Patent Docs

Biotech Patenting Conference

C5 (UK) will be holding its 26th Forum on Biotech Patenting on March 26-27, 2014 in Munich, Germany.  C5 faculty will offer presentations on the following topics:

• A View from the Bench: Evaluating the Implications of the New UPC System on Your Biotech Patent Strategies
• Industry Roundtable: How to Manage and Exploit Your Patents in the UPC
• How Can Biotech Companies Keep the Bolar Rolling: Key Developments in the European Biotech Landscape
• Breadth of Claims: Practical Claim Tips to Avoid Subsequent Invalidity of Your Patents
• Representation of Patent Attorneys Before the Unified Patent Court: Considerations, Dilemmas, Suggestions and the Best Routes Examined
• Understanding the Importance of Personalised Medicine Patents in Biotechnology
• How to Develop a Successful Strategy for Antibody Patents
• Regulatory Insight and Industry Perspectives on your Biosimilars Strategies
• Evaluating the Significance of Transparency and Confidentiality in Clinical Trials
• A Pan European Perspective on SPCs: What You Need to Know to Successfully Obtain a SPC
• Inside the European Patent Office: Understanding the Implications of EPO Developments on Your Patents
• Strategy and Drafting Considerations for Human Genes Post Myriad
• Lifting the Lid on Second Medical Use Patents: Understanding the Implications of Infringement of Second Medical Use Patents
• Patent Protection and Enforcement in Brazil
• Opportunities to Expand Your Patents Portfolio in Canada
• Global Biotech Patent Strategies Afternoon: Up-and-Coming Markets
• Manage the Practical Implications of the Lundbeck and Actavis Reverse Payments Cases
• How to Formulate Your Stem Cell Strategies in light of the Brüstle v Greenpeace and International Stem Cells Corporation Cases

In addition, a pre-conference workshop entitled "Strategies in International Biotech Litigation from a Business and a Legal Point of View" will be held on March 25, 2014.

A complete brochure for the Biotech & Pharmaceutical Patenting conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee is €1945 (conference alone), €2545 (conference plus workshop), or €845 (webcast).  Those registering on or before February 28, 2014 will receive a €200 discount.  Those interested in registering for the conference can do so here, by e-mailing [email protected], by calling +44 20 7878 6888, or by faxing a registration form to +44 20 7878 6885.

Patent Docs is a media partner of the C5 Biotech Patenting conference.

ACI Life Sciences Collaborative Agreements and Acquisitions Conference

American Conference Institute (ACI) will be holding its 18th Advanced Forum on Life Sciences Collaborative Agreements and Acquisitions from March 31 to April 2, 2014 in New York, NY.  The conference will allow attendees to:

• Incorporate the right takeaways from recent deals into optimal business development strategies;
• Negotiate agreements that provide entry into key emerging markets;
• Anticipate when a partnership might lead to a full M&A and incorporate appropriate terms into a hybrid or options agreement;
• Avoid traps that can undermine collaborative efforts and lead to alliance failures;
• Evaluate viable compensation structures;
• Minimize risks through more effective partner selection and due diligence;
• Structure option deals that meet both parties' potential objectives;
• Resolve hotly contested issues with universities;
• Develop appropriate strategies for new technologies;
• Craft termination clauses that provide for a graceful exit when a partnership is not working; and
• Optimize organizational goals for smaller companies when negotiating with a larger, more experienced entity.

In particular, ACI's faculty will offer presentations on the following topics:

• Industry Case Study: "How Personalized Medicine Is Transforming Relationships Between Diagnostic and Drug Companies"
• Getting to the Heart of Current Deal Terms and Drivers
• IPOs and Beyond: Examining Traditional and Innovative Ways of Funding Research In Light of the Improved Capital Market Outlook
• Universes Colliding: Understanding the Borders Between Options, Staged Acquisitions, and Hybrid Transactions
• Mitigating Antitrust Risks Associated with Life Sciences Alliances and Agreements
• Entering into Collaborative Research Agreements with Academic Institutions
• Surviving the Unexpected: Learning from Missteps in Life Sciences Alliances
• How the New Patent Rules and Recent Supreme Court Decisions Are Impacting Life Sciences Licensing
• It's Not You, It's Me: Approaches for Ending A Negotiation or Collaboration That Minimize Exposure and Bridge Burning
• Facilitating Entry into Emerging Markets via Strategic Partnering and Cross-Border Agreements

In addition, a pre-conference workshop, entitled "David and Goliath: Guidance for Smaller Companies on Negotiating with Larger, More Experienced Organizations," will be offered from 9:00 am to 12:00 pm on March 31, 2014, and a psot-conference workshop, entitled "Conducting Effective & Strategic Due Diligence for Life Science Partnering and M&A," will be offered from 9:00 am to 12:00 pm on April 2, 2013.

The agenda for the Life Sciences Collaborative Agreements and Acquisitions conference can be found here, and an agenda for the pre- and post-conference workshops can be found here.  A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference is $2,295 (conference alone), $2,895 (conference and one workshop), or $3,295 (conference and both workshops).  Those registering by February 28, 2014 will receive a $200 discount.  Those interested in registering for the conference can do so here, by e-mailing [email protected], by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs is a media partner of ACI's Life Sciences Collaborative Agreements and Acquisitions conference.

Sequenom Files Opening Brief in Appeal of Summary Judgment on Section 101 Grounds

By Kevin E. Noonan --

Earlier this week, Sequenom, Inc. filed its opening brief in Ariosa Diagnostics, Inc. v. Sequenom, Inc., appealing summary judgment that its licensed claims to a genetic diagnostic method for detecting fetal diseases and abnormalities in utero were invalid for reciting patent-ineligible subject matter.  In view of the exquisitely subjective nature of the standards for patent eligibility enunciated by the Supreme Court (most recently in Mayo v. Prometheus), Sequenom may face a task more daunting that it should be.  But in view of the fact that anything short of reversing the District Court's decision below can be expected to reduce the likelihood that personalized medicine will become commercially viable in our lifetimes, it is important that they prevail.

To recap, the technology at issue was non-invasive prenatal diagnosis of sex determination, blood typing, other genetic disorders and detection of pre-eclampsia, using a simple blood test that reduces or eliminates the need for amniocentesis and chorionic villus sampling (which incur risks to both mother and child).  Sequenom Inc. is the exclusive licensee of U.S. Patent No. 6,258,540 originally obtained by Isis Inc.; there were three independent claims attacked by Ariosa and asserted by Sequenom in its patent infringement counterclaims:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
 amplifying a paternally inherited nucleic acid from the serum or plasma sample and
 detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:
  removing all or substantially all nucleated and anucleated cell populations from the blood sample,
 amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the Paternally [sic] inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises
 obtaining a non-cellular fraction of the blood sample
 amplifying a paternally inherited nucleic acid from the non-cellular fraction and
 performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

The District Court based its decision on the Supreme Court's decision in AMP v. Myriad Genetics, that "naturally occurring" DNA is not patent eligible as a "product of nature," coupled that with the proscription from Mayo that "merely" adding "routine, conventional and well-understood" process steps to a "natural law" (or, in this case, "product of nature") was not "enough" to render method claims patent-eligible, determined that the amplification and sequencing steps recited in the claims were "routine, conventional and well-understood" process steps, and finally invoked Parker v. Flook for the proposition that the Supreme Court did not recognize any distinctions between an "abstract idea" and natural laws or phenomena to arrive at its decision that the claims at issue did not satisfy Section 101.  The District Court also discounted evidence that the art had developed alternative, non-infringing methods for performing the claims detection and diagnosis methods, on the grounds that these methods were not contemporaneous and were not "commercially viable."  The District Court entered summary judgment last November, and Sequenom timely appealed.

Sequenom presents its arguments in thre parts:  first, that the Federal Circuit should review the District Court's determination de novo, and should apply the exceptions to subject matter eligibility narrowly while reading Section 101 expansively, consistent with Congressional intent.  Second, the Court should recognize that the District Court erred in how it applied controlling precedent to the claims at issue, first because the claims do not "merely" claims a "natural phenomenon" and second that the lower court applied a standard (i.e, the "commercially viable" standard for noninfringing alternatives that "lacks legal basics and contradicts public policy").  And finally, whether the District Court erred by deconstructing the claims and assessing their patent-eligibility separately, contrary to the Supreme Court's teachings in Diamond v. Diehr (but, honestly, consistent with Justice Breyer's treatment of the claims in Mayo, a case that pointedly did not overrule Diehr).

The brief first begins with a section on the nature of the invention, which points our to the Court the benefits to the public of the invention disclosed and claimed in the patent-in-suit.  These include the ability to detect fetal abnormalities earlier in pregnancy and without the need for invasive procedures like amniocentesis and chorionic villus sampling that can put both mother and child's lives at risk.  The facts elucidated include those that support the novelty and non-obviousness of the claimed methods, factors necessitated by the Supreme Court's focus on whether a claim is "inventive" in Mayo (thus turning back the clock to the state of the law before Congress affirmatively created Section 103 in the Patent Act to inhibit if not prevent this type of subjective determination of what was patent-worthy by the Court).  (In homage to this pre-1952 Act Supreme Court precedent, Sequenom characterizes the inventors' recognition that cffDNA could be found in the acellular fraction of maternal blood as an "original stroke of genius" and note that the scientific journal article announcing this discovery had been cited "over a thousand times.")  And bowing to more recent trends from the Court, Sequenom accentuates in its factual allegations that the claimed methods were "limited" to detecting paternally inherited DNA in the cffDNA in maternal blood.  Finally, the fact statement notes that the claimed methods "transform" the cffDNA in application of the process steps, including fractionation, amplification and detection (including sequence determination) of the amplified cffDNA.  This section also sets forth the alternative methods for detecting cffDNA and using said detection for diagnostic applications.

The brief also reminds the Court that, because this was a decision on summary judgment (under Ninth Circuit precedent) and because subject matter eligibility is a question of law, the Court is entitled and should decide the question before it de novo.  In so doing, Sequenom urges the Court to apply patent eligibility broadly and the exceptions to it narrowly, based on the statutory language and the Supreme Court's construction of the scope of the statute in Diehr and Bilski v. Kappos as well as recent Federal Circuit precedent, such as CLS Bank v. Alice and Ultramercial v. Hulu (perhaps in an effort to show that, no matter how the cases before these courts have come out, the principle of expansive reading on the scope of Section 101 is consistently broad).  The brief cites much of the same precedent for the corresponding principle that judicially created exceptions to broad subject matter eligibility should be applied parsimoniously.  In this context, of course, Ariosa had the burden of proving that the exception should be applied against Sequenom's claims by clear and convincing evidence, citing CLS Bank, and while not affirmatively drawing the conclusion suggests that Ariosa failed to meet this burden.

In its first argument, Sequenom asserts that its claims do not claim a natural product or phenomenon, nor preempt all uses of fetal DNA or cffDNA, but rather claim narrow, specific, and limited applications of the biological act that cffDNA is present in maternal blood.  The brief identifies undue preemption (defined as "all other uses of the phenomenon"), which Sequenom argues is not the case here due to the existence of alterative, non-infringing methods for detecting cffDNA (once these inventors had disclosed that it was present in maternal blood).  Sequenom argues that the District Court erred by assessing subject matter eligibility of its claims as if they claimed the cffDNA itself, rather than an application of methods for detecting such DNA and providing a diagnosis of fetal disease or developmental disorder therefrom.  Sequenom also argues that the existence of the identified alternative methods for detecting cffDNA was dispositive on the question of preemption, and further that the claims taken as a whole satisfied the statutory requirements of novelty and non-obviousness as well as the Supreme Court's subjective "inventive concept" test and thus are patent eligible.

Regarding preemption, the brief argues that the Supreme Court's concern with preemption was that a claim "preempts all practical uses" of a natural law, phenomenon of nature, or abstract idea, again citing Supreme Court (Mayo, O'Reilly v. Morse) as well as Federal Circuit case law.  This primacy for the preemption question was ignored by the District Court, according to Sequenom's brief, which deemed the preemption issue to be only "a consideration" when deciding whether a claim satisfies Section 101 or falls within an exception to it.  According to the brief:

The Supreme Court has variously stated the distinction it drew in the Morse and Telephone cases, but the essence is that a patent recites ineligible subject matter only when it claims for itself, or preempts all other uses of, an abstract idea, law of nature, or natural phenomenon.

The brief then contrasts this proscription of patent eligibility with instances where "a patent applies a natural phenomenon in a limited, non-preemptive manner so that other uses may be made of it," citing Bilski and Diehr (emphasis in original).  In this regard the brief argues that the District Court misread Flook, Bilski, and Mayo to be directed to "non-preemptive" patent claims, and thus failed to recognize the importance of the preemption question, and that the failure to unduly preempt prevented Sequenom's claims from invalidity under Section 101.  And the brief identifies Diehr as the case most closely related to the facts in this case (and cites how the Diehr Court distinguished the claims before it from the Flook case), asserting error by the District Court in "giving short shrift" to the Diehr decision.  Thus:

In sum, the Supreme Court's and this Court's precedents follow a consistent theme:  where claims recite a natural phenomenon and no more, or when they recite a method in terms so general that it covers all ways to use the natural phenomenon, then the claims are not patent-eligible.  Where, as here, the patent claims a specific limited method and there are alternative methods available, then there is no preemption and no Section 101 eligibility concern.  The District Court failed to follow this controlling Section 101 law.

With regard to the second argument, Sequenom asserts that the District Court "discounted" its evidence for alternative, noninfringing methods, and that "[t]he District Court adopted an unprecedented and improper standard to determine the relevance of alternative methods offered to prove the claimed method does not preempt all uses of a natural phenomenon.  It held that an alternative method would be relevant to show lack of preemption only if it both (i) was disclosed publicly before the '540 patent issued, and (ii) was shown by Sequenom to be commercially viable, a standard not enunciated by either the Supreme Court nor the Federal Circuit.  Further, the brief argues that there is no "rule or logic" in the District Court's "commercially viable" standard for alternative methods for practicing the claimed methods.  The brief notes that the concern has always been that claims "tie up future invention" and thus strongly suggest both that Sequenom's evidence for after-arising non-infringing alternatives was relevant and that this evidence supported Sequenom's arguments for subject matter eligibility.  Sequenom's claims do not do so and thus the District Court erred according to the brief.  Sequenom sets forth the consequences of the misapplied thinking of the District Court:

As the Supreme Court observed in Myriad, it is expected that the original discoverers of a natural phenomenon or law of nature will invent the first (and perhaps best) method of applying their discovery.  . . .  However, the District Court's rule would require inventors, such as Lo and Wainscoat -- who discovered cffDNA in 1996 and claimed a method applying it a few months later -- to wait, perhaps indefinitely, to patent their method until other inventors have disclosed alternative methods using the discovery.

Further, the District Court's "previously disclosed" requirement turns the presumption of validity on its head.  Under the District Court's rule, the first-to-invent is branded as a "preempter" whose method is doomed to be patent-ineligible.  Because Lo and Wainscoat came up with the first-filed method applying their ground-breaking discovery of cffDNA before any alternatives had been published, under the District Court's reasoning, their patent necessarily preempts all other methods that could apply their discovery.  Someone has to file first, and the first inventors should not be required to hold back disclosure of their method until others disclose alternative methods.  The net effect of the waiting game the District Court's rule creates would be to stymie the disclosure and exploitation of inventions -- the reverse of the incentives the patent laws are intended to foster.

(citations omitted).

Specifically addressing the "commercially viable" standard enunciated by the District Court, the brief argues that "[t]he "commercially viable" requirement would impose a higher standard on alternative, non-preemptive methods than now exists for patented methods," and argues that this is a rule unsupported by legal precedent nor logic itself.  In making these arguments, the brief contrasts the District Court's standards for non-infringing alternatives with the requirements of patented methods, wherein there is no requirement that a claimed invention be commercially viable (citing Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 1366 (Fed. Cir. 1999), CFMT, Inc. v. YieldUp Int'l Corp., 349 F.3d 1333, 1338 (Fed. Cir. 2003), and Barmag Barmer Machinenfabrik AG v. Murata Machinery, Ltd., 731 F.2d 831, 839 (Fed. Circ. 1984) as examples).  This portion of the brief also notes that, under the District Court's rubric many earlier patents would need to have been invalidated due to lack of commercially viable, non-infringing alternatives.  (And the brief asserts that there is no definition or other factual basis or standard for what "commercially viable" requires or entails, while providing a propensity to invalidate the best method for a particular purpose.)

Finally, Sequenom argues that the District Court misinterpreted and misapplied the law regarding the need for an "inventive concept" in the claims.  Here the error Sequenom asserts is that the District Court did not consider the claims "as a whole" but rather cherry-picked the different limitations and evaluated them separately and independently for patentability.  The brief argues that this analytical style is contrary to Supreme Court precedent, and then argues that the term is not a cipher for novelty and non-obviousness but rather a way of assessing "genuine human contribution" to an invention, citing (and trying to apply) Supreme Court precedent on this question.  And even using the District Court's failed analytical tools these claims should be deemed "inventive," according to the brief, based on the conventional practices in the art (including discarding acellular blood fraction containing cffDNA).  On the subject of inventiveness the brief has this to say:

What is probative of patent-eligibility, and what the District Court erroneously denied, was the patent's combination of these steps for the first time in a groundbreaking method for the purpose of detecting paternally-inherited cffDNA in maternal plasma or serum and diagnosing fetal characteristics.  This new combination for this new purpose was neither conventional nor routine, and it satisfies the requirements of Section 101.

It is the failure to look at the combination "as a whole" that was the source of the District Court's error.

In the final section of the brief, Sequenom reminds the Court that this case was decided on remand from the Federal Circuit with instructions to consider the issues before the District Court in light of the Myriad decision, and that the District Court misapplied that law as it relates to patent-eligible method claims for screening anticancer drugs, analogizing the laboratory transformed variant with cffDNA in this case.  The brief reads the Court's Myriad decision as "[drawing] the patent-ineligibility line tightly around the genes' DNA sequences themselves" and that the Myriad decision "holds that even a small step away from the natural phenomenon as the result of human intervention is sufficient for patent-eligibility."  In the claims before the Court, Sequenom argues, the cffDNA is much more like cDNA deemed patent-eligible under Myriad than naturally occurring genomic DNA (which the Myriad Court deemed patent-ineligible).  And the brief argues that these claims fall squarely within the types of patent-eligible claims and methods cited with approval in Section III of the Myriad decision itself.

Patent Docs will provide additional posts on Ariosa's responsive brief as well as any amicus briefs filed on behalf of either party.

Patents and the State of the Union -- A Response

By Andrew Williams --

It may come as no surprise, but on Tuesday, January 28, 2014, President Obama highlighted innovation and the patent system during his State of the Union address:

We know that the nation that goes all-in on innovation today will own the global economy tomorrow.  This is an edge America cannot surrender.  Federally-funded research helped lead to the ideas and inventions behind Google and smartphones.  That's why Congress should undo the damage done by last year's cuts to basic research so we can unleash the next great American discovery -- whether it's vaccines that stay ahead of drug-resistant bacteria, or paper-thin material that's stronger than steel.  And let's pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.

President Obama ("Full Text: President Obama's 2014 State of the Union Address").

This is not surprising, considering it was the President's Patent Assertion and U.S. Innovation Report (with accompanying Legislative Priorities and Executive Actions) last June that seemed to kick-start Congress into high gear on patent reform legislation (see "'When the Patent System is Attacked!' -- The White House Task Force on High-Tech Patent Issues").  It is unfortunate, however, that the President chose to speak of the patent system in these terms.  Despite his suggestion, it was the patent system that helped spur the innovation that has given America its edge.  It may be true that there is a vexatious litigation problem, but the entire patent system should not be thrown out with the proverbal bathwater.  The House has already passed a bill that could lead to unintended consequences.  We can only hope that the Senate will take a more reasoned approach to the problem.  Ideally, it will craft a more narrowly-tailored bill to serve as a counter-point to the Innovation Act.  Unfortunately, none of the Senate bills currently pending look like they will serve this function.  We don't need a patent reform bill that will have a chilling effect on legitimate patent claims.  If this happens, it could have the opposite effect desired by the President -- it could result in a decrease in America's innovation.

SmartGene, Inc. v. Advanced Biological Laboratories, SA (Fed. Cir. 2014)

By Michael Borella --

While non-precedential, this recent Federal Circuit decision further illustrates the Court's thinking with regard to the patent-eligibility of computer-implemented inventions under 35 U.S.C. § 101, and provides a reminder about the importance of procedural issues in § 101 cases.

SmartGene filed a declaratory judgment action against the defendants ("ABL"), alleging non-infringement and invalidity of U.S. Patent Nos. 6,081,786 and 6,188,988, both owned by ABL.  On summary judgment, the District Court found both patents invalid under § 101.  A Federal Circuit panel consisting of Judges Lourie, Dyk, and Taranto affirmed.  Judge Lourie was the author of the contentious en banc CLS Bank v. Alice Corp. plurality concurrence that is currently under review by the Supreme Court, and Judge Dyk joined him in that opinion.  Judge Taranto, who wrote the present opinion, began his tenure at the Federal Circuit after the en banc Court heard oral arguments for CLS Bank.

Each patent includes independent claims directed to a method, a system, and a computer readable medium, respectively, "for guiding the selection of a treatment regimen for a patient with a known disease or medical condition."  In December 2011, SmartGene moved for summary judgment under § 101, stating that that "for the purpose of the § 101 analysis, claim 1 of the '786 patent is representative of all of the claims of the patents-in-suit."  The District Court granted the motion based solely on its analysis of this claim, stating that "the differences between the various method and system claims within the patents-in-dispute are immaterial with respect to whether the patents constitute eligible subject matter under 35 U.S.C. § 101."

ABL never contested this grouping of the claims in its responsive brief.  In oral argument against summary judgment, however, ABL attempted to rectify this omission by noting that "claiming an actual system . . . makes it even less abstract because it's not just a method . . . it is even more intimately connected to the computer."  But the District Court held firm, based on ABL's failure to contest the representativeness of claim 1 in its brief, as well as ABL's apparently non-persuasive oral arguments.

ABL appealed both the District Court's grouping of the claims in its § 101 analysis, and the outcome of this analysis.

Turning first to the grouping of the claims, the Federal Circuit quickly dismissed ABL's contentions.  Judge Taranto wrote that "[i]t is well established that arguments that are not appropriately developed in a party's briefing may be deemed waived."  Consequently, the District Court acted within its discretion to rule that "ABL forfeited any argument that any patent claims here are to be treated differently from claim 1 of the '786 patent."

Moving to the substantive § 101 issue, the Federal Circuit once again upheld the District Court's position.  The claim at issue recites:

1.    A method for guiding the selection of a therapeutic treatment regimen for a patient with a known disease or medical condition, said method comprising:
    (a)  providing patient information to a computing device comprising:
        a first knowledge base comprising a plurality of different therapeutic treatment regimens for said disease or medical condition;
        a second knowledge base comprising a plurality of expert rules for evaluating and  selecting a therapeutic treatment regimen for said disease or medical condition;
        a third knowledge base comprising advisory information useful for the treatment of a patient with different constituents of said different therapeutic treatment regimens;
and
    (b)  generating in said computing device a ranked listing of available therapeutic treatment regimens for said patient; and
    (c)  generating in said computing device advisory information for one or more therapeutic treatment regimens in said ranked listing based on said patient information and said expert rules.

Notably, all steps of the method either require the involvement of a computing device, or are performed by the computing device.  Nonetheless, the Federal Circuit still found that the claim was directed to a patent-ineligible mental process.

Leaning heavily on the reasoning in CyberSource Corp. v. Retail Decisions, Inc., Judge Taranto wrote "section 101 [does] not embrace a process defined simply as using a computer to perform a series of mental steps that people, aware of each step, can and regularly do perform in their heads."  Also echoing Justice Breyer in Mayo v. Prometheus, Judge Taranto found that each step of claim 1 involved "well-understood, routine, conventional activity previously engaged in by researchers in the field."

Particularly, in Judge Taranto's view, step (a) was directed to "routine input, memory, look-up, comparison, and output capabilities," step (b) was directed to generating "a ranked listing of available therapeutic treatment regimens, and step (c) was directed to generating "advisory information for one or more therapeutic treatment regimens in said ranked listing."  Consequently, he found that, without citing to any evidence or explaining why, these steps were routinely and consciously performed by doctors.  As a result, he found claim 1 to recite "a mental process excluded from section 101: the mental steps of comparing new and stored information and using rules to identify medical options."

This decision, which I again emphasize is non-precedential, is another illustration of the Federal Circuit's § 101 reasoning post-Mayo and post-CLS Bank, and of the Court's current willingness to disregard the non-abstractness of general-purpose computer hardware when undertaking such reasoning.  However, a further issue is hidden within the subtext of this case.

The alleged "mental process" of claim 1 is more than a series of purely mental steps.  For the claimed invention to be useful, a doctor would have to access a "knowledge base" of different therapeutic treatment regimens, and then produce a "ranked listing of available therapeutic treatment regimens."  Thus, it is implicit that the Federal Circuit considers "mental processes" to include steps that may require looking information up in a book or a database, and perhaps using pencil and paper to produce a result.

But even if the breadth of claim 1 permits such a reading, the Court's § 101 "mental process" jurisprudence has essentially become a patent-eligibility bar on any computer-implemented algorithm that could conceivably be performed with pencil and paper, no matter how long it takes, how complicated, or how error-prone.  In today's "big data" systems, billions of data entries can be received, processed, analyzed, and used to draw conclusions.  It would take an army of humans thousands, or in some cases millions, of years to perform the same steps that could be performed in seconds, minutes, or hours by a modern cloud-computing system.

As just one example, Amazon.com and Netflix are two entities that use recommendation engines to suggest to their users what media and products those users might want to purchase.  These suggestions are often based on the consumption habits of other users (e.g., using logic such as "people who buy product A also buy product B").  These systems often require a large amount of data (much more than one person could hold in his or her head or organize on paper) and a large amount of computing power to make useful recommendations.  Thus, without being computer-implemented, such recommendation engines would not exist.  And yet, method claims drawn to a recommendation engine operating on a general-purpose computer would likely be subject to § 101 challenges.

Judge Lourie's CLS Bank concurrence sets forth this problematic reasoning:  "At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could.  Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility."  Nonetheless, accelerating calculations has enabled new technologies that drive the information economy.

One of aspect of innovation is to make products and services faster, cheaper, and better.  The patent system is intended to incentivize individuals and organizations to publically disclose such inventions, and as a result receive a limited property right thereover.  A broad exclusion of computer-implemented "mental processes" via § 101 is illogical and disregards the fundamental tradeoff on which the system is based.

SmartGene, Inc. v. Advanced Biological Laboratories, SA (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Dyk, and Taranto
Opinion by Circuit Judge Taranto

USPTO Proposes Rules Changes to Require Identification in Applications and Patents of Attributable Owners

By Donald Zuhn --

Last week, the U.S. Patent and Trademark Office published a notice of proposed rulemaking in the Federal Register (79 Fed. Reg. 4105), in which the Office proposed changes to the rules of practice that it claimed would "facilitate the examination of patent applications and . . . provide greater transparency concerning the ownership of patent applications and patents."  The notice, entitled "Changes To Require Identification of Attributable Owner," states that:

This initiative is one of a number of executive actions issued by the Administration that are designed to ensure the highest-quality patents, enhance competition by providing the public with more complete information about the competitive environment in which innovators operate, enhance technology transfer and reduce the costs of transactions for patent rights by making patent ownership information more readily and easily available, reduce abusive patent litigation by helping the public defend itself against frivolous litigation, and level the playing field for innovators.

The proposed changes to the rules would require that the "attributable owner" be identified at the time an application is filed (or shortly thereafter), during the pendency of an application when there is a change in the attributable owner (within three months of such change), at the time the issue fee is paid, when maintenance fee payments are made, and if a patent becomes involved in supplemental examination, ex parte reexamination, or a trial proceeding before the Patent Trial and Appeal Board.  The notice explains that the proposed rules use the term "attributable owner" rather than "real party in interest" to avoid confusion that might arise from use of the latter term elsewhere in Title 35.  The notice also indicates that applicants would not be required to identify the attributable owner for provisional applications or International applications prior to the commencement of the national stage in the United States.

In addition, the notice seeks comments as to whether the Office should permit applicants and patentees to voluntarily report licensing offers and related information to the Office, which the Office would then make available to the public.  Licensing information that the Office envisions as possibly being reportable includes the willingness to license, licensing contacts, license offer terms, and commitments to license a patent on royalty-free or reasonable and non-discriminatory terms.

According to the notice, the rules changes would facilitate patent examination by helping to:

(1) Ensure that a "power of attorney" is current in each application or proceeding before the Office; (2) avoid potential conflicts of interest for Office personnel; (3) determine the scope of prior art under the common ownership exception under 35 U.S.C. 102(b)(2)(C) and uncover instances of double patenting; (4) verify that the party making a request for a post-issuance proceeding is a proper party for the proceeding; and (5) ensure that the information the Office provides to the public concerning published applications and issued patents is accurate and not misleading.

The Office also expects the rules changes to:

(1) Enhance competition and increase incentives to innovate by providing innovators with information that will allow them to better understand the competitive environment in which they operate; (2) enhance technology transfer and reduce the costs of transactions for patent rights since patent ownership information will be more readily and easily accessible; (3) reduce risk of abusive patent litigation by helping the public defend itself against such abusive assertions by providing more information about all the parties that have an interest in patents or patent applications; and (4) level the playing field for innovators.

Under the rules changes, the Office would collect two types of owner information:  (1) titleholders (i.e., assignees), and (2) enforcement entities (i.e., real-parties-in-interest having the right to enforce an issued patent -- defined by the notice as entities that have not already been identified as titleholders, but who are necessary to be joined in a lawsuit in order to have standing to enforce the patent or any patent resulting from the application).  For both of the above categories, the attributable owner would also have to identify the "ultimate parent entity" as defined in 16 C.F.R. § 801.1(a)(3).  The notice indicates that ultimate parent entities would be those entities that ultimately control titleholders or enforcement entities.  In discussing the above ownership interests, the notice explains that:

In many cases, these types of ownership interests may be coextensive.  Specifically, the titleholder (or assignee) is often the same entity that has the right to enforce the patent, and is not controlled by any other entity (and so would not have to separately report an ultimate parent entity).  Most additional reporting will need to be done by companies that have complicated corporate structures and licenses, which often include the complex structures used by certain patent assertion entities ("PAEs") to hide their true identities from the public.  Some of this additional reporting may include exclusive licensees.  Although exclusive licensees are sometimes confidential now, they would only need to be disclosed where their rights are so substantial that they have enforcement rights in the patent.  In such circumstances, the public has a strong interest in knowing their identities in order to have an accurate picture of the competitive patent landscape, to allocate their research and development efforts appropriately, and to take licenses or purchase patents proactively and efficiently from the correct entities, as dictated by business needs.

The rules changes would also provide applicants and patentees with the means to correct omissions and errors in the identification of attributable owner, as well as "excuse good faith failures" to notify the Office of the attributable owner or provide correct and complete information about the attributable owner.

The notice indicates that the proposed rules changes are the result, in part, of the work of the White House Task Force on High-Tech Patent Issues, which published a paper detailing five executive actions and seven legislative recommendations "to protect innovators from frivolous litigation and ensure the highest-quality patents in our system" (see "'When the Patent System is Attacked!' -- The White House Task Force on High-Tech Patent Issues").  The Office also notes that in 2011 it began soliciting comments regarding the process of collecting assignment and real-party-in-interest information (see "USPTO News Briefs," December 15, 2011, and "USPTO New Briefs," December 20, 2012).

A discussion of the specific rules changes can be found on pages 4111-14 of the notice, and a list of the proposed changes to the rules can be found on pages 4119-21 of the notice.

Comments on the notice of proposed rulemaking, which must be submitted by March 25, 2014, can be sent by e-mail to [email protected], by regular mail addressed to:  Mail Stop Comments-Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313–1450, marked to the attention of James Engel, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy, or via the Federal eRulemaking Portal (http://www.regulations.gov).  The notice also indicates that the Office will be holding two meetings with stakeholders (at locations and times to be announced) in order to obtain input on the proposed rules changes.

Medtronic CoreValve, LLC v. Edwards Lifesciences Corp. (Fed. Cir. 2014)

By Nicole Reifman --

The Federal Circuit's decision in Medtronic CoreValve, LLC v. Edwards Lifesciences Corp. provides a warning for patent practitioners seeking to claim priority to earlier filed patent applications:  failure to specifically reference each earlier filed patent application will result in a loss of a claim to priority to the omitted application(s).

Medtronic sued Edwards for infringement of certain claims of its patent for a prosthetic valve, U.S. Patent No. 7,892,281 (the '281 patent).  The'281 patent was filed on January 5, 2009 and descends from a number of United States, international, and French patent applications.  Medtronic's position was that the asserted claims of the '281 patent had a priority date of October 31, 2000.

During litigation in the U.S. District Court for the Central District of California, Edwards realized that the priority chain for the '281 patent did not comply with the requirements of 35 U.S.C. §§ 119 and 120 and moved for partial summary judgment that this limited the priority date of the asserted claims of the '281 patent to no earlier than April 10, 2003.  Medtronic filed a cross-motion for summary judgment, arguing that the asserted claims were entitled to the priority date of October 31, 2000.

The District Court held that the '281 patent was not entitled to a priority date prior to April 10, 2003 because various applications in the chain of priority were not in compliance with the requirements of claiming priority under either 35 U.S.C. §§ 119 or 120.  The District Court thus granted Edwards' motion for summary judgment.  Medtronic appealed the priority issue to the Federal Circuit.

The priority issue under 35 U.S.C. § 120 was whether the '281 patent "contains or is amended to contain a specific reference to the earlier filed application . . . submitted at such time during the pendency of the application."  35 U.S.C. § 120.  The Federal Circuit previously held in another case that the "specific reference" requirement means that each intermediate application in the chain of priority to refers to the prior applications.  Encyclopaedia Britannica, Inc. v. Alpine Electronics of America, Inc., 609 F.3d 1345, 1352 (Fed. Cir. 2010).

Although the application for the '281 patent properly claimed the entire chain of priority, certain U.S.  applications in the chain of priority were held by the Federal Circuit to fail to specifically reference earlier filed applications.  At issue were two applications that simply stated "this application is also a continuation-in-part of [the international application]."  Medtronic argued that "this application" referred to an intervening application in the priority chain and thus did not leave out the intervening application, whereas Edwards argued that "this application" had a plain language meaning and referred to the present application, thus leaving out the intervening application.

The Federal Circuit agreed with Edwards and held that the term "this application" is to have its plain language meaning, consistent with Section 201.11 of the M.P.E.P., to refer self-referentially to the present application.  Medtronic argued that the reasonable person test should instead be applied; however, the Federal Circuit held that "the patentee is the person best suited to understand the genealogy and relationship of her applications; a requirement for her to clearly disclose this information should present no hardship . . . .  Medtronic's 'reasonable person' test improperly places the burden of deciphering a priority claim upon the reader or the public."  The Federal Circuit agreed with the District Court and held that the two applications at issue thus lost any priority claim prior to April 10, 2003, and thereby also ruined a claim to priority before April 10, 2003 for the '281 application.

The loss of claim of priority that limited the asserted claims of the '281 patent to the April 10, 2003 priority date resulted in the asserted claims of the '281 patent being held invalid as anticipated under 35 U.S.C. § 102 with two of the earlier filed applications listed in the '281 patent's chain of priority.

Medtronic CoreValve, LLC v. Edwards Lifesciences Corp. (Fed. Cir. 2014)
Panel: Circuit Judges Prost, Plager, and Taranto
Opinion by Circuit Judge Prost

Biotech Venture Funding Rebounded in 2013 After Strong Fourth Quarter

By Donald Zuhn --

Earlier this month, the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, released the results of its MoneyTree Report on venture funding for 2013.  The report, which is prepared by NVCA and PriceWaterhouseCoopers LLP using data from Thomson Reuters, indicates that venture capitalists invested $29.4 billion in 3,995 deals in 2013, which constituted a 7% increase in dollars and a 4% increase in deals over the prior year (see chart below, which shows total venture funding from 2004 to 2013; data from MoneyTree Reports; click on chart to expand).

Last year, the software sector took the top spot in funding -- with $11.0 billion invested in 1,523 deals -- which was the highest level of funding for that sector since 2000.  The software sector also accounted for 37% of total venture investment in 2013, which constituted the highest percentage since the first MoneyTree Report was issued in 1995.  Biotechnology funding in 2013 increased to $4.5 billion, which was an 8.2% increase over biotechnology funding in 2012 (see chart below, which shows venture funding for the biotech (blue), medical devices (red), and software (green) sectors from 2004 to 2013; data from MoneyTree Reports; click on chart to expand).

Overall, ten of the seventeen sectors tracked by the NVCA saw increases in dollars invested in 2013.

The report also noted that in the fourth quarter of 2013, $8.4 billion was invested into 1,077 deals (see chart below, which shows venture funding by quarter from 2010 to 2013; data from MoneyTree Reports; click on chart to expand).

In the fourth quarter of 2013, biotechnology venture funding was up 42.6% over the third quarter with $1.3 billion being invested.  Biotechnology funding had dropped 34.4% in the third quarter, with only $927 million being invested (see chart below, which shows venture funding by quarter for the biotech (blue), medical devices (red), and software (green) sectors from 2010 to 2013; data from MoneyTree Reports; click on chart to expand).

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

• "Biotech Venture Funding Sees Second Quarter Rebound," July 22, 2013
• "Biotech Venture Funding Down 33% in First Quarter," April 30, 2013
• "Annual Venture Funding Drops for First Time in Three Years," February 4, 2013
• "Biotech Venture Funding Up 64% in Third Quarter," October 29, 2012
• "Venture Funding in Life Sciences Sector Drops 9% in Second Quarter," July 22, 2012
• "Biotech Venture Funding Drops 43% in First Quarter," May 3, 2012
• "Venture Funding Increased 22% in 2011," February 2, 2012
• "Life Sciences Venture Funding Drops in Third Quarter," October 27, 2011
• "Life Sciences Venture Funding up 37% in Second Quarter," August 1, 2011
• "VentureSource Reports 35% Increase in 1Q Venture Funding," April 26, 2011
• "NVCA Reports Modest Gains in First Quarter Venture Funding," April 19, 2011

• "NVCA Reports 31% Drop in Venture Funding for Third Quarter," October 17, 2010

• "NVCA Reports 34% Increase in Venture Funding for Second Quarter," July 22, 2010

• "NVCA Report Shows First Quarter Drop in Venture Funding," April 20, 2010

• "Biotech/Pharma Financing Improving, R&D Spending Up," August 31, 2009
• "NVCA Study Shows Increase in Third Quarter Venture Funding," October 23, 2009

• "First Quarter Venture Capital Funding at 12-Year Low," April 23, 2009

• "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009," February 16, 2009

Conference & CLE Calendar

January 30, 2014 -"Combating Patent Trolls: Third-Party Solutions and Defense Strategies in Litigation and Post-Grant Proceedings -- Leveraging Counterclaim, Summary Judgment and Other Tactics; Utilizing Legislative, Insurance and Third-Party Tools" (Strafford) - 1:00 to 2:30 pm (EST)

February 13, 2014 - "Proactive Patent Procurement and Prosecution Strategies: Minimizing the Threat of Post-Grant Challenges -- Insulating Your Patent Portfolio From New Threats" (Strafford) - 1:00 to 2:30 pm (EST)

February 18, 2014 - "Proposed Patent Reform Legislation: How It May Impact You (Especially if You Are Not Considered to be a 'Patent Troll'" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 to 11:15 am (CT)

February 19-20, 2014 - AIA Post-Grant Patent Practice Conference (International Intellectual Property Institute and Bloomberg BNA) - Arlington, VA

February 20, 2014 - "Protecting IP Rights in Joint Development Agreements and Strategic Alliances -- Structuring JDAs to Apportion Contributed, Joint and Derivative IP; Planning for Involuntary Early Endings; and Avoiding Unintended Consequences" (Strafford) - 1:00 to 2:30 pm (EST)

February 26-27, 2014 - Pharmaceutical and Biotechnology Patent Life Cycles and Portfolio Strategies*** (American Conference Institute) - New York, NY

February 27, 2014 - "Patent Inventorship: Best Practices for Determination and Correction -- Drawing the Line Between Inventor and Contributor, Leveraging Lessons From Year One of the AIA" (Strafford) - 1:00 to 2:30 pm (EST)

March 5-7, 2014 - Advanced Patent Law Seminars (Chisum Patent Academy) - Cincinnati, OH

March 12-13, 2014 - FDA Boot Camp*** (American Conference Institute) - New York, NY

March 24-26, 2014 - Medical Device Patents*** (American Conference Institute) - Chicago, IL

August 13-15, 2014 - Advanced Patent Law Seminars (Chisum Patent Academy) - Seattle, WA

August 18-20, 2014 - Advanced Patent Law Seminars (Chisum Patent Academy) - Seattle, WA

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

AIA Post-Grant Patent Practice Conference

International Intellectual Property Institute and Bloomberg BNA will be holding and AIA Post-Grant Patent Practice Conference on February 19-20, 2014 in Arlington, VA.  The conference will include presentations on the following topics:

• The Fundamentals of Post-AIA Post-Grant Patent Procedures
• Luncheon Address by the Honorable Pauline Newman, Circuit Judge, U.S. Court of Appeals for the Federal Circuit
• Inter Partes and Post-Grant Reviews (including CBM Patent Reviews)
• Derivation and Interference Procedures
• Fresenius USA v. Baxter Int’l and its Impact on Post-Grant Practice
• Motions based on Estoppel/ Privity and Mock Conference
• Motions for Joinder and Mock Conference
• Discovery Motions and Mock Conference
• Luncheon Address by the Honorable Randall Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit
• Motions to Amend Claims and Mock Hearing on Amendment
• Final Briefing and Mock Final Hearing

More information regarding the conference, including an agenda, detailed descriptions of conference sessions, and list of speakers can be found here.

The registration fee is $1,295 (for Bloomberg BNA subscribers) or $1,495 (for non-subscribers).  Those interested in registering for the conference can do so here or by calling 1-800-372-1033.

Webinar on Determining and Correcting Patent Inventorship

Strafford will be offering a webinar/teleconference entitled "Patent Inventorship: Best Practices for Determination and Correction -- Drawing the Line Between Inventor and Contributor, Leveraging Lessons From Year One of the AIA" on February 27, 2014 from 1:00 to 2:30 pm (EST).  Jill K. MacAlpine, Ph.D., of Finnegan Henderson Farabow Garrett & Dunner and Lauren L. Stevens of Global Patent Group will provide guidance for patent counsel on identifying and determining inventorship and will offer best practices for correcting errors regarding inventorship, as well as offer practical experiences and perspectives gained from working with the AIA over the past year -- and outline lessons from recent court decisions.  The webinar will review the following questions:

• What questions should be asked to determine inventorship?
• What steps does counsel need to take when inventorship must be corrected?
• What impact, if any, does the AIA have on inventorship determination?

The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by January 31, 2014 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

More Q&A from Webinar on Top Patent Law Stories of 2013

    By Kevin E. Noonan & Donald Zuhn --

On Tuesday, we presented a live webinar on the "Top Patent Law Stories of 2013."  The webinar covered ten of the fourteen stories that made it onto Patent Docs seventh annual list of top biotech/pharma patent stories.  Posts on our top fourteen stories can be found here (stories #11 to #14), here (stories #7 to #10), here (stories #4 to #6), and here (stories #1 to #3).  The ten stories that we addressed during the webinar were:

➤ Supreme Court Decides AMP v. Myriad
➤ Myriad Unbowed, Asserts Patents Broadly Against Competitors
➤ Supreme Court Decides Monsanto v. Bowman
➤ Supreme Court Decides FTC v. Actavis
➤ First-Inventor-to-File Provisions of Leahy-Smith America Invents Act Take Effect
➤ Rules of Practice Revised to Implement Patent Law Treaty
➤ EPO Removes Time Limit for Filing Divisional Applications
➤ Media and Congress Combat Patent Trolls
➤ District Court Finds Prenatal Diagnostic Method Not Patent Eligible
➤ 23andMe Patent and Diagnostic Test Create Controversy

While we tried to answer several questions before the presentation was concluded, we ran out of time to answer every question posed by attendees, and wanted to provide answers to some of the questions we could not get to.

 

Q:  Why don't plaintiffs ever attack Myriad's patents on 103 obviousness grounds?

Kevin:  This question has at least two answers:

First, the AMP plaintiffs didn't want to use Section 103 as a basis, because they were trying to obtain a categorical exclusion of DNA patenting (which could only be done under Section 101).  Using Section 103, the ACLU would have had to try to invalidate gene patents one at a time.

Second, the defendants in several of the pending Myriad patent infringement suits have asserted invalidity under Section 103; the problem is that applying old methods to new compounds is not generally obvious per se (although in some instances it might be).

 

Q:  Does the Myriad decision mean that naturally occurring cDNA, such as those derived from retroviruses, are not patent-eligible?

Kevin:  Probably.  The rationale is that what is patented has to be different and different by human agency; I don't think obtaining retroviral cDNA is enough.

 

Q:  Could 35 U.S.C. § 101 be amended to re-define or clarify "Law of Nature"?

Kevin:  I think it unlikely (mostly because it is impossible for Congress today to craft language that would cover natural laws discovered in future).  In addition, the Supreme Court has a habit of taking Congressional actions to overturn its decisions and coopting them; for example, Graham v. Deere has a statement that Congress "merely included in the statute the limitations on patentability drawn by the Court in its jurisprudence," when the reality was that Giles Rich and P.J. Federico included Section 103 to strip from the Court its ability to judge patentability by the Justices' subjective opinion of whether a claimed invention was sufficiently "inventive."  Similar to the standard Justice Breyer resurrected in Mayo v. Prometheus.

 

Q:  Is there any discussion regarding modifying the "directed to or encompassing a human organism" bar enacted as part of the Leahy-Smith AIA?

Kevin:  Not that I know of.  That provision seems to incorporate the 13th Amendment prohibition on having an ownership interest in a human being and little else.

 

Q:  The patent on Monsanto's Roundup-Ready soybean expired in 2010 but the company seems to have gotten a patent term extension -- how did they do that?

Kevin:  The patent (U.S. Patent No. 5,352,605) was granted under the old regime where a patent received a 17-year term from its grant date.  This patent was granted October 4, 1994, which suggests that it should have expired on October 4, 2011.  The PTO website does not show this patent as having expired.

The only provisions I can think of for this application having a longer term is that some patentees complained to Congress that they would be harmed by the change in patent term provisions under the law and Congress enacted a bill that set the term as either 17 or 20 years, depending on which was longer.  20 years from 10/4/1994 would be 10/4/2014.  If that's when it expires we will know I am right.

 

Q:  Is prior case law regarding secret commercial use for more than one year working a forfeiture on the trade secret user's right to patent still good law?

Kevin:  Regarding whether the trade secret user will be precluded from patenting by their own commercial use, the answer is in flux.  On a policy level the answer should be yes, but it could be that the Federal Circuit could decide that the risk of losing to another under first to file has eliminated the policy basis for the rule (I don't think so, but I am not the CAFC).

And defensively, I think that the prior user rights provisions reduce the need to patent, because the prior user has a defense against a later patentee.

 

Q:  How can one reconcile holding methods as trade secret with FDA disclosure requirements?

Kevin:  I have two scenarios; the first is less secure, and the second is more speculative.

In the first possibility, you take all reference to the genes and redact them in any public version of your documents, or perhaps encode them (DNA1, DNA2, etc.) and provide the FDA with a key that is not publicly disclosed.  This alternative has the risk that, under FOIA, lawsuit, or Congressional mandate, the Agency will disgorge the information at some point.

The second possibility is that you refuse to disclose the identity of the genes to the FDA, and if they do not grant regulatory approval you take the method abroad and find somewhere that will permit you to market it without disclosure.  Once you have a track record (3-5 years) you write to the heads of the relevant disease Patients' Rights Group (PRG) and tell them that people in (country where you are marketing) can predict whether they will get (relevant disease) but the FDA doesn't permit Americans to have access to it.  Under some circumstances you could run your business offshore, but in others you could encourage the PRG to write their Congressional representative and tell the FDA to let Americans have the benefits of your method.  The distinction between this scenario and scenarios regarding drugs is that for drugs people might believe there is a safety risk, but here disclosure is merely a matter of public policy that the individual is unlikely to care more about than their own health.  I have no idea whether this will work; the point is that court decisions and patent "reform" laws have unintended consequences and where we place the incentives often direct the outcome we get.

 

Q:  Under the Patent Law Treaty, does the 2-month grace period relate to the failure to claim priority or the failure to file an application within one year?

Don:  The Patent Law Treaty (PLT) and Patent Law Treaty Implementation Act of 2012 (PLTIA) provide for "the restoration of the right of priority to a foreign application or the benefit of a provisional application in a subsequent application filed within two months of the expiration of the twelve-month period (six-month period for design applications) for filing such a subsequent application" (78 Fed. Reg. 62368, emphasis added).  The final rule issued by the Patent Office also states that:

[W]ith respect to the right of priority to a prior-filed foreign application that if the subsequent application is filed after the expiration of the twelve-month period (six-month period in the case of a design application) set forth in 35 U.S.C. 119(a), but within two months from the expiration of the twelve-month period (six-month period in the case of a design application), the right of priority in the subsequent application may be restored upon petition and payment of the applicable fee if the delay in filing the subsequent application within the twelve- or six-month period was unintentional.  The Office is providing with respect to benefit of a prior-filed provisional application that if the subsequent application is filed after the expiration of the twelve-month period set forth in 35 U.S.C. 119(e), but within two months from the expiration of the twelve-month period, the benefit of the provisional application may be restored upon petition and payment of the applicable fee if the delay in filing the subsequent application within the twelve-month period was unintentional.

(id.; emphasis added).  The rules specifying the time for filing a priority claim (37 C.F.R. § 1.55(d)) and making a delayed priority claim (37 C.F.R. § 1.55(e)) remain unchanged under the PLT and PLTIA.  In particular, a "claim for priority must be filed within the later of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application in an original application filed under 35 U.S.C. 111(a)," and if the claim for priority is not filed within this time frame, "the claim may be accepted if the priority claim was unintentionally delayed," and the applicant submits the required petition, Application Data Sheet, and petition fee (along with a certified copy of the foreign application, if necessary).

 

Q:  When does the revised rule that removes the time limit for filing EP divisional applications come into force?

Don:  Amended Rule 36 EPC, in which the 24-month time limits within which divisional applications must be filed, takes effect on April 1, 2014.

 

Q:  Regarding the new claim interpretation standard under the Innovation Act, how is the "ordinary and customary meaning" standard different from the "broadest reasonable interpretation" standard?

Don:  The Innovation Act would require that the Patent Trial and Appeal Board construe claims in Post-Grant and Inter Partes Reviews using the same standard as the district courts.  In particular, the Act specifies that "each claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including construing each claim of the patent in accordance with ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent."  In Phillips v. AWH Corp., the Federal Circuit noted that "the ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application."  The Court also noted that:

In many cases that give rise to litigation,  . . . determining the ordinary and customary meaning of the claim requires examination of terms that have a particular meaning in a field of art.  Because the meaning of a claim term as understood by persons of skill in the art is often not immediately apparent, and because patentees frequently use terms idiosyncratically, the court looks to "those sources available to the public that show what a person of skill in the art would have understood disputed claim language to mean."  Those sources include "the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art."

(citations omitted).  Section 2111 of the MPEP notes that "[t]he Federal Circuit's en banc decision in Phillips v. AWH Corp., 415 F.3d 1303, 75 USPQ2d 1321 (Fed. Cir. 2005) expressly recognized that the USPTO employs the 'broadest reasonable interpretation' standard," and cites In re Morris, 127 F.3d 1048, 1054-55, 44 USPQ2d 1023, 1027-28 (Fed. Cir. 1997), for the proposition that:

[T]he PTO is not required, in the course of prosecution, to interpret claims in applications in the same manner as a court would interpret claims in an infringement suit.  Rather, the "PTO applies to verbiage of the proposed claims the broadest reasonable meaning of the words in their ordinary usage as they would be understood by one of ordinary skill in the art, taking into account whatever enlightenment by way of definitions or otherwise that may be afforded by the written description contained in applicant's specification."

Section 2111 also notes that during patent examination "the focus of the inquiry regarding the meaning of a claim should be what would be reasonable from the perspective of one of ordinary skill in the art."

Medtronic, Inc. v. Mirowski Family Ventures, LCC (2014)

By Andrew Williams --

Earlier today, in Medtronic, Inc. v. Mirowski Family Ventures, LLC, the Supreme Court held that "when a licensee seeks a declaratory judgment against a patentee to establish that there is no infringement, the burden of proving infringement remains with the patentee."  Justice Breyer wrote the opinion for a unanimous Court, reversing the Federal Circuit's earlier opinion from 2012.  Based on the tenor of the questioning during oral argument, this outcome was not surprising.  However, this case now disrupts the balance of power between a patent holder and a licensee.  It is often the case that an agreement reached between two parties is mutually beneficial to both.  Now, thanks to this opinion, licensees may be emboldened to subsequently force the patent holder to prove that the licensed products or processes infringe the patents at issue.  The licensee would have little risk in doing so because the patent holder cannot assert counterclaims.  Therefore, the best that can be hoped for from the patentee's point of view is to maintain the status quo.  This could end up creating a disincentive for patent holders from entering into licensee agreements.  At the very least, patent holders will need to be mindful of this decision and its impact while negotiating the terms of any license.

As we have reported previously, this case was the inevitable consequence of the Supreme Court's MedImmune decision, which allowed a patent licensee to challenge the validity and/or non-infringement of a patent in a DJ action without repudiating the license.  In that case, the Court reasoned that "[t]he rule that a plaintiff must destroy a large building, bet the farm, or (as here) risk treble damages and the loss of 80 percent of its business, before seeking a declaration of its actively contested legal rights finds no support in Article III."  Medlmmune, Inc. v. Genentech, Inc., 549 U.S. 118, 134 (2007).  However, in such cases, the licensee is not actually under the threat of an infringement action, so the Court essentially created a patent-license exception to the Article III case-or-controversy requirement.  In fact, even though the licensee now has standing to bring such a DJ action, the patent holder does not have reciprocal standing to even bring infringement counterclaims.  This contributes to the dichotomy by which the patent holder has everything to lose and nothing to win.

In the present case, the Court relied on three legal propositions to conclude that the burden of proving infringement should remain with the patentee in MedImmune-type cases:  (1) "the burden of proving infringement generally rests upon the patentee," (2) "'the operation of the Declaratory Judgment Act'" is only procedural, and (3) "'the burden of proof' is a 'substantive aspect of a claim.'"  The Court did, however, point to three "practical considerations" that also lend support to this conclusion.  The first stems from the potential scenario that Justice Scalia raised during oral argument:

Let's assume that we put the burden of proof where you [the patent holder] want it.  Okay?  So this declaratory judgment action is defeated.  All right?  Nonetheless, they [the licensee] say:  Still and all, we are going to go ahead and not pay any royalties.  And then you bring - - you bring an infringement action, right?

Justice Scalia noted that in such a scenario, the entire case would need to be relitigated, because the best that the patent holder can establish in the original DJ case "is that [the licensee] didn't prove non-infringement."  Justice Breyer posed essentially the same scenario, but considered what would happen if the evidence was inconclusive, such that neither side could establish infringement/non-infringement by a preponderance of the evidence.  The result would be that both sides would lose the infringement question in the respective actions, thereby leaving that issue undecided and ultimately resulting in uncertainty among the parties.  To head off any criticism that this scenario might be "fanciful," Justice Breyer pointed out that the Restatement (Second) of Judgments provides that relitigation of an issue is not precluded if the burden of proof is different in the second case.  Thus, this is potentially a real concern.

The logic of the other two "practical considerations" is more suspect.  First, Justice Breyer repeated the concern of Medtronic (the licensee in this case), pointing out that "an alleged infringer" would have to "negate every conceivable infringement theory."  Notwithstanding the fact that referring to the licensee as an "alleged infringer" is somewhat misleading, because the license would make any allegation of infringement impermissible, the underlying assumption is questionable.  To defeat an allegation of infringement of one or more patent claims, an alleged infringer need only establish that one element of the broadest claim or claims is missing.  If the licensee cannot meet this evidentiary hurdle, perhaps they should not be able to bring a DJ action in the first place.  Of course, the possibility of an infringement theory under the Doctrine of Equivalents complicates the matter, but in general, establishing non-infringement can be a more clear-cut than establishing infringement, because for the latter, all elements of an asserted claim must be proven.  Furthermore, it isn't clear why "[a] patent holder is in a better position than an alleged infringer to know, and to be able to point out, just where, how, and why a product (or process) infringes a claim," as Justice Breyer suggested.  This is especially true considering that the alleged product (or process) is likely within the possession of the licensee.

The last suggested "practical consideration" centered on the original purpose articulated in the MedImmune case:  to avoid the "dilemma" that would be caused by requiring a licensee to choose "between abandoning his rights or risking suit."  Of course, Justice Breyer had to acknowledge that a shift in burden would not deprive Medtronic of the right to seek a DJ action.  Nevertheless, he wrote that requiring the licensee to bear the burden of proof of non-infringement would "create a significant obstacle," thereby putting such a party at a disadvantage.  However, if a non-infringement position is so weak that a shift in burden would create an obstacle to filing suit, maybe the licensee should not be filing a DJ action.

The Court had little concern over the impact that this case would have on the patent community.  In response to the Intellectual Property Owners Association's concern that the Court's holding would permit a licensee to "force the patentee into a full-blown patent infringement litigation," Justice Breyer shifted the "blame" to the patent holder.  The license in dispute in this case had a provision for identifying any new Medtronic products that would be subject to the license.  The patent holder was permitted to identify any new products that it believed were covered by the patent, and if Medtronic disagreed, they were contractually permitted to initiate a DJ action.  Nevertheless, Justice Breyer described the situation as the patent holder setting "the present dispute in motion by accusing Medtronic of infringement."  Of course, characterizing it this way makes it easier to "see no convincing reason why burden of proof law should favor the patentee."  Finally, Justice Breyer pointed out that the public interest in maintaining a "well-functioning patent system" is offset by its interest in preventing patent holders from exacting royalties for the use of ideas beyond the scope of the patents at issue.  As this author has had it explained to him, when any Judge or Justice uses the phrase "patent monopoly," you can be certain things are not going to go well for the patent holder.  As an indication, Justice Breyer used that phrase twice in the penultimate paragraph discussing the public interest.

As a final note, the Court did address the issue of jurisdiction raised by Tessera Technologies, Inc.'s Amicus brief.  The issue was whether the federal courts had subject-matter jurisdiction to hear this case, considering that the nature of the action that the declaratory judgment defendant would have brought could be characterized as seeking damages for a breach of contract.  Of course, this problem also stems from this Court's MedImmune decision, which allowed standing in a case where there was really no genuine dispute "of sufficient immediacy and reality."  Nevertheless, the Court was not convinced.  Instead, the case that the declaratory judgment defendant would have brought, according to Justice Breyer, would have been one for patent infringement, because Medtronic would have had to stop paying royalties.  "The relevant question concerns the nature of the threatened action in the absence of the declaratory judgment suit," and as such, the Court found that this case was "properly characterized as an action 'arising under an Act of Congress relating to patents.'"

Medtronic, Inc. v. Mirowski Family Ventures, LCC (2014)
Opinion of the Court by Justice Breyer

Institut Pasteur v. Focarino (Fed. Cir. 2013)

By Donald Zuhn --

Last month, the Federal Circuit dismissed an appeal by Institut Pasteur of a determination by the Board of Patent Appeals and Interferences affirming the rejection of claim 14 of U.S. Patent No. 7,309,605 in an inter partes reexamination requested by Precision BioSciences.  The Federal Circuit also reversed the Board's affirmance of the rejection of claims 10 and 12 of U.S. Patent No. 6,610,545, and vacated and remanded the Board's affirmance of the rejection of U.S. Patent No. 6,833,252.  Both the '545 and '252 patents were also the subject of inter partes reexaminations requested by Precision BioSciences.

The '605, '545, and '252 patents, which are owned by Institut Pasteur, claim methods and tools for the site-directed insertion of genes into eukaryotic chromosomes.  The claimed methods and tools take advantage of the discovery by the Institut Pasteur in the early 1990's of a class of enzymes called group I intron-encoded (GIIE) endonucleases.  Institut Pasteur demonstrated that GIIE endonucleases, which have recognition sites of over eighteen nucleotides (and therefore provide superior specificity over other endonucleases), could cleave chromosomal DNA in eukaryotic cells, and that eukaryotic cells were able to successfully repair such cleavages via homologous recombination.  All three of the patents at issue expired on May 6, 2012.

Claim 1 of the '605 patent, which was not at issue on appeal (and which includes amendments, indicated by underlining, that were proposed by Institut Pasteur during reexamination) recites:

1.  A method for inducing at least one site directed double-stranded break in the chromosomal DNA of an organism comprising:
    (a)  providing an isolated, viable cell of said organism containing at least one Group I intron encoded endonuclease recognition site at a location in the chromosomal DNA of the cell,
    (b)  providing said Group I intron encoded endonuclease to said cell by genetically modifying the cell with a nucleic acid comprising said Group I intron encoded endonuclease or by introducing said Group I intron encoded endonuclease protein into the cell such that the Group I intron encoded endonuclease cleaves said Group I intron encoded endonuclease site at the location in the DNA of the cell.

Claim 14 of the '605 patent, which was at issue, recites:

14.  The method of claim 1, wherein said method further comprises providing to said cell
    a plasmid comprising a DNA sequence homologous to the sequence of the chromosome, which allows homologous recombination, and
    a modified sequence,
    wherein said Group I intron encoded endonuclease cleaves the Group I intron encoded endonuclease recognition site,
    whereby said cleavage promotes the insertion of said modified sequence into said chromosomal DNA of said cell at a specific site by homologous recombination.

Claim 7 of the '545 patent, which was not at issue on appeal (and which includes amendments proposed by Institut Pasteur during reexamination) recites:

7.  A method for in vivo site directed genetic recombination in an organism comprising:
    (a)  providing a transgenic eukaryotic cell having at least one Group I intron encoded endonuclease recognition site inserted at a unique location in a chromosome;
    (b)  providing an expression vector that expresses said endonuclease in said transgenic cell;
    (c)  providing a plasmid comprising a gene of interest and a DNA sequence homologous to the sequence of the chromosome, allowing homologous recombination;
    (d)  transfecting said transgenic cell with said plasmid of step (c);
    (e)  expressing said endonuclease from said expression vector in said cell; and
    (f)  cleaving said at least one Group I intron encoded endonuclease recognition site with said endonuclease, whereby said cleavage promotes the insertion of said gene of interest into said chromosome of said organism at a specific site by homologous recombination.

Claims 10 and 12, which were at issue, depend from claim 7 and limit the method to yeast and mammalian cells, respectively.

Finally, claim 1 of the '252 patent (the patent's only independent claim) recites:

1.  A recombinant mammalian chromosome comprising an exogenous Group I intron encoded endonuclease site,
    wherein the endonuclease site is within an integrated nucleic acid sequence from a vector,
    wherein the site is selected from the group consisting of an I-SceIV site, an I-CsmI site, I-PanI site, I-SceII site, an I-CeuI site, an I-PpoI site, an I-SceIII site, an I-CreI site, an I-TevI site, an ITevII site, an I-TevIII site, and an I-SceI site.

In 2009, Precision BioSciences filed inter partes reexamination requests for the '605, '545, and '252 patents (as well as a fourth patent not involved in the appeal).  The Office granted all four requests, and the Examiner rejected most claims as anticipated or obvious.

On appeal, the Board affirmed the Examiner's rejections as to obviousness, basing its decision on two references (Quirk and Bell-Pedersen) that disclosed using a GIIE endonuclease to transfer DNA from a plasmid to non-chromosomal DNA in bacterial cells.  In particular, the Board determined that there was reason to substitute the nonchromosomal prokaryotic DNA of Quirk and Bell-Pedersen with chromosomal DNA of a eukaryotic cell, and that one of skill in the art would have a reasonable expectation of success based on two other references (Frey and Dujon), which the Board characterized as disclosing cleavage of chromosomal DNA in yeast cells.  The Board considered evidence that the claimed inventions were praised, copied, and licensed by the industry, but determined that the evidence did not outweigh the strong case of obviousness.  Institut Pasteur appealed the Board's affirmance of the Examiner's rejections to the Federal Circuit.

In dismissing the appeal as to claim 14 of the '605 patent, the Federal Circuit noted that the patent had expired since the Board's decision, and that Institut Pasteur did not dispute that the Office could not issue amended claims for an expired patent if the amendments change the claim’s scope.  The Court concluded that the amendments Institut Pasteur proposed during reexamination did narrow the scope of claim 1 and dependent claim 14.  In countering Institut Pasteur's argument that the amendments to claim 1 did not change the scope of claim 14 because the unamended claim was implicitly limited to chromosomal DNA, the Court explained:

That homologous recombination occurs between the targeted DNA and an introduced plasmid that is homologous to a chromosome does not require that the targeted DNA actually be chromosomal DNA.  It requires only that the targeted DNA be homologous to chromosomal DNA.  Non-chromosomal DNA, such as mitochondrial DNA or DNA in an additional plasmid, can be homologous to chromosomal DNA.  Thus, the original claim covered situations where nonchromosomal DNA is the targeted DNA.  The amendment substantively narrowed the claim in requiring chromosomal DNA as the target.

The Court therefore determined that the amendments narrowed the scope of claim 14 (claim 1 not being at issue on appeal), and concluded that the Office could not issue the amended claim now that the '605 patent had expired.

In reversing the Board's decision with respect to claims 10 and 12 of the '545 patent, the Federal Circuit noted that the "key issue" in determining whether claims 10 and 12 of the '545 patent are invalid for obviousness was:

[W]hether the relevant skilled artisan -- after reading Quirk's and Bell-Pedersen's disclosure that a GIIE endonuclease can promote targeted gene transfer into non-chromosomal DNA in prokaryotic cells -- would have expected that a GIIE endonuclease would successfully promote targeted gene transfer into the chromosomal DNA of eukaryotic cells, and thus had good reason to pursue that possibility.

(emphasis in opinion).

The Court also noted that the Board, in ascertaining the scope and content of the prior art, made factual determinations that were not supported by substantial evidence, and that the Board also failed to give proper consideration to teachings in the prior art that targeting a cell's chromosomal DNA could be toxic to the cell, and to the evidence of industry praise and the licensing of Pasteur's invention.  The Court first concluded that the Board had erred in finding that the Frey and Dujon references showed that a GIIE endonuclease cleaved yeast chromosomal DNA when expressed in yeast cells.  The Court explained that Frey discloses cleaving yeast chromosomes that had been extracted from yeast cells and purified, not chromosomes still "in yeast cells," and that Dujon was silent about what type of DNA is cleaved.  For Dujon, the Court noted that "the PTO bears the burden of demonstrating a prima facie case of obviousness," and that "Dujon's language is insufficient to establish that the GIIE endonuclease targeted chromosomal DNA."

The Court added that "[t]he Board compounded its erroneous findings by ignoring teachings that targeting a GIIE endonuclease to chromosomal DNA in a living cell could be highly toxic to the cell."  The Court also pointed out that "the Board identified no reason at all that a skilled artisan would have pursued a method toxic to cells."

Finally, the Court indicated that Institut Pasteur had "presented compelling evidence that the industry has licensed, praised, and copied its inventions," and that the Board did not properly weigh this evidence.  That evidence consisted of a declaration from the CEO of the exclusive licensee of the '545 patent that the exclusive licensee had entered into more than a dozen sublicenses.  The Board had discounted this evidence because the declaration failed to establish that the sublicensees licensed the '545 patent to gain access to the claimed subject matter as opposed to other technology described, but not claimed, in the patent.  As for the evidence of industry praise, the Board acknowledged the connection between industry praise and the claimed step of homologous recombination, but found that step to be possessed by the prior art.

In vacating the Board's decision with respect to the '252 patent, the Court indicated that it was remanding for consideration of "whether one of ordinary skill would have been motivated simply to create a recombinant chromosome with a GIIE endonuclease recognition site -- without having the reasonable expectation . . . that the GIIE endonuclease could successfully cleave the recognition site and that homologous recombination could successfully repair the break."  The Court explained that because the Board "mistakenly thought that there was sufficient motivation for the '545 patent," the Board did not consider whether motivations other than those for the '545 patent would have made the subject matter of the '252 patent, which essentially claims the first step of the methods of claim 10 and 12 of the '545 patent, obvious.

Institut Pasteur v. Focarino  (Fed. Cir. 2013)
Panel: Circuit Judges Newman, Clevenger, and Taranto
Opinion by Circuit Judge Taranto