlier patent that disclosed the later-claimed use.  According to the opinion, these cases each "address the situation in which an earlier patent claims a compound, disclosing the utility of that compound in the specification, and a later patent claims a method of using that compound for a particular use described in the specification of the earlier patent," citing Sun Pharma, and that in each case the later application (or patent) claimed "a, or the" disclosed use of the composition claimed in the earlier patent.  This analysis was enough by itself to distinguish the claims at issue here, because it was not disputed that the intermediate compound disclosed in the '775 patent (and the compound claimed in the '608 patent) were not the same compound claimed in the '932 patent, i.e., pemetrexed.  Under these circumstances, "[t]he particular concerns motivating our prior decisions are [] absent here" because the claims of the '932 patent were "wholly independent" of the claims of the '775 patent, according to the opinion.  And "[p]utting aside the teachings in the '775 patent's specification, Teva's double patenting contentions evaporate."  In addition, the panel noted that it had no basis for finding error in the District Court's conclusion that there was "no reason" the skilled worker would have chosen to make pemetrexed from the '775 patent intermediate, noting in passing that while not controlling, this conclusion was consistent with the provisions of the Manual of Patent Examining Procedure that states that:

[A]n intermediate product and a final product can be shown to be distinct inventions if the intermediate and final products are mutually exclusive inventions (not overlapping in scope) that are not obvious variants, and the intermediate product as claimed is useful to make other than the final product as claimed.  §806.05(j).

Finally, the panel found that the District Court had erred by refusing to consider so-called "secondary" considerations of non-obviousness, on the grounds that these considerations were not to be applied in an obviousness-type double patenting assessment (on the contrary, the opinion asserts that they must be considered).  But this was harmless error because the District Court had reached the correct conclusion in rejecting Teva's invalidity arguments based on obviousness-type double patenting.

The panel's opinion and discussion of the reasoning behind it appears to have cabined to a narrow category of facts the trio of decisions that applied the disclosure, as opposed to just the claims, of an earlier patent to make an obviousness-type double patenting determination on later-filed claims.  Under the revised interpretation of the obviousness-type double patenting standard enunciated by the Lilly court here, the claims of an earlier patent alone are to be considered for determining obviousness-type double patenting, except insofar as the disclosure of the earlier patent is necessary to construe the scope of the earlier claims, or unless the later application claims a use for a composition claimed in an earlier patent wherein the use itself is disclosed but not claimed in the earlier patent.  If this view is not further distinguished by a future panel, the Court may have brought some certainty to the application of the obviousness-type double patenting doctrine, consistent with their mandate from Congress to harmonize and clarify U.S. patent law.

Eli Lilly & Co. v. Teva Parenteral Medicines, Inc. (Fed. Cir. 2012)
Panel: Circuit Judges Lourie, Dyk, and Wallach
Opinion by Circuit Judge Lourie

Court Report

By Sherri Oslick --

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

Merck Sharp & Dohme Corp. v. Watson Laboratories, Inc.
3:12-cv-05228; filed August 20, 2012 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,571,817 ("Methods of Treating Androgenic Alopecia with Finasteride [17β-N-mono-substituted-carbamoyl-4-aza-5-α-androst-1-en-ones]," issued November 5, 1996), 5,547,957 ("Method of Treating Androgenic Alopecia with 5-α Reductase Inhibitors," issued August 20, 1996), and 5,886,184 ("Finasteride Processes," issued March 23, 1999) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Merck's Propecia® (finasteride, used to treat androgenic alopecia).  View the complaint here.  [NB: Merck voluntarily dismissed the case without prejudice 3 days after filing.]

Santarus, Inc. et al. v. Dr. Reddy's Laboratories Inc. et al.
3:12-cv-05202; filed August 15, 2012 in the District Court of New Jersey

• Plaintiffs:  Santarus, Inc.; The Curators of The University of Missouri
• Defendants:  Dr. Reddy's Laboratories Inc.; Dr. Reddy's Laboratories, Ltd.

Infringement of U.S. Patent Nos. 6,699,885 ("Substituted Benzimidazole Dosage Forms and Methods of Using Same," issued March 2, 2004), 6,489,346 (same title, issued December 3, 2002), 6,645,988 (same title, issue November 11, 2003), and 7,399,772 (same title, issued July 15, 2008) following a Paragraph IV certification as part of Dr. Reddy's filing of an ANDA to manufacture a generic version of Santarus' Zegerid® (omeprazole/sodium bicarbonate, used to treat heartburn and other symptoms associated with gastroesophageal reflux disease).  View the complaint here.

Conference & CLE Calendar

August 27, 2012 - AIA Post-Grant Implementation Begins – Is Your Business Strategy Aligned? (Foley & Lardner) - 3:00 pm (Eastern)

August 30, 2012 - The Written Description Requirement: Are Antibodies Chemicals, Proteins, or Exceptions? (American Bar Association) - 1:00 - 2:30 pm (Eastern)

September 6, 2012 - A Review of the Impact of Recent Supreme Court and Federal Circuit Decisions on Patent Strategy (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 - 11:15 am (CT)

September 9-11, 2012 - IPO Annual Meeting (Intellectual Property Owners Association) - San Antonio, TX

September 10-12, 2012 - Business of Biosimilars & Generic Drugs (Institute for International Research) - Boston, MA

September 18, 2012 - New USPTO Rules for Post-Grant Proceedings (Strafford) - 1:00 - 2:30 pm (EDT)

September 19, 2012 - New Post Grant Proceeding Rules: Adjusting to the New Reality (Technology Transfer Tactics) - 1:00 - 2:15 pm (Eastern)

September 20-21, 2012 - FDA Boot Camp*** (American Conference Institute) - Boston, MA

September 24-25, 2012 - Biosimilars and Biobetters*** (SMi) - London, UK

September 25-26, 2012 - EU Pharma Regulatory Law*** (C5) - Brussels, Belgium

September 28, 2012 - Focus on Biologics and Biosimilars (Catalyzing Collaboration Between Industry and Academia in the Life Sciences) - Hospira, Inc., Lake Forest, IL

October 10-11, 2012 - Maximizing Pharmaceutical Patent Lifecycles*** (ACI) - New York, NY

October 10-11, 2012 - Biotech & Pharmaceutical Patenting*** (C5) - London, UK

October 22-23, 2012 - Tech Transfer Summit North America*** (Tech Transfer Summit Ltd.) - John Hopkins University, Montgomery County, MD

October 24-25, 2012 - FDA Boot Camp Devices Edition*** (American Conference Institute) - Chicago, IL

October 25-26, 2012 - Life Sciences Congress on Paragraph IV Disputes (Center for Business Intelligence) - Washington, DC

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

Webinar on USPTO Post-Grant Proceedings

Strafford will be offering a webinar/teleconference entitled "New USPTO Rules for Post-Grant Proceedings:  Meeting the New Requirements for Post-Grant and Inter Partes Reviews and Supplemental Examination" on September 18, 2012 from 1:00 - 2:30 pm (EDT).  Scott A. McKeown, Greg H. Gardella, and Jessica J. Harrison of Oblon Spivak McClelland Maier & Neustadt will provide guidance for counsel to IP owners on changes to implement inter partes review proceedings, post-grant review proceedings, and the transitional program for covered business method patents, and outline strategic considerations for post-grant practice.  The webinar will review the following questions:

• How has post-grant practice been transformed since the America Invents Act?
• How do the new rules impact the strategic use of post-grant proceedings parallel to litigation?
• What are the relevant deadlines and best practices for the new post-grant review process?

An interactive Q&A session will follow the presentation.

The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by August 31, 2012 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

CBI Life Sciences Congress on Paragraph IV Disputes

The Center for Business Intelligence (CBI) will be holding its 4th Life Sciences Congress on Paragraph IV Disputes on October 25-26, 2012 in Washington, DC.  The conference will offer presentations on the following topics:

• Through the looking glass -- Fine-tune fundamentals of Hatch-Waxman and anticipate future developments in patent litigation;
• The next big wave -- Understand the inner workings of the FDA's biosimilars pathway;
• Interpretation of Supreme Court's ruling for patent use codes;
• Examine the new era of label carve-outs;
• Navigate new provisions and procedures of the America Invents Act -- to be presented by Teresa Stanek Rea, Deputy Deputy Director of the U.S. Patent and Trademark Office
• Understand the impact of the changing bio/pharma business model on Paragraph IV litigation (panel);
• Generic -- Essential considerations and necessary requirements for the letter;
• Branded -- Strategic first steps before and after a PIV letter is received;
• Today's courtroom -- A Judge's perspective -- to be presented by the Honorable Tonianne Bongiovanni of the U.S. District Court for the District of New Jersey;
• Defining inequitable conduct in today's PIV suits;
• Qualification of combination products under Hatch-Waxman and the biosimilars pathway; and
• Recent developments on FTC settlements and pay-for-delay agreements -- to be presented by Mark Woodward of the Health Care Division, Federal Trade Commission.

An agenda for the Congress on Paragraph IV Disputes can be found here.

The registration fee is $2,495 (vendor) or $2,295 (pharma/biotech) for those registering by October 25, 2012.  Those interested in registering for the conference can do so here.

Patent Eligibility and Biology

By Kevin E. Noonan --

Earlier this month we asked for examples of instances where claims to isolated DNA interfered with basic research (see "The Proper Scope of DNA (or "Gene") Patent Claims").  We posited that the claim would be something like this one:

An isolated (human) nucleic acid (or DNA molecule or gene (specified by name)), encoding an amino acid sequence identified by SEQ ID NO: X,

where the portions of this claim in parentheses are optional, used in some cases but not necessary to properly recite the claimed subject matter.  This type of claim has the following features:

• It must use the term "isolated" in the claim, to distinguish it from naturally occurring molecules in their natural state, so as to evince the "hand of man" in its creation (Diamond v. Chakrabarty) to satisfy 35 U.S.C. § 101;

• It cannot read on the natural molecule (i.e., the claim scope cannot be broad enough to encompass the natural molecule) so that it satisfies the novelty requirement of 35 U.S.C. § 102 (Wood-Paper Patent, 90 U.S. 566 (1874), and Cochrane v. Badische Anilin Soda Fabrik, 111 U.S. 293 (1884));

• Infringement will lie only if the entire amino acid sequence-encoding isolated nucleic acid recited in the claim is made, used, sold, offered to be sold, or imported;

• Portions of the gene can be isolated, sequenced, and characterized and not infringe, and such portions can be changed and then introduced into the gene to produce another gene that does not infringe;

• The gene product (typically, a protein) can be isolated from the cell and studied without infringement, as can antibodies raised against the gene product; and

• The sequence itself can be identified in individuals and compared to wildtype or disease-associated mutations without infringing unless the entire DNA is isolated intact.

Recent posts provide an opportunity to further distinguish what is patent eligible from what is not (see "Dolphin Genes Show Relationships between Large Brains and Energy Metabolism Similar to Humans and Elephants" and "Genetic Marker Map of Sunflower Species Reported").  In the former, researchers have identified a number of genes that have been subjected to positive selection, presumably due to their usefulness in adapting to the aquatic lifestyle.  This information was developed by comparing dolphin genes with their orthologs in related species, including cow, horse, dog, mouse, elephant, opossum, platypus, chicken, and man.  And none of this information is, per se, eligible for patenting, being (like the capacity for certain species of Rhizobium to grow together) to be "part of the storehouse of knowledge of all men [and]  manifestations of laws of nature, free to all men and reserved exclusively to none."  Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948).

However, the paper does posit that dolphins may be large animal models for type 2 diabetes in humans

During the course of primate evolution, metabolism evolved to provide a constant supply of energy to the increasing demands of a larger brain.  [Leonard et al., 2003, "Metabolic correlates of hominid brain evolution," Comp. Biochem. Physiol. A 136: 5–15].  Humans have evolved several adaptations, including an increase in visceral fat and the evolution of tissue-specific insulin resistance in the brain that protects nervous tissue from energy shortage; however, malfunctions of this system in humans can cause type 2 diabetes (Kuzawa, 2010 Beyond feast-famine: brain evolution, human life history, and the metabolic syndrome. In Human evolutionary biology (ed. Muehlenbein M.), pp. 518–527. Cambridge, UK: Cambridge University Press).  Interestingly, recent research has proposed that dolphins should be seen as a model for type 2 diabetes, as they possess all the hallmarks of the disease [Venn-Watson et al., 2011, "Dolphins as animal models for type 2 diabetes: sustained, post-prandial hyperglycemia and hyperinsulinemia," Gen. Comp. Endocrinol. 170: 193–99)].  Here, we find genomic signatures of adaptive evolution in dolphin genes related to control of food intake such as genes involved in glycerol uptake and/or glucose metabolism (AQP9, OSTN, SOCS6), and a neuropeptide AGRP that is expressed in the hypothalamus and involved in increasing appetite, decreasing metabolism and regulating leptin. In addition, we found several genes under selection related to lipid transport and metabolism [] that may be associated with the large fat reserves found in cetaceans.

Thus, methods for testing compounds as potential drugs for treating human type 2 diabetes using dolphins may be patent eligible, in a claim such as this one:

A method for identifying a compound that is effective in treating type 2 diabetes in the human, comprising the step of administering the compound to a bottlenose dolphin and detecting an antiglycemic effect in the dolphin.

The other paper, on the sunflower genome identified more than 10,000 genetic loci (by virtue of small nucleotide polymorphisms or SNPs) to provide a genetic map of the sunflower genome.  That genome was represented graphically as follows:

Like the dolphin genome, this map is also not patent eligible.  However, sunflowers are of great economic importance, being the fourth largest source of cultivated vegetable oils worldwide (www.fas.usda.gov).  In addition to these maps, the "sunflower genome project" is under active pursuit (Kane et al. 2011, "Progress towards a reference genome for sunflower," Botany-Botanique 89: 429–37), wherein genes that may increase yield or resistance to insect predation or aridity may be mapped to portions of the sunflower genome close to one of these SNPs.  In such a case, methods for identifying sunflowers having a desirable trait associated with one of these polymorphisms may be patentable:

A method for producing sunflowers having [a desirable trait], wherein the trait is genetically linked to [a particular SNP], the method comprising the step of identifying the SNP in said sunflower and cultivating said sunflower.

These examples are not meant to be exhaustive.  But they are intended to illustrate the difference between patent eligible and ineligible subject matter, and to show that the mere intersection of patents and biology should not be the occasion to disqualify patent eligible subject matter.

This is illustrated by the drawing below, which discloses relationships between gene expression in mammalian development.  If you squint a little looking at the drawing (or click on the image), these inter-relationships look somewhat like a circuit drawing, and in some ways they are.  These interrelationships are not, per se, eligible for patenting.  But components thereof, and methods taking advantage of the elucidation of these interrelationships should be, and their provenance in the natural world should not be enough to categorically exclude them from patent eligibility.

Figure from Ellis, "Animal Evolution: A View from the Genome," Engineering & Science 3/4: 42-51 (2001).

Genetic Marker Map of Sunflower Species Reported

By Kevin E. Noonan --

Long before DNA sequencing technology existed (indeed, long before Watson and Crick proposed that DNA was the genetic material and proposed a structural basis for its ability to be replicated), scientists were able to study genome structure using strictly genetic approaches.  Genetic linkage maps, for example, date from the work of Thomas Hunt Morgan and Hermann Mueller on fruit flies at Columbia University and later at Cal Tech.  Traditionally, these maps have been generated using phenotypic markers, much like Mendel did with his pea plants (in relative obscurity) a generation before.

Marker density is a limitation using traditional methods, however.  But an improvement in this aspect of the methodology was achieved in the 1980's with the advent of restriction fragment length polymorphism (RFLP) methods.  These methods used physical changes in DNA sequence (specifically at restriction enzyme recognition sites) to greatly expand the scope of linkage analysis.  This is because the "phenotype" of a RFLP is a polymorphism that can be identified using electrophorectic separation of fragments having different lengths; unlike traditional phenotypes, unless the RFLP happens to be associated with an amino acid change in a protein it is unlikely to be subject to natural selection, and thus will fall within the "neutral" sequence variation that has been appreciated to exist in natural populations since the work of Motoo Kimura in the 1960's.  The RFLP method was used to great effectiveness by David Botstein, Ray White, Mark Skolnick, and Ronald Davis in identifying the chromosomal location of genes associated with, inter alia, Huntington's disease, and notably by Mary Claire King in identifying the locus of the BRCA1 gene and in forensic studies used to identify Argentines "disappeared" by the military dictatorship during the co-called "dirty war."

Since the completion of the Human Genome Project, the existence of single nucleotide polymorphisms (SNPs), which are RFLPs without being limited to restriction enzyme recognition sites, has expanded the extent and number of generic markers useful for genome mapping.  These SNPs have been used to construct a high-density linkage map for the sunflower (Helianthus annus) in a paper by John E. Bowers, Eleni Bachlava, Robert L. Brunick, Loren H. Rieseberg, Steven J. Knapp and John M. Burke from the Department of Plant Biology and Center for Applied Genetic Technologies, University of Georgia, the Department of Crop and Soil Science, Oregon State University, the Department of Botany, University of British Columbia, and the Department of Biology, Indiana University.  The study, "Development of a 10,000 Locus Genetic Map of the Sunflower Genome Based on Multiple Crosses" was reported in the online journal Genes/Genomes/Genetics (G3), 2: 721-729 (July 1, 2012).  These researchers identified 10,080 polymorphic genetic loci in the approximately 3.5 Gbp sunflower genome using a high throughput SNP genotyping array in developing their map, but also noted areas of the sunflower genome (up to 26 centiMorgans in size) having no markers that could be detected in individual crosses, the result, the authors speculate, of genetic identity between individuals in the four populations studied.  However, none of these regions were in common in the four populations as a whole, permitting a "gapless" map of the sunflower genome to be elucidated.

Interestingly, the economic importance of sunflowers (being the fourth largest source of cultivated vegetable oils worldwide; www.fas.usda.gov) is such that earlier genomic mapping technologies have been applied (including RFLP maps; Berry et al. 1995, "Molecular marker analysis of Helianthus-annuus L. 2. Construction of an RFLP linkage map for cultivated sunflower," Theor. Appl. Genet. 91: 195–99; Gentzbittel et al. 1995, "Development of a consensus linkage RFLP map of cultivated sunflower (Helianthus-annuus L)," Theor. Appl. Genet. 90: 1079–108) and others.  These efforts, however, have been directed towards "traits of agronomic importance" as well as comparisons with genomic structure of related Helianthus species according to the authors.  But these traditional efforts suffered from the same limited marker density deficiencies noted earlier (although SNPs and other markers identified using these methodologies were integrated into the high-density map).  Compared with the marker density in these earlier studies (one marker per 2 Mbps) other species (Arabidopsis, rice, sorghum) were previously mapped at a density of ~160 bp per marker (i.e., a ~12,500-fold higher marker density).  These efforts were also hampered by the fact that no plant species closely related to sunflower (family Asteraceae) have been fully sequenced (the closest sequenced relative is the potato), although other related species (tomato, lettuce) are currently subject to genomic sequencing efforts.

Markers were analyzed from multiple genetic crosses between members of the four populations.  The study reports crosses between individuals from an oilseed maintainer line with high oleic acid content and an oilseed "restorer" line, while other crosses involved individuals from the oilseed maintainer line and a wild sunflower line; an oilseed restorer line and a confectionery restorer line; and an oilseed restorer line that segregates for nuclear male sterility and a non-oilseed landrace line.  From these four populations, four individual maps of ~3500-5500 marker loci were created, falling into 17 linkage groups which was consistent with the 17 chromosomes in the sunflower species (although crosses with the landrace species showed genetic heterogeneity that required additional analysis).  Analyses of genotyping errors showed that the "raw allele calls" made from the data were "highly robust" (i.e., having an error rate ranging from ~0.14-1%).  Turning to these results, the authors report that the maps were "largely collinear with an average of 88.7% of all shared loci being syntenic in pairwise combinations."  "Not surprisingly," according to the study, "the cross that showed the most and largest regions of reduced recombination was the only cross that involved wild sunflower," a phenomenon that had been previously seen in maize (McMullen et al. 2009, "Genetic properties of the maize nested association mapping population," Science 325: 737–40).  The study also reports that 762 of the 5694 mapped loci could be ascribed to two different chromosomal locations in different crosses (and 21 markers were found at three genomic locations), a phenomenon the authors suggest could be due to the existence of multicopy genes, wherein the mapped markers were the result of detecting the different paralogs that were located at different loci in the sunflower genome.  This corresponded to <14% of all detected SNPs being associated with multicopy genes.

The combined consensus map reported in this paper comprised 10,080 loci spanning 1380 cM.  The authors state that the existence of this SNP map represented "over 5 million molecular data points" made possible by using multiple mapping populations simultaneously and that can be used to help assemble a map from the "sunflower genome project" currently underway (Kane et al. 2011, "Progress towards a reference genome for sunflower," Botany-Botanique 89: 429–37).  The relevance and utility of this marker map for understanding and improving sunflower species, subspecies and economically important variants remains a task for the future.

Dolphin Genes Show Relationships between Large Brains and Energy Metabolism Similar to Humans and Elephants

By Kevin E. Noonan --

"Genome projects" for a variety of species (comprising a complete sequence determination of a species' genomic DNA) has been underway for the past dozen or so years, in the wake of the completion of the Human Genome Project at the turn of the century.  While such a sequence determination remains the "gold standard" for a full appreciation of the gene structure and complement of a species, partial genome sequences, focusing on an animal's protein-coding sequences can also be useful in deriving phylogenetic relationships and understanding how genes are associated with (if not directly responsible for) shared phenotypic characteristics.

Such a study was reported recently for the bottlenose dolphin, Tursiops truncates in a paper by Michael McGowen, Lawrence Grossman and Derek Wildman of the Center for Molecular Medicine and Genetics, Wayne State University School of Medicine (Proceedings of the Royal Society: Biological Sciences, 279: 3643-3651).   The paper,"Dolphin genome provides evidence for adaptive evolution of nervous system genes and a molecular rate slowdown," reports the results of a comparison of 10,025 protein-coding genes from bottlenose dolphins and orthologous genes from cow (Bovis taurus, the closest living mammalian species in the Order Cetartiodactyla), horse (Equus caballus), dog (Canis familiaris) (together, these four species comprising the laurasiatherian species), mouse (Mus muscalus), elephant (Loxodonta africana), opossum (Monodelphis domestica), platypus (Ornithorhynchus anatinus), chicken (Gallus gallus) and man.  The comparison was limited to coding sequences (CDS) ranging from 26335 bp (SYNE1) to 150 bp (C20orf196 and FDPS).

Dolphin genes were found to have the slowest rates of synchronous substitution between the laurasiatherian species and comparable to rates seen in elephants and humans.  The mean ratio of the number of non-synonymous substitutions per non-synonymous site to the number of synonymous substitutions per synonymous site (dN/dS) were highest in dolphins of all laurasiatherian species, and again close to human rate ratios.  Within the dolphin genome, 228 genes were identified as having  (dN/dS) >1 (shown in Table 2), which was interpreted to indicate positive selection at levels (2.26%) significantly higher than seen in other species (horse, 48 or 0.51%; cow, 32 or 0.32%; dog, 11 or 0.12%).  Moreover, while at least 46% of genes in all other lineages studied were subject to "purifying selection" (genes having a (dN/dS) <0.1), only 36.4% (or 3646 dolphin genes) were found with this ratio, compared with 44-51% in other species.

Of the 228 dolphin genes (2.26% of total genes sequenced) under positive selection (having dN/dS > 1), 27 of these genes are related to the nervous system including genes homologous to human genes known to be involved in sleep, synaptic plasticity and, when defective, cognitive disability.  These include "[s]even genes [that] are identified as being involved in intellectual disabilities and/or microcephaly (ERCC8, AP4S1, MCPH1, TTR), schizophrenia (MAL) or Alzheimer's susceptibility (AGER, RNF182)[; f]ive genes [] involved in neuroendocrine function, neuropeptide hormonal activity, or function as hormones that affect the brain (AGRP, C2orf40, EDN2, NMU, TTR)[; ] genes [that] function in the development of myelin (MAL), neuronal or brain development (CNPY1, ZNF597, PCP4L1, MCPH1), neural potassium channel function (KCNK18), neurite growth (CD47, LRFN1,CNPY2) and synaptic function (BAALC, DBI, SYPL1, AP4S1, LRFN1)."  These results were consistent with morphological characteristics of dolphin brains, including "high level of gyrification (cortical folding), expansion of the insular and cingulate cortices, specialized von Economo neurons, high glia to neuron ratio increase in synapse number, reduction of the olfactory system and the large relative size of the cerebral cortex."  This suggests to the authors that a genetic analysis might uncover evidence of "convergent evolution" among large-brained mammals.  Further, consistent with the source, the authors report that genes "putatively related to cetacean adaptations" were also identified, including "the cardiovascular system (TSPO2, EPGN, PLN, EDN2, PLA2G5, KCNJ2), sperm function and spermatogenesis (TNP1, USP26,SPAG4, NANOS3, SPATA9, CDYL, SOX30, SPATA7, AKAP4, SPATA3, GTSF1), lung development and respiratory function (SCGB3A2, PLUNC, TMPRSS11D), dermal development and function (KRTDAP, SPINK5, SPINK6, IL20, PSORS1C2, DMKN), hair (KRT84), olfaction (OR6B1, OR2AK2), vision (CRYGN), milk (CSN2), glucose and/or glycerol metabolism (OSTN, SOCS6, AQP9), vitamin B-1 and B-12 binding and metabolism (TCN1, THTPA) and a multitude of genes involved in lipid transport and metabolism (APOA2, APOC4, APOO, FABP4, SERINC4, CCDC129, PLA2G5, PNLIPRP3, RARRES2, NR1I3)."

The study also examined metabolism-associated genes (a total of 548 genes), particularly the mitochondrial cellular (genomic) component genes (i.e., genes residing in the cellular chromosome whose gene products localize in the mitochondrion).  These genes are believed to be important for energy metabolism.  8.5% of these genes (compared with 1.5-5% for other species) were found to have (dN/dS) > 0.5, including the gene for cytochrome c (CYCS).  This is consistent with the increased energy needs of mammals with large brains, it being known that "basal metabolic rates [are correlated] with relative [larger] brain size" [Isler et al., 2006, "Metabolic costs of brain size evolution," Biol. Lett. 2, 557–560] as has been observed in humans [Grossman et al., 2004, "Accelerated evolution of the electron transport chain in anthropoid primates," Trends Genet. 20, 578–585].  These results were consistent with increased brain size, which like in humans is larger than expected when body size is considered.

The authors conclude that their data is consistent with a slower rate of mutation that other species (1.4 x 10^-9 substitutions/per site per year compared with an average mammalian mutation rate of 2.2 x 10^-9 substitutions/per site per year).  These results are also consistent with "adaptive evolution" of both the dolphin nervous system and brain, and although the authors have not established a definitive link between any of the brain-related genes they identified and "morphological or behavioral" traits in dolphins.  But they point out that they identified six genes (AP4S1encoding a membrane protein associated with AMPA glutamate receptors; SYPL1encoding a synaptic molecule differentially regulated during human development; LRFN1encoding a synaptic adhesion molecule; BAALC encoding a component of postsynaptic complexes; and DBI encoding a modulator of signal transduction at type A gamma-aminobutyric acid receptors with implications in sleep regulation) that are thought to be involved in synaptic function; similar genes "have been implicated in the evolution of the brain in humans" according to the report.

Genes involved in DNA repair and associated with intellectual disabilities in humans were also identified in the study, including "ERCC8 is a gene involved in transcription-coupled DNA damage repair; mutations in this gene result in Cockayne's syndrome, whose symptoms include microcephaly, neurological defects and premature ageing [Rapin et al., 2006, "Cockayne syndrome in adults: Review with clinical and pathological study of a new case," J. Child Neurol. 21, 991–1006].  ERCC8 shows evidence of positive selection in recent human populations [Voight et al., 2006, "A map of recent positive selection in the human genome," PLoS Biol. 4, e72].  MCPH1 is another gene with evidence of function in DNA damage repair as well as cell cycle regulation.  MCPH1 dysfunction can cause microcephaly and has been documented to be under positive selection along the human lineage."

Regarding genes involved in energy metabolism, the positive selection observed by these authors is consistent with an oxygenation rate of 6.0 mL kg/min, greater than in humans or elephants.  In this regard the paper makes the following interesting observation:

During the course of primate evolution, metabolism evolved to provide a constant supply of energy to the increasing demands of a larger brain.  [Leonard et al., 2003, "Metabolic correlates of hominid brain evolution," Comp. Biochem. Physiol. A 136, 5–15].  Humans have evolved several adaptations, including an increase in visceral fat and the evolution of tissue-specific insulin resistance in the brain that protects nervous tissue from energy shortage; however, malfunctions of this system in humans can cause type 2 diabetes (Kuzawa, 2010 Beyond feast-famine: brain evolution, human life history, and the metabolic syndrome. In Human evolutionary biology (ed. Muehlenbein M.), pp. 518–527. Cambridge, UK: Cambridge University Press).  Interestingly, recent research has proposed that dolphins should be seen as a model for type 2 diabetes, as they possess all the hallmarks of the disease [Venn-Watson et al., 2011, "Dolphins as animal models for type 2 diabetes: sustained, post-prandial hyperglycemia and hyperinsulinemia," Gen. Comp. Endocrinol. 170: 193–99)].  Here, we find genomic signatures of adaptive evolution in dolphin genes related to control of food intake such as genes involved in glycerol uptake and/or glucose metabolism (AQP9, OSTN, SOCS6), and a neuropeptide AGRP that is expressed in the hypothalamus and involved in increasing appetite, decreasing metabolism and regulating leptin. In addition, we found several genes under selection related to lipid transport and metabolism [] that may be associated with the large fat reserves found in cetaceans.

This paper is just one example of how elucidating genomic DNA structure can provide insights (including, as set forth above regarding the relationship between energy metabolism and diabetes, unexpected insights) into genotype/phenotype relationships in evolutionarily related species.  These results also indicate that the "golden age" of genomics is still, really, in its infancy.