Patent Docs

Webinar on Patents and Export Control Compliance

Strafford will be offering a webinar/teleconference entitled "Patents and Export Control Compliance: Managing Risk and Avoiding Unintentional Violations -- Minimizing Export Control Liability in Patent Application Preparation, Development and Analysis of Innovation, and Licensing" on September 4, 2014 from 1:00 to 2:30 pm (EDT).  The webinar will provide guidance for patent counsel on navigating the intersection of patents and export control laws, examine the challenges facing patent owners, when and where export control issues arise, and licensing issues, and offer best practices for complying with export control laws.  The webinar will review the following questions:

• What export control compliance challenges do patent owners and applicants face?
• When do export violations arise in the patent context?
• What are the best practices for counsel to patent owners for compliance with ITAR and EAR requirements?

The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those interested in registering for the webinar, can do so here.

Examination of Myriad-Mayo Guidance Comments -- AUTM, COGR, AAU, and APLU

By Donald Zuhn --

On March 4, the U.S. Patent and Trademark Office issued a guidance memorandum, entitled "Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products" (or "Myriad-Mayo Guidance"), to implement a new procedure for determining the subject matter eligibility of claims under 35 U.S.C. § 101 in view of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012).  At a biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting in April, the Office announced that it would be hosting a public forum on the Guidance in May to receive public feedback on the Guidance, and at that forum encouraged shareholders to submit written comments on the Guidance.  The original "end of June" deadline for submitting comments on the Guidance was subsequently extended to July 31.  With that extended deadline now passed, Patent Docs has summarizing selected comments in a series of posts.

The Office has posted the comments that were submitted on the USPTO website.  The comments are divided into five groups (with the number of submissions in each group also provided):  Intellectual property organizations and other associations (18), academic and research institutions (7), law firms (6), companies (9), and individuals (42).  Today, we examine the comments submitted by the Association of University Technology Managers (AUTM), Council on Governmental Relations (COGR), Association of American Universities (AAU), and Association of Public and Land-Grant Universities (APLU).

The comments letter submitted by the four academic groups begins by noting that AUTM is a nonprofit organization with more than 3,000 members from more than 300 universities, research institutions, and teaching hospitals as well as numerous businesses and government organizations; COGR is an association of 190 U.S. research universities and their affiliated academic medical centers and research institutes; AAU is an association of 60 U.S. and two Canadian research universities; and APLU is a research, policy, and advocacy organization representing 234 public research universities, land-grant institutions, state university systems, and affiliated organizations.  The comments letter indicates that "[t]he majority of AUTM members and the entire COGR, AAU and APLU memberships represent nonprofit research institutions that do not directly commercialize their discoveries and intellectual property but are dependent on the private sector to invest in, develop and market products and services based on university-created technology."  According to the four academic organizations, "[w]ith over $36 billion in net sales of products based on inventions made at institutions represented by our associations, it has been estimated that academic technology transfer generates $80 billion dollars in economic activity annually in the U.S."

After describing the contribution of the organizations' members to the economy and innovation in the U.S., the groups state that they are "deeply concerned about the PTO Guidance Memorandum and its unwarranted, as well as legally inconsistent broad changes in examination practice."  In particular, the letter asserts that "[t]he Guidance adversely and unnecessarily impacts our ability not only to license and commercialize future discoveries and inventions, but also the validity of many existing patents for products, particularly in life science areas which make up the majority of university patents."

The academic organizations identify one primary concern and two major flaws with the Guidance.  With respect to the former, the groups suggest that "the Guidance is overly broad and contravenes the Supreme Court's own warning in Mayo against over-interpreting its holdings in a way that might stifle innovation, the very kinds of innovation to which U.S. universities contribute," and support opponents of the Guidance "who have criticized the emphasis on structure rather than the functional characteristics of a product."  As for the major flaws, the groups argue that the Guidance provides "[a]n inappropriate and legally questionable interpretation of Myriad," and as a result "[t]o patent a product (e.g., a drug) purified from a natural source under the new Guidance, the claimed product must be both structurally and functionally different from its natural state, a position not supported by case law."  The letter contends that "earlier cases emphasized functionality rather than the need for a significant modification from their natural form."

The letter indicates that the second flaw is the Guidance's "[m]isinterpretation of Mayo [that] could seriously harm the diagnostics industry and patients relying on its products."  According to the academic organizations, "[t]he examples provided in the Guidance [relating to diagnostic methods] are unclear, ambiguous, and raise more questions than they answer."

The letter argues that "[b]y drafting and releasing this Guidance, the PTO is assuming a judicial authority that is not properly PTO's to assume by erroneously re-interpreting Supreme Court case law, with no opportunity for public comment."  The comments letter concludes by stating that:

Numerous AUTM, COGR, AAU, and APLU members . . . find the Guidance unsettling because it could improperly prevent universities from patenting valuable and potentially life-saving technology and effectively block these technologies from ever reaching the public.  It could also create grave uncertainty about pending and issued university patents and remove the incentive for companies to license them and create innovative products and services that will benefit society.

The groups urge the USPTO revise the Guidance, arguing that "[f]ailing to do so will eviscerate the benefits of that research by unnecessarily denying patent protection to promising technologies, stifle innovation in academia, seriously harm the ability of companies to develop products that will help the American public, and significantly, adversely impact job growth in America."

Patent Docs will examine other Guidance comments in subsequent posts.

For additional information regarding this topic, please see:

• "Examination of Myriad-Mayo Guidance Comments -- International Bioindustry Associations," August 11, 2014
• "Examination of Myriad-Mayo Guidance Comments -- ACLU," August 5, 2014
• "Guest Post: Overview of First Published Comments on Myriad-Mayo Patent Eligibility Guidance," July 13, 2014
• "Guest Post: USPTO Public Forum on Patent Guidance: My Thoughts as a Speaker and Attendee," June 11, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part IV," May 22, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part III," May 15, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part II," May 14, 2014
• "Guest Post: How to Patent Grapefruit Juice -- The New USPTO Guidance for Patent Eligible Subject Matter Is Both Sticky and Sour," May 13, 2014
• "USPTO Holds Forum on Subject Matter Eligibility -- Part I," May 12, 2014
• "USPTO Tries to Address Public Misunderstandings Regarding Myriad-Mayo Guidance," April 16, 2014
• "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products," March 4, 2014

Top NIH-funded U.S. Universities 2014

By Kevin E. Noonan --

On Monday, Genetic Engineering and Biotechnology News (GEN) published a list of the Top 50 NIH-funded U.S. universities in fiscal year October 1st – September 30th.  Geographically, California leads the list of most Federal research monies going to schools in the state.  The list, set forth below, shows that private universities represent 22 of the 50 universities and garner about 24% of the funding (disproportionately, with Johns Hopkins University, Duke, Yale, Stanford, Washington and the Universities of Pittsburgh and Pennsylvania getting more thanm 50% of the total of almost $19 billion in NIH funding).

*Private universities

The top 50 get about 80% of the total awarded, representing "almost 50,000 competitive grants given to more than 2,500 universities, medical schools and other research institutions" at home and abroad according to GEN.  The leader, Johns Hopkins, received almost one thousand awards in 2014, while the majority of the rest of the schools received between 300-500 awards.

Source (according to GEN): Source: NIH Awards by Location and Organization, database contained within NIH Research Portfolio Online Reporting Tools (RePORT) website, Fiscal Year 2014, last updated by NIH on August 11

Domestic Cat Genome Sequenced

By Kevin E. Noonan --

Earlier this month, an international effort* led by Stephen J. O'Brien at the Oceanographic Center, Nova Southeastern University, Ft. Lauderdale, Florida reported the complete genomic sequencing of the domestic cat, Felix catus.  The report, entitled "Annotated features of domestic cat – Felis catus genome," was published in GigaScience 2014, 3:13 (August 5, 2014).

The study reports sequencing of a female Abyssinian cat named Cinnamon, a mixed-breed cat from Russian named Boris, and Sylvester, a wildcat ancestor of domestic cats.  Most significantly, the report showed that domestic cats have retained "a highly conserved ancestral mammal genome organization" in comparison with ancestral cats (see Driscoll et al., 2007, "The near eastern origin of cat domestication," Science 317: 519–23).  Both species, F. catus and Felix silvestris silvestris, have 38 chromosomes, 18 pairs of autosomes, and two pairs of dimorphic gender-determining chromosomes.

The report is replete with arcane details of the cat genome, including the discovery of:

• 217 loci of endogenous retrovirus-like elements (amounting to 55.7% of the entire genome, comprised of long interspersed elements (LINEs), short interspersed elements (SINEs), satellite DNA, retroviral long terminal repeats (LTRs) and "others");

• 21,865 protein coding genes (open reading frames or ORFs), detected by comparison with eight mammalian genomes (from human, chimpanzee, macaque, dog, cow, horse, rat, and mouse);

• 99,494 "new" single nucleotide polymorphisms (SNPs), in addition to 3,078,438 previously identified SNPs;

• 8,355 new insertion/deletion events (indels);

• 743,326 evolutionarily constrained elements (ECEs);

• 3,182 microRNA homologues;

• 25 novel families of complex tandem repeat elements;

• 53,710 short terminal repeat (STR) loci;

as well as 176 kb of mitochondrially derived DNA and 125 kb of partial feline retrovirus-derived DNA.  In addition, 10.5% of cytosine residues are methylated in the cat genome.

There was also extensive evidence of regions of "recent" autosomal segmental duplications.  Specifically:

Among all variants 24.6% (693,428 SNVs and 122,333 indels) were heterozygous in Felis silvestris.  Between the genomes of Felis catus and Felis silvestris some 2.9 million (2,847,548) single nucleotide variants and ∼1.9 Mbp of insertions and deletions were detected.  Observed differences were significantly fewer compared to difference between human and chimpanzee genomes (~35 million SNV and ~90 Mbp of indels).

The report also contains extensive comparison between domestic cats and other species ("reference genomes") in terms of gene numbers, using genes with the longest the longest mRNA and corresponding coding sequences (click on table to expand).

The intriguing finding that modern domestic cats are more similar to their wildcat forebears than are dogs to wolves (or humans and chimpanzees, for all the touted 98% similarity between simian and human genomes) is not explained in the report.  Regarding dogs, comparison of breed types provides some hints:  while there are about 41 breeds of domestic cat, there are 339 breeds of dogs, sorted into 10 groups (terriers, retrievers, pointer/setters, hounds, companion or "toy" dogs, "herding" dogs like sheepdogs, mastiffs, non-sporting dogs like Dalmatians and bulldogs, sporting dogs like spaniels, and working dogs like the Akita and Alaskan Husky).  These dogs vary in overall size, leg length, muzzle shape, fur length and density, muscularity, and temperament, among other attributes.  Many of the features of these dog breeds have been selected by human breeding practices for traits and features having at least some genetic component.  In addition, the process of domesticating a dog from its wolf ancestors involved changing its personality from human predator to human companion and allowed the dog to permit humans to take the "alpha" role of pack leader.

Cats, on the other hand do not vary that much in size and in fact show most of their variation in coat and eye color and coat pattern.  There also have been many fewer behavioral changes in domestic cats than in dogs, as evidenced by cats' (in)famous independence.  While these are merely speculations, it seems likely that the domestication process required far fewer genetic adaptations in cats than it seems were required in dogs, and thus their modern genomes retain much closer similarity to the ancestral European wild cat than do dogs to their wolfish ancestors.

Finally, for the cognoscenti (and those with a low sense of humor), the authors also report their development of a cat genome browser, designated Genome Annotation Resource Field or GARField (groan).

* Other members of the team included scientists from the Theodius Dobzhansky Center for Genomic Bioinformatics, St. Petersburg State University, St. Petersburg RU (Gaik Tamazian, Serguei Simonov, Pavel Dobrynin, Alexey Makunin, Anton Logachev, Aleksey Komissarov, Andrey Shevchenko, Vladimir Brukhin, Nikolay Cherkasoy, Anton Svitin, Klaus-Peter Koepfli, and Joan Pontius); Laboratory of Neurogenetics, NIAAA, Rockville, MD USA (Carlos A Driscoll, Kevin Blackstone, Cristina Barr and David Goldman); CIIMAR – Interdisciplinary Center of Marine and Environmental Research, University of Porto, Porto PT (Agostinho Antunes); Department of Animal and Food Science, Veterinary Molecular Genetics Service, Universitat Autonoma de Barcelona, Barcelona ES (Javier Quilez);  IBE, Institute of Evolutionary Biology, Universitat Pompeu Fabra-CSIS, PRBB, Barcelona ES (Belen Lorente-Galdos and Tomas Marques-Bonet); Department of Computer Engineering, Bilkent Univesity, Ankara TK (Can Alkan); Laboratory of Genomic Diversity, Frederick National Laboratory for Cancer Research, Frederick MD USA (Marylin Menotti-Raymond and Victor David); and the Department of Veterinary Medicine and Surgery, College of Veterinary Medicine, University of Missouri, Columbia MO (Krsitina Narfstrom).

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

• "Leg Length Variation in Dogs and its Relevance to Human Mutations," August 31, 2009
• "The Genetic Basis of Coat Variation in Dogs," August 30, 2009
• "From Toy Poodle to Rottweiler: Why Is Fido So Small (or Large)?" April 9, 2007

Apotex Inc. v. UCB, Inc. (Fed. Cir. 2014)

By Kevin E. Noonan --

Last week, the Federal Circuit affirmed a finding of inequitable conduct in Apotex v. USB, a relatively rare occurrence in the years after the Federal Circuit's decision in Therasense v. Becton, Dickenson.  In the Therasense case, the Federal Circuit sitting en banc clarified the standards for finding inequitable conduct, in a frank effort to remedy the "plague" on the patent system that the Court believed the inequitable conduct defense had become.  (The historically minded will recall that this isn't the first time that members of the Court identified this particular plague.)  In its decision, the majority decided that the traditional materiality prong of the test for inequitable conduct needed to amount to "but for" materiality, i.e., that the U.S. Patent and Trademark Office would not have granted the patent if the Examiner had been aware of the undisclosed or misrepresented art or information.  For "intent to deceive," the Court held that intent needed to be the "single most reasonable inference" to be drawn from the applicant's behavior, recognizing that finding an express "smoking gun" of intent would be rare.  The most significant change in the law was that the Court prohibited the common practice of using evidence regarding one prong to bolster evidence of the other prong (e.g., if the materiality of the undisclosed art or information was extremely high, courts would accept lesser evidence of intent, with the justification that the applicant would know or should have known that art of such materiality should be disclosed and failure to disclose was evidence of intent).  The Court left open the possibility that, even in the absence of sufficient evidence for either prong there could be evidence of such egregious misconduct that a court, exercising its equitable powers, could find a patent unenforceable for inequitable conduct.

The matter at issue in Apotex was moexipril magnesium, an angiotensin converting enzyme (ACE) inhibitor used to treat hypertension, which was known in the art to be "susceptible to degradation and instability."  The patent-in-suit, U.S. Patent No. 6,767,556, claimed formulation methods, as exemplified in claim 1:

1.    A process of making a solid pharmaceutical composition comprising moexipril magnesium, said process comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound in a controlled manner in the presence of a sufficient amount of solvent for a predetermined amount of time so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium.

The formulation was prepared by reacting moexipril with (preferably) magnesium hydroxide or magnesium carbonate and formulated by wet granulation.  The accused infringing articles, the drugs Univasc® and Uniretic, were also magnesium-stabilized formulations of moexipril.

During prosecution the Office asserted three references, including U.S. Patent No. 4,743,450, which was listed in the Orange Book and disclosed methods for stabilizing ACE inhibitors using alkaline magnesium compounds; and the Gu scientific journal article, which compared wet granulation and dry powder mixing for formulating moexipril with "alkaline stabilizers and concluding only wet granulation capable of stabilizing moexipril."  These references were disclosed in the specification of the '556 patent, which distinguished the claimed methods and formulations by asserting that "the moexipril hydrochloride and alkaline magnesium compound are capable of an acid-base reaction that is difficult to control and results in uncertainty regarding the final composition of the product."  Moreover, the '556 patent asserted that the Gu article teaches that "only a portion (if any) of the drug may be converted to moexipril magnesium and that stabilization therefore occurs not because of conversion, but because of the presence of the alkaline stabilizing compound in the final product."

During prosecution, the applicant and inventor, Dr. Bernard Charles Sherman (who was also Apotex CEO) addressed three obviousness rejections based on varying combinations of the art by maintaining that there was no evidence that the art-recognized methods taught that moexipril and alkaline magnesium were reacted, instead arguing that these compounds were merely mixed together.

In addition to these arguments, Apotex (at the direction of Dr. Sherman) submitted an expert declaration from Dr. Michael Lipp who testified that the alkaline magnesium stabilizer acts to prevent reactions, and that the stabilizer must remain unreacted to do this, so that a person of ordinary skill would not expect there to be a reaction between moexipril and the magnesium compound:

An additional example particularly relevant to the matter at hand is the UNVASC® [sic] moexipril hydrochloride formulation . . . .  The product monograph for the UNVASC [sic] moexipril hydrochloride formulation lists moexipril hydrochloride as being present in the final formulation in addition to magnesium oxide as an alkaline stabilizer, as per the teachings of the '450 patent which is listed on the FDA Orange Book for this formulation.  As a result, in my opinion, a skilled formulator reading Harris et al. would not expect a reaction to occur between an alkaline or saccharide stabilizer and an ACE inhibitor drug in the formulations disclosed therein.

The claims were granted after Apotex's counsel agreed to include the "greater than 80% conversion" limitation into the claim as allowed, with the reasons for allowance showing (according to the District Court) the materiality of the representations made during prosecution:

The primary reason for allowance is that the prior art does not disclose nor fairly suggest a process of making a pharmaceutical composition comprising moexipril magnesium, comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium.  Rather, the prior art teaches that only a portion of drug (if any) may be converted to the alkaline salt and that the stable product results entirely or primarily not from conversion to alkaline salts, but from stabilization of the moexipril hydrochloride by the presence of the alkaline stabilizing compound in the final product.

The District Court found that the '556 patent had been obtained through inequitable conduct, based on the following evidence of materiality and intent to deceive.  The District Court found that Dr. Sherman, the named inventor, Apotex CEO and person in charge of prosecution and litigation knew that the prior art accused product was made using the claimed process and thus the process was known in the prior art, but concealed this information from the Office and misrepresented the facts through his counsel and expert witness.  The following evidence supported these findings regarding materiality:

1.    Dr. Sherman conceded during trial that, before filing the '556 patent application, he had a "strong suspicion" and a "belief" that Univasc® was made according to his claimed process.

2.    "[O]n the same day the application was filed, Dr. Sherman conducted tests comparing Univasc to an Apotex moexipril product with no alkaline stabilizer.  In his handwritten notes, Dr. Sherman concluded that the Apotex product was 'much less stable than the magnesium salt,' implying at least a suspicion that Univasc consisted of moexipril magnesium."

3.    "About a month [thereafter], Dr. Sherman's suspicion was confirmed by two Apotex scientists who produced a detailed mass spectrometry report on Univasc and concluded that moexipril in Univasc is 'mainly present' as moexipril magnesium."

As explained in the Federal Circuit's opinion:

The district court also found that Dr. Sherman made several misrepresentations to the PTO regarding the prior art.  In particular, Dr. Sherman misrepresented the nature of Univasc and the '450 patent by asserting that the moexipril hydrochloride in Univasc was not reacted but merely combined with an alkaline magnesium compound.  The district court also found that Dr. Sherman, in the specification and through Dr. Lipp's declaration, mischaracterized the Gu article by asserting that only a minor portion of the drug, if any, is converted to moexipril magnesium.  Lastly, the district court found that Dr. Sherman lied in the '556 patent application by including certain examples of experiments that were never conducted.  The court noted that each example is written in the past tense as if it had occurred, but Dr. Sherman admitted at trial that the experiments were made up in his head.

The court found that Dr. Sherman failed to inform Dr. Lipp of the true facts about Univasc and shielded him from the truth, which resulted in a declaration that Dr. Sherman knowingly submitted to the PTO to perpetuate his mischaracterizations of the prior art.  Dr. Lipp testified that he was specifically asked to limit his discussions to only the documents provided by Apotex, which did not include any information regarding the tests conducted on Univasc or Dr. Sherman's knowledge of the product.

These misrepresentations satisfied the Therasense "but for" materiality standard, according to the District Court, because "the Examiner adopted Dr. Sherman's repeated misrepresentations verbatim and would not have allowed the claims had he been aware that Univasc contained moexipril magnesium."

The District Court also found that, even if the evidence did not satisfy the "but for" test for materiality, Dr. Sherman's conduct during prosecution amounted to "egregious misconduct" under the Therasense standard.  The District Court further "observed that Dr. Sherman abused the patent system by targeting a competitor's existing and widely available product and seeking to obtain a patent on it through lies and deception for the purpose of suing that competitor."

With regard to intent to deceive, the District Court found that the "single most reasonable inference" to be drawn from the evidence, including Dr. Sherman's "overall pattern of misconduct and his poor credibility at trial" and "demeanor and evasive testimony at trial" established by clear and convincing evidence the intent to deceive required under Therasense.

The Federal Circuit affirmed, finding that the District Court's determination on materiality and intent to deceive not clearly erroneous and its ultimate decision not an abuse of discretion.  In an opinion by Judge Reyna, joined by Judges Wallach and Hughes, the Court agreed that the evidence from the Examiner's "Reasons for Allowance" established that there were "affirmative misrepresentations of material facts" because Dr. Sherman knew the statements made during prosecution were not true.  The opinion did draw an important distinction, however:

To be clear, we agree with Apotex that Dr. Sherman had no duty to disclose his own suspicions or beliefs regarding the prior art.  There is nothing wrong with advocating, in good faith, a reasonable interpretation of the teachings of the prior art.  The misconduct at issue, however, goes beyond failing to disclose a personal belief or alternative interpretations of the prior art; here, Dr. Sherman affirmatively and knowingly misrepresented material facts regarding the prior art.

As to intent, the Federal Circuit stated that "[Dr. Sherman] knew enough to recognize that he was crossing the line from legitimate advocacy to genuine misrepresentation of material facts."

Finally, the Federal Circuit did not reach the "egregious misconduct" determination because the evidence of materiality and intent were sufficient and thus the District Court's inequitable conduct determination was not an abuse of discretion.  However, the opinion did note that Dr. Sherman's actions "come close" to that standard, stating that "[w]e find particularly significant and inexcusable the fact that Dr. Sherman arranged for the preparation and submission of an expert declaration containing false statements instrumental to issuance of the patent."

Apotex Inc. v. UCB, Inc. (Fed. Cir. 2014)
Panel: Circuit Judges Reyna, Wallach, and Hughes
Opinion by Circuit Judge Reyna

I/P Engine, Inc. v. AOL Inc. (Fed. Cir. 2014)

By Michael Borella --

Ever since the 2010 Supreme Court opinion in Bilski v. Kappos was handed down, the debate over the scope of patent-eligibility under 35 U.S.C. § 101 has been at times stimulating, complex, comical, and frustrating.  Now it has taken a turn for the disturbing.

I/P Engine sued AOL and several other parties in the United States District Court for the Eastern District of Virginia, alleging infringement of U.S. Patent Nos. 6,314,420 and 6,775,664.  As an example, claim 26 of the '664 patent recites:

A method for obtaining information relevant to a first user comprising:
    searching for information relevant to a query associated with a first user in a plurality of users;
    receiving information found to be relevant to the query by other users;
combining the information found to be relevant to the query by other users with the searched information; and
    content-based filtering the combined information for relevance to at least one of the query and the first user.

After a trial, the verdict was that both patents were infringed, not anticipated, and not obvious.  On appeal, the Federal Circuit panel of Judges Wallach, Mayer, and Chen reversed the District Court on the grounds that the claims were obvious.  Judge Chen dissented from this non-precedential decision.

Where this case gets interesting, however, is Judge Mayer's concurrence.  Neither the majority opinion nor Judge Chen's dissent invoke § 101, but Judge Mayer has a lot to say about that part of the statute.

In Judge Mayer's view, the recent high court Alice v. CLS Bank opinion "made clear that abstract ideas untethered to any significant advance in science and technology are ineligible for patent protection."  He referred to the two-prong CLS Bank test as a "technological arts test for patent-eligibility."  In applying this test, Judge Mayer believes that "advances in non-technological disciplines, such as business, are irrelevant."  Further, he writes that the Supreme Court did not address the "issue of whether [Alice's] claimed intermediated settlement technique represented an innovative method for improving commercial transactions" because these claims were non-technical in nature.

It worthwhile to note at this point that the Supreme Court did not close the door on business method patents.  While three of the nine justices are of the mind that "any claim that merely describes a method of doing business does not qualify as a 'process' under §101," this was not the majority holding.  Instead, as reflected in the USPTO's June 25, 2014 Preliminary Examination Instructions, Alice v. CLS Bank "neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods."  Also, Congress has explicitly acknowledged the existence of business method patents in the AIA's Covered Business Method review program.

The Supreme Court has adopted the Mayo v. Prometheus patent-eligibility test for all claim types that contains any of the judicial exclusions to § 101.  This test, no doubt, makes it more difficult to obtain some types of business method patents, but falls short of the extreme position that Judge Mayer is taking.

Regardless, Judge Mayer continued to stake out this shaky ground by asserting that "if claims are drawn to the application of principles outside of the scientific realm -- such as principles related to commercial or social interaction -- no amount of specificity can save them from patent ineligibility."  While he acknowledged that in some cases it can be difficult to determine "whether claims are sufficiently 'technological' to warrant patent protection," Judge Mayer's view is that claims can fail the Mayo / CLS Bank test because they are "overly broad."

One would think that it is meaningless to state that claims are too broad without a reference point -- the prior art.  On one hand, Judge Mayer seems to agree, and states that there is "'overlap' between the eligibility analysis under section 101 and the obviousness inquiry under 35 U.S.C. § 103" but "the section 101 inquiry is broader and more essential: it asks whether the claimed subject matter, stripped of any conventional elements, is the kind of 'discovery that the patent laws were intended to protect."  On the other hand, he appears to suggest that the breadth of claims should be "in proportion to the technological dividends they yield."  But how to quantify "breadth" and the extent of these "technological dividends" is left unsaid.

Applying this reasoning to I/P Engine's claims, Judge Mayer found they failed the Mayo / CLS Bank test.  He wrote that "[t]he asserted claims simply describe the well-known and widely-applied concept that it is often helpful to have both content-based and collaborative information about a specific area of interest."  Their alleged use of the Internet to do so is "well-understood and routine."

Judge Mayer concludes his concurrence by opining that the § 101 analysis should precede novelty, non-obviousness, and written description analyses because "[p]atent eligibility issues can often be resolved without lengthy claim construction, and an early determination that the subject matter of asserted claims is patent ineligible can spare both litigants and courts years of needless litigation."

So we have three of nine Supreme Court justices, and at least one Federal Circuit judge, ready to bar business method patents completely.  The math is simple -- patentees are one Federal Circuit judge away from a panel that will likely find any business method claim patent-ineligible, regardless of whether its contribution is novel and non-obvious.  Further, the evidentiary standard for invalidating a patent under § 101 appears to be quite low as well as subjective -- just throw around the words "routine," "conventional," "generic," and "too broad" rather than compare the language of the claims to relevant prior art.

If claims are to be analyzed, as Judge Mayer suggests, under § 101 first, patent-eligibly will take a few more steps toward being a conclusory "I know it when I see it" test.  The well-understood § 103 analysis asks whether the differences between the claimed invention and the prior art would have been obvious to one of ordinary skill in the art.  The Mayo / CLS Bank test, for a claim that incorporates a preexisting algorithm or a longstanding practice, inquires if the claim adds "significantly more" to that algorithm or practice.  The substantive difference between the two is that the § 103 test is grounded using prior art as a reference point for what is known, while the Mayo / CLS Bank test is not.

I/P Engine, Inc. v. AOL Inc. (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Wallach, Mayer, and Chen
Per curiam opinion; concurring opinion by Circuit Judge Mayer; dissenting opinion by Circuit Judge Chen

Court Report

        By Sherri Oslick --

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

Unimed Pharmaceuticals LLC et al. v. Perrigo Co. et al.
1:14-cv-01004; filed July 31, 2014 in the District Court of Delaware

• Plaintiffs:  Unimed Pharmaceuticals LLC; Besins Healthcare Luxemborg SARL
• Defendants:  Perrigo Co.; Perrigo Israel Pharmaceuticals Ltd.

Unimed Pharmaceuticals LLC et al. v. Watson Laboratories Inc.
1:14-cv-01003; filed July 31, 2014 in the District Court of Delaware

• Plaintiffs:  Unimed Pharmaceuticals LLC; Besins Healthcare Luxemborg SARL
• Defendant:  Watson Laboratories Inc.

The complaints in these cases are substantially identical.  Infringement of U.S. Patent Nos. 8,729,057 ("Testosterone Gel and Method of Use," issued May 20, 2014), 8,741,881 (same title, issued June 3, 2014), 8,754,070 (same title, issued June 17, 2014), and 8,759,329 (same title, issued June 24, 2014) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of AbbVie's AndroGel® (testosterone gel, used to treat conditions associated with a deficiency or absence of endogenous testosterone).  View the Perrigo complaint here.

Astrazeneca AB et al. v. Zydus Pharmaceuticals (USA) Inc. et al.
3:14-cv-04782; filed July 31, 2014 in the District Court of New Jersey

• Plaintiffs:  Astrazeneca AB; Aktiebolaget Hassle; Astrazeneca LP; KBI Inc.; KBI-E Inc.
• Defendants:  Zydus Pharmaceuticals (USA) Inc.; Cadila Healthcare Ltd.

Infringement of U.S. Patent Nos. 6,369,085 ("Form of S-omeprazole," issued April 9, 2002), 7,411,070 (same title, issued August 12, 2008), and 8,466,175 (same title, issued June 18, 2013) following a Paragraph IV certification as part of Zydus' filing of an ANDA to manufacture a generic version of AstraZeneca's Nexium® (esomeprazole magnesium, used for the treatment of gastroesophageal reflux disease).  View the complaint here.

Warner Chilcott Co. LLC et al. v. Apotex Inc. et al.
1:14-cv-00998; filed July 30, 2014 in the District Court of Delaware

• Plaintiffs:  Warner Chilcott Co. LLC; Warner Chilcott (US) LLC
• Defendants:  Apotex Inc.; Apotex Corp.

Infringement of U.S. Patent No. 6,106,864 ("Pharmaceutical Formulations Containing Darifenacin," issued August 22, 2000) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Warner Chilcott's Enablex® (darifenacin, used to treat symptoms of overactive bladder).  View the complaint here.

Impax Laboratories Inc. et al. v. Lannett Holdings Inc. et al.
1:14-cv-00999; filed July 30, 2014 in the District Court of Delaware

• Plaintiffs:  Impax Laboratories Inc.; AstraZeneca AB; AstraZeneca UK Ltd.
• Defendants:  Lannett Holdings Inc.; Lannett Co. Inc.

Infringement of U.S. Patent Nos. 6,750,237 ("Pharmaceutical Formulations Containing Aolmitriptan," issued June 15, 2004) and 7,220,767 (same title, issued May 22, 2007), licensed to Impax, following a Paragraph IV certification as part of Lannett's filing of an ANDA to manufacture a generic version of Impax's Zomig® Nasal Spray (zolmitriptan nasal spray, used for the acute treatment of migraine with or without aura in adults).  View the complaint here.

Taro Pharmaceuticals U.S.A. Inc. et al. v. Perrigo Israel Pharmaceuticals, Ltd.
1:14-cv-00809; filed July 30, 2014 in the Western District of Michigan

• Plaintiffs:  Taro Pharmaceuticals U.S.A. Inc.; Taro Pharmaceuticals North America, Inc.
• Defendant:  Perrigo Israel Pharmaceuticals, Ltd.

Infringement of U.S. Patent Nos. 8,277,780 ("Stable Liquid Desoximetasone Compositions with Reduced Oxidized Impurity" issued October 2, 2012) and 8,715,624 (same title, issued May 6, 2014) following a Paragraph IV certification as part of Perrigo's filing of an ANDA to manufacture a generic version of Taro's Topicort® (desoximetasone topical spray, used for the treatment of plaque psoriasis).  View the complaint here.

Boehringer Ingelheim Pharma GmbH & Co. KG et al. v. Amneal Pharmaceuticals LLC
1:14-cv-04726; filed July 30, 2014 in the District Court of New Jersey

• Plaintiffs:  Boehringer Ingelheim Pharma GmbH & Co. KG; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Pharmaceuticals, Inc.
• Defendant:  Amneal Pharmaceuticals LLC

Boehringer Ingelheim Pharma GmbH & Co. KG et al. v. Mylan Pharmaceuticals Inc.
1:14-cv-04727; filed July 30, 2014 in the District Court of New Jersey

• Plaintiffs:  Boehringer Ingelheim Pharma GmbH & Co. KG; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Pharmaceuticals, Inc.
• Defendant:  Mylan Pharmaceuticals Inc.

The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 6,015,577 ("Pharmaceutical Compositions Containing Dipyridamole or Mopidamol and Acetylsalicylic Acid or the Physiologically Acceptable Salts Thereof, Processes for Preparing Them and Their Use in Treating Clot Formation," issued January 18, 2000) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Boehringer's Aggrenox® (extended-release dipyridamole/acetylsalicylic acid, used to reduce the risk of stroke in patients who have had transient ischemia of the brain or completed ischemic stroke due to thrombosis).  View the Amneal complaint here.

Conference & CLE Calendar

August 18-19, 2014 - Advanced Patent Prosecution Workshop 2014: Claim Drafting & Amendment Writing (Practising Law Institute) - San Francisco, CA

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

August 19, 2014 - "Alice Corp. v. CLS Bank International: General Purpose Computers Cannot Save Inventions Directed to Abstract Ideas" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 to 11:15 am (CT)

August 21, 2014 - "Inducement to Infringe in Hatch-Waxman Litigation: Strategies for Patent Drafting, Prosecution and Litigation" (Strafford) - 1:00 to 2:30 pm (EDT)

August 28, 2014 - "Alice Corp. vs. CLS Bank: What’s Eligible, What’s Not, and What’s Still to be Determined?" (Technology Transfer Tactics) - 1:00 to 2:00 pm (ET)

September 7-9, 2014 - 42nd Annual Meeting (Intellectual Property Owners Association) - Vancouver, Canada

September 11, 2014 - "Post-AIA Section 102 and Prior Art: Navigating the Expanded Scope of Prior Art and AIA Exceptions" (Strafford) - 1:00 to 2:30 pm (EDT)

September 11-12, 2014 - Advanced Patent Prosecution Workshop 2014: Claim Drafting & Amendment Writing (Practising Law Institute) - Chicago, IL

September 16, 2014 - "Section 103 and Obviousness: Capitalizing on CCPA and Early Federal Circuit Precedent -- Strategies for Withstanding Obviousness Rejections and Attacks on Patent Validity and Patentability" (Strafford) - 1:00 to 2:30 pm (EDT)

September 18-19, 2014 - FDA Boot Camp (American Conference Institute) - Boston, MA

September 30, 2014 - 2014 Intellectual Property Continuing Legal Education Seminar (DuPont and Widener University School of Law) - Wilmington, DE

September 30 - October 1, 2014 - Paragraph IV Disputes Master Symposium (American Conference Institute) - Chicago, IL

October 2, 2014 - "USPTO Guidance for Determining Subject Matter Eligibility In View of U.S. Supreme Court's Mayo and Myriad Decisions" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 to 11:15 am (CT)

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

DuPont & Widener University School of Law IP CLE Seminar

DuPont and the Widener University School of Law will be holding the 2014 Intellectual Property Continuing Legal Education Seminar on September 30, 2014 at The DuPont Country Club in Wilmington, Delaware.  Among the presentations being offered at the seminar will be:

• IP Due Diligence - Global Aspects / Pitfalls to Avoid
• Non-Practicing Entities: Promoting the Progress of Science and the Useful Arts?
• Ethics
• USPTO Perspective -- to be presented by Andrew Byrnes, Chief of Staff, U.S. Patent & Trademark Office
• Patent Highlights
• Practical Tips on Patent Drafting In View of Recent Case Law
• Post-Grant Review Strategies Update

Additional information about the seminar, including a program, list of speakers can be found here.

The registration fee for the seminar is $600.  Those interested in registering for the seminar can do so here.

Webinar on Post-AIA Section 102 and Prior Art

Strafford will be offering a webinar/teleconference entitled "Post-AIA Section 102 and Prior Art: Navigating the Expanded Scope of Prior Art and AIA Exceptions" on September 11, 2014 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving of Finnegan Henderson Farabow Garrett & Dunner, Washington; John J. Cheek, Senior Corporate Counsel, Caterpillar; and John Mulcahy of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel regarding post-AIA Section 102 and prior art and offer best practices for utilizing prior art in patent applications.  The webinar will review the following questions:

• How did AIA expand the definition of prior art?
• What are the Section 102 exceptions and what is the impact on Section 103 art?
• How can counsel claim—or defend against—post-AIA patent applications asserting priority over pre-AIA applications?
• What practices should patent counsel employ in order to utilize prior art?

The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those interested in registering for the webinar, can do so here.

Webinar on Section 103 and Obviousness

Strafford will be offering a webinar/teleconference entitled "Section 103 and Obviousness: Capitalizing on CCPA and Early Federal Circuit Precedent -- Strategies for Withstanding Obviousness Rejections and Attacks on Patent Validity and Patentability" on September 16, 2014 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving; Jill K. MacAlpine, Ph.D.; Mary Henninger, Ph.D.; and Deborah M. Herzfeld of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel on leveraging decisions by the Court of Customs and Patent Appeals (CCPA) and the Federal Circuit in the application of the Section 103 obviousness standard and offer strategies for evaluating obviousness, handling evidence, and overcoming assertions of unpatentability.  The webinar will review the following questions:

• How is evidence of unexpected properties by a claimed invention evaluated?
• What lessons can patent counsel draw from CCPA decisions when applying the statutory obviousness standard?
• What steps should patent counsel take going forward to avoid making the mistakes of the past?

The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by August 22, 2014 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

Tyco Healthcare Group LP v. Mutual Pharmaceutical Co.

By Andrew Williams --

Can filing a lawsuit under the Hatch-Waxman scheme of 35 U.S.C. § 271(e)(2)(A) ever give rise to antitrust liability?  The Federal Circuit last week indicated in the affirmative.  That statute provides that:

It shall be an act of infringement to submit—
    (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of which is claimed in a patent . . . .

The case law is well established that an infringement analysis in this context is prospective in nature.  Therefore, it is necessary to look at the drug product that the ANDA applicant will likely market if it receives FDA approval.  This analysis is not limited to the ANDA itself, though.  Instead, a court needs to look to the ANDA, materials submitted by the ANDA applicant in support of the ANDA, "and any other relevant evidence submitted by the applicant or patent holder."  Bayer AG v. Elan Pharmaceuticals Research Corp., 212 F.3d 1241, 1248-49 (Fed. Cir. 2000).  With regard to antitrust liability, it is also well established that a patent holder is ordinarily exempt for bringing a patent infringement lawsuit.  This principle is known as "Noerr-Pennington" immunity.  There is an exception to this immunity for sham litigation, however, which is defined as a lawsuit that is both (1) objectively baseless, and (2) subjectively brought to interfere with a competitor's business relationships.  The intersection of these two well-established principles was clarified in the Federal Circuit's Tyco Healthcare Group LP v. Mutual Pharmaceutical Co. case.  Specifically, the Court found that it is possible for a patent holder to engage in sham litigation by filing a Hatch-Waxman lawsuit if the factual theory of infringement is objectively baseless.  The Court also held that a citizen petition filed by a patent holder could give rise to antitrust liability if an ANDA filer suffers anticompetitive harm.

Judge Newman dissented, in part, because she believed that a lawsuit brought in accordance with § 271(e)(2)(A) cannot be a sham because "[t]he filing of . . . an Abbreviated New Drug Application (ANDA) in and of itself constitutes probable cause to initiate suit . . . for the Hatch-Waxman statute authorizes the filing of an infringement suit in response to a Paragraph IV filing."  A review of the statute (reproduced above) would suggest that this is not necessarily correct.  For example, there needs to be a patent that is infringed by the drug or the use of a drug to invoke § 271(e)(2)(A) (not to mention that there is also no reference in the statute to Paragraph IV certifications).  Therefore, for example, as the Supreme Court explained in Caraco Pharm. Labs, Ltd. v. Novo Nordisk A/S, if an ANDA applicant "carves-out" a particular field of use in its application with a section viii statement, it can avoid infringement liability under § 271(e)(2)(A) for patents that claim that carved-out use.  In such a case, the patent holder would likely not have probable cause to initiate suit.  Nevertheless, the policy reasons espoused by Judge Newman are still valid.  Unlike infringement suits brought under 35 U.S.C. § 271(a), in which a patent holder normally has ample time to carefully study the accused infringing activity, in the Hatch-Waxman context, an NDA holder receiving a Paragraph IV notification letter only has 45 days to initiate suit.  Moreover, because the ANDA application is not publically available, the patent holder must rely on statements by the ANDA applicant in the Paragraph IV notice letter, which may or may not contain data sufficient to allow the patent holder to make an independent assessment of infringement.  This is in addition to the fact that an ANDA applicant must represent to the FDA that its ANDA product is "bioequivalent" to the marketed drug.  Of course, there is the possibility of obtaining "confidential access" to the ANDA, but negotiations of the terms of such access can consume most (if not all) of the 45-day window.  Therefore, to impose antitrust liability for lawsuits that are found to have been "objectively baseless" seems like an unjustified shift of power in favor of ANDA applicants, and could encourage vague notice letters and protracted negotiations for ANDA confidential access.  And, as Judge Newman put it, it will be the rare litigation that does not now contain an allegation of antitrust liability.

The drug at issue in this case was temazepam, which is used to treat insomnia.  Tyco markets under the brand name Restoril, which it obtained from Sandoz Limited in 2001, along with several related patents. The patents all claimed formulations with specific surface areas between 0.65 and 1.1 square meters per gram (m²/g).  In general, the smaller the particle size of the drug material in a formulation, the greater the specific surface area will be.  Specific surface area is often measured using a gas-adsorption technique referred to as B.E.T. testing (for Bruanauer, Emmet, and Teller).  This procedure measures the amount of an adsorbate gas bound to the surface of the particles.  However, the sample must be prepared by removing all gas or vapor from the surface in a process referred to as outgassing.  The temperature at which the outgassing is performed is important, because if the temperature is too high, it can physically alter the test material (by softening or melting it).  Conversely, if the temperature is too low, it is possible that the test material will not be "cleaned" of all of the gas or vapor, resulting in less surface area available for the adsorbate gas.

Mutual filed an ANDA with the FDA to market a generic version of temazepam, in which Mutual represented that the ANDA product would have a specific surface area of not less than 2.2 m²/g, thereby taking it outside the scope of the claims.  However, Mutual was using an outgassing temperature of 40°C, rather than the 105°C that Tyco used in all of its tests.  Neither party disputed that the specific surface area of Mutual's ANDA product would fall within the infringing range using an outgassing temperature of 105°C.  Instead, Mutual alleged that its material was physically altered by such temperatures, resulting in larger particles and decreased specific surface area.  The District Court granted a judgment of non-infringement to Mutual on August 4, 2009.  The next day, Tyco filed a citizen petition with the FDA, urging that the criteria for evaluating bioequivalence of generic temazepam products be heightened in view of Mutual's representation to the Court that its drug particles are different than those which had already been approved as safe and effective by agency.  The FDA approved the ANDA, and subsequently denied the petition.  On May 10, 2010, the District Court granted summary judgment that the claims at issue were invalid as obvious, which the Federal Circuit affirmed.  Ultimately, the District Court turned to the antitrust counterclaims filed by Mutual, but granted summary judgment to Tyco.  The present case is the appeal of this decision.

Infringement

Mutual's first antitrust allegation was that Tyco's infringement suit was "objectively baseless" because the Federal Circuit had already held, in the Bayer case cited above, that if the  specific surface area of an ANDA product fell outside the scope of the patented range, it could not infringe under § 271(e)(2)(A).  However, in Bayer, neither party submitted evidence that the specific surface area of the commercial ANDA product would differ from that reported in the ANDA.  As such, the statements contained in the ANDA were controlling.  Instead, the Court in the present case reaffirmed that it is not unreasonable to allege infringement if the patent owner has independent evidence apart from the ANDA filing that the as-marketed product will infringe.

That did not end the "objectively baseless" inquiry for the majority, however.  Mutual had presented expert evidence that its use of a lower outgassing temperature should have underestimated the specific surface temperature, not overestimated it.  This was because the lower temperature, at worst, would result in an incomplete "cleaning" of the test particles, leaving less available surface for the test gas to adsorb to.  The argument goes, therefore, that the 2.2 m²/g should be the low end of the specific surface area of the ANDA product, resulting in a finding of non-infringement at any temperature used.  If this was the case, then the Court believed that Tyco's factual theory of infringement could have been objectively baseless.  The Court remanded for this determination, as well as whether the subjective element had also been satisfied.

Validity

Mutual's second antitrust allegation was that Tyco lacked any reasonable prospect of successfully defending the validity of the patents.  The Court did uphold the lower court's ruling that, in this case, such allegations were without merit.  Nevertheless, the Court stopped short of stating that "the presumption of validity of a duly granted patent negates ruling that the routine defense of a patent's validity constitutes 'sham' litigation," as Judge Newman would have held.  She had a problem with the majority's suggestion that antitrust liability could in situations where a patent holder has the "burden of production," such as with secondary considerations of non-obviousness.  Her concern was that such a requirement could import a "chilling effect" of antitrust liability into routine patent debates.  Judge Newman predicted that this decision will cause accused infringers to assert Sherman Act violations in almost all patent suits going forward.

The Citizen Petition

Mutual's next antitrust allegation was that Tyco's citizen petition to the FDA was a sham, and therefore Tyco did not have Noerr-Pennington immunity.  The lower court held that the sham exception was limited to litigation, and therefore was not applicable to administrative petitions.  The majority disagreed as a matter of law, and remanded for a determination whether the citizen petition was objectively baseless, and whether the filing of the petition caused antitrust injury to Mutual.  Judge Newman pointed out in dissent that Tyco's petition communicated public information that Mutual's ANDA product was not the same as the FDA-approved product, a conclusion based on the fact that an outgassing temperature of 105°C impacted the two allegedly equivalent drug products differently.  "An accurate communication," Judge Newman explained, "cannot be an antitrust violation, even if it relates to competitors, as firmly established by Noerr-Pennington."

The Walker-Process Allegation

Mutual's final allegation was that Tyco was aware that Sandoz fraudulently obtained the patents at issue, and therefore it was stripped of its immunity from antitrust liability based on the Supreme Court's Walker Process case.  The Federal Circuit rejected this argument and affirmed the lower court because, even if Sandoz had committed fraud in obtaining the patent, there was insufficient evidence on the record to support the inference that Tyco was aware of it.  First, a reasonable fact-finder could not conclude that Tyco had knowledge of the alleged fraud just because it had reviewed the prosecution record.  In addition, just because Tyco might have been aware that there could be a strong validity challenge to the patents, this does not support an inference of knowledge of fraud.  Finally, Mutual's Paragraph IV notice letter was insufficient to put Tyco on notice (pun in the original) of the alleged fraud, because Mutual had not sufficiently articulated these allegations at that time.

One important consideration of this case is that the Federal Circuit did not comment on the subjective component of the "sham litigation" exception to antitrust liability, other than to instruct the lower court to consider it on remand.  Before declaring antitrust allegation to be the new plague on the patent system, as least as far as ANDA litigation is concerned, it will be necessary to see how lower court's apply this second prong.  Hopefully Judge Newman's premonition of antitrust counterclaims in almost every case will not come to pass.

Tyco Healthcare Group LP v. Mutual Pharmaceutical Co. (Fed. Cir. 2014)
Panel: Circuit Judges Newman, Bryson, and Moore
Opinion by Circuit Judge Bryson; dissenting opinion by Circuit Judge Newman

FDA Releases Another Prospective Guidance

By Kevin E. Noonan --

On August 5th, the U.S. Food and Drug Administration issued a "Guidance for Industry" entitled "Reference Product Exclusivity for Biological Products file under Section 351(a) of the PHS Act."  Before setting forth the first word of the Guidance, the Administration set forth the following caveat:

This draft guidance, when finalized, will represent the Food and Drug Administration's (FDA's or the Agency's) current thinking on this topic.  It does not create or confer any rights for or on any person and does not operate to bind FDA or the public.  You can use an alternative approach if the approach satisfies the requirements of the applicable statutes and regulations.  If you want to discuss an alternative approach, contact the FDA staff responsible for implementing this guidance.

The term of market exclusivity under the BPCIA (12 years; Sec. 351(k)(7), codified at 42 U.S.C. 55 262(k)) requires that the agency identify the date from which to calculate the term.  This Guidance, prefaced by the quote set forth above, provides some grounds for making that determination.  However, as with many of the FDA's Guidances on provisions of the law, the tentativeness of the principles set forth are more akin to hints than rules and provide little other than further evidence that the Administration will act with utmost caution (a stance understandable when taken with regard to substantive grounds for biosimilar approval but somewhat less so in the context of this Guidance).

The critical date with which the Guidance is concerned is the "date of first licensure" of the reference product under PHSA Sec. 351(k)(7)(C).  This date determines not only the length of the market exclusivity of the reference product but also the time (4 years) that a biosimilar applicant must wait before filing an application for biosimilar approval.  The Guidance notes that "[n]ot every licensure of a biological product under 351(a) is considered a 'first licensure' that gives rise to its own exclusivity period," where some changes in "previously licensed" reference products, from either the same or "related" reference product sponsors are expressly excluded from being considered as a date of first licensure.  Because the agency recognizes that it is the reference drug sponsor who will have "superior information" about such changes or such relationships between companies, the Guidance sets forth "the types of information that reference product sponsors should provide to facilitate FDA's determination of the date of first licensure for their products."

The Guidance then sets forth these types of "superior information."  Typically, the date of first licensure is "the initial date the particular product at issue was licensed in the United States."  But there are exceptions codified into the statute; these include

• a supplement for the biological product that is the reference product; or

• a subsequent application filed by the same sponsor or manufacturer of the biological product (or a licensor, predecessor in interest, or other related entity) for:

-- a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength; or

-- a modification to the structure of the biological product that does not result in a change in safety, purity, or potency.

(These can be seen as "anti-evergreening" provisions.)  The Guidance notes that the Agency has "experience in construing other provisions that require examination of the relationships between business entities to determine eligibility of a new drug application for exclusivity" (citing "Abbreviated New Drug Application Regulations; Patent and Exclusivity Provisions" (patent and exclusivity final rule), published in the Federal Register of October 3, 1994 (59 FR 50338 at 50359 and 50362)).  In view of this experience, the Guidance asserts that the Agency will construe certain terms of the statute consistently to its previous determinations.  Thus:

• the term "predecessor in interest" will be "any entity that the sponsor has taken over, merged with, or purchased, or that has granted the sponsor exclusive rights to market the biological product under the 351(a) application, or had exclusive rights to the data underlying that application";

• a "licensor" will be "any entity that has granted the sponsor a license to market the biological product, regardless of whether such license is exclusive" and shall "include, for instance, entities that continue to retain rights to develop, manufacture, or market the biological product, and/or rights to intellectual property that covers the biological product"; and

• one corporate entity will be considered an "other related entity" "if (1) either entity owns, controls, or has the power to own or control the other entity (either directly or through one or more other entities) or (2) the entities are under common ownership or control" or "if the entities are or were engaged in certain commercial collaborations relating to the development of the biological product(s) at issue."  In this regard, the FDA "expects to consider not only ownership and control of the investigational new drug application (IND) and the BLA, but also the level of collaboration between the entities during the development program as a whole."

Regarding the statutory proscriptions against considering for the date of first licensure situations wherein there is "a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength" unless there are "modifications in the structure of the biological product" that results in a change in "safety, purity or potency," the Agency will need to determine what qualifies as "modifications in the structure of the biological product" that satisfy the statute.  To do so, "a sponsor seeking to assist FDA in determining the date of first licensure for a reference product licensed under 351(a), should describe the structural similarities and differences between its proposed product and any previously licensed biological product that was the subject of a 351(a) application filed by the same sponsor or manufacturer (or its licensor, predecessor in interest, or other related entity)."  Specifically, for a protein product the reference drug sponsor should describe "any differences in amino acid sequence, glycosylation patterns, tertiary structures, post-translational events (including any chemical modifications of the molecular structure such as pegylation), and infidelity of translation or transcription, among others."  In addition, the Agency will perform a structural comparison of the reference drug product and the modified product, including "whether the modified product affects the same molecular target as the previously licensed product."  For changes in cell lines to make the reference product, the Agency asserts that "modification of the structure will not simply be presumed" but rather require the product sponsor to submit relevant evidence that establishes the change.

In addition, according to the statute, the reference product sponsor will be required by the Agency to show the structural modification "results in a change in safety, purity or potency" (or alternatively and interchangeably, "safety and effectiveness").  The Agency will do this on a "case-by-case basis" based on scientific data (as provided by the sponsor).  The Agency is willing to presume such a change if the sponsor establishes that the modified "product demonstrates that it affects a different molecular target than the original product" (where the Guidance defines "a difference molecular target" to mean any molecule in the body whose activity is modified by the product, resulting in a desirable therapeutic effect," including "receptors, enzymes, ion channels, structural or membrane transport proteins, nucleic acids, and pathogens, among others").

The final section of the Guidance sets forth expressly the information the Agency "suggests" the reference product sponsor should submit to support its date of first licensure.  This information includes:

1. A list of all licensed biological products that are structurally related to the biological product that is the subject of the 351(a) application being considered. This list should include products that share some of the same principal molecular structural features of the product being considered, but generally can be limited to products that affect the target should be included. Where specific molecular targets have not been defined, this list should include products that share the narrowest target that can be characterized. This may be a pathway, cell type, tissue, or organ system. If this assessment results in the conclusion that no product that has the same molecular target or shares some of the same principal molecular structural features has been licensed, a sponsor should provide an adequate justification to support the assertion that there are no previously licensed products that are relevant for purposes of determining the date of first licensure.

2. Of those licensed biological products identified in item 1 above, a list of those for which the sponsor or one of its affiliates, including any licensors, predecessors in interest, or related entities, are the current or previous license holder.

3. Description of the structural differences between the proposed product and any products identified in item 2 above. For protein products, this should include, but is not limited to, changes in amino acid sequence, differences due to post-translational events, infidelity of translation or transcription, differences in glycosylation patterns or tertiary structure, and differences in biological activities.

4. Evidence of the change in safety, purity, and/or potency between the proposed product and any products identified in item 2 above. This should include, but is not limited to, a description of how the structural differences identified in item 3 above relate to changes in safety, purity, and/or potency.

And, of course, "any other information and data that would assist the FDA in making its determination."

Finally, the Guidance notes that it "is reviewing options for making information publicly available regarding reference product exclusivity and dates of first licensure" and will provide the information to the public on its website when the Agency decision has been made.

News from Abroad: The Regretful Patentee -- The Re-Emergence of File Wrapper Estoppel & Equivalence in the UK

By Ralph Cox* and Simon Spink** --

Overview

For the best part of 10 years, since the judgment of Lord Hoffmann in Kirin-Amgen v Hoescht Marion Roussel[1], it has been widely assumed that there is no file wrapper estoppel in the UK and no doctrine of equivalents either.  Both these assumptions are thrown into doubt by the Patent Court's decision in Actavis v Eli Lilly[2].  The judge, Mr Justice Arnold, held that the court should not shut its eyes to the prosecution file but should ensure a patentee did not abuse the system by accepting narrow claims during prosecution and then argue for a broader construction in a subsequent infringement action.  The judge also applied the more or less defunct Improver or Protocol Questions[3] in a manner that potentially opens the door to a doctrine of equivalence in all but name.

Use of the File Wrapper

In Kirin-Amgen, Lord Hoffmann said that there were good reasons why the German and English courts discouraged, if not actually prohibited, the use of patent office files in aid of the construction of claims.  The reasons included that the meaning of a patent does not change depending on whether a party has access to the office file or not and anyway the file may reflect no more than a patentee's desire to get the patent granted quickly without further argument with the examiner.  In short, it was a difficult and likely unproductive exercise to use the file wrapper to try to work out what the patentee meant by a claim's terms.

Taking the hint, parties and the courts made little use of file wrappers in subsequent cases with Sir Robin Jacob observing in Eli Lilly v Human Genome Sciences[4] that he was not confident it was legitimate to do so even though the UK courts had yet to decide the matter conclusively.  Going further, Mr Justice Floyd in Qualcomm v Nokia[5] warned that it was positively counterproductive to be referred to prosecution documents as it alerted the tribunal to the fact that there might be something to be said for the alternative construction.

Doctrine of Equivalents

While Lord Hoffmann considered that Article 69 of the European Patent Convention firmly shut the door on any doctrine which extended protection outside the claims, he acknowledged that equivalence could be an important part of the background that would affect the skilled person's understanding of a claim.  This was consistent with Article 2 of the Protocol on the Interpretation of Article 69, which states that, in balancing the literal and purposive construction of a patent's claims, due account should be taken of "any element which is equivalent to an element specified in the claims".  However, he doubted the usefulness of the Improver Questions in reaching a purposive construction saying that there was only one compulsory question:  what would a person skilled in the art have understood the patentee to have used the language of the claim to mean?

Following this decision, the Improver Questions have seldom been used in UK patent actions.  In Smith & Nephew v Convatec Technologies[6] it was even questioned whether a 1992 decision on infringement of a numerical limitation would have been decided the same way following Kirin-Amgen as it had been using the Improver Questions.

The Actavis v Eli Lilly Decision

The Actavis case concerned Eli Lilly's European patent protecting its cancer treatment, Alimta.  The patent claims the active ingredient, pemetrexed disodium, in combination with vitamin B12 and, optionally, a folic protein binding agent.  Actavis sought declarations that its proposed generic version of Alimta, which would contain one of pemetrexed diacid, pemetrexed dipotasium or pemetrexed dimethamine, did not infringe.  As Actavis was not challenging validity, it was allowed to seek declarations of non-infringement under the French, Italian and Spanish designations of the patent as well as the UK designation.

In his judgment, Mr Justice Arnold carefully reviewed the case law on both use of file wrappers and the doctrine of equivalence.  On the latter, he identified three main classes of case in which patentees resort to arguments on equivalence, namely where:

(i)       the patent has been poorly drafted (as in the Improver case);

(ii)      technology has moved on significantly since the patent was filed (as in Kirin-Amgen); and

(iii)     the patent regrets a decision taken during the course of prosecution.

The Actavis case was a clear example of the third category.  Eli Lilly had attempted to broaden its claims in prosecution to cover "pemetrexed", failed and accepted the narrower claims to pemetrexed disodium.  It had reserved the right to file a divisional application, but did not do so.  It clearly now wished it had broader claims in order to catch Actavis on infringement.  But there was "no reason why the law should be sympathetic to the patentee", which not only had the benefit of skilled professional advice but also had the opportunity to appeal against adverse decisions by patent examiners.  Further, allowing examiners' decisions effectively to be overturned by the courts on claim construction would undermine their important role.  Against this background, Mr Justice Arnold made use of the prosecution history as one of several reasons why Eli Lilly's broad construction, that pemetrexed disodium encompassed other salts because the important pemetrexed anion was present irrespective of the cation used, should be rejected.

He also used the Improver Questions, partly because there was no dispute that the alleged infringement was not within the primary, literal meaning of the claim and partly because the parties used them for consistency in their submissions on the non-UK designations.

Conclusion

Mr Justice Arnold observed that the US has a doctrine of equivalence and a doctrine of file wrapper estoppel to counterbalance it.  While following prior case law, the UK had neither, file wrapper estoppel is back albeit only in the case of the regretful patentee.  Even then, as Arnold J warned, the courts should be cautious using the prosecution history only when it is short, simple and shows clearly why the claims are in their granted form and not broader.

As regards equivalence, using the Improver Questions having held that there is plainly no literal infringement comes very close to Lord Hoffmann's description of the US approach in Kirin-Amgen as being "to adhere to literalism in construing the claims and evolve a doctrine which supplements the claims by extending protection to equivalents".  Even if not explicitly recognised as a doctrine of equivalence, the decision may therefore lead to a resurrection of the Improver Questions by patentees effectively arguing just that.

* Ralph Cox is a Partner with Fasken Martineau LLP (London, UK)
** Simon Patrick Spink is a Senior Associate with with Fasken Martineau LLP (London, UK)

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[1] [2005] RPC 9

[2] [2014] EWHC 1511 (Pat)

[3] From Improver v Remington Consumer Products [1990] FSR 181 - in brief, as guidance on arriving at a purposive construction of a claim, the Questions ask whether a variant has a material effect on the way an invention works, whether this was obvious at the patent's publication date and whether strict compliance with the primary meaning of the claim is nonetheless essential.

[4] [2013] RPC 22

[5] [2008] EWHC 329 (Pat)

[6] [2013] EWHC 3955 (Pat)