Patent Docs

Phigenix, Inc. v. ImmunoGen, Inc. (Fed. Cir. 2016)

By Andrew Williams --

Can any petitioner appeal a Board's final written decision from an inter partes review or post grant review proceeding?  Contrary to the language of 35 U.S.C. § 141(c) which permits any party "who is dissatisfied with" the Board's decision to appeal the case to the Federal Circuit, most practitioners believed that the Federal Circuit's decision in Consumer Watchdog v. Wisconsin Alumni Research dictated that Article III standing was still a requirement for IPRs and PGRs.  However, the Court left a potential loophole in the Consumer Watchdog case when it acknowledged that it was not deciding "whether, under other circumstances, the preclusive effect of the estoppel provisions could constitute an injury in fact."  In the IPR context, 35 U.S.C. § 315(e) prevents a petitioner from requesting or maintaining any proceeding before the Office or asserting in a civil action or before the ITC the invalidity of any claim on a ground that the petitioner "raised or reasonably could have raised," if the claim was subject to a final written decision (subject, of course, to the interpretation of this statute by the Federal Circuit).  Nevertheless, the Federal Circuit earlier today decided that standing is still required for a petitioner to appeal an adverse final written decision from the Board.  Moreover, in Phigenix, Inc. v. ImmunoGen, Inc., the Court did not find any distinction in the estoppel effects of the two different proceedings, because the petitioner/appellant was "not engaged in any activity that would give rise to a possible infringement suit."

The Federal Circuit recognized in the Phigenix opinion that since its inception nearly thirty-five years ago, it has never "established the legal standard for demonstrating standing in an appeal from a final agency action."  The three elements that make up the standing requirement are "(1) [that the party has] suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [party], (3) that is likely to be redressed by a favorable judicial decision."  Phigenix (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)).  However, when Congress provides a party with a procedural right to appeal an administrative decision, the immediacy and redressability requirements may be relaxed.  See Phigenix, FN 2 and Consumer Watchdog.  Nevertheless, the obligation to establish an injury in fact remains firm.  See id.

In order to demonstrate standing to appeal a decision from final agency action, the Federal Circuit addressed three considerations.  First, the appellant has the burden of production to establish standing, not unlike a party that moves for summary judgement in district court.  Second, the appellant must use evidence "to the extent necessary to explain and substantiate its entitlement to judicial review."  Sometimes standing can be self-evident, such as when the appellant is an object of the action.  Otherwise, it must submit "'arguments and any affidavits or other evidence," which can be record evidence from the agency action or any additional evidence submitted to the Court.  Finally, an appellant must produce this evidence at the first appropriate time, which can either by "in response to a motion to dismiss or in the opening brief."

In the present case, the patent holder was ImmunoGen, Inc., and the patent at issue was U.S. Patent No. 8,337,856, which relates generally to huMab4D5 ANTI-ErbB2 antibody-maytansinoid conjugates.  ImmunoGen had licensed the '856 patent to Genentech Inc. because it purportedly covers the use of the drug Kadcyla^®.  Phigenix is a third-party for-profit "research company that focuses 'on the use of novel molecular therapeutics' designed to fight cancer."  It had developed a patent portfolio that included U.S. Patent No. 8,080,534, which Phigenix alleged covers Genentech's activities related to Kadcyla.  In fact, a case is currently pending in the Northern District of California in which Phigenix has asserted the '534 patent against Genentech.  Phigenix claimed that it filed the current IPR petition "[t]o further its commercialization efforts with respect to its patent portfolio."  The PTAB subsequently found the claims nonobvious, thereby prompting this appeal.

The Court first applied the operative standards that it had identified to the question of Phigenix's standing.  In doing so, the Federal Circuit noted that Phigenix was not asserting that it faced a risk of infringing the patent, that it was a potential licensee of the patent, or that it would otherwise take any action that implicated the patent.  Instead, Phigenix was contending that it had suffered "actual economic injury" because the mere existence of the patent increased competition between itself and ImmunoGen, which Phigenix alleged was a cognizable Article III injury.  Specifically, it alleged that at least of portion of the licensing revenue that ImmunoGen was enjoying would inure to Phigenix if the patent were invalidated.

Nevertheless, the Federal Circuit found that Phigenix had failed to substantiate these assertions with evidence.  These arguments were not developed at the PTAB, so there was no record evidence that Phigenix could cite.  Instead, it resorted to submitting at least one declaration and a "non-record" document.  The problem was that the declaration did not set out the requisite supporting facts, but instead included conclusions of law.  In addition, the other document, an attorney letter sent to ImmunoGen, merely stated that Phigenix "believed" that it had a strong portfolio, and that it "believed" the '856 patent was invalid.  The conclusory statements found in the declaration and the letter regarding a hypothetical licensing injury were insufficient to establish injury in fact.  "However, there is simply no allegation here that Phigenix has ever licensed the '534 patent to anyone, much less that it licensed the '534 patent to entities that have obtained licenses to the ImmunoGen '856 patent."

So what can practitioners take away from this case?  First, if you are a third-party petitioner that unsuccessfully challenged a patent before the PTAB, and you intend to rely on economic injury in fact to establish standing, you will need to present concrete evidence providing facts of that harm.  Fortunately for such a petitioner, it's clear that you don't need to establish the necessary record during the IPR itself.  Even though the presented evidence didn't succeed in this case, the Federal Circuit sanctioned the use of declarations and other evidence presented for the first time before the Court.  This is good news, of course, because the ability to establish a record before the Board is severely limited, especially with the page and word count limits.  Moreover, such evidence would unlikely be relevant to the assertions made in the petition.

Finally, from a policy point of view, this case could severely undermine the participation of parties unrelated to the challenged patents in IPR proceedings.  Of course, biotech and pharmaceutical interest groups would like to see a "standing" requirement added to the IPR petitions themselves.  But, without a change to the statute, anybody is still able to file a petition against any patent (provided they are not subject to the one-year time bar).  Nevertheless, public interest groups, hedge funds, and operating companies without a cognizable injury will be unable to appeal an adverse decision.  This is perhaps sufficient to deter at least some petitioners.  With the prospect of no redress from a Board's decision, these parties may simply find that it is not worth the expense.  On the other hand, this concern is only realized when the petitioner loses.  With the levels of claim invalidation at the PTAB still high, this case probably won't deter as many petitioners as patent owners would like.

Phigenix, Inc. v. ImmunoGen, Inc. (Fed. Cir. 2016)
Panel: Circuit Judges Dyk, Wallcah, and Hughes
Opinion by Circuit Judge Wallach

Top Five Stories of 2016

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its tenth annual list of top patent stories.  For 2016, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  In previous posts, we counted down stories #20 to #16, stories #15 to #11, and stories #10 to #6, and today we count down the top five stories of 2016.  As with our other lists (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2016" on January 18, 2017 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

5.  Federal Circuit Finds That Continuation Filed on Same Day Parent Issues Satisfies 35 U.S.C. § 120

Last year, a pair of District Court decisions, including the decision by the District Court for the District of Delaware in Immersion Corp. v. HTC Corp., came in at #16 on our list of Top Stories for 2015.  In June, the Federal Circuit reversed the decision of the District Court that Immersion Corporation's U.S. Patent No. 7,148,875 was not "filed before the patenting" of U.S. Patent No. 6,429,846 within the meaning of 35 U.S.C. § 120, because the '875 patent application was filed on the same day that the '846 patent issued.  In an opinion by Judge Taranto, joined by Chief Judge Prost and Judge Linn, the Federal Circuit noted that the question is "whether . . . the continuing application has to be filed at least one day before the earlier application is patented, or whether an application may be 'filed before the patenting' of the earlier application when both legal acts, filing and patenting, occur on the same day" (emphasis in original).  The panel also noted that "same-day continuations have been approved by a consistent, clearly articulated agency practice going back at least half a century, which has plausibly engendered large-scale reliance and which reflects the agency's procedural authority to define when the legal acts of 'filing' and 'patenting' will be deemed to occur, relative to each other, during a day."

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

• "Immersion Corp. v. HTC Corp. (Fed. Cir. 2016)," June 26, 2016

4.  USPTO Issues More Subject Matter Eligibility Guidance

Last spring, the U.S. Patent and Trademark Office issued the May 2016 Subject Matter Eligibility Update, which provides further guidance for determining subject matter eligibility under 35 U.S.C. § 101.  The May Update discusses a memorandum on subject matter eligibility determinations that was issued to the patent examining corps, and provides additional life sciences examples that are intended to assist examiners in making eligibility determinations, an updated index of eligibility examples, and an updated list of court decisions (Supreme Court and Federal Circuit) addressing subject matter eligibility.  Among the six additional life sciences examples (which brings the total number of examples for all technologies to 33) is an example (29) that includes seven claims directed to the detection of a hypothetical protein, JUL-1, and the diagnosis and/or treatment of a hypothetical autoimmune disease, julitis.  Exemplary claims 2-6 of Example 29 are directed to method of diagnosing julitis, or diagnosing and treating julitis, in a patient.  Whether the latest update to the USPTO's subject matter eligibility guidance will prove to be helpful to applicants has yet to be determined.

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

• "USPTO Charting the Way for Subject Matter Eligibility," November 23, 2016
• "USPTO to Hold Roundtables on Subject Matter Eligibility," November 6, 2016
• "USPTO Issues Memorandum on Recent Subject Matter Eligibility Decisions," November 2, 2016
• "USPTO Releases Memorandum on Subject Matter Eligibility," July 18, 2016
• "Subject Matter Eligibility Guidance -- Example on Screening for Gene Alterations," June 9, 2016
• "The Recent PTO Guidance on Subject Matter Eligibility: Lessons," May 25, 2016
• "Subject Matter Eligibility Guidance -- Example on Diagnosing and Treating Julitis," May 12, 2016
• "USPTO Issues Update to Subject Matter Eligibility Guidance," May 9, 2016
• "Was the Deck Stacked? Federal Circuit Refuses to Rule on Scope of USPTO Patent Guidance," April 7, 2016

3.  Supreme Court Finds: (1) USPTO Properly Applies BRI Standard to Construe Claims in IPRs, and (2) Decision to Institute IPR Is Not Subject to Judicial Review

In June, in its first pronouncement regarding the post-grant review proceedings established under the America Invents Act, the Supreme Court ruled that the U.S. Patent and Trademark Office's positions on two of the law's provisions regarding inter partes review were correct.  First, the Court held unanimously that the USPTO properly applied the "broadest reasonable interpretation" standard for claim construction for IPRs.  Second, six members of the Court also agreed that the statute mandated that the decision to institute an IPR was not subject to judicial review.  Justice Breyer authored the decision of the Court, with Justice Thomas authoring a concurring opinion to voice his continued displeasure with judicial deference to administrative agencies under Chevron USA Inc. v. Nat'l Defense Council, Inc.  On the second question Justice Alito penned a dissent, which was joined by Justice Sotomayor.

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

• "Cuozzo Speed Technologies, LLC v. Lee (2016) -- Question 2 -- PTAB Shenanigans and Reviewability," June 20, 2016
• "Cuozzo Speed Technologies LLC v. Lee (2016)," June 20, 2016
• "Of Patent Trolls and Hot Dog Stands -- The Supreme Court Oral Argument in Cuozzo Speed Technologies, LLC v. Lee," April 25, 2016
• "Supreme Court Preview -- Cuozzo Speed Technologies, LLC v. Lee -- Question 2," March 9, 2016
• "Cuozzo Speed Technologies, LLC v. Lee," January 18, 2016

2.  Continuing Fallout from Alice Corp. v. CLS Bank Int'l -- Courts and PTAB Find Patent Eligibility in Some Cases

It has become abundantly clear that the Supreme Court's 2014 Alice Corp. v. CLS Bank decision has significantly changed the patent-eligibility landscape for business methods and some types of software inventions.  For instance, in 2015, approximately 70% of all patents challenged under Alice in district courts were invalidated, while the monthly 35 U.S.C. § 101 rejection rates for USPTO Technical Centers 3620, 3680, and 3690 were over 85% for most of the year.  These sobering statistics are due to the two-prong subject matter eligibility test set forth in Alice.  Particularly, one must first determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more."  Notably, the abstract idea exclusion has been heavily employed against the aforementioned business method and software inventions.  However, in four separate opinions issued by the Federal Circuit last year -- Enfish, LLC v. Microsoft Corp., BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC; McRO, Inc. v. Bandai Namco Games America Inc.; and Amdocs (Israel) Limited v. Openet Telecom, Inc. -- the Court surprised some in the patent community by finding challenged claims to be patent eligible.  These decisions may provide some light at the end of the tunnel for applicants who have struggled to protect business method and software inventions since Alice.

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

• "Garfum.com Corp. v. Reflections by Ruth (D.N.J. 2016)," December 26, 2016
• "Verint Systems Inc. v. Red Box Recorders Ltd. (S.D.N.Y. 2016)," December 13, 2016
• "Amdocs (Israel) Limited v. Openet Telecom, Inc. (Fed. Cir. 2016)," November 27, 2016
• "USPTO Charting the Way for Subject Matter Eligibility," November 23, 2016
• "Location-Based Online Gaming Patents Found to be Directed to Patentable Subject Matter," November 7, 2016
• "USPTO Issues Memorandum on Recent Subject Matter Eligibility Decisions," November 2, 2016
• "Intellectual Ventures I LLC v. Symantec Corp. -- Judge Mayer on the First Amendment" October 24, 2016
• "Perdiemco, LLC. v. Industrack LLC (E.D. Tex. 2016)," October 20, 2016
• "Recent Software Case Gives Important Lessons for Biotech," October 17, 2016
• "September Was a Good Month for Patent Eligibility in the District Courts," October 16, 2016
• "Iron Gate Security, Inc. v. Lowe's Companies, Inc. (S.D.N.Y. 2016),"September 21, 2016
• "Zak v. Facebook, Inc. (E.D. Mich. 2016)," September 19, 2016
• "McRO, Inc. v. Bandai Namco Games America Inc. (Fed. Cir. 2016)," September 13, 2016
• "Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc. (E.D. Tex. 2016)," August 30, 2016
• "Intellectual Ventures I LLC v. J. Crew Group, Inc. (E.D. Tex. 2016)," August 29, 2016
• "Of Technical Tools and Problems: Going Beyond the Two-Prong Alice Test," August 21, 2016
• "BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (Fed. Cir. 2016)," June 27, 2016
• "Femto-Sec Tech, Inc. v. Lensar, Inc. (C.D. Cal. 2016)," June 15, 2016
• "USPTO Issues Memorandum Regarding Enfish and TLI," May 26, 2016
• "Section 101 and the Growing Alice Backlash," May 15, 2016
• "Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016)," May 12, 2016
• "Avago Technologies General IP (Singapore) Pte Ltd. v. Asustek Computer, Inc. (N.D. Cal. 2016)," May 3, 2016
• "Samsung Electronics America, Inc. v. Smartflash LLC (PTAB 2016)," April 19, 2016
• "Global Cash Access, Inc. v. NRT Technology Corp. (D. Nev. 2016)," April 12, 2016
• "Treehouse Avatar LLC v. Valve Corp. (D.C. Del. 2016)," April 4, 2016
• "Gonzalez v. Infostream Group, Inc. (E.D. Tex. 2016)," February 22, 2016
• "NRT Technology Corp. v. Everi Payments, Inc. (PTAB 2016)," February 2, 2016
• "Genband US LLC v. Metaswitch Networks Corp. (E.D. Tex. 2016)," January 14, 2016
• "Motio, Inc. v. BSP Software LLC (E.D. Tex. 2016)," January 11, 2016

1.  Supreme Court Refuses to Hear Sequenom

Last year, the story coming in at #1 on our list of Top Stories for 2015 was the Federal Circuit's decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc., in which the Federal Circuit affirmed the District Court's grant of summary judgment of invalidity that the claims of U.S. Patent No. 6,258,540 were patent ineligible.  Although the Federal Circuit appreciated that the inventors had found cell-free fetal DNA (cffDNA) in maternal plasma or serum "that other researchers had previously discarded as medical waste," the panel stated that "[a]pplying a combination of known laboratory techniques to their discovery," the inventors "implemented a method for detecting the small fraction of paternally inherited cffDNA in maternal plasma or serum to determine fetal characteristics, such as gender."  In affirming the District Court decision, the opinion concluded that "[t]he method . . . begins and ends with a natural phenomenon," and "[t]hus, the claims are directed to matter that is naturally occurring."  Judge Linn noted in his concurring opinion that he joined the majority "only because [he is] bound by the sweeping language of the test set out in Mayo Collaborative Services v. Prometheus Laboratories, Inc."  Sequenom responded to the decision by filing a petition for rehearing en banc, which the Federal Circuit denied.  In March, Sequenom filed a petition for certiorari for Supreme Court review of the Federal Circuit's decision, advising the Court that it "should take this opportunity to provide the guidance the Federal Circuit is openly seeking, and avoid a result neither it nor Congress could have intended."  In response to Sequenom's petition for certiorari, a total of twenty-two amicus briefs were filed encouraging the Court to grant certiorari.  However, in June, the Supreme Court surprised many in the the patent community by issuing an order denying certiorari in the case.

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

• "Supreme Court Denies Certiorari in Sequenom v. Ariosa," June 27, 2016
• "Amicus Briefs in Support of Sequenom's Petition for Certiorari: Dr. Chakrabarty, A Scientist's View," June 19, 2016
• "Amicus Briefs in Support of Sequenom's Petition for Certiorari: Eli Lilly and Company et al.," June 16, 2016
• "Amici Support Certiorari in Sequenom v. Ariosa," May 2, 2016
• "Genetic Technologies Ltd. v. Merial L.L.C. (Fed. Cir. 2016)," April 10, 2016
• "Coalition for 21st Century Medicine Comments on Expected Ariosa Cert Petition," April 3, 2016
• "Sequenom Petitions for Certiorari," March 21, 2016

Conference & CLE Calendar

January 10, 2017 - "The BPCIA Patent Dance - What Biosimilar Companies Need To Know" (The Knowledge Group) - 3:00 to 5:00 pm (EST)

January 12, 2017 - "Navigating Administrative Law in Patent Appeals Involving Review Proceedings -- Identifying and Preserving Administrative Errors in IPR Proceedings; Impact of Recent Court Decisions" (Strafford) - 1:00 to 2:30 pm (EST)

January 12, 2017 - "Strategic Patent Portfolio and Lifecycle Development for Pharma & Biotech Industries: Significant Issues" (The Knowledge Group) - 12:00 to 2:00 pm (EST)

January 18, 2017 - "Top Patent Law Stories of 2016" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 am to 11:15 am (CT)

January 19, 2017 - "Evidence of Prior Art at the PTAB: Rigorous Proof, Or Else" (Intellectual Property Owners Association) - 2:00 to 3:00 pm (ET)

January 19, 2017 - "Preparing for Pharma PGRs: Lessons for Patent Owners From PGR Denials -- Leveraging Successful IPR Arguments, Strengthening Patent Applications to Survive PGR Petitions" (Strafford) - 1:00 to 2:30 pm (EST)

January 25, 2017 - "Functional Patent Claims After Williamson: Understanding the Benefits and Risks for Your University's Patent Portfolio" (Technology Transfer Tactics) - 1:00 to 2:00 pm (Eastern)

January 26, 2017 - "Leveraging Latest Patent Decisions, Navigating New Complexities, Cases to Watch in 2017 -- Key Lessons on Patent Eligibility, Deference on Appeal, Venue, Estoppel, Continuation Patent Applications, and More" (Strafford) - 1:00 to 2:30 pm (EST)

February 22, 2017 - "Patent-Eligibility Update: Abstract Ideas in the Federal Circuit and USPTO" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 am to 11:15 am (CT)

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

Patent-Eligibility Update for Abstract Ideas

McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar entitled "Patent-Eligibility Update: Abstract Ideas in the Federal Circuit and USPTO" on February 22, 2017 from 10:00 am to 11:15 am (CT).  In this presentation, MBHB attorney and Patent Docs author Michael Borella will review the new case law and USPTO guidance, with an eye toward how each is being applied in practice.  Topics to be discussed will include:

• A review of the Enfish, BASCOM, McRO, and Amdocs cases;
• A comparison of these cases to others in which the Federal Circuit found claims to be ineligible, emphasizing important distinctions made by the court;
• Do's and don'ts of claim drafting / amending in light on these developments;
• Introduction of a framework for determining how a given set of claims might be viewed under § 101, with an emphasis on what characteristics makes claimed inventions more likely to be eligible; and
• Open issues not yet answered by the courts.

While there is no fee to participate, attendees must register in advance.  Those wishing to register can do so here.  CLE credit is pending for the states of California, Illinois, New Jersey, New York, North Carolina, and Virginia.

IPO Webinar on Evidence of Prior Art at the PTAB

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Evidence of Prior Art at the PTAB: Rigorous Proof, Or Else" on January 19, 2017 from 2:00 to 3:00 pm (ET).  David Conrad of Fish & Richardson PC, Brian Mudge of Andrews Kurth Kenyon LLP, and Michael Rosato of Wilson Sonsini Goodrich & Rosati will discuss the Blue Calypso v. Groupon and GoPro v. Contour IP cases, which expand the edges of existing case law on the use of Internet-based and printed prior art regarding public accessibility to those skilled in the art, and the recent post-grant review (PGR) Altaire Pharmaceuticals v. Paragon Bioteck, where for the first time the PTAB upheld a patent in a PGR, with the patent surviving because the petitioner failed to prove that the claims were invalid due to public use or on-sale activity.

The registration fee for the webinar is $135 (government and academic rates are available upon request).  Those interested in registering for the webinar can do so here.

Webcast on Patent Portfolio and Lifecycle Development for Pharma & Biotech Industries

The Knowledge Group will offer a live webcast entitled "Strategic Patent Portfolio and Lifecycle Development for Pharma & Biotech Industries: Significant Issues" on January 12, 2017 from 12:00 to 2:00 pm (EST).  Christine G. Espino of Proskauer Rose LLP, Taylor Corbitt of Riley Safer Holmes & Cancila LLP, and Edward Arons of Weiss & Arons, LLP will offer a discussion on the most significant issues involving patent portfolio and LCM strategies, provide a roadmap through the R&D process, and help attendees understand the best practices in minimizing the risks associated with patent portfolio and lifecycle development.  The panel will cover the following topics:

• Pharmaceutical and Medical Device Patent Life Cycles – An Overview
• Patent Term Adjustments for Biotech and Pharma
• Role of PTA in Medical Device and Pharma Patent Life Cycle
• Patent Term Extension
• Patentability and Implications for Life Sciences Innovation
• Portfolio Strategies
• Common Risks and Pitfalls
• Up-to-the-minute Regulatory Updates

The registration fee for the webcast is $299 (regular rate) or $199 (government/nonprofit rate).  Those interested in registering for the webinar can do so here.

Webinar on Preparing for Pharma PGRs

Strafford will be offering a webinar/teleconference entitled "Preparing for Pharma PGRs: Lessons for Patent Owners From PGR Denials -- Leveraging Successful IPR Arguments, Strengthening Patent Applications to Survive PGR Petitions" on January 19, 2017 from 1:00 to 2:30 pm (EST).  Thomas L. Irving and Amanda K. Murphy of Finnegan Henderson Farabow Garrett & Dunner, and Kerry Flynn, Vice President, Chief IP Counsel, Vertex Pharmaceuticals will provide guidance to prepare patent counsel for pharma-related America Invents Act (AIA) post-grant reviews (PGRs). The panel will provide theories for surviving a declared PGR with instituted claims intact, or, even better, achieving denial of institution.  The webinar will review the following issues:

• How can practitioners help patent owners prepare for PGRs?
• What can patent owners do during prosecution to strengthen their patents against PGR challenges?
• What can patent counsel learn from successful IPRs in order to succeed in PGRs?

The registration fee for the webinar is $297.  Those interested in registering for the webinar, can do so here.

In re Van Os (Fed. Cir. 2017)

"Intuitive" to Combine Insufficient to Support Obviousness Rejection

By Joseph Herndon --

The Federal Circuit recently issued a decision in an appeal from the U.S. Patent and Trademark Office Patent Trial and Appeal Board in a case captioned In re Marcel Van Os, Freddy Allen Anzures, Scott Forstall, Greg Christie, and Imran Chaudhri.  The appellants, Marcel Van Os and other inventors at Apple Inc., appealed from a decision of the Board affirming the Examiner's rejection of claims 38–41 of U.S. Patent Application No. 12/364,470 ("the '470 application").  The Federal Circuit vacated and remanded due to the Board and Examiner's insufficient factual reasoning stated for the combination of references used in the rejection.  Notably, the Federal Circuit rejected the notion that references may be "intuitively" combined, and alternatively required a factual rationale to be provided for such a combination.

The '470 application is directed to a touchscreen interface in a portable electronic device that allows a user to rearrange icons.  Claims 38 and 40 both recite the initiation of an "interface reconfiguration mode" to permit icon rearrangement.

Claim 38 distinguishes among a "first user touch" to open an application, a longer "second user touch" to initiate the interface reconfiguration mode, and a "subsequent user movement" to move an icon.  Claim 40 does not recite a touch to open an application, but recites that its "first user touch of at least an established duration" initiates the interface reconfiguration mode and allows movement of an icon "in the absence of a further user input."

The Board reversed the examiner's rejection of twenty- nine claims but affirmed that claims 38–41 would have been obvious over U.S. Patent No. 7,231,229 ("Hawkins") and U.S. Patent Application Publication No. 2002/0191059 ("Gillespie").  Hawkins discloses a personal communication device with a touch-sensitive screen.  Hawkins teaches that an "Edit Favorites Button" can be selected from a menu or keyboard command for "performing button 701 configuration and/or editing," and that "a user can rearrange buttons 701 by dragging button 701 from one location to another . . . ."

Gillespie discloses an interface on a computer touch pad with an unactivated and activated state.  Gillespie discloses that in the activated state, icons are functional and can be removed or rearranged.  It teaches that an individual icon could be "activated" by various means, such as touching an icon with multiple fingers or with rapid double taps, hovering the finger over an icon without touching the touch screen, or holding the finger on an icon for a sustained duration, whereas "single taps near an icon could be interpreted as normal mouse clicks."

The Examiner found that Hawkins discloses each limitation of claim 38, but "does not explicitly disclose that the interface reconfiguration mode is initiated by a user touch of a longer duration than a user touch of a first duration used to initiate an application corresponding to an icon."  To satisfy this limitation, the Examiner relied on Gillespie's disclosure of a sustained touch and reasoned adding this feature to Hawkins "would be an intuitive way for users of Hawkins' device to enter into the editing mode."  The Examiner found claim 40 to be "substantially the same" and rejected it on the same basis.

The Board incorporated the Examiner's analysis and concluded that the Examiner did not err in holding that claims 38 and 40, and dependent claims 39 and 41, would have been obvious over a combination of Hawkins and Gillespie.

The Federal Circuit, however, found that the Board's conclusion that claims 38–41 of the '470 application would have been obvious was erroneous.  That finding hinged on a person of ordinary skill in the art being motivated to modify Hawkins' initiation of an editing mode via menu selection or keyboard command with Gillespie's disclosure of a sustained touch, "holding the finger steady over an icon for a given duration" to "activate" an icon.

Specifically, the Board found, without further discussion, that the combination of Gillespie with Hawkins would have been "intuitive."  The Federal Circuit noted that in KSR, the Supreme Court criticized rigid preventative rules that deny factfinders recourse to common sense when determining whether there would have been a motivation to combine prior art, but the flexibility afforded by KSR did not extinguish the factfinder's obligation to provide a reasoned analysis.

The Federal Circuit has repeatedly explained that obviousness findings grounded in "common sense" must contain explicit and clear reasoning providing some rational underpinning why common sense compels a finding of obviousness.  The Federal Circuit noted that while the Board may rely on common sense, it must explain why common sense of an ordinary artisan seeking to solve the problem at hand would have led him to combine the references.

The Federal Circuit noted that absent some articulated rationale, a finding that a combination of prior art would have been "common sense" or "intuitive" is no different than merely stating the combination "would have been obvious."  Such a conclusory assertion with no explanation is inadequate to support a finding that there would have been a motivation to combine.

Here, neither the Board nor the Examiner provided any reasoning or analysis to support finding a motivation to add Gillespie's disclosure to Hawkins beyond stating it would have been an "intuitive way" to initiate Hawkins' editing mode.  The Board did not explain why modifying Hawkins with the specific disclosure in Gillespie would have been "intuitive" or otherwise identify a motivation to combine.

The Federal Circuit noted that when the Board's action is potentially lawful but insufficiently or inappropriately explained, they have consistently vacated and remanded for further proceedings.  Thus, for these reasons, the Board's holding that claims 38–41 of the '470 application would have been obvious was vacated and remanded.

Judge Newman, writing an opinion concurring in part and dissenting in part, agreed that the bare recitation by the Board and Examiner of intuitiveness to combine the disclosures of the Gillespie and Hawkins references was inadequate to support a ruling of obviousness.  However, Judge Newman dissented with the decision to remand as an inappropriate remedy in examination appeals in which the USPTO has not carried its burden of establishing unpatentability.  Judge Newman stated that on "our affirmance that the PTO has not established unpatentability, Apple is 'entitled to a patent,'" according to 35 U.S.C. § 102(a).

Judge Newman noted that the statute provides:  "A person shall be entitled to a patent unless—."  35 U.S.C. 102(a).  Thus, the burden of establishing unpatentability rests with the PTO during examination, and if the PTO fails to carry that burden, by statute the applicant is "entitled to a patent."

When the Patent Office, as it did here, relies on the naked invocation of skill in the art to supply a suggestion to combine the references, with no adequate explanation, reasoning, or analysis, the statutorily required result is reversal.

Judge Newman criticized the panel majority for describing the Board's reasoning as "potentially lawful but insufficiently or inappropriately explained."  Judge Newman believed that the issue here is not a lack of specificity or absence of citation to the record or to legal authority, but rather the Board and the Examiner, without citation or explanation, justified the combination of Gillespie's sustained touch on a computer mousepad to initiate the editing menu on Hawkins' portable electronic device.  Because the Examiner and the Board did not meet the statutorily required burden of demonstrating unpatentability, although they had full opportunity to do so, the appropriate remedy is to instruct that the claims be allowed and the patent granted.

It will be interesting to see how the Examiner now addresses the '470 application as prosecution is reopened, and whether the Examiner may simply issue a Notice of Allowance, given Judge Newman's strong indication to do so.  In any event, it is encouraging to see the Federal Circuit push back on these type of generic/unsupported rejections that are issued by the USPTO.

In re Van Os (Fed. Cir. 2017)
Panel: Circuit Judges Newman, Moore, and Wallach
Opinion by Circuit Judge Moore; opinion concurring in part and dissenting in part by Circuit Judge Newman

Top Stories of 2016: #6 to #10

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its tenth annual list of top patent stories.  For 2016, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  In two prior posts, we counted down stories #20 to #16 and stories #15 to #11, and today we count down stories #6 to #10 as we work our way towards the top five stories of 2016.  As with our other lists (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2016" on January 18, 2017 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

10.  Sandoz and Amgen Seek Supreme Court Review of Federal Circuit's Decision in Amgen v. Sandoz

In 2015, the Federal Circuit, in a seriously fractured decision, construed the provisions of the Biologics Price Control and Innovation Act (BPCIA) in Amgen v. Sandoz.  In doing so, the Court limited the information available to biologic drug makers regarding a competitor's application for a biosimilar product (adopting Sandoz's argument), and extended the statutory exclusivity period enjoyed by innovator biologic drug makers relating to when the biosimilar applicant can enter the marketplace (as Amgen argued).  The Federal Circuit subsequently denied petitions for rehearing and rehearing en banc filed by both parties.  The Federal Circuit's decision in Amgen v. Sandoz came in third in our Top Stories of 2015 list.  Last year, Sandoz petitioned the U.S. Supreme Court for certiorari to review the Federal Circuit's decision (and Amgen then conditionally cross-petitioned).  One month after Sandoz petitioned for certiorari, Amgen filed a declaratory judgment action in the District Court for New Jersey against Sandoz, arguing that Sandoz had refused to comply with certain of the "patent dispute resolution" provisions of the BPCIA.  In June, the Supreme Court invited the Solicitor General to submit briefs on Sandoz's petition and Amgen's cross-petition to provide the views of the United States, and in December, the Solicitor General recommended that the Court grant both petitions, counseling that the Court should overturn the Federal Circuit's determination that a biosimilar applicant cannot provide notice of commercial marketing under the statute prior to FDA approval, but to affirm the Federal Circuit's decision that the disclosure provisions of the statute are not mandatory.

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

• "Solicitor General Recommends that Supreme Court Grant Certiorari in Sandoz v. Amgen," December 12, 2016
• "Amgen v. Sandoz Update -- Supreme Court Seeks Views of United States," June 21, 2016
• "Amgen files Declaratory Judgment Action against Sandoz over NEULASTA® Biosimilar," March 7, 2016
• "Sandoz Petitions for Certiorari over 180-day Notice Provision in BPCIA," February 17, 2016

9.  Supreme Court Grants Certiorari in Venue Case

In March, Sen. Flake of Arizona introduced S. 2733, the "Venue Equity and Non-Uniformity Elimination Act of 2016," which would amend 28 U.S.C. § 1400 to limit the venues in which patent holders could bring patent infringement lawsuits.  The bill is narrowly tailored to one particular perceived problem -- the use of the Eastern District of Texas as the venue of choice by patent trolls.  In May, in In re TC Heartland, the Federal Circuit concluded that Congress did not restrict what could be considered a proper venue when it passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011.  Interestingly, during oral argument in TC Heartland, Judge Moore commented that the changes TC Heartland was seeking might be more appropriately made by Congress.  Within days of that comment, the VENUE bill was introduced.  In December, the Supreme Court joined the discussion when it granted a petition for writ of certiorari in TC Heartland.

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

• "Patent Trolls Beware! -- Supreme Court to Review Patent Venue Statute," December 14, 2016
• "In re TC Heartland (Fed. Cir. 2016)," May 5, 2016
• "The VENUE Act -- A Last-Ditch Attempt at Patent Reform?" March 28, 2016

8.  Supreme Court Rejects Federal Circuit's Seagate Test for Deciding Enhanced Damages

In June, the Supreme Court overturned the Federal Circuit's In re Seagate Tech. LLC jurisprudence in Halo Electronics, Inc. v. Pulse Electronics, Inc., and a companion case, Stryker Corp. v. Zimmer, Inc.  The Federal Circuit's Seagate test had created a two-pronged analysis for deciding willfulness, wherein a district court was instructed to find that infringement occurred "despite an objectively high likelihood" that the accused infringer's actions constituted infringement, as well as a subjective component, that the risk of infringement "was either known or so obvious that it should have been known to the accused infringer."  Chief Justice Roberts delivered the opinion of the unanimous Court that swept away the complexities of the Federal Circuit's Seagate test for a simple discretionary standard to be applied by district courts and the Federal Circuit.  While eschewing any "precise rule or formula" the Court directed district courts to exercise their discretion "'in light of the considerations' underlying the grant of that discretion," and emphasized that enhanced damages should not be "meted out in the typical infringement case" but are warranted only for "egregious infringement behavior" (providing a host of synonyms for such behavior, including "willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or -- indeed -- characteristic of a pirate").

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

• "Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc. (2016)," June 13, 2016
• "Trolls v. Pirates: Supreme Court Oral Argument Reviewing Enhanced Damages," February 23, 2016

7.  Federal Circuit Finds Method of Producing Multi-Cryopreserved Hepatocytes to Be Patent Eligible

In July, the Federal Circuit engendered a glimmer of hope that it will once again take up its mantle of patent law expertise regarding the proper judicial interpretation of 35 U.S.C. § 101, in its decision in Rapid Litigation Management Ltd. v. Cellzdirect, Inc.  The case arose following summary judgment in the District Court that the claims were invalid under § 101.  The invention is directed to methods for producing pure cultures of mature hepatocytes to be used "for testing, diagnostic, and treating purposes."  The inventors found, contrary to the art, that certain hepatocytes in a hepatocyte population could be frozen and thawed multiple times and retain viability.  In an opinion by Chief Judge Prost joined by Judges Moore and Stoll, the panel noted that the eligibility inquiry need not extend past step 1 of the Mayo/Alice test because the District Court erred in finding that the claims were directed to a law of nature.  On the contrary, according to the panel "the claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles[; r]ather, the claims of the '929 patent are directed to a new and useful laboratory technique for preserving hepatocytes."  Viewed in this way, as being a "constructive process," directed to achieving "a new and useful end," the panel indicated that this "is precisely the type of claim that is eligible for patenting."

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

• "Rapid Litigation Management Ltd. v. Cellzdirect, Inc. (Fed. Cir. 2016)," July 6, 2016

6.  Federal Circuit Defines Eligibility for Covered Business Method Review

The America Invents Act (AIA) defines a covered business method (CBM) patent as "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."  For the purpose of determining whether a CBM review is to be instituted, the Patent Trial and Appeal Board considers "whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity."  In November, in Unwired Planet, LLC v. Google Inc., the Federal Circuit resolved the issue, determining that the PTAB's "reliance on whether the patent claims activities incidental to or complementary to a financial activity as the legal standard to determine whether a patent is a CBM patent was not in accordance with law."  As a result, the Court vacated the PTAB's decision, and remanded the case.

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

• "Kayak Software Corp. v. International Business Machines Corp. (PTAB 2016)," December 27, 2016
• "Unwired Planet, LLC v. Google Inc. (Fed. Cir. 2016)," November 21, 2016
• "Plaid Technologies Inc. v. Yodlee, Inc. (PTAB 2016)," September 29, 2016
• "BMC Software, Inc. v. zIT Consulting GmbH (PTAB 2016)," September 28, 2016
• "HP Inc. v. Big Baboon, Inc. (PTAB 2016)," July 20, 2016
• "Corelogic, Inc. v. Boundary Solutions, Inc. (PTAB 2016)," June 2, 2016
• "AT&T Mobility LLC v. Intellectual Ventures II LLC (PTAB 2016)," May 24, 2016
• "Qualtrics, LLC v. OpinionLab, Inc. (PTAB 2016)," April 26, 2016
• "Motorola Mobility, LLC, v. Intellectual Ventures I, LLC (PTAB 2016)," March 31, 2016
• "Square, Inc. v. Protegrity Corp. (PTAB 2016)," March 24, 2016
• "Blue Calypso, LLC v. Groupon, Inc. (Fed. Cir. 2016)," March 6, 2016

Top Stories of 2016: #11 to #15

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its tenth annual list of top patent stories.  For 2016, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Yesterday, we counted down stories #20 to #16, and today we count down stories #15 to #11 as we work our way towards the top five stories of 2016.  As with our other lists (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2016" on January 18, 2017 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

15.  Magistrate Finds Method Claims Patent Eligible and Kit Claims Patent Ineligible

In one of several patent eligibility determinations that we reported on in 2016, Magistrate Judge Donald L. Cabell of the U.S. District Court for the District of Massachusetts recommended in August that Defendants' joint motion to dismiss under Fed. R. Civ. P. 12(b)(6) in Oxford Immunotec Ltd. v. Qiagen, Inc. be allowed in part and denied in part.  Oxford, which develops tests to diagnose and monitor patients with auto-immune diseases, asserted that Qiagen's development, use, and sale of a tuberculosis ("TB") test infringed six of Oxford's patents.  Oxford's patents relate to a claimed method using eight peptides from ESAT-6, a unique protein produced by Mycobacterium tuberculosis, the bacterium that causes TB.  Finding that Oxford "discovered a law of nature -- namely which specific peptides in ESAT-6 are most likely to induce a recognition response by the T-cells of patients who have TB without creating false positive responses by the T-cells of those who have merely been vaccinated," but also determining that the peptides are "contained in an intact ESAT-6 strand," Judge Cabell recommended that Qiagen's motion to dismiss be allowed with respect to infringement of the kit claims and denied with respect to infringement of the method claims.

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

• "Oxford Immunotec Ltd. v. Qiagen, Inc. (D. Mass. 2016)," September 5, 2016

14.  Federal Circuit Provides Some Clarity on BPCIA's Notice of Commercial Marketing Provision

In 2015, the Federal Circuit described the Biologics Price Competition and Innovation Act ("BPCIA") in Amgen v. Sandoz as "a riddle wrapped in a mystery inside of an enigma."  And one of the provisions of the BPCIA that was still shrouded in mystery after Amgen v. Sandoz was the notice of commercial marketing provision found at 42 U.S.C. § 262(l)(8)(A).  While describing the provision as both mandatory and stand-alone (independent of the information-disclosure and patent-exchange provisions that comprise the rest of § 262(l)), the Court limited the holding to cases in which the biosimilar applicant failed to comply with disclosure provision of § 262(l)(2)(A).  In July, the Federal Circuit provided some clarification regarding this provision in Amgen Inc. v. Apotex Inc., noting that the notice is always mandatory -- even when the biosimilar applicant engaged in the so-called "patent dance."  The Court also held that this provision is enforceable by injunction.  In our report on the decision, we noted that it may not solve the entire riddle that is the BPCIA, and in fact may end up creating more confusion.  For example, the opinion suggests that the FDA may begin providing tentative licensure for a biosimilar product, although such action is not specifically provided for in the BPCIA and the FDA has not suggested that it would take such action.

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

• "Amgen Inc. v. Apotex Inc. (Fed. Cir. 2016)," July 11, 2016
• "Does the "Notice of Commercial Marketing" Provision in the BPCIA Stand Alone? -- Amgen v. Apotex Case Preview," March 2, 2016

13.  Massachusetts Court Finds No Per Se Ethical Violation for Simultaneous Representation of Clients Competing in Same Technology Area

Although technically issued in late December 2015, our report on Maling v. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP was posted at the start of 2016, and therefore narrowly missed the "deadline" for making last year's Top Stories list.  Nevertheless, the determination by the Supreme Judicial Court of Massachusetts in Maling that the simultaneous representation by a law firm in the prosecution of patents for two clients competing in the same technology area for similar inventions is not a per se violation of Rule of Professional Conduct 1.7 is of significance to many firms performing patent prosecution on behalf of their clients.  Although the decision likely came as a relief to most practitioners working in private practice, the Massachusetts Court warned about the significant financial and reputational risks of violating Rule 1.7, noting that "[n]othing we say here today, however, should be construed to absolve law firms from the obligation to implement robust processes that will detect potential conflicts."  Although this case involves the Massachusetts Supreme Judicial Court's application of Rule 1.7 of the Massachusetts Rules of Professional Conduct, and therefore is not binding authority in any other jurisdiction that has adopted Rule 1.7 of the Model Rules, the decision nevertheless could have had a chilling effect on all intellectual property law firm practices had it come out differently.

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

• "No Per Se Ethical Violation for "Subject Matter Conflicts"," January 12, 2016

12.  Federal Circuit Finds Patent Agent-Client Privilege

In March, the Federal Circuit addressed the issue of whether communications between a patent agent and a client are privileged.  The Court had not previously addressed the subject, although there had been a split between district courts that had considered the issue.  A divided panel, however, determined in In re Queen's University at Kingston that there is a patent agent-client privilege.  In October, the U.S. Patent and Trademark Office proposed to amend the rules of practice before the Patent Trial and Appeal Board "to recognize that, in connection with discovery conducted in certain proceedings at the [USPTO], communications between U.S. patent agents and foreign patent practitioners and their clients are privileged to the same extent as communications between clients and U.S. attorneys."  However, the Office's notice makes it clear that "communications between clients and U.S. patent agents relating to patent application matters would be protected as privileged under the rule, but communications between these parties regarding litigation strategies would not be protected."

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

• "PTAB Update -- Patent Office Proposes Rule Amendment to Recognize Patent Agent-Client Privilege," October 26, 2016
• "In re Queen's University at Kingston (Fed. Cir. 2016)," March 16, 2016

11.  PTAB Must Articulate Its Reasoning in Final Written Decisions

In January, the Federal Circuit determined in Cutsforth Inc. v. MotivePower, Inc. that the Patent Trial and Appeal Board must provide a thorough explanation of its reasoning when it issues Final Written Decisions.  The Court indicated that "[w]hen the Board determines that modifications and combinations of the prior art render a claimed invention obvious, the Board must fully explain why a person of ordinary skill in the art would find such changes obvious."  In December, the Federal Circuit vacated and remanded another PTAB decision in In re NuVasive, Inc., reiterating the need for the Board to enunciate a reasoned basis for finding obviousness.

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

• "In re NuVasive, Inc. (Fed. Cir. 2016)," December 8, 2016
• "Cutsforth Inc. v. MotivePower, Inc.," January 31, 2016

Top Stories of 2016: #16 to #20

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its tenth annual list of top patent stories.  For 2016, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Today, we count down stories #20 to #16, and then in the coming week, we will work our way towards the top stories of 2016.  As with our other lists (2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2016" on January 18, 2017 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

20.  Mailing of Corrected Restriction Requirement Did Not Reset PTA Clock

In February, the Federal Circuit affirmed the finding by the District Court for the Eastern District of Virginia that the U.S. Patent and Trademark Office properly calculated the Patent Term Adjustment of Pfizer's U.S. Patent No. 8,153,768.  In calculating the PTA, the USPTO denied Pfizer 197 days between the time the Examiner issued a first restriction requirement and then, after the applicant noted that the Examiner had omitted claims 75, 76, and 103-106, issued a corrected restriction requirement.  Noting that the applicant "could have taken direction for the[] classification [of the six omitted claims] from the fact that their respective independent claims were each included in the initial restriction requirement," the panel majority sided with the District Court and USPTO.  Writing in dissent, Judge Newman countered that "[t]he panel majority erroneously holds that term adjustment is not available because the applicant, not the PTO, spotted the PTO's error," stating that "[w]hether the examiner's actions 'were outside the normal 'give-and-take process' of patent prosecution,' should not turn on who recognized the error."

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

• "Pfizer, Inc. v. Lee (Fed. Cir. 2016)," February 15, 2016

19.  USPTO Continues Efforts to Enhance Patent Quality

In 2015, the U.S. Patent and Trademark Office announced the launch of a comprehensive and enhanced patent quality initiative, indicating that its efforts would be aimed at improving patent operations and procedures, enhancing the customer experience, and improving existing quality metrics.  In 2016, the Office continued its efforts to improve patent quality through the Office's Enhanced Patent Quality Initiative.  In response to an invitation to stakeholders to submit patent quality-related topics that could be used as case studies, the Office selected six topics for the case study pilot program in May.  In April, the Office announced that it was in the process of designing new patent quality metrics for use in FY2017 and requested comments from stakeholders regarding the new metrics.  The Office also held a Patent Quality Community Symposium at its headquarters in Alexandria, VA in April, and offered several webinars in its patent quality chat webinar series.  In November, the Office issued a request for public feedback regarding its reevaluation of examination time goals, and announced that it would be holding five roundtables on examination time goals (the last of which will be held on January 11 in San Jose, CA).

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

• "USPTO Seeks Comments and Will Hold Roundtables on Examination Time," November 3, 2016
• "USPTO Selects Topics for Quality Case Study Pilot Program," May 31, 2016
• "USPTO Holds Patent Quality Symposium," May 4, 2016
• "USPTO Seeks Comments on New Patent Quality Metrics," May 1, 2016
• "IPO Responds to USPTO Call for Case Study Topics," March 15, 2016

18.  CRISPR Patent Battle Begins

CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats), which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, was hailed as a "Breakthrough of the Year" for 2015.  CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme.  Given the commercial potential of this method, patenting is an obvious concern and, as it turned out, more than one group of inventors has filed patent applications on the reagents, methods, and cells produced or used to produce CRISPR modifications.  Because these applications were filed prior to March 16, 2013, the dispute regarding who was the first to invent will be resolved in an interference.  On January 11, 2016, the USPTO declared Interference No. 106,048, naming Feng Zhang and his colleagues, the named inventor of the Broad Institute/MIT's patents, as the Junior Party, and Jennifer Doudna and her colleagues at UC/Berkeley as Senior Party.  Oral argument in the interference was held last month, so the dispute could reach a resolution in 2017 and make a return trip to our list of top stories next year.

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

• "The Patient Side of the CRISPR Patent Battle," December 19, 2016
• "CRISPR Interference Motions Set," March 23, 2016
• "CRISPR Interference Declared," January 28, 2016

17.  AbbVie Engages Amgen in BPCIA Dispute over HUMIRA^®

Earlier this year, we noted that Amgen has been the reference product sponsor for many biosimilar applications, and as a result has been the Plaintiff in many of the litigations that have been based on the provisions of the Biosimilar Price Competition and Innovation Act ("BPCIA").  It was therefore noteworthy that Amgen once again became involved in a BPCIA litigation -- but this time as the aBLA filer.  In August, AbbVie sued Amgen pursuant to the BPCIA and 35 U.S.C. § 271(e)(2)(C) because Amgen submitted an application to the FDA to market a biosimilar version of adalimumab, AbbVie's anti-TNFα therapeutic antibody, HUMIRA^®.  Prior to the filing of AbbVie's complaint, it was not known whether the parties had been engaging in the BPCIA's "patent dance," because the process consists of various disclosures and exchanges, none of which are meant to be publicly available.  In September, the FDA approved Amgen's application to market Amjevita (adalimumab-atto) -- which marked the fourth biosimilar approved by the FDA pursuant to the BPCIA.  Notwithstanding the approval, Amgen indicated in its counterclaims and answer to AbbVie's complaint that it would not begin commercial marketing of its biosimilar before at least one of the patents identified by AbbVie had expired on December 31, 2016. 

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

• "FDA Approves Amjevita -- Amgen's HUMIRA® Biosimilar," September 25, 2016
• "AbbVie v. Amgen: The Litigation Phase for a HUMIRA® Biosimilar Begins," August 9, 2016

16.  Defend Trade Secrets Act Signed into Law

In May, President Obama signed the Defend Trade Secrets Act of 2016 ("DTSA") into law, creating a new Federal cause of action for misappropriation of trade secrets.  The new law is a significant expansion of Federal intellectual property law, and brings with it significant benefits -- but also new responsibilities -- for intellectual property owners and employers.  And in this era of narrowed subject matter eligibility for patenting, the DTSA may provide enough of an incentive for intellectual property owners to keep more information as trade secrets.  Prior to the enactment of the DTSA, trade secret owners could protect their rights under state law or a patchwork of Federal laws that provided criminal and civil sanctions for interstate trade secret misappropriation or misuse of computerized data, such as the Economic Espionage Act ("EEA") and the Computer Fraud and Abuse Act ("CFAA").  The DTSA includes three key provisions that intellectual property owners should know about:  (1) the Federal civil cause of action for misappropriation of trade secrets; (2) an ex parte seizure provision that can be invoked in extraordinary circumstances; and (3) whistleblower protections that preempt criminal and civil liability under either Federal or state law, and place certain new obligations upon employers.

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

• "President Obama Signs Defend Trade Secrets Act," May 11, 2016
• "Defend Trade Secrets Act Passes House, Moves to President for Signature," April 27, 2016
• "House Judiciary Committee Unanimously Reports Defend Trade Secrets Act of 2016," April 20, 2016

Addressing Increased Drug Costs -- A Proposal

By Kevin E. Noonan --

The New York Times in a recent video (see "'Could You Patent the Sun?'") has returned to its theme against patenting, particularly with regard to patents for life-saving drugs.  This time the paper invokes the meme of Jonas Salk and his response to a question during an interview by Edward R. Murrow that patenting his polio vaccine would be like "patenting the sun."  He certainly said that, and he certainly meant it, and the sentiment has a visceral appeal that echoes the success of the ACLU's anti-gene patenting campaign.  But a closer look at the circumstances in which Dr. Salk could make this statement, and the realities facing drug development today, points out again how dangerous facile pronouncements made in the media (social or conventional) can inhibit rational debate by masking the real differences (and associated challenges) between those times and our own.

As set forth in Jane S. Smith's 1990 book "Patenting the Sun: Polio and the Salk Vaccine," Dr. Salk operated under conditions that gave him the luxury of not having to worry about patents.  One was the famous "March of Dimes" campaign of the National Foundation for Infantile Paralysis, which was created specifically to address polio by President Roosevelt (himself a polio sufferer) in 1938.  The disease, virtually unheard of before the turn of the last century, created a popular panic wherein tens of thousands of children were incapacitated annually, and the grassroots efforts of the March of Dimes generated more than $200 million for research and patient care.  Salk's work (as well as that of Albert Sabin on what would become the preferred form of the vaccine) was funded by March of Dimes money, circumstances very different from how science is funded today.

Other differences involve the regulatory environment and the costs such regulations impose on drug development.  Of course, these regulations are also responsible for protecting (albeit sometimes imperfectly) the American public from ineffective or dangerous drugs, and so the societal costs need to be balanced with increased barriers to new vaccines and other drugs.  But as Ms. Smith sets out, Dr. Salk was able to test early prototypes of his vaccine on children in a nearby institution caring for mental retardation, and the force of the fear regarding polio was such that the propriety of this testing was not questioned.  Moreover, Salk did his work prior to the thalidomide tragedy that led to changes in FDA laws and regulations that greatly increased the stringency (and thus the cost) of obtaining approval.  While a great deal of the cost of drug development can be laid at the feet of other aspects of this endeavor (the cumulative costs of many failed drugs for each successful one, for example), much of the increased costs of bringing new drugs to market since Dr. Salk's day has to do with this increased (but societally desirable) regulatory burden.

But even in view of these realities, the basis for an increasing amount of political pressure on drug companies is higher drug costs, particularly (and ironically) for biologic drugs which have significant advantages in addressing otherwise intractable diseases and which can have a specificity unknown for conventional drugs.  It is easy but incorrect to attribute these costs to patents, but it is equally unavailing to ignore the political power of the many memes relating to failures in American capitalism that permit these seeming cost imbalances to arise.

If the future appears to contain even more expensive drugs and a political backlash against them, then a clear-eyed assessment of that future can provide at least three alternatives.  The first is that the drugs will exist but that their availability will be stratified, between those who will be able to afford them on their own (either out-of-pocket or through so-called "Cadillac" health insurance plans) or through government-sponsored programs for select groups (veterans, for example) and those (perhaps the majority of Americans) who will not.  The second is that these drugs will not be developed in the U.S., due to changes in patent or regulatory law that provide disincentives to development (such as further erosion of patent eligibility by the Supreme Court or a reduction in market exclusivity for biologic drugs as sought after by the Obama Administration).  Neither of these alternatives is palatable, socially or politically.

A third course that may have the ability to address the growing problem of unsustainable increases in drug pricing would be some sort of cost control (presumably by the Federal government, analogous to systems in place in Europe and elsewhere), but to be practical there would need to be an economic incentive for the biotech and pharmaceutical industry to acquiesce.  One quid pro quo in this calculus would be a reversal in the current regime that the FDA imposes user fees on applicants for regulatory approval, and instead to have the government pay the costs of its regulatory requirements.  There is precedent in the negotiations leading to passage of the "Obamacare" healthcare overhaul to have government and the pharmaceutical industry come to an agreement over new ways to reduce healthcare costs.  Such a tradeoff could reduce a significant proportion of the costs of new drug development and thus eliminate the economic pressure for legitimate recompense that is likely not economically sustainable (see, e.g., Picchi, "The cost of Biogen's new drug: $750,000 per patient").  And it might also attenuate the FDA's requirements for approval, wherein the agency as a Federal bureaucracy might have incentives to balance its mandate to ensure safety and efficacy of approved drugs with the realities of drug development, to make both more realistic.

But it is clear that something must be done, if only to ensure that our ability to produce more effective drugs does not founder on soundbite-driven, simplistic solutions to the problems of providing efficient incentives for doing so.

Conference & CLE Calendar

January 4, 2017 - "Parallel Patent Proceedings After Murata, Skyhawke and Shaw: Navigating Claim Construction, Estoppel, RPI, Stays and More" (Strafford) - 1:00 to 2:30 pm (EST)

January 10, 2017 - "The BPCIA Patent Dance - What Biosimilar Companies Need To Know" (The Knowledge Group) - 3:00 to 5:00 pm (EST)

January 12, 2017 - "Navigating Administrative Law in Patent Appeals Involving Review Proceedings -- Identifying and Preserving Administrative Errors in IPR Proceedings; Impact of Recent Court Decisions" (Strafford) - 1:00 to 2:30 pm (EST)

January 18, 2017 - "Top Patent Law Stories of 2016" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 am to 11:15 am (CT)

January 25, 2017 - "Functional Patent Claims After Williamson: Understanding the Benefits and Risks for Your University's Patent Portfolio" (Technology Transfer Tactics) - 1:00 to 2:00 pm (Eastern)

January 26, 2017 - "Leveraging Latest Patent Decisions, Navigating New Complexities, Cases to Watch in 2017 -- Key Lessons on Patent Eligibility, Deference on Appeal, Venue, Estoppel, Continuation Patent Applications, and More" (Strafford) - 1:00 to 2:30 pm (EST)

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