Patent Baristas

In a nonprecedential opinion, the U.S. Court Of Appeals For The Federal Circuit held that just because a case involves patents doesn’t mean that you get federal jurisdiction.  Wisconsin Alumni Research Foundation (WARF) v. Xenon Pharmaceuticals (07-1026-33).

The court ruled that it has no jurisdiction over the case because it does not present a claim arising under the patent laws. Xenon Pharmaceutical looked to the mention of the Bayh-Dole Act 35 U.S.C. 200 et seq.) in WARF’s complaint to get jurisdiction.

The court noted that the Bayh-Dole Act concerns government funding agreements and contracts in the language of 35 U.S.C.  201, an area that is outside our section 1295(a) jurisdiction. See Bonzel v. Pfizer, Inc., 439 F.3d 1358, 1362-63 (Fed. Cir. 2006) (noting that contract obligations do not “arise under” the patent laws merely because the contract is a patent license).

Therefore, the case was transferred to the United States Court of Appeals for the Seventh Circuit.

Earlier, WARF won a $1 million jury award against Xenon Pharmaceuticals, a Canadian biotechnology company in a dispute of licensing of WARF’s stem cell patent.  The award was based on the amounts that Xenon Pharmaceuticals failed to pay in fees related to a licensing agreement with WARF, the patenting and licensing arm for the University of Wisconsin-Madison.

In 2001, WARF licensed technology to Xenon, a privately held company that pulled in $31 million of private financing last month. The technology was based on four UW-Madison researchers’ discoveries of a compound related to the control of cholesterol, obesity and diabetes. Xenon announced in September 2004 that it had an agreement with Novartis Pharma AG to commercialize related compounds. WARF filed the lawsuit against Xenon last spring in Madison.

The Foundation for Taxpayer and Consumer Rights has argued that WARF’s stem cell patent is overly broad and is impeding stem cell research. They hope the earlier Supreme Court ruling in eBay v. Merc Exchange will limit what the foundation calls “dubious patent claims to control all human embryonic stem cells in the United States.”

Another partying eyeing this case is the California’s Proposition 71 stem cell research program and should be challenged. The California Institute of Regenerative Medicine (CIRM), the state’s stem cell institute, will finance $3 billion in stem cell research. When bond financing is factored in, a total of $6 billion in California taxpayer funds are at stake.

After PUBPAT filed formal reexamination requests, the U.S. Patent and Trademark Office (PTO) rejected the claims of three key patents (US 5,843,780, US 6,200,806 and US 7,029,913) that cover research using human embryonic stem cells.

In reaching the preliminary decision, the examiners stated that the stem cells described in the patents appeared to be either the same or obvious variations of stem cells described in earlier patents and literature references.

The USPTO granted each of the requests in September 2006 and rejected all claims of each of the patents on March 30, 2007. In June 2007, PUBPAT submitted comments to the Patent Office supporting the rejections. The proceedings are currently ongoing.

IP Biz had a few things to note about the dust-up and the award process of early-stage stem cell research grant applications.