Patent Baristas

The U.S. Court of Appeals for the Federal Circuit smacked down Pfizer’s bid to get the court to reconsider a March 22 ruling that the patent on its hypertension drug Norvasc was invalid. See Pfizer v. Apotex (06-1261). The earlier ruling allowed Mylan Labs to make a generic version of Norvasc.

Mylan entered the market the day after a March 22 decision that invalidated the Norvasc patent but it lost in its efforts to prevent Apotex from entering the market before September. Apotex, the generic challenger that won the lawsuit over the patent’s validity, also may enter the market immediately. The patent expired March 25, three days after the court ruling. Pfizer had been given an additional six months of exclusivity for agreeing to test the drug for pediatric use.

Mylan was the first to challenge the patent and the only company to get FDA approval and so argued it has exclusive rights for six months. Apotex said that it should be the only generic company in the market because it won the appeals court decision. Teva claimed that since key provisions of the patent were invalidated, everyone should be allowed into the market.

The FDA came back and decided that, since the patent expired, Mylan wasn’t entitled to the six-months of exclusive rights for being the first to challenge the patent. However, the agency also ruled that, since only a portion of the Norvasc patent was invalidated, only Apotex could enter the market before Pfizer’s six-month exlusivity period ends in September — effectively shutting out Teva. Noteably, three of the 12 Fed Circuit judges, Judge Newman, Judge Lourie and Judge Rader, dissented.From Judge Newman:

Both sides acknowledge that the effects of chemical changes on properties of medicinal products is not predictable; the difference residing in the panel’s acceptance of the long-discredited “obvious to try” standard, on which the panel superimposes the theory that the skill of these inventors guided them to trial of the besylate salt (despite the prior art’s preference for the maleate salt), thereby negating patentability. The panel’s application of the obvious-to-try standard is in direct conflict with precedent; it has long been the law that “patentability shall not be negated by the manner in which the invention is made.”

From Judge Lourie:

… rather than give deference to the district court’s fact-findings, the panel substituted its own finding that a reasonable expectation of success existed in the art. See Pfizer, 480 F.3d at 1361, 1364-65 … Much public discussion has occurred, and even judicial comments in opinions, that we should defer to district court judges concerning certain aspects of claim construction, which we have held is a matter of law. Be that as it may, it is undisputed that we must defer to fact-findings by a district court, unless they are clearly erroneous, and I do not believe that they were here.

The panel concluded that the improvement of the invention, which related to drug formulation, viz., increased stability and decreased stickiness, was “insufficient” to meet the standards of patentability. … I read that conclusion as improperly requiring a compound to possess a specific type of improvement over the prior art—in this case, improved therapeutic properties—to be patentable, negating other important properties, a conclusion that is not compelled by our case law and not sound. Any useful and unexpected property should be eligible to overcome a prima facie obviousness determination.

Chemical and pharmaceutical compounds often can be found to be prima facie obvious, as they are based on prior work that could reasonably suggest them, see KSR Int’l Co. v. Teleflex Inc., — S.Ct. —, 2007 WL 1237837 (Apr. 30, 2007), but commercialization of such compounds may depend on their possession of unexpected properties. Such properties may be biological or physical. A failure to recognize all such properties that may be relevant to the value of such a compound may doom the compound to being poured down the drain rather than becoming an important therapeutic. The general public, innovative companies, and, ultimately, generic companies, depend upon faithful adherence to this principle. In addition, our cases hold that unexpected properties make for non-obviousness, see Papesch, 315 F.2d 381, and this decision disdains such properties if they are not biological. That is a conflict with our precedent that needs resolution.

From Judge Rader:

… ‘obvious to try’ jurisprudence has a very limited application in cases of this nature. With unpredictable pharmaceutical inventions, this court more wisely employs a reasonable expectation of success analysis. In this case, salt selection is unpredictable, thus rebutting, as most other courts found, any reasonable expectation of success. Although the panel gives “lip service” to the principle that ‘obvious to try’ does not work in this field, it nonetheless appears to be the basis for its decision in this case. In addition, the panel discerned a reasonable expectation of success by giving undue emphasis to the inventor’s subjective hopes for the outcome of his experiments.

The panel also found that amlodipine besylate was not patentable since it was made by a routine testing or a “well known problem solving strategy.” This clearly violates the statutory mandate that “patentability shall not be negatived by manner in which the invention was made.” 35 U.S.C. 103(a). Many if not most pharmaceutical inventions are discovered through a routine screening protocol or through an established trial and error process. Pharmaceutical inventions discovered by these routine screening methods include not only new formulations and salt forms, but also include the active pharmaceutical compounds themselves. Thus, this decision calls into question countless pharmaceutical patents, which in turn could have a profoundly negative effect on investments into the design and development of new life-saving pharmaceuticals.

More from the Orange Book blog.

EFF Wants You to Help Stop Broadcasting Treaty Flip-Flop

The Electronic Frontier Foundation (EFF) wants to mobilize businesses, public interest groups, and creative industry representatives to stand up against what it sees as over-broad protection of broadcast material. The World Intellectual Property Organization (WIPO) has been debating a treaty that could severly inhibit digital devices like DVR’s and grant broadcasters and cablecasters copyright-like rights over everything they transmit. A draft version of the Broadcasting Treaty is on the fast track and they want your help to stop it.

On June 18-22, WIPO’s Standing Committee on Copyright and Related Rights (SCCR) will be holding a special session to determine whether there’s enough agreement on this new draft to go forward with an already-scheduled inter-governmental Diplomatic Conference in November, at which the new draft could become international law.

EFF wants you to help convince the US WIPO delegation not to support this draft at the June meeting. Particularly if one or more of your senators is a member of the Judiciary Committee, which has oversight over US intellectual property policy. If you want to voice your opinion, EFF has a fillable form here.

IP Kat Blogger Makes A Move

The Human Law Mediation blog reports that IP Kat blogger, Jeremy Phillips is joining the UK law firm Olswang. Jeremy Phillips is the author of the IP Kat blog. The press release states that:

“Jeremy worked as an academic at several universities, was the founder of Trademark World, Patent World, Copyright World and Managing Intellectual Property magazines, and has been the Editor of the European Trade Mark Reports and the Journal of Intellectual Property Law and Practice since 1996 and 2005 respectively. Jeremy is currently the Research Director and a Council Member of the Intellectual Property Institute and a visiting professor to the World Intellectual Property Organization. He also launched IPKat, the highly regarded IP blog.”

 

Gene-Chip Company Moves to Iceland To Circumvent IP Laws; Now Headed For an IPO

Earlier, NimbleGen Systems Inc. fled to Iceland in 2002 in order to circumvent U.S. patents controlled by Santa Clara, Calif.-based Affymetrix Inc. that were blocking NimbleGen’s ability to market its gene chips in the U.S. Affymetrix hadn’t applied for patent protection in Iceland so NimbleGen moved there to set up shop for making and using the gene chips offshore. Basically, NimbleGen receives samples from patent-protected countries and ship back only the results (data) from the chip analysis.

After a court decision requiring competitor Illumina to pay about $16.7 million in damages to Affymetrix for infringing on five patents, Affymetrix has changed it’s business model and has now agreed to license its technology to NimbleGen. NimbleGen now hopes to cash in on the gene chip market, which could reach $900 million by 2012.

NimbleGen filed with federal securities regulators in March to raise as much as $75 million through an IPO.

The General Counsel for the Department of Commerce (DOC), as overlord of the U.S. Patent and Trademark Office (USPTO), sent its own views on the provisions of H.R. 1908, the “Patent Reform Act of 2007,” to Howard L. Herman Chairman of the Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary. This patent bill is a revised version of legislation considered in the last Congress to modernize the U.S. patent system through changes designed to improve patent quality, reduce patent litigation costs and further international harmonization of patent laws.

The letter lobbies for adding provisions that are not currently in the bill but that the USPTO believes “could usefully modernize the U.S. patent system” emphasizing that they are merely considering “what will benefit U.S. inventors and the American public.” So they say.

Under the heading “Quality Is A Shared Responsibility,” the letter outlines the euphemistically-named Applicant Quality Submissions (AQSs). Basically, from the Patent Office’s perspective, their work is much easier under the disclosure rules of the Accelerated Examination Program and the letter states that the “USPTO looks forward to taking the success of this model … to lower pendency, raise productivity and increase quality, and apply it to all patent examinations.” (emphasis added)

The letter does make a nod towards the Draconian penalties under inequitable conduct for innocently omitting information. The DOC calls for legislative action to change the appropriate standards as:

First, the standard for finding intent could be explicitly separated from the materiality of the withholding, requiring proof that the misrepresentation was knowing, with intent to deceive. Second, the doctrine could be changed to a standard requiring a finding that the information would have been relevant to a reasonable examiner. The “relevance” standard could usefully be framed in terms of whether a reasonable examiner would have allowed the patent, without more, but for the misrepresentation or omission.

With respect to materiality, Congress may wish to consider requiring the USPTO to define the term (as it does now) and limit the courts to finding inequitable conduct only in circumstances in which information that the USPTO has defined as material is misrepresented or withheld.

The letter makes further points on Interlocutory Appeals and Post-Grant Review while providing a big thank you for specifically authorizing the USPTO “to promulgate such rules, regulations and orders that the Director determines appropriate to carry out the provisions of Title 35 or any other applicable law or that the Director determines necessary to govern the operation and organization of the USPTO.”

See these and other points here: commerce-dept-letter-on-patent-reform.pdf.

A letter went out today to Speaker of the House Nancy Pelosi, Senate Majority Leader Harry Reid, House Minority Leader John Boehner, Senate Minority Leader, and Mitch McConnell from 111 companies across 27 states expressing concern over certain provisions of patent reform legislation (H.R. 1908/S. 1145 – The Patent Reform Act of 2007) currently under consideration by Congress. 

The letter is signed by companies, associations, venture capital firms and academic institutions across various industries – electronics, telecommunications, life sciences, computer hardware, financial services, chemical, and biotechnology. 

While calling to improve intellectual property protections, strengthen the patent system, and end the diversion of patent fees, the letter states that: 

However, we strongly believe that certain provisions, such as those dealing with apportionment of monetary damages for patent infringement, expansive PTO rule making authority, an open-ended post grant opposition system, and a narrow grace period will not strengthen our patent system but instead will fundamentally undermine patent certainty, discourage investment in innovative technologies, and reduce publication and collaborative activities among academic scientists. 

There is a concern that the reform could lead to an inability to rely on valid patents, weakened protections against infringement and a decreased access to capital, which would hurt U.S. competitiveness.

See the complete letter: cross-coalition-letter.pdf

See more commentary at Peter Zura’s 271 Patent Blog and Patently-O.

The U.S. Supreme Court rebuffed an appeal from Amgen, which tried to have the Supreme Court review the Federal Circuit’s practice of drawing its own conclusions about patent claims rather than relying solely on findings made by the trial court. See Amgen Inc. v. Hoechst Marion Roussel Inc. and Transkaryotic Therapies Inc., 06-1291.

Earlier, the Court of Appeals for the Federal Circuit affirmed a District Court’s decision that Transkaryotic Therapies Inc. (TKT) and Aventis Pharmaceuticals Inc. infringe Amgen’s erythropoietin (EPO) patents. The court’s decision upheld the validity of two of Amgen’s EPO patents and the infringement by TKT of three patents and 12 claims, including a patent that does not expire until 2015.

The issue remains over the District Court’s findings on the infringement and validity of two patents with claims to the production of erythropoietin, the infringement of one product patent under the doctrine of equivalents, and the validity of one product patent. The Federal Circuit found the production patents valid and infringed (U.S. Patent Nos. 5,618,698 and 5,756,349). The court reversed the District Court’s determination that TKT infringed Amgen’s U.S. Patent No. 5,621,080 under the doctrine of equivalents, and remanded to the District Court for further consideration of the remaining validity issue on one of the other product patents (U.S. Patent No. 5,955,422).

The Federal Circuit has ruled that appeals courts can do their own examination of facts surrounding a patent claim. Appeals courts generally review the interpretation of laws rather than the particular facts of a case, but the Federal Circuit has determined that a lower court’s patent analysis can be called into question.

Amgen contends that Federal Circuit’s willingness to reconsider the factual aspects of the case “produces incorrect results and causes litigants and district courts to waste tremendous resources”

The final outcome in a patent lawsuit depends on whether a patent claim covers “the alleged infringer’s product or process,” which requires a determination of “what the words in the claim mean.” The issue here is what is the proper standard of review of factual findings underlying patent claim construction. See Markman v. Westview Instruments Inc., 517 U.S. 370 (1996).

The Supreme Court’s ruling in Markman set out that the trial court must decide the proper meaning of claim construction but the Federal Circuit has wrestled with the standard of review for fact findings underlying claim construction, and further, the extent to which the trial court may base its claim construction on extrinsic evidence.

However, an en banc panel of the Federal Circuit held that all aspects of claim construction are reviewed de novo. See Cybor Corp. v. FAS Techs. Inc. The factual findings involved in claim construction include the level of ordinary skill in the art at the time of filing, the background of the technology and the customary meaning of technical claim terms to one of ordinary skill in the art.

The Federal Circuit held that Markman did not compel deferential appellate review of factual findings underlying claim interpretations, concluding instead that “[n]othing in the Supreme Court’s opinion supports the view . . . that claim construction may involve subsidiary or underlying questions of fact.”

In the present case, the district court heard testimony on the background of the technology and the customary meaning of technical claim terms to assist in the court’s interpretation of terms such as “therapeutically effective amount.” The question then remains “How does a court decipher the plain and customary meaning of a term as understood by one skilled in the art without resorting to extrinsic evidence about how one skilled in the art would construe the term?”

Many argue that the District Court should find the facts necessary for claim construction, including the definition for one of ordinary skill in the art and the customary meaning of claim terms. They also argue that a determination of whether a patentee has successfully rebutted the presumption of prosecution history estoppel is based on factual underpinnings that should be subject to deference on appellate review.

The Federal Circuit has held that the issue of whether a patentee has successfully rebutted a Festo presumption of surrender of equivalents is a question of law to be reviewed de novo.

In the petition for rehearing at the Federal Circuit, Judge Michel and Judge Rader dissented stating:

In my view, four practical problems have emerged under the Markman-Cybor regime: (1) a steadily high reversal rate; (2) a lack of predictability about appellate outcomes, which may confound trial judges and discourage settlements; (3) loss of the comparative advantage often enjoyed by the district judges who heard or read all of the evidence and may have spent more time on the claim constructions than we ever could on appeal; and (4) inundation of our court with the minutia of construing numerous disputed claim terms (in multiple claims and patents) in nearly every patent case.

On its face, a review of claim construction seems to be a factual decision within the discretion of the trial judge and only reversible for clear error. Since each dispute raises unique factual situations and unique experimental evidence, the trial judge is best situated to guide the inquiry and determine the result. Therefore, appellate courts should only reverse if the trial judge exceeded discretion in determining reliability and fit of various experts’ evidence.

However, a decision to admit or exclude expert testimony is one that depends on an interpretation of the rules of evidence and so it could be argued to be a matter of law reviewable de novo by the appellate court. While most courts seem to follow the “abuse of discretion” standard of review, by letting this ruling stand the Supreme Court seems to agree with the majority to look at claim construction de novo.

As you can imagine, security was quite tight at the convention center during the BIO2007 conference. This was especially evident on Tuesday during the visit of Her Majesty Queen Noor of Jordan. Special Operations officers lined the walkways — I would post a picture but they asked that I not photograph them.

Because of an over-abundance of caution and fear of activists, there were a half-dozen chemical-warfare specialists on hand with special equipment to detect anything from poison gas to biological weapons. There was even this armored vehicle parked nearby:

Despite the stepped up efforts, the security personnel were extremely friendly and every one that I met bent over backwards to answer questions or to help as necessary (they even had me sit on one of the police motorcycles for a photo op).

Overall, it was a quiet and uneventful time for security — just the way everyone wanted it. Apparently, more officers should have been over at the Boston Pops!

On Tuesday late afternoon, a few lone protesters across the street from the BIO2007 International Convention at the Boston convention center caught my eye as they were holding up a large banner that read: “Life Is Not Patentable.” I really wanted to know why they were against patents.

I made my way over to their gathering and talked to a few of the protesters at length. I wanted to understand their point of view. What I found is that biotechnology patents are not their real concern.

Anne Fletcher, an ecologist from Ohio, is not a radical or uninformed. She holds a Bachelor of Science degree and made it very clear that they are not afraid of biotech because they do not understand biotech, they fear biotech because they do understand it. Their fear is of the unintended consequences we may face decades after the fact.

While the group indicated that they are concerned that crops are now manipulated genetically and then planted without fully knowing the consequences, Fletcher indicated that a main concern is the growing trend towards large-scale farming based on only a few select crop strains. While this is really not an issue specific to biotechnology, the industry does play a role in the decrease in biodiversity as farmers plant more acres of fewer strains.

Tom, a vegetarian who declined to give his last name, felt concerned about the fragility of our world’s food supply and about the possibility of unintended consequences, pointing out the recent findings showing fewer insects and seeds to support wildlife with GM sugar beet and rapeseed. He felt that farmers have placed their trust in the hands of the biotech companies and must rely on them to act in a responsible manner.

According to genetic theory, the more uniform a crop is in genetic makeup the more easily it could be wiped out by disease. But, the non-GMO crops currently cultivated are not very diverse either and are already quite genetically similar. Also, unintended and unwanted consequences are not unique to GM plants. Nature manages to come up with a wide selection of new variations all by herself. Others would point out that humans have been genetically modifying our food crops through breeding methods to improve yield since the beginning of farming — only the efficiency has changed.

Despite their banner, the group never really expressed a concern about patents. The take home message was that the industry must ensure adequate testing and safeguards. Biotechnology can be a great force across the planet helping farmers produce higher yields on less land and reducing the amount of harmful chemicals used by many traditional farmers. At the same time, with great power comes great responsibility — to paraphrase the Spider-Man movie.

More at BioVoice.

While attending BIO2007 in Boston on May 6-9 and will be participating as a blogger on-site at BioVoice, the BIO2007 Conference Exhibitor Hall has been jam-packed with events. With 1,900 exhibitors, 60 pavilions and 60 countries available to stop by and visit, it’s difficult to meet with all those you want and to spend enough time visiting.

For readers of Patent Baristas, I’m passing on some insider information. The best chocolate can be found at the Switzerland pavilion. The best theme-based, game playing is the mini-curling at Saskatchewan. Best new trinket is at novo nordisk, offering slick, colorful pedometers. Ireland even had a visit from Bono — although my pictures are blurry.*

And forget about all the iPod give-aways. The best raffle prize is at the Scientist Magazine, which is offering a chance for a cool red Vespa. They’re also handing out the premier issue of Biotech360, a quarterly magazine for leaders in the biotech industry, which asks the question “Can Biotech Save the Developing World?”  A question for all of us, indeed.

__________________
(*Note: I’m just having some fun. I think it was just someone that looked like Bono. Of the two gentlemen at the Ireland booth, one believed it was Bono while the other thought it was a look-a-like. I can’t offer any proof either way but somehow I image he would be followed around by cameras.)