Patent Baristas

The Human Genome Project, started in started in 1990 to identify genes, has finally come to a close with the publication of the last chromosome sequence in the Human Genome, chromosome 1.

It took 150 scientists 10 years to complete the sequence of chromosome 1, which contains nearly twice as many genes as the average chromosome and makes up eight percent of the human genetic code. It has 3,141 genes and is linked to almost 350 illnesses.

The finished sequence comprises 223.6 million base-pairs (Mbp), determined to an accuracy of >99.99%, and includes the centromere and a large non-coding region (heterochromatin) in the centre of the chromosome. The sequence of chromosome 1 published today includes 99.4% of the gene coding (euchromatin) regions of the chromosome amenable to sequencing with current technologies. Gaps within the sequence (most are due to repetitive sequence) comprise about 1.3 Mbp.

The entire human genome has 20,000 to 25,000 genes, with the sequencing of chromosome 1 identifying more than 1,000 new genes. They also identified 4,500 new single nucleotide polymorphisms (SNPs).

Almost 4500 single-letter changes in the genetic code (called SNPs) were identified that could lead to changes in protein activity. In addition, 90 SNPs were found that would result in a shortened protein. Although some 15 SNPs are associated with already known protection from malaria and predisposition to porphyria, the function of these newly located SNPs is yet to be discovered.

Sequencing was carried out at the Wellcome Trust Sanger Institute and the University of Washington Genome Center contributed 13% of the sequence finishing. Analysis of the chromosome content was carried out by Wellcome Trust Sanger Institute.

The details of the sequence are published in Nature (Gregory SG et al. (2006) The DNA sequence and analysis of chromosome 1. Nature 441: 315-21).

A lone blogger may have succeeded in getting Amazon’s 1-Click Patent cut short. The ‘411 patent, assigned to Amazon, is known as the 1-Click Patent for its claim on ordering items on the web by “clicking” just once. Based on material submitted by New Zealander and Lord of the Rings choreographer Peter Calveley, the USPTO ordered a reexamination of Amazon’s 1-Click Patent.

Specifically, the 1-Click patent claims:

Claim 11. A method for ordering an item using a client system, the method comprising: displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to only the indicated single action being performed, sending to a server system a request to order the identified item whereby the item is ordered independently of a shopping cart model and the order is fulfilled to complete a purchase of the item.

Citing a ‘substantial new question of patentability’ to claims 11, 14-17, 21 and 22 of U.S. Pat. No. 5,960,411, the Examiner now contends that U.S. Pat. No. 5,729,594, along with other non-patent references, suggest the use of a single action ordering system.

The ‘594 patent and all of the cited publications relate to one form or another of a Digicash system, also called E-cash, Cybercash, Cybercoin, etc. In such Digicash systems, a user has access to an amount of “electronic cash” available to purchase items electronically via phone lines or via the Internet. The purchaser may click on an item to buy using a single action. An amount of electronic cash is then subtracted from the user’s account and the item may be sent to the user, for example via an electronic connection in the case where the item is software or some other downloadable product. Therefore, the ‘594 patent and exhibits suggest the use of a single action ordering system. The Examiner notes that none of these Digicash or electronic cash systems contemplates the use of a shopping cart model. But, the Examiner points out tat the shopping cart model is not a positively recited element in claim 11.

In an Ex Partereexamination, either a challenger or patent holder may seek reexamination of a patent based on patents or printed publications. If the PTO orders reexamination, the patent holder is given the opportunity to file a statement concerning the new question of patentability, including amendments or new claims they want to propose (provided, however, that the claims may not be broadened).

If the patent holder files such a statement, the statement must be served on the person requesting reexamination, and the requester is given two months to file a reply to the patent owner’s statement. From that point on, the claims are examined without participation by the requester. Following the Ex Partereexamination, the PTO issues a certificate canceling any claim determined to be unpatentable, confirming any claim determined to be patentable and incorporating in the patent any new claim or amended claim determined to be patentable.

Whether to pursue patent reexamination, either Inter Partes or Ex Parte, involves the balancing of significant considerations. The major advantage to a patent challenger of the Inter Partes procedure over the Ex Parte procedure is that in the Inter Partes procedure the challenger has the right to participate throughout the process. Also, the challenger can submit arguments supporting the Examiner when the Examiner takes a position unfavorable to the patentee, and the challenger can submit declarations by technical experts concerning the patent and the prior art.

The challenger however, must consider certain disadvantages to the reexamination process. One important consideration is that the process gives the patentee the opportunity to amend its claims and add new claims. While the patentee may not broaden the scope of its claims, the patentee may amend the claims to (1) make them patentable in view of the prior art, including the new prior art cited by the challenger, and (2) make them more clearly cover the challenger’s allegedly infringing product. Another major disadvantage to the challenger, in the Inter Partes process, is that the challenger is estopped from challenging the patent in court, except in very limited circumstances. Thus, the Inter Partes challenger must be prepared to do its best job before the PTO because it is unlikely to get another opportunity if it fails to achieve the results it desires there.

Whatever the result of the 1-Click patent, this case is a good example of how it only takes one determined individual to bring down the mightiest patent.

The US Supreme Court ruled unanimously that judges do not have to automatically bar companies from using patents that they been shown to have violated. In eBay Inc. et al. v. MercExchange, LLC., a small patent-holding company that won a ruling against the auction site, the Court said judges must use a four-point test to decide if a permanent injunction should be granted against the losing party in patent disputes.

The Court held that according to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate:

(1) that it has suffered an irreparable injury;
(2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.

The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. Earlier, the Court of Appeals for the Federal Circuit ruled that injunctions should be granted as a “general rule.”

The case put a number of large interests on the two sides of the case as Microsoft, Intel and other large technology companies supported eBay’s position that an injunction preventing the continued use of disputed patents hurts innovation and gives patent-holding companies too much leverage in extracting licensing fees. MercExchange, along with the pharmaceutical industry, the federal government and many venture capitalists, argued that injunctions are necessary and useful tool to force infringers to negotiate in good faith.

In the end, the Supreme Court sided with eBay, stating that to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. These principles apply with equal force to Patent Act disputes. The court stated that:

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. See, e.g., Weinberger v. Romero-Barcelo, 456 U. S. 305, 311-313 (1982); Amoco Production Co. v. Gambell, 480 U. S. 531, 542 (1987). The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. See, e.g., Romero-Barcelo, 456 U. S., at 320.

These familiar principles apply with equal force to disputes arising under the Patent Act. As this Court has long recognized, “a major departure from the long tradition of equity practice should not be lightly implied.” Ibid.; see also Amoco, supra, at 542. Nothing in the Patent Act indicates that Congress intended such a departure. To the contrary, the Patent Act expressly provides that injunctions “may” issue “in accordance with the principles of equity.” 35 U. S. C. §283.2

The bottom line is that this could buy some time for companies hit with an infringement suit to try and get the patent invalidated at the Patent Office. In MercExchange’s case, the U.S. Patent and Trademark Office has issued a preliminary ruling saying that MercExchange’s invention was obvious and should not have been issued. The final outcome will take some time to resolve.

They say the modern biotechnology industry was born 30 years ago this year, with the founding of Genentech in April 1976. Now, in its 20th anniversary edition report called Beyond Borders 2006, Ernst & Young sets out an in-depth analysis and key trends for the biotechnology sector with a timeline charting the industrys evolution.

The news is good as biotech is booming across the globe, from the maturing US sector to the emerging Asia-Pacific. Revenues of the world’s publicly traded biotech companies grew 18 percent in 2005, reaching an all-time high of $63.1 billion. In addition, the sector raised $19.7 billion in capital, the sector’s second highest total since 2000.

According to Ernst & Young, the European biotechnology sector has emerged from a lengthy restructuring period with double-digit revenue growth and the second-strongest financing year on record, with €3.2 billion in capital raised. The pipelines of Europe’s publicly traded biotech companies increased by 28 per cent. While the US biotechnology sector is still strong with 32 new product approvals, the Asia-Pacific biotechnology sector showed 46 per cent increase in revenues.

There is also tremendous growth in biotech crops despite the EU’s chronic incapacity to lift national bans on GMO products. There is increasing pressure by the WTO to allow such crops. Other countries have asserted that the EU had been in violation of international trade rules since 1998 by imposing a moratorium on GM crops, contrary to scientific advice that they presented no health or safety risk. They complained that the EU has set no deadline to lift the moratorium.

Between 1997 and 2000, Austria, France, Germany, Greece, and Luxembourg imposed individual bans on GM crops that had secured approval by the European Food Safety Agency (EFSA). The bans were imposed on a temporary basis using a so-called “national safeguard clause” that EU member states can invoke when they have doubts about the products’ safety for human health or the environment. The EU commission is responsible for the implementation of EU treaties and decisions but has imposed delays on biotech approvals, preventing the marketing of GM crops.

While oversold in the beginning, the next big thing in biotech may just be biogenerics (if the FDA ever sets out guidellines for their approval). It is predicted that by 2009, the pharmaceutical market will hit $650 billion, with biotech drug sales representing 15 percent to 20 percent of total sales. Furthermore, it is expected that 50 percent of all new drug approvals in 2010 will be for biotech drugs. Already, the top five biotech drugs represent almost $12 billion in sales with most of them already off patent but there are no generics given the regulatory hurdles for biogenerics.

Given the relatively complex nature of biotech products compared with conventional chemical generics, it is clear that when the FDA acts on biogenerics, it will most likely require substantially more data to obtain approval. Unlike small molecules, the data needed for biogenerics may depend on the product itself.

We’ll keep you posted on developments.

The European Court of Justice rendered a decision that states drug companies can’t receive patent extensions covering the combination of two substances when only one is an active ingredient and the other controls the release of the first.

Drug companies often try to extend patent protection and, under EU rules, drug makers can apply for a “Supplementary Protection Certificate.” The certificate, granted for a maximum of five years, acts as a patent term extension for time lost from when a company first applies for a drug patent to its authorization, which can be as long as 15 years. The SPC is not an automatic right and has to be applied for in each individual state. The SPC covers a combination of what was claimed in the patent in relation to the marketed drug and what is covered by the marketing authorization.

MIT holds a European patent covering the drug Gliadel 7.7 mg Implant, which is the combination of polifeprosan, a polymeric, biodegradable excipient, and carmustine, an active ingredient already used in intravenous chemotherapy with inert excipients and drug additives for the treatment of brain tumors. Gliadel comes in the form of a device which is implanted into the cranium for the treatment of recurrent brain tumors. The mechanism of its action consists in the carmustine, a highly cytotoxic active ingredient, being released slowly and gradually by the polifeprosan, which acts as a bioerodible matrix.

MIT requested a supplementary protection certificate for carmustine in combination with polifeprosan. The German Patent Office rejected the rejected that application for an SPC on the ground that polifeprosan could not be considered to be an active ingredient within the meaning of Article 1(b) and Article 3 of Regulation No 1768/92.

MIT claimed that polifeprosan is an essential component of Gliadel since it enables carmustine to be administered in a therapeutically relevant way for the treatment of malignant brain tumors, thereby contributing to the efficacy of the medicinal product. It is consequently not a mere excipient or an ancillary component.

The Court looked at the following questions:

1. Does the concept of “combination of active ingredients of a medicinal product” within the meaning of Article 1(b) of Regulation [No 1768/92] mean that the components of the combination must all be active ingredients with a therapeutic effect?

2. Is there a “combination of active ingredients of a medicinal product” also where a combination of substances comprises two components of which one component is a known substance with a therapeutic effect for a specific indication and the other component renders possible a pharmaceutical form of the medicinal product that brings about a changed efficacy of the medicinal product for this indication (in vivo implantation with controlled release of the active ingredient to avoid toxic effects)?

As set out in Article 1(b) of Regulation No 1768/92, ‘product’ means the active ingredient or combination of active ingredients of a medicinal product. However, it does not define the concept of ‘active ingredient’. The court stated that the expression ‘active ingredient’ is generally accepted in pharmacology not to include substances forming part of a medicinal product which do not have an effect of their own on the human or animal body.

In a lengthy opinion, the court concluded that a substance which does not have any therapeutic effect of its own and which is used to obtain a certain pharmaceutical form of the medicinal product is not covered by the concept of active ingredient, which in turn is used to define the term product. Therefore, the combination of such a substance with another substance which does have therapeutic effects of its own cannot give rise to a combination of active ingredients within the meaning of Article 1(b) of Regulation No 1768/92.

The fact that the substance without any therapeutic effect of its own renders possible a pharmaceutical form of the medicinal product necessary for the therapeutic efficacy of the substance which does have therapeutic effects doesn’t change the results.

The group blog over at Point of Law, with an impressive list of contributors, teamed up to cover Blawg Review #56: Sex, Virtual Weddings, and Baseball. Point ‘o Law is sponsored by the Center for Legal Policy at the Manhattan Institute and Liability Project at the American Enterprise Institute.

We were only interested in the post for the baseball — really. OK, we liked the part about wet t-shirts but only for the legal ramifications.

We also enjoyed reading the comprehensive how-to on becoming a mediator by Diane Levin of MediationBlog. Finally, we’ll add our own recommendation that you check out the excellent new Patent Pros blog.

In Breckenridge Pharmaceutical, Inc. v. Metabolite Laboratories, Inc., the Federal Circuit summarized the standard for personal jurisdiction in patent cases.

Metabolite holds patents for a method of controlling hyperhomocysteinemia, a condition involving elevated serum metabolite levels, which is an emerging risk factor for heart and vascular disease, and its principal business involves licensing its patents to pharmaceutical manufacturing companies. PamLab has an exclusive license of the Metabolite patents and manufactures and distributes a prescription-only vitamin product containing a specific formulation of B12, folic acid and B6 marketed as FOLTX. Breckenridge, a generic drug company headquartered in Florida, manufactures a similar product, marketed as “Folbee”, which it sells as a substitute for FOLTX.

Metabolite and PamLab filed suit in District Court alleging that Breckenridge had infringed the Metabolite patents by offering to sell Folbee to drug wholesalers and retailers as a generic equivalent to FOLTX. Following the district court’s denial of the plaintiffs’ motion for a temporary restraining order, the plaintiffs voluntarily dismissed the suit.
Several weeks later, Metabolite sent letters to vitamin distributors and retailers informing them of the Metabolite patents and PamLab’s exclusive license. Three letters were sent to customers of Breckenridge in Florida: Publix Super Markets, Eckerd, and Winn-Dixie. The letters did not name Breckenridge or threaten a lawsuit for infringement.

The letters stated in relevant part:

[O]ne or more small generic drug companies are offering generic equivalents to FOLTX. As the patent owner, Metabolite wanted to alert you to the patent coverage on FOLTX. We would urge you to consult with your patent attorney before entering into any arrangements for the distribution, dispensing or substitution of these generic equivalents in place of a legitimate prescription or order for FOLTX.

Metabolite enclosed a PamLab brochure that contained PamLab’s contact information but did not contain pricing or order forms.

Breckenridge filed suit against Metabolite and PamLab seeking declaratory judgment of non-infringement and alleging state law claims of tortious interference and unfair competition. Metabolite moved to dismiss the complaint for lack of personal jurisdiction and the district court granted the motion. The Federal Circuit has now reversed.

Where a defendant is not subject to general jurisdiction in the forum state, a district court may nonetheless exercise specific jurisdiction over the defendant if the cause of action “arises out of” or “relates to” the defendant’s in-state activity. The issue of personal jurisdiction in a declaratory action for non-infringement is “intimately related to patent law” and thus governed by Federal Circuit law regarding due process.

Where a suit involves both patent and non-patent claims, Federal Circuit law regarding due process also applies to the question of personal jurisdiction on non-patent claims if “the resolution of the patent infringement issue will be a significant factor” in determining liability under the non-patent claims. A court must inquire whether the defendant has “purposefully directed his activities” at the forum state and, if so, whether “the litigation results from alleged injuries that arise out of or relate to those activities.” Then, to defeat jurisdiction, the burden of proof shifts to the defendant, which must “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”

The court held that:

Thus, the crux of the due process inquiry should focus first on whether the defendant has had contact with parties in the forum state beyond the sending of cease and desist letters or mere attempts to license the patent at issue there. Where a defendant-licensor has a relationship with an exclusive licensee headquartered or doing business in the forum state, the inquiry requires close examination of the license agreement. In particular, our case law requires that the license agreement contemplate a relationship beyond royalty or cross-licensing payment, such as granting both parties the right to litigate infringement cases or granting the licensor the right to exercise control over the licensee’s sales or marketing activities.

Here, the court felt that jurisdiction arose by sending letters into the forum state, which it presumed qualify as cease and desist” letters, stating that Metabolite had entered into an exclusive license with PamLab, a company that conducts business in Florida.

Interestingly, the court noted that as a practical matter, patentees and patent counsel today often write accusatory letters artfully, and the type of implicit accusation of infringement contained in the Metabolite attorney letters has become the norm for what is traditionally refer to as “cease and desist” letters without using those magic words.

In sum, the court felt that Metabolite had not met its burden of showing a “compelling case” that the exercise of personal jurisdiction would be unfair under Burger King (Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 1985).

Eli Lilly and Company today got hammered by a jury in the U.S. District Court of Massachusetts in Boston in a decision in the case of Ariad Pharmaceuticals et al. v. Eli Lilly and Company. The Jury handed down a verdict that U.S. Patent No. 6,410,516, owned by Harvard, the Massachusetts Institute of Technology, and the Whitehead Institute and licensed to Ariad Pharmaceuticals, is valid and infringed by Lilly’s sale of Evista® and Xigris®.

The ‘516 patent, awarded after 16 years of prosecution in the USPTO, presents 203 separate claims covering methods of treating disease by regulating a family of molecules known as NF-kB, a biological trigger believed to play a role in a wide range of illnesses from cancer to osteoporosis to bacterial infections.

The ‘516 patent claims methods based on the discovery of a naturally-occurring biological pathway, the NF-kappaB pathway. While Ariad contends that the patent covers all means for modulating the NF-kappaB pathway, Lilly’s contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees’ scientists made their discovery.

In June 2002, Lilly was sued by Ariad, MIT, Whitehead and Harvard in the U.S. District Court of Massachusetts alleging that sales of two of Lilly’s products, Evista and Xigris, were inducing the infringement of their patent and seeking royalties on past and future sales of these products. The jury awarded the plaintiffs approximately $65 million in back royalties and a 2.3 percent royalty on future U.S. sales of Evista and Xigris until the patent’s expiration in 2019.

Regarding Evista, the jury found that the drug infringed claims 80 and 95:

80. [A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-kappaB-mediated intracellular signaling, the method comprising altering NF-kappaB activity in the cells such that NF-kappaB-mediated effects of external influences are modified … wherein NF-kappaB activity in the cell is reduced] wherein reducing NF-kappaB activity comprises reducing binding of NF-kappaB to NF-kappaB recognition sites on genes which are transcriptionally regulated by NF-kappaB.

95. [A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-kappaB-mediated intracellular signaling, the method comprising reducing NF-kappaB activity in the cells such that expression of said genes is reduced] carried out on human cells.

1(a) Does a patient who takes Evista in accordance with the product label for prevention and/or treatment of osteoporosis infringe claim 80 and/or claim 95 of the ‘516 patent? Yes.

1(b) Did defendant Eli Lilly induce infringement of claim 80 and/or claim 95 by selling or causing a third party to sell Evista to such patients? Yes.

1(c) Did defendant Eli Lilly contributorily infringe claim 80 and/or claim 95 by selling or causing a third party to sell Evista? Yes.

Regarding Evista, the jury found that the drug infringed claims 144 and 145:

144. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-kappaB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], wherein reducing NF-kappaB activity comprises reducing binding of NF-kappaB to NF-kappaB recognition sites on genes which are transcriptionally regulated by NF-kappaB.

145. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-kappaB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], carried out on human cells.

2(a) Does a patient who takes Xigris in accordance with the product label for treatment of severe sepsis infringe claim 144 and/or claim 145? Yes.

2(b) Did defendant Eli Lilly induce infringement of claim 144 and/or claim 145 of the ‘516 patent by selling or causing a third party to sell Xigris? Yes.

2(c) Did defendant Eli Lilly contributorily infringe claim 144 and/or claim 145 by selling or causing a third party to sell Xigris? Yes.

This decision appears to go against long-standing patent practice in that one cannot get a patent that would remove known materials from the public. In addition, it has always been the case that one may patent a drug without knowing how it works. If this decision were allowed to stand, many drugs could eventually be found to infringe patents that were issued long after the drugs themselves were discovered.

This also begs the question of if a researcher discovers a drug without ever knowing the drug acts on a patented pathway or before the pathway is understood, does that constitute infringement? If the drug was acting on the pathway before the pathway was discovered, does the existence of the drug invalidate the patent on the pathway by rendering it not “new”? This could also give rise to an ever-increasing number of conflicting patents. Because NF-kB can activate so many genes, more than 150, it is implicated in many diseases.

A separate bench trial with the U.S. District Court of Massachusetts will be held on Lilly’s contention that the patent is unenforceable and will also consider the patent’s improper coverage of natural processes. In June 2005, the U.S. Patent and Trademark Office commenced a reexamination of the patent (Reexam. C.N. 90/007,828). The reexamination is currently in progress although the USPTO has not issued any substantive action.