Patent Baristas

I received information regarding a new IP consulting firm, Criterion Dynamics, tagline: “IP Centric Market Research”. Criterion Dynamics is a consulting firm offering patent and trademark searching and customized competitive intelligence services. They specialize in secondary research and claim to know the fundamentals of business and to “understand where intellectual property fits into the bigger picture.”

They offer a case law search tool called EZLegalResearch that forwards you to a Google Custom Search Engine.  Just type in what you are looking for, hit enter, and click on ‘case law search’ and the search engine will use Google to search for summary judgments, opinions, and alternate info among slightly more than 100 selected sites – including Patent Baristas.

Criterion claims that “Our company was founded under the vision of a corporate world where patent lawyers and business executives do not merely co-exist, but work hand in hand with one another to accomplish shared goals.”

It made me nervous, though, that a click on the upper logo takes you to a site called Quick Sand Productions. Check it out to see if you can add this to your toolbox of searching implements.

It was three up and three down for the Wisconsin Alumni Research Foundation (WARF) as the U.S. Patent and Trademark Office (USPTO) rejected the claims of its patents on human embryonic stem cells.

Embryonic stem cells, as their name suggests, are derived from embryos that develop from eggs that have been fertilized in vitro. Embryonic stem cells possess two properties that make them valuable for cell therapy. First, because embryonic stem cells are at a very early developmental stage (pluripotent), they retain the ability to become any one of the more than 200 cell types that make up the human body. A second feature of embryonic stem cells is their ability to remain in an undifferentiated state and to divide indefinitely.

Earlier, the USPTO announced it would re-examine patents covering embryonic stem cell discoveries made by University of Wisconsin researchers. The patents, US Pat. Nos. 5,843,780, 6,200,806, and 7,029,913, cover all embryonic stem cell research in the U.S.  The USPTO granted each of the requests in September 2006 and rejected all claims of each of the patents on March 30, 2007.

In the Office Actions rejecting the claims, the examiners said the Wisconsin cells appeared to be either the same or obvious variations of cells described in previous patents issued to others or in scientific papers.

The USPTO smackdown really comes from two main prior art patent references:

(a) U.S. Pat. No. 5,166,065 (Williams et al.), which relates to the use of leukaemia inhibitory factor (LIF) in the maintenance and derivation of embryonic stem (ES) cells in culture. The ES cells are maintained and/or derived from animal embryos by culturing said cells or embryos in a culture medium containing an effective amount of LIF for a time and under conditions sufficient to maintain and/or derive said ES cells.

(b) U.S. Pat. No. 5,690,926 (Hogan), directed towards non-murine pluripotential cells that have the ability to be passaged in vitro for at least 20 passages and which differentiate in culture into a variety of tissues. The scope of the claimed cells includes any non-murine ES cells and particular claims are drawn to human pluripotential cells. 

The request for reexamination was made by two nonprofits, the Foundation Taxpayer and Consumer Rights (FTCR) and the Public Patent Foundation (PUBPAT), who believe that the patents are impeding scientific progress and driving vital stem cell research overseas. They argue that the work done by University of Wisconsin researcher James Thomson to isolate stem cell lines was obvious in the light of previous scientific research, making the work unpatentable.

But, I don’t think anyone should go out and throw a party just yet. The patent office grants over 90 percent of the requests for reexamination and many of those patents are issued with substantially the same claim(s) as before reexamination. WARF, a nonprofit group that acts as UW’s tech transfer office, will have a chance to prove the cells are novel. And, if the claims are ultimately rejected, it can still appeal or narrow the claims.  This could take years to resolve.

Still, a lot of money is at stake. WARF has made free licenses and cells available to more than 300 academic research groups but charges companies $75,000 to $400,000, depending on their size and the terms of the license. WARF also claims royalties from products produced using the patents.

WARF has said the patents apply to all human embryonic stem cells, no matter how derived, but had not slowed research. It said academic researchers were entitled to free licenses and had to pay only $500 for cells. The terms in general have been made less restrictive over time in response to complaints.

USPTO Office Actions:

Patent Office Order Rejecting All Claims of ‘780 Patent (PDF; 946KB)

Patent Office Order Rejecting All Claims of ‘806 Patent (PDF; 1.2MB)

Patent Office Order Rejecting All Claims of ‘913 Patent (PDF; 1.0MB)

Copies of the challenges filed by FTCR and PUBPAT.

If you are interested in more details of the ongoing dispute between California and Wisconsin, check out the coverage on the California Stem Cell Report.

Some recent new blogs have come across my desk that I wanted to pass along to readers.The first is the self-explanatory Generic Pharmaceuticals & IP, which looks at the IP issues in terms of the generic drug manufacturer. This blog offers the perspective of a patent attorney working in a generic pharmaceutical company in India. A good, representative post is on the heated in-fighting of generic vs. generic lawsuits.

The second is the not so self-explanatory PatentMonkey, which provides an open and freely accessible version of a patent search and review site with a plethora of features. On PatentMonkey, there is a page dashboard to review patents at a high level to find ones worth a deeper review, including: a readable patent front page; option of claims, abstract or description sections; and navigation all optimized to one monitor screen. 

PatentMonkey claims to be the only site that offers a free online search engine that displays a patent’s status information on every patent detail page. It also offers the Infinite Monkey Theorem blog that covers various patent-related topics.  There are plans to add design patents and applications quite soon.

We recommend that you check both out.

In Merck & Co. v. Hi-Tech Pharmacal (06-1401) , the Court of Appeals for the Federal Circuit looked at the question of whether a patent term extension under the Hatch-Waxman Act, 35 U.S.C. § 156, may be applied to a patent subject to a terminal disclaimer under 35 U.S.C. § 253, filed to overcome an obviousness-type double-patenting rejection.

Finding that the language of § 156 is unambiguous and fulfills a purpose unrelated to and not in conflict with that of § 253, the court held that a Hatch-Waxman term extension may be so applied.

Merck had filed a patent application covering carbonic anhydrase inhibitors, including dorzolamide, which is the active ingredient in Trusopt®, a drug used to treat glaucoma..  That patent application eventually issued as United States Patent No. 4,797,413 but during prosecution, the examiner rejected all claims on the ground of obviousness-type double patenting over the claims of an earlier patent owned by Merck, U.S. Patent No. 4,677,115.

To overcome this rejection, Merck filed a terminal disclaimer that disavowed any term of the ’413 patent that would extend beyond June 30, 2004, the original term of the ’115 patent (17 years from its date of issue).  The filing of the terminal disclaimer was accepted by the Examiner and the  patent was granted.

Later, under the Uruguay Round Agreements Act (URAA), patent term was changed to 20 years from the date of filing of the patent application with issued patents getting a term of the greater of 20 years from its earliest effective filing date or 17 years from its date of issue.  The expiration date of the ‘115 patent was reset to December 12, 2004 (twenty years from the filing date of the ’115 patent).  Because the terminal disclaimer linked the expiration date of the ’413 patent to the term of the ’115 patent, the expiration date of the ’413 patent likewise was reset to December 12, 2004.

Merck got approval to market Trusopt, listing the ‘413 patent in the Approved Drug Products with Therapeutic Equivalence Evaluation (the “Orange Book”).   Then the USPTO extended the term of the ’413 patent 1233 days based on the period of regulatory review undertaken by the FDA.

When Hi-Tech Pharmacal filed Abbreviated New Drug Applications for a generic version of a drug containing the active ingredient dorzolamide and used in drops for the treatment of ocular hypertension, it sent a paragraph iv patent certification notice to Merck, stating that Hi-Tech’s generic eye-drops do not infringe the ’413 patent.  In response, Merck sued.

Hi-Tech filed a motion to dismiss on the ground that while its products were covered by the claims of the ’413 patent, the terminal disclaimer foreclosed the patent term extension and the ’413 patent therefore expired on December 12, 2004.  Merck filed a cross-motion for judgment on the pleadings on the ground that the terminal disclaimer did not foreclose the Hatch-Waxman term extension.

The District Court sided with Merck and enjoined Hi-Tech from commercializing the drug claimed in the ’413 patent until the end of the patent term extension, i.e., until April 28, 2008.

The Hatch-Waxman Act established a patent term extension for patents relating to certain products subject to regulatory delays that could not be marketed prior to regulatory approval.  Section 156 provides an extension of up to five years if certain conditions are met as set forth in the five numbered sub-paragraphs of § 156(a):

(a) The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section from the original expiration date of the patent, which shall include any patent term adjustment granted under section 154(b), if

(1) the term of the patent has not expired before an application is submitted under subsection (d)(1) for its extension;

(2) the term of the patent has never been extended under subsection (e)(1) of this section;

(3) an application for extension is submitted by the owner of record of the patent or its agent and in accordance with the requirements of paragraphs (1) through (4) of subsection (d);

(4) the product has been subject to a regulatory review period before its commercial marketing or use;

(5)(A) except as provided in subparagraph (B) or (C) [not relevant in this case], the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred.

Hi-Tech claimed that terminal disclaimers are irrevocable and final because the disclaimer is the only reason the patent issued.  Merck countered that § 156 unambiguously states that a patent term “shall be extended” where the conditions enumerated are satisfied.  Moreover, it argues that § 156 makes no mention of terminal disclaimers under 35 U.S.C. § 253 and does not prohibit them.

While § 156 states that, if the requirements are met, the patent term “shall be extended.” According to the Federal Circuit, the use of the word “shall” in a statute generally denotes the imperative.  Thus, use of the word “shall” indicates that if the enumerated list of requirements is met, the patent term is entitled to be extended. 

In addition, the court held that:

§ 156 states that the Hatch-Waxman extension shall run from the expiration date of the patent, as adjusted under section 154(b) to make up for certain PTO delays.  In turn, § 154(b)(2)(B) expressly excludes patents in which a terminal disclaimer was filed from the benefit of a term adjustment for PTO delays.  There is no similar provision that excludes patents in which a terminal disclaimer was filed from the benefits of Hatch-Waxman extensions.  The express prohibition against a term adjustment regarding PTO delays, the absence of any such prohibition regarding Hatch-Waxman extensions, and the mandate in § 156 that the patent term shall be extended if the requirements enumerated in that section are met, support the conclusion that a patent term extension under § 156 is not foreclosed by a terminal disclaimer.

Therefore, the court held that a patent term extension under § 156 may be applied to a patent subject to a terminal disclaimer. 

After Teva Pharmaceuticals appealed the dismissal of its declaratory judgment action in District Court, the United States Court of Appeals for the Federal Circuit has taken a fresh new look at things in light of the Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007).

Because the district court relied on the Fed Circuit’s earlier two-part declaratory judgment test for patent non-infringement, it found that Teva failed to establish a reasonable apprehension of imminent suit and that it therefore lacked jurisdiction over the declaratory judgment action. Finding that its declaratory judgment test for non-infringement or invalidity “conflicts” with the Supreme Court, the Fed Circuit reversed.  See Teva Pharmaceuticals v. Novartis (06-1181).

Basically, Novartis has a New Drug Application for three strengths of the drug Famvir® in which Novartis listed five patents in the Orange Book, each of which covers and is directed to various aspects of Famvir®, including U.S. Patent Nos: 5,246,937; 5,840,763; 5,866,581; 5,916,893; and 6,124,304. The ’937 patent is directed to the active ingredient in Famvir®, famciclovir, while the remaining Orange Book patents are directed to methods of therapeutic use (“method patents”) of Famvir®. The ’937 patent expires in 2010, but the related therapeutic use patents do not expire until 2014-15.

In 2004, Teva filed an Abbreviated New Drug Application with the FDA for generic famciclovir tablets in which Teva certified under paragraph IV that its drug did not infringe any of the five Novartis Famvir® Orange Book patents or that the patents were invalid. Novartis brought an infringement suit against Teva on the ’937 patent alone and did not include in the action the related therapeutic use patents. The infringement suit is pending in District Court.

In light of the suit, Teva brought a declaratory judgment action on the four remaining method patents in order to settle everything at once or “patent certainty.” Title 21 U.S.C. § 355(j)(5)(C) is a 2003 amendment to the ANDA statute entitled “civil action to obtain patent certainty.” Under this provision, if the patentee or NDA holder does not bring an infringement suit within 45 days after receiving notice of a paragraph IV certification, the ANDA applicant may bring a civil action for a declaratory judgment that the patent at issue is invalid or will not be infringed by the drug for which the ANDA was submitted. Like MedImmune, Teva argued that it would have been left with the Hobson’s choice of either launching at risk of liability for patent infringement or foregoing the opportunity.

Novartis argued that Teva had no reasonable apprehension that it would be sued by Novartis for infringing the four method patents. In response, Teva argued that: (1) Novartis had already sued Teva on the underlying composition patent; (2) listing patents in the Orange Book established infringement as a matter of law; (3) Novartis had a history of aggressively suing generic drug companies; and (4) Novartis had declined to give Teva a covenant not to sue.

The district court dismissed Teva’s declaratory judgment action using the Fed Circuit’s earlier two prong “reasonable-apprehension-of-imminent-suit” test from Pfizer in stating that Teva had failed to establish a reasonable apprehension of imminent suit and that the district court therefore lacked jurisdiction over the declaratory judgment action.

The Declaratory Judgment Act requires a case of actual controversy. In MedImmune, the Court found that its precedent “did not draw the brightest of lines between those declaratory-judgment actions that satisfy the case-or-controversy requirement and those that do not.” Id. Instead of applying a bright line, the Court stated that its decisions required:

… that the dispute be “definite and concrete, touching the legal relations of the parties having adverse legal interests”; and that it be “real and substantial” and “admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.”

In MedImmune, the Court re-affirmed the correct standard for determining a justiciable declaratory judgment action: “Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between the parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

In reviewing this case in light of MedImmune, the Fed Circuit found that under “all the circumstances” as found in this case, Teva has an injury-in-fact and therefore has a justiciable Article III controversy.

Novartis came up with the disingenuous argument that there is no actual controversy between it and Teva on the four method patents in spite of Teva’s paragraph IV certifications of the four method patents because Novartis has not filed suit nor threatened to sue Teva on the method patents. Novartis claimed that the suit on the ’937 patent is an entirely different controversy.

The court pooh-poohed this for the following reasons:

First, Novartis listed its Famvir® patents in the Orange Book. By doing this, Novartis represented that it had an infringement claim.

Second, Teva submitted its ANDA certifying that it did not infringe Novartis’ Famvir® Orange Book patents or that the patents were invalid. The very act of submitting an ANDA is an act of infringement.

Third, an actual controversy is seen from the combination of three statutory provisions: 1) the “civil action to obtain patent certainty” under 21 U.S.C. § 355(j)(5)(C); 2) the ANDA declaratory judgment provision under 35 U.S.C § 271(e)(5); and 3) the purpose of the Hatch-Waxman Act. The “civil action to obtain patent certainty,” which was enacted in 2003 is designed to prevent patentees from “gaming” the Hatch-Waxman Act.

Fourth, Novartis’ pending infringement litigation against Teva on Teva’s submitted ANDA is an Article III controversy.

And fifth, the possibility of future litigation that Novartis created by electing to challenge Teva’s ANDA on only one of the five Orange Book listed Famvir® patents contributes to finding that Teva has a justiciable declaratory judgment controversy.

In reversing, the court held that:

By filing a lawsuit on only one its five patents certified under paragraph IV in Teva’s ANDA, Novartis has tried to simultaneously leverage the benefits provided to a patentee under the Hatch-Waxman Act and avoid the patentee’s accompanying responsibilities. Novartis’ ’937 patent suit against Teva has invoked the statutory automatic 30-month stay and is concurrently insulating the four method patents from a validity challenge. In the statute, Congress explicitly required that in exchange for the 30-month stay, patentees were to “reasonably cooperate in expediting the action” of whether the paragraph IV patents were invalid or not infringed.

Senior Circuit Judge Friedman concurred with the findings but stated:

In these unusual circumstances, where the Supreme Court went out of its way to state its disagreement with our “reasonable apprehension of imminent suit” test, which was not an issue in the case before it, it appears incumbent on us to stop using that test and hereafter to apply the general declaratory judgment standards that the Supreme Court applied in MedImmune.

The guys at FedCirc.us have announced a new search feature — cleaverly named search.fedcirc.us — that gives you quick and easy access to patent caselaw and commentary. Here’s how it works:A Google-powered search box is provided on the left side of the page. Search results are presented under the box once a search is performed (it’s even pre-loaded with a search). Just enter your search string and click the button.

In the reverse payment case Joblove v. Barr Labs (S.Ct. No. 06-830), the Supreme Court has now asked for the government’s views on the antitrust effects of settlement agreements between holders of drug patents and generic drug makers enjoying the 180-day market exclusivity after Food and Drug Administration approval. This case involves the same legal issue that was raised in FTC v. Schering-Plough Corp., No. 05-273 (Jun. 26, 2006; denying certiorari), as well as three other recent petitions.The issue is the appropriate antitrust standard applicable to an agreement between a brand pharmaceutical manufacturer (and patent holder) and a generic market entrant (and alleged patent infringer) whereby the patent holder shares a portion of its future profits with the alleged infringer in exchange for the latter’s agreement to not market its competitive product. The three Circuit Courts of Appeals that have addressed the issue have rendered inconsistent decisions.

These antitrust class actions involve the prescription drug tamoxifen citrate (tamoxifen), a drug for the treatment of breast cancer. Zeneca manufactures and markets tamoxifen under the brand-name Nolvadex®. Zeneca’s former parent, Imperial Chemical Industries PLC (ICI), held the patent for tamoxifen, U.S. Patent 4,536,516 (‘516 Patent). In 1987, Barr amended its ANDA for tamoxifen to include a Paragraph IV Certification, which prompted a patent infringement suit by ICI (Zeneca’s parent which was then the patent holder). In 1992, the ‘516 Patent was held invalid and unenforceable.

While an appeal from the judgment invalidating the patent was pending in the Federal Circuit, Zeneca and ICI, the patent holders, and Barr, the alleged infringer, agreed to settle the case. Zeneca and ICI agreed to: (1) pay Barr $21 million; (2) pay Barr’s supplier $35.9 million; and (3) supply Barr with Zeneca-manufactured tamoxifen for resale in the United States at a high royalty rate. In return, Barr agreed to: (1) abandon its successful challenge of the tamoxifen patent; (2) withdraw its Paragraph IV Certification to manufacture and market generic tamoxifen prior to the patent’s expiration; and, if possible, and (3) prevent competitive entry by future generic manufacturers.

Now, the plaintiffs allege that the Agreements unlawfully restrained competition in the market for tamoxifen in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and analogous state statutes. The question presented being “Under what circumstances is an agreement by a brand pharmaceutical manufacturer (and patent holder) to share a portion of its future profits with a generic market entrant (and alleged patent infringer), in exchange for the generic’s agreement not to market its product, a violation of the antitrust laws?”

In FTC v. Schering-Plough Corp., the Solicitor General concluded that no conflict exists that would warrant this Court’s review of this issue, based on the same body of case law that exists today. The court of appeals, after noting the public policy favoring settlement of litigation and the statutory right of patentees to exclude competition with in the scope of their patents, rejected that this violated the Sherman Act per se by settling, instead of litigating, a legitimate dispute between them over the validity of the patent for the drug tamoxifen. The court agreed that “‘simply because a brand-name pharmaceutical company holding a patent paid its generic competitor money cannot be the sole basis for a violation of antitrust law,’ unless the ‘exclusionary effects of the agreement’ exceed the ‘scope of the patent’s protection.'”

To add mud to the mix, the Preserve Access to Affordable Generics Act (S. 316) has been introduced into Congress to prohibit brand name drug companies from paying off generic drug companies to delay the entry of a generic drug into the market.

This would amend the Clayton Act (15 U.S.C. 12 et seq.) adding section 28, entitled “Unlawful Interference with Generic Marketing.” This section would read:

(a) It shall be unlawful under this Act for any person, in connection with the sale of a drug product, to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim which (1) an ANDA filer receives anything of value; and (2) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time.

(b) Nothing in this section shall prohibit a resolution or settlement of patent infringement claim in which the value paid by the NDA holder to the ANDA filer as a part of the resolution or settlement of the patent infringement claim includes no more than the right to market the ANDA product prior to the expiration of the patent that is the basis for the patent infringement claim.

We’ll keep you posted on developments.

As a follow-up on yesterday’s article on the road to biogenerics, Food and Drug Administration deputy commissioner Janet Woodcock testified before an Oversight Committee held to examine the prospects and need for a pathway that would allow the FDA to approve safe and affordable generic versions of biotech drugs. Witnesses included representatives of FDA, pharmaceutical manufacturers, scientists, and consumer groups.

During the House Oversight and Government Reform Committee hearing, Woodcock said that while the FDA can currently establish the safety between versions of simple protein-based drugs, it will likely “be a stepwise progression over a decade or so,” before the agency can scientifically verify that a generic version of a complex biotech drug can be substituted for the original. 

The issue comes down to a question of whether generic drug companies would have to conduct clinical trials (and to what extent) before gaining approval. Rep. Henry A. Waxman, D-Calif., along with Representatives Emerson, and Pallone and Senators Schumer and Clinton, have re-introduced H.R. 1038, the “Access to Life-Saving Medicine Act,” which would establish a process through which the FDA will be able to approve generic biologics or biopharmaceuticals.

In summary, H.R. 1038 “Amends section 351 of the Public Health Service (PHS) Act to authorize the Secretary of HHS to approve abbreviated applications for biological products that are ‘comparable’ to previously approved (reference) biological products.”

The current abbreviated pathway described in section 505(b)(2) of the FD&C Act permits an applicant to rely on published literature or on the FDA’s finding of safety and effectiveness for a referenced approved drug product to support approval of a proposed product. A 505(b)(2) applicant must demonstrate that reliance on the previous finding of safety and effectiveness is scientifically justified and must submit whatever additional nonclinical and clinical data are necessary to establish that the proposed product is safe and effective.

The FDA has used this pathway to approve some follow-on protein products including Hylenex (hyaluronidase recombinant human), Hydase (hyaluronidase), Fortical (calcitonin salmon recombinant) Nasal Spray, Amphadase (hyaluronidase), GlucaGen (glucagon recombinant for injection), and Omnitrope (somatropin [rDNA origin]).

However, Woodcock made clear that things won’t go easy absent a drastic change in the law stating that:

Because of the variability and complexity of protein molecules, current limitations of analytical methods, and the difficulties in manufacturing a consistent product, it is unlikely that, for most proteins, a manufacturer of a follow-on protein product could demonstrate that its product is identical to an already approved product. Therefore, the section 505 (j) generic drug approval pathway, which is predicated on a finding of the same active ingredient, will not ordinarily be available for protein products.

To establish that two protein products would be substitutable, the sponsor of a follow-on product would need to demonstrate through additional clinical data that repeated switches from the follow-on product to the referenced product (and vice versa) would have no negative effect on the safety and/or effectiveness of the products as a result of immunogenicity. For many follow-on protein products — and in particular, the more complex proteins – there is a significant potential for repeated switches between products to have a negative impact on the safety and/or effectiveness. Therefore, the ability to make determinations of substitutability for follow-on protein products may be limited.

Not that the FDA has been resting on it’s laurels. As evidence of progress on follow-on protein products, Woodcock noted that :

Because there are many challenging scientific and policy questions about follow-on protein products, FDA has actively promoted a public dialogue on these issues. FDA has held two public meetings (September 2004 and February 2005) and co-sponsored a workshop, in collaboration with the National Institute for Standards and Technology, and with the New York Academy of Sciences (December 2005), to gather input on scientific and technical issues related to follow-on protein products. These meetings resulted in a large number of comments and concerns from the interested parties that have informed our considerations of these issues.

Expect continued arguments over the process as well as the projects savings over current costs.