Patent Baristas

Rep. Xavier Becerra from Southern California, and Rep. Dave Weldon of Florida have introduced the Genomic Research and Accessibility Act, a bill that would end the practice of patenting any and all portions of the human genome. They point out that the Human Genome Project has led to the discovery of approximately 35,000 genes and approximately twenty percent of those genes have already been granted patents by the United States Patent and Trademark Office (USPTO).

“The practice of gene patenting is preventing critical research from advancing because scientists are wary of trespassing patent laws,” Rep. Weldon said. “This not only violates the spirit of the Human Genome Project, it hinders the discovery of medical breakthroughs that could save lives. Our bill is a common sense measure to ensure that genes yet unpatented remain the province of science.”

The bill, H. R. 977, would amend title 35 of the U.S. Code, to prohibit the patenting of human genetic material. Chapter 10 of title 35 would be amended to at the end the following new section:

`Sec. 106. Prohibition on patent of human genetic material

`Notwithstanding any other provision of law, no patent may be obtained for a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies.’.

(b) Table of Contents- The table of sections of chapter 10 of title 35, United States Code, is amended by adding at the end the following:

`106. Prohibition on patent of human genetic material.’.

(c) Applicability- The amendment made by subsection (a) shall not apply to a patent issued before the date of the enactment of this Act .

According to patent law, one who “invents or discovers any new and useful process, machine, manufacture, or any composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.” To be patentable, an invention must be useful, novel, and nonobvious and once the USPTO issues a patent, the owner gets the right to exclude others from making, using, selling, offering to sell, or importing into the United States the patented invention.

Genes are just chemical compounds and, as such, they qualify as compositions of matter with respect to patent criteria. Although products of nature (a preexisting substance that is found in the wild) may not be patented, per se, the courts have determined that such a product of nature may be patentable if significant artificial changes are made. By purifying, isolating, or otherwise altering a naturally occurring product, an inventor may obtain a patent on the product in its altered form. Thus, “one cannot patent a naturally occurring gene or protein as it exists in the body, but one can patent a gene or protein that has been isolated from the body and is useful in that form as a pharmaceutical drug, screening assay or other application.”

It is, however, important to recognize that patent protection is what secures the economic payback that allows companies to invest in the research to develop new drugs from gene sequences even when the odds are high that it will fail. Without the limited exclusive rights of patents, much research would never occur.

Author Michael Crichton, apparently now an expert on patents and genomics, followed this with a NY Times Op Ed piece about how evil gene patents are used to “halt research, prevent medical testing and keep vital information from you and your doctor. ” He also contends that they raise costs exorbitantly claiming that “a test for breast cancer that could be done for $1,000 now costs $3,000.” No word on just where he pulled those numbers from or if he will be writing on how copyrights raise costs on his books.

More reasoned views can be found here and here.

Sanofi-Aventis SA lost a U.S. patent challenge brought by generic drugmakers Amphastar Pharmaceuticals and Teva Pharmaceutical Industries Ltd. over Sanofi’s blockbuster anticoagulant drug, Lovenox. Lovenox is Sanofi’s best-selling drug, with sales over $2.79 billion in 2005 — even more than Plavix. Lovenox is an injectable drug used in protecting patients against deep vein thrombosis or blood clots that usually develop in the legs. If the clots break free, they can wind up in the lungs causing potentially fatal consequences.

In June 2005, District Court had granted Amphastar and Teva a motion for summary judgment that invalidated Sanofi-Aventis’ US Pat. No. 5,389,618 for Lovenox based on inequitable conduct concerns. In April 2006, a federal appeals court reversed the decision and sent the case back to the trial court. The major issue was whether Sanofi tried to mislead to the U.S. Patent and Trademark Office. The District Court retried the case in December. Amphastar Pharmaceuticals and Teva Pharmaceuticals were seeking approval from the FDA for purportedly generic versions of Lovenox® and were challenging the ‘618 listed in the Orange Book for Lovenox®.

Although the patent covering the Lovenox main ingredient (enoxaparin sodium) does not expire until February 14, 2012, a ruling by the U.S. District Court for the Central District of California has found inequitable conduct by Sanofi when it initially filed the patent. In the decision by Judge Mariana Pfaelzer, the court ruled that there was sufficient evidence that Aventis had withheld material information during prosecution of the ‘618 patent and its replacement, Reissue Pat. No. RE38,743.

The central issue involves Aventis’ representations that Example 6 in the patent “clearly demonstrated” a significantly longer plasma half-life for the low molecular weight heparin (LMWH) compound. At no time did Aventis or its employee, Dr. Andre Uzan, disclose at what dosage the half-life comparisons in Example 6 were made. It was later discovered that the Example compared a 60 mg dose versus a 40 mg dose of the earlier product.

The case for deceptive intent hinged on the credibility and scientific rationale of the testimony of Dr. Uzan. The burden of affirmatively proving intent to deceive fell on Amphastar and Teva and the Court found clear and convincing evidence of intent to deceive in finding that (1) the applicant knew the information; (2) the applicant knew or should have known the materiality of the information; and (3) the applicant did not provide a credible explanation for the withholding.  In fact, the Court opined that “Dr. Uzan’s explanation suffers from a total absence of indicia of credibility.” Ouch.

The Court ruled that but for Dr. Uzan’s intentional omissions, there was a high probability that the ‘618 patent would not have issued and the ‘618 patent must therefore be found unenforceable due to inequitable conduct.

If the ruling stands, Sanofi could see 60% of its Lovenox sales at risk to generic competition five years before the patent would have expired. However, the Food and Drug Administration hasn’t approved any generic versions yet. Also, some believe that Sanofi may avoid an immediate generic entry because Lovenox’s complex formula makes it difficult for other companies to copy. Generic-drug makers must prove their products are bioequivalent to brand-name drugs — meaning it must have the same strength and reach the desired target in the same way as a brand-name drug.

See the entire ruling here:  teva-v-sanofi.pdf

FedCirc.us, the new, new thing from the RethinkIP guys (Matt/Doug/Steve), has announced their latest creation, The Resolution. It’s a quarterly magazine, The FedCirc.us Reader, and the first issue is available as a free preview issue (Download the .pdf here).

I took a look at this item thinking it would be a nice, little four-pager with a few notes. I was blown away by the 34-page spread highlighting all the action at the Federal Circuit. How these guys can do all they do is beyond me but I recommend you check out the preview.

We agree that the magazine is an effective new tool for staying current on patent caselaw developments.

The Court of Appeals for the Federal Circuit held that whether broadened claims are invalidated by the recapture rule is an issue separate from construction. (MBO Laboratories v. Becton, Dickinson & Company; 06-1062).  In this case, MBO appealled a summary judgment of noninfringement of U.S. Patent No. RE 36,885 based on the district court’s claim construction on a hypodermic safety syringe.The patented invention relates to syringes with features intended to protect people from inadvertent needle sticks by somehow covering the needle. Having stuck myself with a needle here and there, I know it’s importance.

MBO’s syringe is essentially structured by having the needle or cannula mounted inside a guard sleeve. The needle’s sharp end protrudes through a hole in the front of the guard, permitting it to be inserted into the patient. When the needle is removed from the patient, the health care worker slides the needle backwards relative to the guard. During a long, tortured prosecution history, MBO differentiated cited prior art patents for failing to prevent the re-emergence of the needle. Id. at 7-8. MBO additionally differentiated the one reference as lacking “the automatic and immediate safety means of the present invention.”A reissue of the ’699 patent was done because the claims could be interpreted to cover only backwards movement—”retraction”—of the needle into a stationary guard, and not pushing the guard forward while holding the needle still. It asked to replace “retraction” with “relative movement” in order to more clearly capture embodiments where the guard sleeve was moved forward. The PTO allowed the reissue without objection. The district court then limited the claims to “retraction,” negating the expansion of claim scope permitted by the PTO, in part because of the recapture rule.

The recapture rule is a limitation on the ability of patentees to broaden their patents after issuance. Inventors may seek reissuance of their patent under 35 U.S.C. § 251, if the reissue application is filed within two years of the patent’s initial issuance and the patentee “through error without any deceptive intention . . . claim[ed] . . . less than he had a right to,” the reissue patent’s claims may be broader than the original patent’s claims. The recapture rule thus serves the same policy as does the doctrine of prosecution history estoppel: both operate, albeit in different ways, to prevent a patentee from regaining what had previously been committed to the public.

The court reversed and remanded stating:

We believe that the district court erred in the first instance by applying the recapture rule to rewrite the claims, essentially unmaking the change that the PTO had permitted. Claim construction should not, of course, be blind to validity issues: “claims should be so construed, if possible, as to sustain their validity.” Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999). A claim that is interpreted too broadly will run into validity issues, providing motivation for the construing court to choose a narrower interpretation if possible. However, validity construction should be used as a last resort, not a first principle: “we have limited the maxim [that claims are to be construed to preserve validity] to cases in which the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous.” Phillips, 415 F.3d at 1327 (quotation marks omitted).

The Federal Circuit disagreed with the district court’s construction of the phrase as referring to “a stationary body into which the movable needle retracts.” But said that this is not to say that the recapture rule may never properly factor into claim construction:

In a case where the available techniques of construction yield two possible interpretations of a reissue claim, only one of which includes previously surrendered matter, it would be correct to resolve the ambiguity by selecting the interpretation not barred by the recapture rule.

The Court of Appeals for the Federal Circuit upheld the ruling of a federal court that its generic version of painkiller Ultracet does not infringe upon Ortho-McNeil’s patent. (Ortho-McNeil Pharmaceutical, Inc. v. Caraco Pharmaceutical Laboratories; 06-1102). 

Caraco’s Abbreviated New Drug Application was to make and sell a pharmaceutical composition containing tramadol and acetaminophen with an average weight ratio of tramadol to acetaminophen of 1:8.67. Caraco’s ANDA also expressly requires Caraco’s formulation to have a weight ratio of no less than 1:7.5.1

In response to Caraco’s ANDA, Ortho alleged that Caraco infringed claim 6 of the ‘691 patent. After Ortho sued for patent infringement, Ortho appealed the granting of Caraco’s motion for summary judgment of non-infringement regarding claim 6 of U.S. Patent No. 5,336,691. The ‘691 patent has fifteen claims directed to a pharmaceutical composition comprising certain weight ratios of two known drugs, tramadol and acetaminophen. Both of these drugs act as pain relievers, i.e., analgesics. The ‘691 patent discloses that where these components are in certain ratios the pharmacological effects of the compositions are superadditive or synergistic. More specifically, the description of the invention reads:

The [acetaminophen] and the tramadol material are generally present in a weight ratio of tramadol material to [acetaminophen] from about 1:1 to 1:1600. Certain ratios result in a composition which exhibits synergistic analgesic effects. For example, in a composition comprising a tramadol material and [acetaminophen], the ratio of the tramadol material: [acetaminophen] is preferably from about 1:5 to 1:1600; and, more preferably, from about 1:19 to 1:800.

The most preferred ratios are from about 1:19 to 1:50. Compositions of a tramadol material and [acetaminophen] within these weight ratios have been shown to exhibit synergistic analgesic effects. In addition, the particular compositions wherein the ratio of the components are [sic] about 1:1 and about 1:5 are encompassed by the present invention.

Claim 6 reads:

[A pharmaceutical composition comprising a tramadol material and acetaminophen], wherein the ratio of the tramadol material to acetaminophen is a weight ratio of about 1:5.

The only claim construction dispute between the parties was the meaning of the phrase “about 1:5.” Caraco argued that the proper construction is “approximately 1:5, subject perhaps to minor measuring errors of, say, 5 or 10%.” Ortho argued that the proper construction is “approximately 1:5, and . . . encompasses a range of ratios of at least 1:3.6 to 1:7.1.”

Under either claim construction, Caraco argued its ANDA-defined product did not literally infringe. With respect to infringement under the doctrine of equivalents, Caraco argued that the doctrine should not apply to broaden the scope of the “about 1:5” limitation beyond the range of ratios suggested by the confidence intervals in the patent because to do so would, alternatively, improperly expand a narrow claim limitation, improperly eliminate the 1:5 claim limitation, or improperly encompass the prior art disclosed in U.S. Patent No. 3,652,589 to Flick, et al.

Caraco also stated that prosecution history estoppel should apply because, during reissue proceedings relating to the ‘691 patent, Ortho narrowed the “about 1:5” limitation to something very close to 1:5 when Ortho described the 1:5 limitation and clearly distinguished it from the 1:10 limitation disclosed in the Flick patent.

Ortho argued that, under its construction, there were issues of fact as to literal infringement. In addition, Ortho contended that its experts would opine that, under the function-way-result test, Caraco’s product with a tramadol to acetaminophen average weight ratio of 1:8.67 was indistinguishable from that with a ratio of 1:5.

The district court construed the “about 1:5” limitation of claim 6 to mean “approximately 1:5, encompassing a range of ratios no greater than 1:3.6 to 1:7.1” based on reissue proceedings where Ortho distinguished the “about 1:5” limitation of claim 6.

The court noted that the word “about” does not have a universal meaning in patent claims, the meaning depends upon the technological facts of the particular case, stating:

The use of the word “about,” avoids a strict numerical boundary to the specified parameter. Its range must be interpreted in its technological and stylistic context. We thus consider how the term . . . was used in the patent specification, the prosecution history, and other claims. It is appropriate to consider the effects of varying that parameter, for the inventor’s intended meaning is relevant. Extrinsic evidence of meaning and usage in the art may be helpful in determining the criticality of the parameter.

The court held: 

We must focus, then, on the criticality of the 1:5 ratio to the invention in claim 6 of the ‘691 patent. The intrinsic evidence points to a meaning for the term “about 1:5” that is narrow because the 1:5 weight ratio, along with the 1:1 weight ratio, is distinctly claimed and distinguished from other broader weight ratio ranges in the patent. There are fifteen claims in the ‘691 patent, all of which use the term “about” to modify the weight ratio or weight ratio ranges of tramadol to acetaminophen. There are two claims, claim 4 and disputed claim 6, that claim a single weight ratio; the other claims distinctly point out ranges of weight ratios. For example, independent claim 1 reads: “A pharmaceutical composition comprising a tramadol material and acetaminophen, wherein the ratio of the tramadol material to acetaminophen is a weight ratio from about 1:1 to about 1:1600.” Id. col.11 ll.19-22. This leads to a conclusion that one of ordinary skill in the art would understand the inventors intended a range when they claimed one and something more precise when they did not.

Considering the intrinsic and extrinsic evidence in this case, we see no error in the district court’s construction of the term “about 1:5” to mean “approximately 1:5, encompassing a range of ratios no greater than 1:3.6 to 1:7.1.”

The Court of Appeals for the Federal Circuit poked another hole in the state immunity shield that that public universities and other state entities use to protect themselves from lawsuits in federal court. (Vas-Cath, Inc. v. , University of Missouri; 06-1100).After Vas-Cath, Inc. had appealed the dismissal of its appeal of the decision of the USPTO in an interference proceeding between Vas-Cath and the University of Missouri, the Federal Circuit found that by requesting and participating in the interference proceeding in the United States Patent and Trademark Office, the University waived its constitutional immunity not only in that proceeding but also in the appeal taken by the losing party.

The appeal had been dismissed by the District Court on Eleventh Amendment grounds. A patent interference proceeding, 35 U.S.C. §135, is conducted for the purpose of determining priority of invention as between competing applicants for patent on the same invention. In general the patent examiner checks for interfering patent applications while they are pending, (“Where two or more applications are found to be claiming the same patentable invention, they may be put in interference, dependent on the status of the respective applications and the difference between their filing dates.”), and if conflict is discovered the examiner will initiate interference proceedings or suggest that the applicant amend the application by presenting a claim drawn to the same invention for interference purposes.

In the present case, the Vas-Cath patent had issued while the University’s application, although filed before the Vas-Cath application, was still pending. The University invoked the procedures to institute an interference between the University’s pending application and Vas-Cath’s issued patent; the University amended its application by copying into the application all nineteen claims from the Vas-Cath patent, as USPTO practice permits.

During a six-year interference proceeding, both sides vigorously contested the issues, producing records, examining and cross-examining witnesses, filing motions and briefs, and arguing their positions. The PTO awarded priority to the University, granted the nineteen Vas-Cath claims to the University, and held that Vas-Cath is not entitled to the patent that had been issued to Vas-Cath.

Vas-Cath appealed to the District Court and the University asserted Eleventh Amendment immunity from suit in federal court, and on this ground the district court granted the University’s motion to dismiss.

The Eleventh Amendment limits the judicial authority of the federal courts and bars unconsented suit against a state:

The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. U.S. Const., amend. XI.

The district court held that since there was not a waiver of immunity by the University, Vas-Cath’s suit must be dismissed on Eleventh Amendment grounds. The University argued that it has absolute immunity from any action in federal court, and that this immunity was not waived by its participation in the PTO proceeding or its action to secure the patent to which it was entitled as first inventor.

Vas-Cath argued that any immunity was waived when the University provoked and successfully litigated the interference contest, and that such waiver includes appeal by the party that lost its patent to the University — that its §146 action was not a new claim against the University, but simply the statutory path of review of the agency ruling.

A state’s participation in the federal patent system does not of itself waive immunity in federal court with respect to patent infringement by the state, and such waiver cannot occur unless the conditions are such that there is violation of the Fourteenth Amendment’s guarantee of due process.

Vas-Cath argued that when the University requested the PTO to conduct an interference proceeding without raising any Eleventh Amendment issue, a waiver was created that extends not only to the initial agency litigation but also to the subsequent judicial review.

The court stated that:

Judicial review of PTO adjudications is established by statute, and when such procedure is invoked by the losing party in an interference proceeding, the result of that proceeding is stayed. See 37 C.F.R. §1.663 (“Whenever an adverse judgment is entered as to a count against an applicant from which no appeal (35 U.S.C. 141) or other review (35 U.S.C. 146) has been or can be taken or had, the claims . . . stand finally disposed of.”). Upon completion of judicial review, the patenting process is completed. See 35 U.S.C. §146 (“Judgment of the court in favor of the right of an applicant to a patent shall authorize the Director to issue such patent.”). Thus the interference proceeding is a multi-part action with appeal as of right, starting in the PTO and culminating in court.

The district court correctly observed that “a state does not waive its sovereign immunity simply by engaging in activities normally conducted by private individuals or corporations.” Op. at 9. However, here the University did not simply procure a patent through the routine of ex parte examination, but requested the PTO to conduct litigation-type activity, obtaining a favorable agency ruling for which the statute authorizes judicial review.

It is likely that involvement in administrative proceedings similar to the patent interference process could be seen as abrogating immunity and could limit the circumstances under which public entities can claim state immunity in federal court.

On Friday, the U.S. Court of Appeals for the Federal Circuit denied a petition to rehear by Apotex asking the Federal Circuit to reconsider a ruling that Apotex is barred from selling its generic version of the anticlotting drug Plavix while Apotex continues its five-year patent lawsuit with Sanofi-Aventis.

The trial began this week with Apotex urging that the underlying patent should be declared invalid saying that the development of Plavix was anticipated in a prior patent held by Sanofi and that its development would have been obvious to a person of ordinary skill in the field who examined the prior patent. Apotex also claims that Sanofi made several misstatements and omissions in its prosecution of the patent in the USPTO. The trial is expected to last about four weeks.

A reader recently asked the question about how often generics succeed in challenging branded drugs. I don’t have recent statistics for just generic drug challenges but some earlier studies for all patent cases showed that out of the 2,500 cases filed each year, barely one in seven terminates with a court’s judgment. Most of the remaining cases were settled. Thus, the vast majority of the patents remain intact. Of those patents that go all the way through to a court ruling, many do not survive validity challenges.

Approximately 40% of those patents challenged on validity grounds are found invalid on summary judgment. Assuming summary judgment of validity is survived, approximately 30% are found invalid at trial. However, validity is only one piece of the equation on whether the patent will survive. There are also equitable challenges so the cumulative effect of all validity and equitable challenges results in a patent surviving a challenge to its validity approximately 55% of the time. (If you have information you can share on generic challenges, drop me a note)

Keep in mind, this all comes down to money and the balance of risk. If you are talking about a blockbuster patent, which could mean over $1 billion in yearly sales, then spending a few million dollars on a patent suit is not a bad investment if you feel there is a substantial ground for challenging the patent, e.g., invalidity. While it is true that basic active ingredient patents are challenged more and more frequently, no generic drug has been legally permitted to enter the US market before a branded drug’s initial active ingredient patent’s expiration — it is also true that patents are often challenged, found invalid, and (only) then a generic may enter the market. The incentives for challenging a patent are quite high.

The provisions of the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments) which govern the generic drug approval process give 180 days of marketing exclusivity to certain generic drug applicants. The statute provides an incentive of 180 days of market exclusivity to the “first” generic applicant who challenges a listed patent by filing a paragraph IV certification and running the risk of having to defend a patent infringement suit.

The statute provides that the first applicant to file a substantially complete ANDA containing a paragraph IV certification to a listed patent will be eligible for a 180-day period of exclusivity beginning either from the date it begins commercial marketing of the generic drug product, or from the date of a court decision finding the patent invalid, unenforceable or not infringed, whichever is first.

Given last year’s sales of Plavix of $6.3 billion, for example, you can see why a 180-day exclusivity period (i.e., being the only approved generic drug) can be worth the risk of a patent challenge. All the generic risks is the cost of the suit. The generic would only need to be successful a few times to be quite lucrative.

In the Apotex case, the disputed patent, U.S. Patent No. 4,847,265, covers Plavix’s main ingredient and does not expire until 2011. The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas the ‘265 patent, due to expire in 2011, claims only the (+)-enantiomer. In the description of the activities of each enantiomer in the ‘265 patent, data show that the (+)-enantiomer is pharmacologically superior in activity and less toxic than both the (–)-form and the racemate.

The U.S. District Judge agreed that Apotex would infringe the patent issued an injunction blocking the sale of generic Plavix citing the likelihood that they will prevail in the patent case. The judge said Sanofi had demonstrated that questions Apotex raised as to the validity and enforceability of its patent were without substantial merit. Therefore, Apotex has been unable to sell its generic drug thus far. (But see: Court Blocks Generic Plavix by Apotex and Apotex To Launch Generic Plavix At Its Own Risk)

On the question of pay-offs of generics to not introduce their drugs, things are never simple. As I mentioned above, generic-drug companies regularly make legal challenges to brand-name companies’ patents in the hopes of getting their generic versions on the market more quickly. They have little to lose. For the cost of a lawsuit, the generic company gets a shot at hundreds of millions (perhaps billions) of dollars in revenue.

The threat of a lawsuit claiming that the brand-name drug companies patent is invalid is close to being held at gunpoint since a jury may find the patent invalid and the drug company will be left twisting in the wind. Patent invalidity suits often come down to a nuanced, battle of experts trying to decide what some hypothetical person skilled in the art would or would not have found obvious a decade or two ago.

Having these matters put in front of a jury can feel a lot like a game of Russian roulette. Therefore, the drug company will often decide to resolve the dispute out of court, with the generic companies agreeing to give up their claims in exchange for cash settlements. The generic versions of the drugs then enter the market when the patents expire. But, the alternative would be for the companies to continue legal battles through endless appeals.

For now, Sanofi’s patent runs through November 2011.

Executive summary

This bench trial addresses patent validity and enforceability issues different from those considered in the jury trial. Lilly contends that the asserted claims of US 6,410,516 are invalid for including non-statutory subject matter, for being obtained through inequitable conduct, and are unenforceable due to prosecution laches.

Lilly argues, and of course Ariad disputes, that the claims cover unpatentable naturally-occurring phenomena, that Ariad withheld critical documents from the patent examiner not only to get the patent issued, but to avoid the risk of losing 13 years of patent term.

Of these, the patent term argument is the most compelling. In any case, particularly in light of the parallels with the Court of Appeals for the Federal Circuit decision in University of Rochester v. G. D. Searle et al., the likelihood that Ariad’s victory will survive the bench trial and the inevitable appeal(s) is low.

Ariad sued Lilly for infringing US 6,410,516, which is directed to therapeutic interventions to the NF-kB signaling system, and which was licensed to Ariad by Harvard and MIT. Litigation was divided into two portions. In the first, a Massachusetts jury found that Lilly infringed claims 80, 95, 144, and 145 of US 6,410,516, and that those claims were valid and enforceable. In the second, a bench trial in August addressed patent validity and enforceability issues different from those considered by the jury.

In the bench trial Lilly argued that the asserted claims of the ‘516 patent are invalid on one or more of the following grounds:

• they claim non-statutory subject matter,
• they were obtained through inequitable conduct (not conforming to the requirement of informing the PTO of information bearing adversely on patentability), and
• they are unenforceable due to prosecution laches (unreasonable delay in obtaining the patent).

Non-statutory material

Patent statutes specifically proscribe patents drawn to natural phenomena, so a discovery in and of itself is not patentable. Discovery coupled with utility is patentable. So the argument here centers on whether Ariad’s patent claims more than a discovery of how NF-kB works in cells.

Lilly argues that since NF-kB pathway occurs naturally, as does an autoregulatory loop that reduces NF-kB activity, the Ariad claims to methods of reducing NF-kB activity are broad enough to cover a naturally-occurring phenomenon. In essence, Lilly argued that nature has been practicing the invention for eons.

Ariad denies those assertions, and argues that claim scope is a matter for the sections of the patent statutes that were involved in the jury trial but not here. Ariad further attacks the status of the autoregulatory loop as not demonstrated to exist in nature, disputes that it reduces NF-kB activity in any case, and asserts that its operation in nature does not meet the limitations of the claims because the ‘516 patent specifies that “natural” IkB is not to be used in the invention.

Ariad has a point that claim scope is not in and of itself is not relevant to the non-statutory material issue, but Lilly’s argument that the claims are broad enough to include naturally-occurring phenomena seems compelling.

Inequitable Conduct 

Inventors, patent attorneys, and others connected with the filing and prosecution of a patent application have a duty of candor to inform the patent examiner of information bearing adversely on the patentability of their application. Failure to do so constitutes inequitable conduct, and is grounds for rendering a patent unenforceable. Applicants need not disclose information that “is cumulative to” (i.e., repeats) information already before the examiner. Determinations of inequitable conduct require a balancing of materiality with intent, so that the more material the omission, the less intent need be shown (and conversely).

Debate here centers on the following:

1. Figure 43 of the issued ‘516 patent, for which the specification supplies the caption “FIG. 43 is the nucleotide sequence and the amino acid sequence of IkB-a,” and
2. Undisclosed references that purport to speak to the issue inherent anticipation. 

Figure 43

Lilly asserted that Figure 43 discloses only an incomplete sequence from a chicken protein called pp40, and lacks 56 amino acids that are necessary for it to bind NF-kB and thereby reduce NF-kB’s activity. Lilly argued that the partial sequence would not have worked in a method of reducing NF-kB activity, and thus the Ariad method as described in the application was inoperative. Lilly further asserted that Ariad knew about this, but did not disclose it to the examiner.

That omission is important because the patent examiner had rejected Ariad’s application for lack of an enabling disclosure and failure to describe the invention in sufficient detail to allow others to practice it, as required. Ariad responded to the examiner’s rejection by pointing out that the application described and enabled use of IkB and DNA encoding it.

Had Ariad disclosed the true nature of Figure 43, Lilly asserted, the examiner would almost certainly have maintained his final rejection of the application and thereby necessitated Ariad’s refiling of it to continue prosecution.

Here is the important part. During prosecution, to conform more closely to international practice, US patent law changed the term of a patent from 17 years from date of issuance to 20 years from date of the original filing. Ariad had been prosecuting this case (and its parent case) for 16 years (!); the case had grandfather status, but only if it were not refiled. The simple act of refiling would cost 13 years of patent term (causing the patent to expire on January 9, 2006, instead of June 25, 2019).

Lilly argued that that potential loss of term provided a strong motivation to Ariad not to disclose any irregularities with Figure 43 that could necessitate such refiling. In the balancing of materiality with intent (the latter being generally inferred from circumstances), such a substantial loss of term goes a long way to showing intent, thereby reducing the hurdle of materiality Lilly needs to show. Lilly further pointed out that Ariad informed the examiner of the Figure 43 situation in two related cases (where Ariad deleted the figure), but not in this one.

Ariad did not address the issue of patent term, but argued that it had informed the examiner of the Figure 43 situation in the related cases, and that doing so in this would therefore have been cumulative. Ariad maintained that the examiner had all of the relevant information to determine whether Figure 43 in fact disclosed IkB-a or not, and that in any case pp40 has subsequently been recognized as a member of the IkB-a family. Ariad further contended that any error was unintentional; even Lilly’s expert witness failed to notice the problem.

Ariad also asserted that, under the law as it existed at the time, a reasonable examiner would not have considered the references Lilly cites as material, and points to the jury verdict as validation for this view.

Disclosure of inherent anticipation references

Inherent anticipation means that others had practiced the invention, even though they hadn’t known it at the time, because through their actions they, of necessity, had to have practiced it. (For example, a method of obtaining a tan by exposure to the sun would be inherently anticipated by those working outdoors.)

The subtlety here is that Lilly could not simply argue that the asserted claims are inherently anticipated, because that issue has already been dealt with in the jury trial. (Whether the jury verdict stands up to appeal, however, is another question.)  Lilly instead argued that of whether the claims are in fact inherently anticipated, Ariad’s failure to disclose references that bear on that issue constituted inequitable conduct that invalidate the asserted patent.

According to Lilly, during prosecution, the family of applications to which the ‘516 patent belongs received numerous rejections from the PTO for inherent anticipation. Lilly contended that, during the pendency of the Ariad application, one of the co-inventors published papers reporting that various compounds – including one found in red wine – that had been used in the prior art inhibit NF-kB activity, and that the failure to disclose that information to the PTO constitutes inequitable conduct, which would render the entire patent unenforceable.

To support its assertion of the materiality of those references, Lilly points to the re-examination of the ‘516 patent, in which the PTO rejected the asserted claims on the grounds of inherent anticipation based in part on those references.

Ariad asserted that, during the ‘516 prosecution, the Manual of Patent Examination Procedure instructed examiners that inherency required “contemporaneous recognition” (i.e., that the missing descriptive matter is not only necessarily present, but also that it would be recognized by those of ordinary skill). Ariad argued that there was no contemporaneous recognition here, that no one recognized that any of the various compounds cited reduced NF-kB activity.

The inherent anticipation argument is complicated because two separate lines of cases conflict on the issue of “contemporaneous recognition,” with each side citing cases that favor its interpretation.

Overall, Lilly’s argument regarding the patent term is deadly.

With regard to the sufficiency of its disclosures to the PTO, Ariad seems to take conflicting positions. On one hand, Ariad argues that the examiner had the information available to determine the compare the sequences of Figure 43 and IkB and could have identified the differences, but on the other they argue that the difference was obscure enough that even Lilly’s expert failed to notice it. Surely they didn’t expect a busy examiner to check sequences for accuracy (anymore than one would expect analysts to check the addition on financial reports). That argument seems disingenuous, at best.

Prosecution Laches 

This is by far the weakest argument Lilly makes. Ariad appears to have been following a “submarine” patent strategy, i.e., temporize on patent prosecution to let industrial practice adopt the patented technology. In the course of the lengthy patent prosecution, however, the patent statutes were changed, vitiating that strategy. In any case, it is hard to imagine a court invalidating the patent on the grounds of prosecution laches.

This argument, while not without foundation, is unlikely to work.

Comparison with Court of Appeals for the Federal Circuit 2003 decision in University of Rochester v. G. D. Searle et al.

The University of Rochester asserted US 6,048,850 against Searle et al. in a case with many parallels to this one. If anything, claims in the ‘850 patent had more substance than those asserted here, since at least the ‘850 patent specified use of a class of compounds in its method of reducing a biological activity. Nevertheless, the Court of Appeals for the Federal Circuit affirmed the district court’s summary judgment holding the ‘850 invalid for failing to comply with the written description requirement of 35 USC 112 because it did not

provide any guidance that would steer the skilled practitioner toward compounds that can be used to carry out the claimed methods – an essential element of every claim of that patent – and has not provided evidence that any such compounds were otherwise within the knowledge of a person of ordinary skill in the art at the relevant time…

Ariad will be lucky indeed to have the ‘516 patent avoid a similar fate.

Today’s post comes from Guest Barista Stephen R. Cooper, Ph.D., an experienced registered patent agent at Patenting Strategy, LLC, a consultancy based in Carlsbad, CA.