Patent Docs

PTAB Remains Hostile to Section 101 Appeals

By Michael Borella and Ashley Hatzenbihler --

There is ample evidence that patent examiner allowance rates vary dramatically from examiner to examiner and art unit to art unit.[1]  This has resulted in the general understanding that there are "easy" examiners and "tough" examiners.

Naturally, there is little complaining about "easy" examiners (until you are defending against a patent with very broad claims, at least).  But when patent attorneys stand around the coffee machine at work (or, more accurately, are on Zoom or Teams calls), there is a not small amount of eye rolling and wringing of hands over "tough" examiners.

Over the last several years, a particular type of "tough" examiner has emerged -- one that will reject just about any claim as ineligible under 35 U.S.C. § 101 . . . and never withdraw the rejection.[2]  In other words, if you get a 101 rejection from one of these examiners, prosecution is basically over.  Interviews don't help.  Arguments and amendments go nowhere, with the examiner engaging in vigorous goalpost-shifting.[3]  More often than not, the natural habitats of such examiners are the verdant plains of technology centers 1600 and 3600.

The USPTO's Patent Trial and Appeal Board (PTAB) is often a last resort for patent applicants who cannot afford further appeals to the federal judiciary.  Therefore, should not the PTAB lay the judicial smack down on these errant plains-dwellers?  If only.

Last year, we studied all substantive 101 decisions from the PTAB that came down in 2021.  The results were puzzling, striking, and, not in small part, abysmal.  The PTAB affirmed examiners' 101 rejections 87.1% of the time, whereas the overall affirmance rate across all grounds of rejection was 55.6%.  Why the discrepancy?  The data does not provide that information, though it could be due to the notorious vagueness of the test set forth in Alice Corp. v. CLS Bank Int'l, the Federal Circuit's conflicting case law, and/or the PTAB not following the USPTO's 101 guidance.

Regardless of cause, the numbers do not lie.  The PTAB is a brutal tribunal for applicants attempting to argue that an examiner's 101 rejection is in error.

But was 2021 an outlier or a blip on the radar?  Does the data from 2022 exhibit a similar affirmance rate or has there been a "regression to the mean" of sorts?

To answer this question, we once again reviewed every substantive 101 appeal decided by the PTAB in 2022.  As was the case for the 2021 data, this required a particular search strategy as well as manually combing the text of each decision.

From the PTAB's search interface, we specified the following criteria:  decision dates between January 1, 2022 and December 31, 2022, a proceeding type of "appeal", a decision type of "decision", and an issue type of "101".  Even so, the results were over-inclusive, returning decisions that just mentioned 101 in passing.  Thus, we further filtered these decisions to focus only on those in which the applicant appealed an examiner's Alice-based 101 rejection and the PTAB ruled on this grounds of appeal.  This took the 634 decisions returned by the search engine down to 482 -- the substantive 101 decisions.[4]

Of these, 426 were examiner affirmances, for an affirmance rate of 88.4%.  Yep, the PTAB got a little worse for applicants in 2022.  The month-by-month and total statistics are provided in the table below.

Not unlike 2021, the examiner affirmance rate fluctuated with no clear month-over-month trend.  For example, the lowest 101 affirmance rate was in May (77%) while the highest was in October (100%).[5]  Also like 2021, there is a slight downward trend in the number of appeals from Q1 to Q4.  The monthly average of appeals on 101 grounds was 49.5 for the first four months of the year and 34.25 for the last four months of the year (as compared to 78.25 and 49.25, respectively, for 2021).

But one data point that sticks out is that the total number of appeals has dropped significantly year-over-year.  In 2021, 708 substantive 101 decisions were handed down, while in 2022 this number was -- as noted above -- just 482.  That is better than a 30% decline.  From our (admittedly anecdotal) experience, this is not because examiners are getting easier.  The opposite appears to be the case.  It seems more likely that applicants have determined that appealing 101 rejections to the PTAB has betting odds akin to those of the Cleveland Browns making it to the Super Bowl.

Given that the PTAB does not provide much of a recourse for applicants stuck with a 101 rejection from an unrelenting examiner, we next wondered what grounds of rejection are popular with the PTAB.  For the abstract idea exception to patentable subject matter, the three main categories are mathematics, mental processes, and methods of organizing human activity.  In other words, a claim is deemed ineligible for patenting if it is directed to mathematics, a mental process,[6] or a method of organizing human activity[7] without significantly more.

Of all substantive affirmances of 101 rejections by the PTAB, 14.1% were based on mathematics, 58.4% on mental processes, and 64.6% on methods of organizing human activity.  Use of the latter two categories is quite widespread among PTAB judges, with many decisions incorporating new grounds of rejection to accentuate the examiner's mental process rejection with a method of organizing human activity rejection or vice-versa.  Indeed, grounds of both mental processes and methods of organizing human activity were found in 31.9% of all affirmances.

Another factor we looked into was whether certain PTAB panels or judges were making formulaic rejections -- in other words cutting and pasting large sections of their reasoning for the 101 rejections from case to case and only changing the discussion of the facts.  It was not too difficult to identify a few instances of this.

For example, Appeal 2021-002509 (decided January 31, 2022) and Appeal 2021-002913 (also decided January 31, 2022) involve two different applicants claiming two different technologies, but the decisions rely on reasoning that is largely word-for-word the same.  The deciding PTAB panels had two judges in common and both decisions were written by the same judge.  Another example of liberal cutting-and-pasting can be found in Appeals 2021-002840 and 2021-002807, also both decided on the same day by a panel with two judges in common.

It is important to understand that this does not imply laziness or malfeasance on the part of anyone involved in these decisions.  Instead, this is more evidence that it is very easy to find virtually any invention ineligible by robotically deconstructing the claims into small enough parts and ignoring the advantage or improvements provided the claims as a whole.  Not convinced?  Try our rationale for invalidating the eligible claims of Diamond v. Diehr that is based on observed USPTO reasoning.

There is a false narrative that has been floating around for the better part of two decades.  It implies that broad claims on obvious technological variants can be easily obtained from the USPTO.  There may have been some small truth to this notion in the 1990s, but today the pendulum has swung so far in the other direction that narrowly-scoped, complex, innovative technologies are often denied patentability just because they involve software.

As a consequence, the irrational arbitrariness of Section 101 provides limited access to patenting for individual inventors as well as small and mid-sized companies.  Maybe someday the PTAB will lay the judicial smack down in a less one-sided fashion, but for now it appears that 101 appellants need to be wary against flying elbows of ineligiblity.

[1] See the histogram of examiner grant rates compiled by Patent Bots, for example.

[2] Okay, the word "never" is admittedly somewhat hyperbolic, but not far from the truth.

[3] Again, we want to emphasize that most examiners are reasonable, even with their 101 rejections.  Some are quite clear in terms of what they deem to be sufficient to overcome a 101 rejection.  But there is a notable contingent who are not, and anecdotally it seems as if the size of this contingent has grown since early 2021.

[4] Many of these decisions also reviewed rejections on other grounds (e.g., Sections 102 or 103).  We did not consider anything but the 101 determinations.  We also omitted rejections based on laws of nature or natural phenomena, which accounted for only 10 of the decisions and did not impact the results in any significant fashion.

[5] Ouch.  Just ouch.  At least relatively few appeals were decided in October. 

[6] We have previously detailed how illogically and broadly that this category is being construed.

[7] This is another overly-broad category.  What isn't a method of organizing human activity at some level?

The New York Times Is at It Again Regarding Patents

By Kevin E. Noonan --

It's always good to have a villain, a "Snidely Whiplash" or other cartoon caricature to support an argument, especially if the issue is complex and fails the cocktail party test.*  The New York Times is (in)famous for these types of intellectually lazy arguments when it comes to patents (see "Top Stories of 2022: #8 to #10"; #9. New York Times Reopens Attack on U.S. Patent System), and they were at it again on Sunday in a front page piece on Humira, a drug used for a variety of ailments that has brought relief to millions of patients who otherwise suffered with earlier, less effective drugs.  (At least in the past the Times has had the good sense to relegate such articles to the Op-Ed pages.)

The problem seems to be that Humira has made a pharma company a lot of money (purportedly $116 billion), that the drug is expensive (said to cost upwards of $50,000/year) and that the drug company has amassed a large number of patents to protect its intellectual property.  The bigger problem is that the article fails to recognize several important facts relating to the circumstances under which Humira's makers made this money and amassed its patent estate (or "thicket" as the anti-patent crowd likes to call it).

The first of these is that until 2010 there was no pathway for "generic" (accurately, "biosimilar") competition for innovator biologic drugs (the class of drugs including Humira).  This has nothing to do with patents; the FDA could not approve a biosimilar competitor by law until the Biologic Price Competition and Innovation Act (BPCIA) was passed as part of Obamacare (see "Follow-on Biologics News Briefs - No. 11"; "House Passes Health Care Reform Bill -- Biosimilar Regulatory Pathway Makes Cut, Pay-for-Delay Ban Does Not").  Thereafter, the FDA needed to develop guidelines (see "FDA Looks to Multiple Sources, Including EMA Guidelines, in Developing Biosimilar Approval Standards") and Guidances (see "FDA Publishes Draft Guidelines for Biosimilar Product Development"; "FDA Releases "Final" Guidances for Industry regarding the Biosimilar Approval Pathway") establishing the standards under which biosimilar drugs could be approved; while still on-going for certain types of biosimilars these efforts took about 5 years to be promulgated (the FDA engaging with stakeholders to ensure the efforts were fair and robust enough to minimize the possibility of approving drugs that were not "similar enough" to avoid safety, potency, or efficacy issues).

The first approved biosimilar was Zarxio from Sandoz, which competes with Amgen's Neupogen, an adjuvant for cancer patients for treating side effects of chemotherapy (see "FDA Approves Sandoz Filgrastim Biosimilar").  Humira biosimilars have been pursued by several companies and FDA has approved seven (see, e.g., "FDA Approves Amjevita -- Amgen's HUMIRA® Biosimilar") and this table:

(With one of them, Cyltezo, being designated as an interchangeable biosimilar, see "FDA Approves Another Interchangeable Biosimilar Drug", which is highly sought after because it has advantages, see "FDA Issues Final Guidance Regarding Biosimilar Interchangeability", similar to what can be achieved for a small molecule drug.)

Immediately it will be clear that a great deal of the $116 billion cited to raise the temperature of the debate (and the purported perfidy of Humira's producer) was made during the time that it was impossible to compete, and that once a pathway had been opened several companies took the steps to do so.  But although there was this large patent estate accumulated when litigation ensued, the number of patents asserted and claimed was but a minuscule portion of the estate.  As for types of patents accumulated, much is made in the article about the patent on the active pharmaceutical product (the drug) expired in 2016, as if that was the only patent upon which Humira was entitled to rely.  The first source of error in this assertion is that most of the current biologic drugs were approved so long ago that they similarly no longer have patent protection on the drug molecule itself.  But due to the complexity of producing these drugs commercially, they all have protection on those methods (without which the drugs could not be produced and regarding which each sponsor company invested money, time, and effort to develop).  Humira is not alone nor an outlier on such protection and these patents protecting how the drugs are made are no less worthy than the drug patent itself.

The irony of ironies in this story printed this Sunday is that this Tuesday, January 31st, those seven Humira biosimilar-approved companies will be able to sell their biosimilar Humira free of all the patents in the patent estate, pursuant to a settlement agreement (see, e.g., "HUMIRA® Biosimilar Update -- Settlement in AbbVie v. Amgen Case Announced and AbbVie v. Boehringer Ingelheim Litigation Begins"; "AbbVie Announces Global Resolution of HUMIRA® (adalimumab) Patent Disputes with Sandoz"), with others as yet not approved being licensed to go on the market on July 1st and September 30th of this year.  As mentioned above, the overwhelming number of the Humira patents were not asserted but could have been asserted to prevent these Humira biosimilars from being marketed for many more years.  Inconsistent with the bad guy caricature promulgated by the Times, the cases were settled, benefiting the public at the real-world expense of Humira's drug maker.

Two other points bear mentioning.  First, the 7th Circuit Court of Appeals decided last year that the Humira patent estate was not an antitrust violation and thus fear of antitrust liability is not a factor in these settlements (see "Mayor and City Council of Baltimore v. AbbVie Inc. (7th Cir. 2022)").  The second point is that the FTC in a 2009 white paper (see "No One Seems Happy with Follow-on Biologics According to the FTC") predicted that the price reduction benefit of biosimilars would be about 30%, that is that the cost of a biosimilar equivalent to a patented biologic drug would be about 70% of the reference biologic drug price.  With admittedly few data points, that prediction has been borne out so far, meaning that instead of $116 billion the cost for an equivalent period of time an amount of Humira biosimilar sales can be expected to be $82 billion.  As Sen. Dirksen would say that is real money but hardly the type of windfall public benefit that small molecule drug generics represent (which sell for about 10% of the innovator price).

The real issue is that the development cost of biologic drugs is much higher than traditional small molecule drugs as is the cost of producing them.  Everyone thinks "drugs cost too much" and want them to be cheaper but the reality (in a capitalist society) is that there needs to be sufficient prospect of return on investment to justify development.  The entire economic argument is TLDR (which is why articles like the one in Sunday's Times is both easy and incomplete); for a good and accurate explication of the patent side of this issue, Professor Adam Mossoff at George Mason University has published a report for the Hudson Institute (see "Unreliable Data Have Infected the Policy Debates Over Drug Patents"), which, while generating less heat than the Times article, does shed enormously more light (see "Faux-Populist Patent Fantasies from The New York Times").  Suffice it to say that while it may make the medically self-righteous feel better, it does little to advance the real debate about how to ensure that people who need drugs (and medical care generally) can get them.  That's too complicated for a lazy winter Sunday afternoon reading the Times, but the issue deserves more than this shallow level of analysis and rhetoric.

* Where you are likely to be talking to yourself in under five minutes if you bring up the subject.

Conference & CLE Calendar

January 31, 2023 - "Full Disclosure About Non-Disclosure Agreements" (Fitch Even) - 12:00 pm to 1:00 pm (ET)

January 31, 2023 - "Patents and the Expectation of Success Doctrine -- What is Reasonable, Tension With Enablement, Best Practices for Patent Drafting and Prosecution" (Strafford) - 1:00 to 2:30 pm (EST)

January 31, 2023 - "Operationalizing DEI: A Solutions-Based Strategy" (Intellectual Property Owners Association) - 2:00 pm to 3:00 pm (ET)

January 31, 2023 - "Patent Law Year in Review 2022" (Federal Circuit Bar Association Patent Litigation Committee) - 3:00 pm to 4:30 pm (ET)

February 2, 2023 - "Navigating the New EU Unitary Patent System and Unified Patent Court: Are You Ready? -- Strategic Considerations for U.S. Applicants and Patentees" (Strafford) - 1:00 to 2:30 pm (EST)

Webinar on Non-Disclosure Agreements

Fitch Even will be offering a webinar entitled "Full Disclosure About Non-Disclosure Agreements" on January 31, 2023 from 12:00 pm to 1:00 pm (ET).  Steven G. Parmelee and Michael R. Anderson of Fitch Even will address the following topics:

• Building the best Non-disclosure agreements (NDA) for a given situation
• The reason for an NDA, (this may be more complicated than you think)
• How can information be disclosed
• Why is the information being disclosed
• Practice tips

While there is no cost to participate in the program, advance registration is required.  Those interested in attending the webinar can register here.

Webinar on Expectation of Success Doctrine

Strafford will be offering a webinar entitled "Patents and the Expectation of Success Doctrine -- What is Reasonable, Tension With Enablement, Best Practices for Patent Drafting and Prosecution" on January 31, 2023 from 1:00 to 2:30 pm (EST).  David A. Gosse of Fitch Even Tabin & Flannery, Daniel J. Pereira of Oblon McClelland Maier & Neustadt, and Bryan K. Wheelock of Harness Dickey & Pierce will provide patent counsel with guidance on the doctrine of expectation of success, examine how much is reasonably needed and the tension between the doctrine and enablement, discuss recent cases, and offer best practices for patent drafting and patent prosecution.  The webinar will review the following issues:

• Under what circumstances should the reasonable expectation of success be argued during prosecution at the PTAB? During litigation?
• What evidence is necessary to support a reasonable expectation of success argument?
• How can patents be drafted to establish that the disclosure enables the claimed subject matter but that skilled persons would not have had a reasonable expectation of success based on the prior art?

The registration fee for the webcast is $347.  Those interested in registering for the webinar, can do so here.

IPO Webinar on Solutions-Based Strategy for Diversity, Equity & Inclusion

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Operationalizing DEI: A Solutions-Based Strategy" on January 31, 2023 from 2:00 pm to 3:00 pm (ET).  Karen Cochran of Shell USA, Inc.; Lloyd Freeman of Buchanan Ingersoll & Rooney PC; Kaveh Rasidi-Yazd of Eaton Corporation; and Richard Watkins, Sr. of Medtronic will discuss the following questions:

• What makes certain Diversity, Equity & Inclusion programs so successful?
• How can companies build an authentic program that achieves heightened goals each year when hiring and retaining talent is so challenging post-pandemic?
• What standards should exist for company vendors, legal and otherwise?

There is no registration fee for the webinar.  However, those interested in attending the webinar should register here.

FCBA Program on 2022 Patent Law Year in Review

The Federal Circuit Bar Association (FCBA) Patent Litigation Committee will be offering a remote program entitled "Patent Law Year in Review 2022" on January 31, 2023 from 3:00 pm to 4:30 pm (ET).  Jill Schmidt of Genentech, Inc.; Sharonmoyee Goswami of Cravath, Swaine & Moore LLP; Derek McCorquindale of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP; and Angelo Oliver of Haynes & Boone, LLP will review key decisions issued by the Federal Circuit regarding patent law issues in 2022, including decisions on enablement and written description, patent damages, venue, litigation procedure, and AIA trials before the Patent Trial and Appeal Board.

The webinar is complimentary for FCBA members, $50 for government/academic/retired/student non-members, and $175 for private practitioner non-members.  Those interested in registering for the program, can do so here.

Webinar on Unitary Patent System and Unified Patent Court

Strafford will be offering a webinar entitled "Navigating the New EU Unitary Patent System and Unified Patent Court: Are You Ready? -- Strategic Considerations for U.S. Applicants and Patentees" on February 2, 2023 from 1:00 to 2:30 pm (EST).  Hazel Ford of Mathys & Squire and Leythem A. Wall of Oxon IP will guide patent counsel on the new EU Unitary Patent System and the Unified Patent Court (UPC), covering the nuts and bolts of the systems and strategic considerations for U.S. applicants and patentees with European portfolios.  The webinar will review the following issues:

• What are the advantages and disadvantages of the EU Unitary Patent System? How does it differ from the current system?
• What are the benefits and risks of the UPC?
• What key considerations should companies and their counsel keep in mind as they navigate the new systems?
• What steps should patent counsel take now and in the future to prepare for the new systems?

The registration fee for the webcast is $347.  Those interested in registering for the webinar, can do so here.

PTAB Rules on Preliminary Motions in Interference No. 106,133

By Kevin E. Noonan --

On December 14th*, the Patent Trial and Appeal Board rendered its decision on Preliminary Motions in Interference No. 106,133 between Senior Party Sigma-Aldrich and Junior Party The Broad Institute, Harvard University, and MIT (collectively, "Broad").

To recap, the Board granted leave for Junior Party Broad to file its proposed Substantive Preliminary Motion No. 1 to change the Count under 37 C.F.R. §§ 41.121(a)(1)(i) and 41.208(a)(2).  The justification here as in earlier interferences (Nos. 106,115 and 106,126) was to provide "a count broad enough to cover Broad's best proofs, which are directed to CRISPR-Cas9 systems using dual-molecule RNA but not including a donor polynucleotide sequence."  Broad argued in the alternative a proposed Substitute Count 3:

A method comprising: introducing into, or expressing in, a eukaryotic cell having a DNA molecule,
    (I)    a Cas9 protein or one or more nucleotide sequences encoding the Cas9 protein;
    (II)   an RNA or one or more nucleotide sequences encoding the RNA, the RNA comprising: (a) a first RNA comprising a first ribonucleotide sequence and a second ribonucleotide sequence, and (b) a second RNA; and
    (III) a template polynucleotide;
    wherein the second RNA forms an RNA duplex with the second ribonucleotide sequence, and wherein, in the eukaryotic cell, the first ribonucleotide sequence directs the Cas9 protein to a target sequence of the DNA molecule, whereby the Cas9 cleaves both strands of the DNA molecule and the cleavage is repaired by integration of the template polynucleotide into the DNA molecule in the eukaryotic cell.

or, as in this interference as declared, claim 31 of U.S. Application No. 15/456,204; the Board notes that the first alternative portion of proposed Substitute Count 3 corresponds to Broad Application No. 16/177,403 claim 52 which has not been deemed allowable in ex parte examination.

The Board also granted Broad leave to file Contingent Preliminary Motion No. 2 to add claims in Broad applications not designated as corresponding to the Count as declared under 37 C.F.R. §§ 41.121(a)(1)(i) and 41.208(a)(2).  Specifically, these included claims 1, 40, and 41 of Application No. 15/160,710; claims 74, 94, and 95 of U.S. Application No. 15/430,260; and claims 52-56 of U.S Application No. 16/177,403.

The Board also granted Broad leave to file Substantive Preliminary Motion No. 3 to designate various claims as not corresponding to Substitute Count 3 on a variety of grounds under 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(2).

The Board denied or deferred to the priority phase all other motions Broad requested.

For Senior Party Sigma-Aldrich, the Board granted leave to file Substantive Preliminary Motion No. 1 to challenge Broad's entitlement to be accorded benefit of its provisional applications for failure to provide a constructive reduction to practice of an embodiment falling within the scope of Count 1.

The Board also granted leave to file Substantive Preliminary Motion No. 2 to have the Board designate Broad's application No. 15/330,876 as not corresponding to the Count.

The Board denied or deferred to the priority phase all other motions requested by Sigma-Aldrich.

After accepting the Parties' expert witnesses and assertions regarding the level of ordinary skill in the art, the Board rendered its decisions first on Junior Party Broad's Preliminary Motions and thereafter on Senior Party Sigma-Aldrich's motions.  No motions were granted; the Board denied Broad's Substantive Motions No. 1 and 3 and dismissed as moot Broad's Contingent Motion No. 2, denied Sigma-Aldrich's Substantive Motion No. 1.  In addition, the Board dismissed as moot Sigma-Aldrich's Miscellaneous Motion No. 2 and Broad's Miscellaneous Motion No. 4 to exclude evidence as moot in view of its denial of the parties' substantive motions.

Regarding the Board's reasoning for denying Broad's Substantive Preliminary Motion No. 1, the Board agreed with Sigma-Aldrich that Broad failed to comply with the provisions of the Board's grant of leave to file the motion, and specifically that portion of the grant where the Board restricted the designation of one of Broad's claims as part of a McKelvey Count (a hybrid Count reciting in the alternative a representative claim of each party) to a claim that had been granted or allowed, which was not the case for the claim Broad designated (claim 52 of the Broad '403 application).  The basis for this decision was that the Examiner in the '403 prosecution expressly stated on the record that "no agreement had been reached" as to the patentability of this claim at the time Broad filed its Motion, inter alia, because prosecution had been suspended (although the claim was deemed allowable on March 7, 2022).  Broad filed its brief on December 3, 2021 and thus this claim had not been deemed allowable when the Motion as filed.  In addition to this procedural deficiency, the Board agreed with Sigma-Aldrich that proposed Count 3 was excessively broad and introduced changes in Count 1 as declared "without any apparent reason."  This flaw extended to the Count not being restricted to "Type II CRISPR-Cas9" (because this term was not recited) and recites "first RNA" and "second RNA" species rather than crRNA and tracrRNA as recited in Count 1 as declared.  The Board further denies Broad's request to substitute because "Broad fails to present persuasive arguments that Count 1 is not limited to a single patentable invention" as well as Broad citing Sigma-Aldrich arguments made with regard to applications for which the Board states "it is not clear that these arguments are specifically relevant to the issues Broad raises in this motion."  Finally, the Board denies Broad's Substantive Motion No. 1 because while Broad argues the Count as declared unfairly excludes Broad's best proofs because it includes a Broad claim that is not the broadest claim involved in the interference" Broad did not take advantage of the opportunity to propose a new count without these purported deficiencies by submitting a proposed Count No. 3 that did not correspond to a granted or at least allowed claim.

Regarding Broad's Contingent Preliminary Motion No. 2, the Board dismissed this claim as moot based on its denial of Broad's Substantive Preliminary Motion No. 1.

The Board considered Broad Substantive Preliminary Motion No. 3 in view of similar motions made in other interferences (for example Interference No. 106,115); there the Board held that disclosing two or more nucleus localization signal (NLS) sequenced rendered the claims as corresponding to the Count and on this basis denied Broad's motion to have claims designated as not corresponding to the Count as declared (despite Sigma-Aldrich providing no opposition to this Motion) based on issue preclusion.  Specifically, the Board held that these requirements of A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700, 702 (Fed. Cir. 1983) were satisfied:

(1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) plaintiff had a full and fair opportunity to litigate the issue in the first action.

The fact that Broad ultimately prevailed in the priority phase of the '115 interference did not rebut the Board's conclusion, the opinion stating that "we see no reason why Broad should continue to get additional bites of the apple merely because it ultimately prevailed in an earlier proceeding" and finding the status of this decision on appeal was also insufficient unless the Federal Circuit produces a basis (i.e., reversal) to do so.  And with regard to Broad's argument that claims reciting chimeric Cas9 proteins, including such proteins fused to heterologous protein domains should fall outside the scope of the Count the Board summarily held that they were unpersuaded (after setting forth Broad's arguments in detail and even Sigma's argument from Interference No 106,132 on this issue).

Turning to Sigma-Aldrich Substantive Preliminary Motion No. 1, the Board rejected Sigma's argument that Broad Provisional Application No. 61/736,527 (designated "P1" and filed December 12, 2012) did not provide a constructive reduction to practice (i.e., lacked adequate written description and enabling disclosure) for one embodiment falling within the scope of Count 1 as declared.  Specifically, the Board disagreed with Sigma's assertion that a constructive reduction to practice required P1 to demonstrate differences in gene expression and not just double-stranded CRISPR cleavage of a target genomic DNA sequence recognized by the crRNA portion of the CRISPR-Cas9 complex introduced into a eukaryotic cell.  This decision is based in part on the Board's consideration of expert testimony from each Party's expert as well as portions of the P1 specification identified by each Party in support of their arguments.  And the Board rejects Sigma's argument that the term "altering" gene expression is limited to exclude cleaving a genomic DNA sequence per se and relies on Paragraph 38 of the P1 specification for a broader meaning of the phrase:

[T]extbook discussion of the basic cellular processes involved in gene expression (e.g., transcription, translation, and splicing) [and] is unenlightening here because the claim limitation is directed to the cell's "express[ion]" of the gene product, not the DNA molecule's "encod[ing]" process (i.e., transcription, translation, or splicing).

Based on this disclosure, the Board held that "the preponderance of the evidence supports a broader interpretation wherein the alteration of any aspect of gene expression meets the limitation in the Broad portion of Count 1 of "whereby express of the at least one gene product is altered."

The Board further cites Broad's assertion of disclosure of example of homology-directed recombinant to replace "a 2000-nucleotide section of the EMXI gene with a homologous template that includes a 12-base pair sequence changing the stop codon of the gene to sequences for two restriction enzymes (HindIII and NheI) and, thus, altering the expression of at least one gene product using a CRISPR-Cas9 system in a eukaryotic cell" in support of this construction (as illustrated by Figures 4C-4E of the P1 specification:

Illustrating how an expert witness can produce unpersuasive testimony, the Board states with regard to her support for Sigma's argument that this disclosure is insufficient to show alteration of gene expression that:

Neither Sigma nor Dr. Cannon explains why sequence data showing the absence of a stop codon would not have indicated to one of ordinary skill in the art that the resulting protein would contain additional amino acids.

and

Dr. Cannon does not testify that one of ordinary skill in the art would not have understood that the sequencing information in Figure 4E would produce a protein longer than the unaltered emx1 gene would produce.

On this argument, the Board was persuaded by Broad's expert that this disclosure satisfies the requirement that the CRISPR-Cas9 complex disclosed in Broad's P1 priority document demonstrates a system wherein expression of at least one gene product is altered" as required by Count 1.

Finally, the Board easily rejects Sigma's argument that the P1 disclosure of Cas9 embodiments comprising an unspecified number of NLS sequences does not provide constructive reduction to practice of embodiments comprising one NLS sequence, saying "Because the Broad portion of Count 1 includes an embodiment without a limitation on the number of NLS or even if an NLS is present on the Cas9 protein, we are not persuaded that even if Broad P1 does not describe a CRISPR-Cas9 system with a Cas9 protein having only one linked NLS, as Sigma argues."

On the basis of these Party arguments, the Board denied Sigma-Aldrich's Substantive Preliminary Motion No. 1.

And as with the priority phase in co-pending Interference No. 106,126, No. 106,127, and No. 106,132 (see "PTAB Suspends ToolGen Interferences" and "PTAB Redeclares Interference No. 106,132 and Suspends Priority Phase Proceedings"), the Board suspended the priority phase of this interference until the appeal in Interference No. 106,115 has been decided by the Federal Circuit.

*Our apologies for the delay in posting on these decisions.

Conference & CLE Calendar

January 24, 2023 - "Legal Underpinnings of Patent Damage Calculations in Germany" (OxFirst Limited) - 15:00 (GMT)

January 24, 2023 - "Top Patent Law Stories of 2022" (McDonnell Boehnen Hulbert & Berghoff LLP) - 10:00 am to 11:15 am (CT)

January 24, 2023 - Stakeholder Offerings and Resources (SOaR) training session on how to appeal a patent application decision before the Patent Trial and Appeals Board (PTAB) (U.S. Patent and Trademark Office) - 2:00 pm to 4:00 pm (ET)

 

MBHB Webinar on Top Patent Law Stories of 2022

McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on the "Top Patent Law Stories of 2022" on January 24, 2023 from 10:00 am to 11:15 am (CT).  Since 2007, the Patent Docs weblog has presented an annual, end-of-the-year review of the top stories in patent law.  In this presentation, Patent Docs co-authors Donald Zuhn, Kevin Noonan, and Michael Borella will take a look back at the top patent stories of 2022, many of which will likely impact patent applicants and practitioners in the coming year.

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.

USPTO Training Session on Patents Appeal Process

As part of the U.S. Patent and Trademark Office's Stakeholder Offerings and Resources (SOaR) virtual training series, the Office will be offering a training session on how to appeal a patent application decision before the Patent Trial and Appeals Board (PTAB).  The training session will be offered on January 24, 2023 from 2:00 pm to 4:00 pm (ET).  The training session will cover basic information about the PTAB, provide an overview of the patent application appeal process, and highlight resources for inventors.  In addition, Hope Shimabuku, Director of the Texas Regional Office (TXRO) will discuss resources and programs TXRO offers to stakeholders in the region.

Those interested in registering for the webinar can do so here.

Webinar on Patent Damage Calculations in Germany

OxFirst Limited will be offering a webinar entitled "Legal Underpinnings of Patent Damage Calculations in Germany" on January 24, 2023 at 15:00 (GMT).  Dietrich Kamlah of Taylor Wessing will present an analysis of damages for patent infringement in Germany, including a discussion on whether the German damages approach is in line with European law, and addressing a more recent concern on whether damage awards under the UPC may be more attractive compared to awards by German courts.

While there is no cost to participate in the program, those interested in attending the webinar should register here.

Top Four Stories of 2022

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 16th annual list of top patent stories.  For 2022, we identified ten 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.  On Monday and Tuesday, we counted down stories #10 to #8 and stories #7 to #5, and today we count down the top four stories of 2022.  As with our other lists (2021, 2020, 2019, 2018, 2017, 2016, 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 2022" on January 24, 2023 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a few of the most important stories on this year's list, can be found here.

4.  Supreme Court Refuses to Grant Certiorari in American Axle v. Neapco Holdings

In May, there was a brief moment of hope in the patent community when the Solicitor General provided the government's views to the Supreme Court in an amicus brief in American Axle & Manufacturing, Inc., Petitioner v. Neapco Holdings LLC.  In the first sentences of the Discussion section of the brief, the Solicitor General writes:  "The court of appeals held that claim 22 of the '911 patent, which claims a method of manufacturing automobile driveshafts that uses specific mechanical structures and calibrates particular physical properties, is patent-ineligible under Section 101.  That holding is incorrect."  Thus, the Solicitor General expressed the government's view that the Supreme Court should grant certiorari with respect to Question 1 of the Questions Presented.  That moment of hope, however, was cut short by the Supreme Court in June, when the Court denied certiorari in American Axle, thereby refusing (once again) to address the morass in patent subject matter eligibility created by its decisions in Bilski v. Kappos; Mayo Collaborative Services v. Prometheus Laboratories; Alice Corp. v. CLS Bank International; and Association for Molecular Pathology v. Myriad Genetics, Inc.  For a Court whose political inclinations became more evident in 2022, the chorus of dissent regarding the state of subject matter eligibility law from the patent community, industry groups, the U.S. Patent and Trademark Office, members of Congress, half (at last count) of the judges on the Federal Circuit, and the Solicitor General has fallen on particularly deaf ears, the Court's refusal in American Axle being the latest.  To many, American Axle represented the Gordian Knot in patent-eligibility that had been unartfully tied by the Court with help from the Federal Circuit.  The case was possibly the best opportunity yet to clarify what was meant by the remarkably vague two-part test set forth in Alice.

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

• "In re Smith (Fed. Cir. 2022)," September 15, 2022
• "Think Twice About Appealing a § 101 Rejection to the PTAB," September 13, 2022
• "Realtime Adaptive Streaming LLC v. Netflix, Inc. (Fed. Cir. 2022)," July 31, 2022
• "USPTO Director's Blog Post Extolling Certainty in § 101 Determinations Paradoxically Increases Uncertainty," July 26, 2022
• "CareDx, Inc. v. Natera, Inc. (Fed. Cir. 2022)," July 19, 2022
• "The Supreme Court Sidesteps America's Patent Eligibility Crisis," June 30, 2022
• "Supreme Court Denies Cert in American Axle," June 30, 2022
• "Solicitor General Provides Government Views in American Axle & Mfg. Inc. v. Neapco Holdings Co.," May 24, 2022
• "Repifi Vendor Logistics, Inc. v. Intellicentrics, Inc. (Fed. Cir. 2022)," March 23, 2022
• "Mentone Solutions LLC v. Digi International Inc. (Fed. Cir. 2021)," February 8, 2022

3.  WTO Waiver Permits Use of COVID-19 Vaccine Patents -- But WTO Declines to Extend Waiver (For Now) to COVID-19 Diagnostics and Therapeutics

In March, it was reported that the United States, European Union, India, and South Africa had reached an agreement on a waiver with respect to patents for COVID-19 vaccines.  Progress on the compromise appeared to have been made during a meeting of the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS).  And then only a few months later, the World Trade Organization (WTO) Ministerial Conference issued a June 17 Ministerial Decision, which permits an eligible Member, defined as including all developing country Members, to "limit the rights provided for under Article 28.1 of the TRIPS Agreement . . . by authorizing the use of the subject matter of a patent required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic."  The "subject matter of a patent" is defined in the Decision as including the ingredients and processes necessary for the manufacture of COVID-19 vaccines.  Eligible Members can apply the provisions of the Decision until 5 years from the date of the Decision (i.e., June 17, 2027).  The Decision also included a provision that "[n]o later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics."  Despite a December request from nine delegations (Argentina, Bangladesh, Bolivia, Egypt, India, Indonesia, Pakistan, South Africa, and Venezuela) calling on the WTO General Council to extend the June 17 Decision to COVID-19 therapeutics and diagnostics, the WTO instead further extended the deadline to decide whether to extend the June 17 Decision.

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

• "WTO TRIPS Council Recommends That General Council Extend Waiver Deadline," December 18, 2022
• "Nine Countries Seek Extension of WTO Waiver to COVID-19 Therapeutics and Diagnostics," December 11, 2022
• "Status of Proposed Extension of TRIPS Waiver in WTO," December 8, 2022
• "C4IP Presents Webinar on COVID Waiver Extension," December 5, 2022
• "Moderna Sues Pfizer and BioNTech over mRNA Vaccine Technology," August 31, 2022
• "U.S. Trade Representative Releases 2022 Special 301 Report," April 28, 2022
• "U.S. Chamber of Commerce Supports House and Senate Legislation Prohibiting Biden Administration from Negotiating Modifications to WTO TRIPS Agreement Without Congressional Authorization," April 24, 2022
• "Senators Send Letter to Commerce Secretary Regarding WTO Waiver Compromise," March 28, 2022
• "The Proposed WTO IP Waiver: Just What Good Can It Do? -- An Analysis," March 24, 2022
• "IP Associations "Concerned" by Reports of TRIPS Waiver Compromise," March 24, 2022
• "More on Leaked WTO COVID-19 Vaccine Patent Waiver Compromise," March 21, 2022
• "Compromise Reportedly Reached on COVID-19 Vaccine Patent Waiver," March 16, 2022

2.  Supreme Court to Address Scope of Disclosure Necessary to Satisfy Enablement Requirement of 35 U.S.C. § 112(a)

In November, the Supreme Court surprised the patent community by granting Amgen's petition for certiorari in Amgen v. Sanofi on the second of the Questions Presented in its petition:

2.  Whether enablement is governed by the statutory requirement that the specification teach those skilled in the art to "make and use" the claimed invention, 35 U.S.C. §112, or whether it must instead enable those skilled in the art "to reach the full scope of claimed embodiments" without undue experimentation—i.e., to cumulatively identify and make all or nearly all embodiments of the invention without substantial "'time and effort,'" Pet.App. 14a [emphasis added].

This Question, and how the Court has been petitioned to address it, directly concerns the scope of disclosure necessary to satisfy the statutory requirements of 35 U.S.C. § 112(a), a question of particular importance for genus claims in pharmaceutical and biotechnology patents.  As always, it is impossible to discern the Court's reasoning for granting certiorari.  Here the Court will wade into a question that involves balancing the scope of genus claims and their preclusive preemptive effect on future development of related but not expressly disclosed species, on the one hand, and the need for a patentee of an invention capable of a multiplicity of (relatively) minor structural changes to be able to protect an invention from trivial infringers, on the other hand.  How this issue is addressed will likely make our top stories list for 2023.

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

• "Supreme Court Grants Certiorari in Amgen v. Sanofi," November 6, 2022

1.  Impact of Russian Invasion of Ukraine on Global Patent Systems

On February 24, 2022, Russia invaded Ukraine in a major escalation of the Russo-Ukrainian War, which began in 2014.  The invasion has resulted in tens of thousands of deaths on both sides.  It has caused Europe's largest refugee crisis since World War II, with 8 million Ukrainians being displaced within their country by late May, and more than 7.9 million having fled the country as of the beginning of the year.  Many countries imposed sanctions on Russia, affecting the economies of Russia and the world, and provided humanitarian and military aid to Ukraine, totaling over $80 billion from 40 countries as of August 2022.

The impact of the invasion was also felt by the global patent community.  In March, the U.S. Patent and Trademark Office announced that it had "terminated engagement with officials from Russia's agency in charge of intellectual property, the Federal Service for Intellectual Property (commonly known as Rospatent), and with the Eurasian Patent Organization [EAPO]," noting that the termination of engagement with Rospatent and EAPO was in keeping with guidance issued by the U.S. Department of State.  As part of that termination, the USPTO announced that it would no longer grant requests to participate in the Global Patent Prosecution Highway (GPPH) at the USPTO when such requests are based on work performed by Rospatent as an Office of Earlier Examination under the GPPH.  Russia responded to the actions of the USPTO and other patent offices by issuing a Resolution permitting uncompensated use of certain patents without patentee consent -- the patents at issue being held by patent holders who are "associated with foreign states" that commit "unfriendly actions" in relation to Russian legal persons and individuals.

In March, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury issued a General License authorizing "U.S. persons . . . to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations, or certifications" for a limited time when such activities relate to transactions involving the Central Bank of the Russian Federation ("Bank of Russia").  According to the General License, transactions that were "ordinarily incident and necessary to such persons' day-to-day operations in the Russian Federation" were authorized "through 12:01 a.m. eastern daylight time, June 24, 2022."  As a result of the General License, Applicants prosecuting applications before Rospatent or paying annuities on Russian patents would have had to make some difficult decisions regarding the prosecution of those applications and maintenance of those patents by June 24.  But in May, the U.S. Patent and Trademark Office announced that the OFAC's publication of General License No. 31 "authorize[d] certain intellectual property-related transactions in Russia, including the filing and prosecution of any application to obtain a patent, trademark, or copyright, as well as renewal and maintenance fees."  Shortly after the USPTO's announcement, the Intellectual Property Owners Association (IPO) noted that General License No. 31 "clarifies previously issued General License No. 13, which left unresolved whether such payments constituted permissible 'payments for registrations, certifications, and licenses to conduct day-to-day operations' or were prohibited by Russian Harmful Foreign Activities Sanctions Regulations."

Shortly after Russia invaded Ukraine, the Ukrainian Institute of Intellectual Property (Ukrpatent) issued a statement declaring "that during this extremely difficult time for the country, during the military aggression of the Russian Federation against Ukraine, which became the reason for the imposition of martial law . . . the State Enterprise 'Ukrainian Institute of Intellectual Property' (Ukrpatent) continues to operate on a full-time basis providing all the necessary functions and continuous operation of the state system of legal protection of intellectual property."  Although the functions of the National Intellectual Property Authority from Ukrpatent were transferred to the Ukrainian National Office of Intellectual Property and Innovation (UANIPIO) in November (as part of Ukrainian IP reform begun in 2016; see announcement on UANIPIO website), patent protection in Ukraine has not ceased as a result of the conflict.

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

• "USPTO News Briefs," June 6, 2022 (Rospatent terminated as ISA/IPEA)
• "Treasury Department Issues General License Authorizing Certain Transactions Related to Patents, Trademarks, and Copyrights," May 10, 2022
• "U.S. Trade Representative Releases 2022 Special 301 Report," April 28, 2022
• "Treasury Department Authorizes Transactions Involving Bank of Russia Until June 24, 2022," April 10, 2022
• "USPTO News Briefs," April 4, 2022 (Rospatent PPH termination)
• "USPTO Provides Advice Regarding Dealings with Rospatent," March 22, 2022
• "Georgian and Estonian Patent Offices Join Other IP Offices in Expressing Support for Ukraine," March 13, 2022
• "Several Law Firms Close Russian Offices," March 13, 2022
• "Russia Permits Uncompensated Use of Certain Patents without Patentee Consent," Match 11, 2022
• "Lithuanian Patent Office and EUIPO Join Other Patent Offices in Expressing Support for Ukraine," March 10, 2022
• "USPTO Terminates PPH with Rospatent and Terminates Engagement with NCIP," March 10, 2022
• "Life Sciences Business Leaders Call for Immediate and Complete Economic Disengagement from Russia," March 9, 2022
• "PRH Joins Other Patent Offices in Expressing Support for Ukraine," March 9, 2022
• "USPTO Terminates Engagement with Rospatent and EAPO," March 7, 2022
• "Ukrpatent Continues Normal Operations Despite Russian Aggression," March 6, 2022