Patent Baristas

Rep. Jenkins introduced a bill, H.R. 5120, to amend title 35, United States Code, to change the provisions for patent term extensions for drup patents. Specifically, the bill would amend 35 USC 156, which extends the term for a patent where the product has been subject to a regulatory review period before its commercial marketing or use (i.e., pharmaceuticals), to allow for an unintentional delay in filing for the extension.

The Drug Price Competition and Patent Term Restoration Act of 1984 amended 35 USC § 156 to provide for the extension of the normal 20 years from filing patent term of a product, use or process patent if the product which is the subject of the patent is required by Federal law to be approved before it is commercially marketed [PL No 98-417, (1984)]. The Act was passed in recognition of the fact that both the U.S. Food and Drug Administration (FDA) and the US Department of Agriculture (USDA) conduct extensive reviews of human and animal drug applications to determine the safety and efficacy of the drugs or products, including the submission of several years of test data prior to approving a drug for sale and use in the US.

Prior to the enactment of the Drug Price-Patent Term Act, surveys demonstrated that from 1966 to 1979, the effective life of a patent which required regulatory review fell from 13.6 years to 9.5 years. Later studies indicate that the mean effective life fell further until less than one-half of the original patent term remained after regulatory approval. The Act amended 35 USC § 156 with the underlying purpose to recover the time lost to the regulatory approval process.

HR 5120 would now provide for acceptance of an extension request that is filed late were the delay is unintentional. Under this provision:

…the Director may accept an application under this section that is filed not later than 5 days after the expiration of the 60-day period provided in subsection (d)(1) if the applicant files a petition showing, to the satisfaction of the Director, that the delay in filing the application was unintentional. Such petition must be filed with the application in the case of an application filed on or after the date of the enactment of this subsection and must be filed not later than 5 days after such date of enactment in the case of an application which, on such date of enactment, is pending, is the subject of a request for reconsideration of a denial of a patent term extension under this section, or has been denied a patent term extension under this section in a case in which the period for seeking reconsideration of such denial has not yet expired. The Director shall make a determination on a petition under this subsection not later than 30 days after the date on which the petition is received. If no determination has been made on the petition within that 30-day period, the petition shall be deemed to be denied.

The amendments made by this section shall take effect on the date of the enactment of this Act, and shall apply to any application for patent term extension under section 156 of title 35, United States Code, which (1) is filed on or after the date of the enactment of this Act; or (2) on such date of enactment (A) is pending; (B) is the subject of a request for reconsideration of a denial of a patent term extension under section 156; or (C) has been denied a patent term extension under such section 156 in a case in which the period for seeking reconsideration of such denial has not yet expired.

In case you haven’t guessed, patent term extensions or restorations are critical to the research-based pharmaceutical industry. With drugs, a missed filing for an extension of time can mean the loss of hundreds of millions of dollars in revenue.

Promote the Progress asks: Makes you wonder who missed a filing….

The NewStandard ran an article outlining that Drug Firms ‘gouge’ consumers by taking taxpayer handouts. The article points to the government grants offered to Big Pharma companies, which then make huge profits off the drugs they sell. Hence, the argument goes, we are paying twice for drugs.

If only it were that simple.

American consumers spent nearly $200 billion on prescription drugs a year. The cost reflects growth in the availability and use of prescription drugs and also a steep surge (twice the rate of overall inflation) in the price of drugs. And, the absence of pharmaceutical price containment in the United States leaves consumers paying two to three times as much as consumers in other countries, including neighbors Canada and Mexico.

The article points out that Genentech reported total product sales for the first quarter of 2006 increased 39 percent, to $1.64 billion, while sales of their colon-cancer drug Avastin increased 96 percent, raking in $398 million. Currently, colorectal cancer patients pay about $46,640 for a ten-month treatment regimen of Avastin.

The article tries to make a connection that drug prices are maintained at high levels due to the political leverage of pharmaceutical companies in Washington. Admittedly, a 2005 study found that the pharmaceutical and health-product industries spent $87 million on campaign contributions to federal candidates between 1998 and 2005. Probably not just as a goodwill gesture.

It seems, though, that it is more than just a lack of political will in Congress to stand up to the drug companies and enforce rules that require the drugs to be priced fairly. Clearly, it’s difficult for the government to argue fair prices after a drug is proven to be beneficial and establishes its value on the market. You end up asking how much is it worth to keep a person alive.

The drug industry is dependent upon on government-granted monopolies in the form of patents and Food and Drug Administration (FDA) regulations. However, although nearly half of biomedical research spending in the United States is supported by either the government or non-profit sector, the bulk of the research involved in actually carrying drugs through the clinical testing process needed to gain FDA approval is carried on by the pharmaceutical industry and financed through patent protection. And, in exchange, we get access to newer and (presumably) better drugs. Drug companies need to make money to support research and to generate profits but who’s to say how much is enough?

Basically, the prices drug companies charge appear to have little relationship to the costs of making the drugs. Research and development (R&D) is a relatively small part of the budgets of the big drug companies – more is spent on marketing and administration. And generally speaking, the industry has been the most profitable in the US. But is that necessarily wrong?

It could be argued that we receive a partially-subsidized drug cost based on taxpayer-funded research and grants. These funds help lower the prices of drugs from the full price. But, like all subsidies that are not 100%, it’s difficult to say how much is enough. And drugs are different than common goods. People depend on them for their health and even their lives. People want there to be some checks and balances on the costs.

How can the pharmaceutical industry respond to the building wave of support for government intervention? Drug companies need to decide to make some changes by trimming their prices, or at least make them more equitable, and put more of their money into R&D. That would go a long way in smoothing over the unrest among consumers.

Meanwhile, as drugs come off patents, the costs should ease for patients. This week, Indian pharmaceutical firm Dr. Reddy’s Laboratories received final approval from the Food and Drug Administration for its generic version of allergy medication Allegra (fexofenadine hydrochloride), which in allergy-prone Cincinnati should be put into the water supply like fluoridation. Mylan Laboratories also got tentative approval to sell a generic version of Allegra, joining Barr Pharmaceuticals and Teva Pharmaceuticals.

The U.S. Court of Appeals for the Federal Circuit, in Aventis Pharma S.A. v. Amphastar Pharmaceuticals, Inc., and Teva Pharmaceuticals Usa, Inc., (No. 05-1513; April 10, 2006), held that if there is another reasonable inference for not disclosing information during prosecution, the failure to disclose may have been due purely to inadvertence.

In the case, Aventis appealed a District Court summary judgment in favor of Amphastar Pharmaceuticals and Teva Pharmaceuticals that held U.S. Pat. No. 5,389,618 and Reissue Patent No. 38,743 unenforceable. The ’618 patent and the ’743 reissue patent disclose and claim mixtures of low molecular weight herapin (“LMWH”) used to prevent blood clots and sold as Lovenox® (enoxaparin sodium injection). During prosecution of the application leading to the ’618 patent and the ’743 reissue patent, Aventis compared the half-life of a product allegedly covered by the ’618 patent at a 40 mg dose to the half-life of a prior art product at a 60 mg dose to show an unexpected and significantly better half-life. Aventis did not, however, expressly disclose the dosages at which the half-life comparisons were made, and specifically, that the EP 40,144 LMWH data was for a 60 mg dose.

The district court faulted Aventis for comparing data based on different doses to show an improved half-life, when a comparison of available data using the same doses actually showed that there was little if any difference between the half-lives of the prior art and the purported invention. Aventis argued that the use of the 40 mg Debrie LMWH data, as opposed to the 60 mg Debrie LMWH data, was reasonable. The court stated that the question is not whether use of the 40 mg data was reasonable, but whether there was an omission of material fact, particularly in light of the fact that the same study showed that the 60 mg Debrie LMWH data and the 60 mg EP 40,144 LMWH data was much closer than the 40 mg Debrie LMWH data and the 60 mg EP 40,144 LMWH data. It therefore granted summary judgment of unenforceability due to inequitable conduct.

The standards for finding inequitable conduct as follows:

Applicants for patents have a duty to prosecute patents in the PTO with candor and good faith, including a duty to disclose information known to the applicants to be material to patentability. A breach of this duty may constitute inequitable conduct, which can arise from an affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive or mislead the PTO.

Purdue Pharma L.P. v. Endo Pharm., Inc., 438 F.3d 1123, 1128-29 (Fed. Cir. 2006) (citations omitted).

The threshold showing of materiality required to proceed to the “balancing” portion of the inequitable conduct inquiry can be met by showing a reasonable examiner would have considered such information important in deciding whether to allow the application.

The district court determined that an omission that would have revealed that the difference in half-lives was actually much smaller was material to patentability. A comparison made at the same dosage, 60 mg, would have yielded a much smaller difference in half-life. Given the centrality of the differences in half-lives to patentability, by failing to disclose the dosage of the 60 mg compound or to disclose that the difference in half-lives at the same dosage was actually lower, Aventis failed to disclose material information to the PTO.

The CAFC held that it was insufficient to merely submit the underlying data to the examiner and later argue that the examiner could have requested the EP 40,144 dosage information to make additional comparisons. The withholding of the EP 40,144 dosage information prevented the examiner from considering information important in deciding whether to allow the application, and was therefore a failure to disclose material information to the PTO.

Even if an omission is found to be material, the omission must also be found to have been made with the intent to deceive. On summary judgment, to create a genuine issue of material fact, Aventis was required to state specific facts supporting a plausible justification or excuse for its failure to disclose material information.

The CAFC stated that:

Here, the district court did not find direct evidence of intent to deceive, but found that the “facts and circumstances surrounding the failure to disclose the dose differential . . . supports a strong inference of intent by Aventis to deceive the PTO.” … Because Aventis has met its burden of setting forth a plausible justification for its failure to disclose material information, deciding all inferences in favor of Aventis, we hold that the district court erred in finding intent to deceive on summary judgment.

…

The district court’s inference was reasonable—by failing to disclose that the EP 40,144 data was at a 60 mg dose, Aventis may have been painting the rosiest picture possible as to the half-life improvement of its claimed compounds in an attempt to deceive the examiner. Appellees contend that this is only reasonable inference to draw from the facts presented. However, there is another reasonable inference—namely, as Aventis argues, if the comparison between different doses was reasonable, the failure to disclose may have been due purely to inadvertence. Based on the facts presented by Aventis, these are not “insupportable, [or] specious . . . explanations or excuses.” … Therefore, a finding of intent was inappropriate on summary judgment.

The CAFC then remanded for further proceedings stating there remain genuine issues of material fact regarding Aventis’s intent to deceive the PTO.

I just returned from the BIO 2006 conference in Chicago. It was a fantastic meeting with lots of excitement in the biotech arena. Almost every U.S. state had a booth and lots of governors and state officials were in attendance. With sponsorships going for over $200K, there were big bucks being splashed around – including a lot of tax dollars. It’s not hard to see why. All the states (and countries) want a piece of the growing biotechnology industry pie given its revenue and employment opportunities. A report by Battelle’s Technology Partnership Practice shows bioscience employment was 1.2 million in 2004, which represents more than a 1% increase over the 2001 level, with workers earning an average annual wage of $65,775.

This week’s worldwide biotech industry meeting at Chicago’s McCormick Place convention center drew almost 20,000 registrants (and apparently half of them were in line at Starbuck’s when I arrived Monday morning. Ohio Gov. Bob Taft made the rounds over at the Ohio exhibit headed up by Tony Dennis of Omeris. I had a chance to meet up with clients, associates, trades people and even other bloggers (a nod to Ellen at Life Science Communicants)

There was a wide diversity of life science beyond therapeutics that plays to the strengths in the Midwest including medical devices (surgical, orthopedic, cardiovascular, etc.), diagnostics, nanotech, Agbiotech, and industrial/environmental (e.g., biofuels). Agbiotech really was shining bright – you could almost smell the biodiesel. Former U.S. president Bill Clinton gave a speech touting biodiesel as a way to combat global warming. BASF announced it would dedicate more than $320 million over next three years to development of next generation biotechnological optimized crop plants. DuPont and Syngenta announced a joint venture to facilitate the out-licensing of seed genetics and biotech traits.

While not everyone thinks this is all good, most had a fantastic time. The exhibits from Scandinavia, Scotland, Wales, UK, and many others were a wonderful chance to meet people from all around the globe. And for just a short time, the world felt like a kinder, gentler (and smaller) place.

I’ll see you next year in Boston.

Carnival of Biotechnology

Welcome to this edition of the Carnival of Biotechnology. If you’re interested in hosting the Carnival, drop an email to admin@biotechblog.com. Next week’s host is the Biotech Blog.

Colorado Life Sciences Deal Flow reports that Tapestry Pharmaceuticals, Inc. has closed on the sale of 12.75 million shares of its common stock at a price of $2.00 per share, for gross proceeds of $25.5 million, with nine institutional investors. And that the closing of this financing gives Tapestry the resources necessary to aggressively advance their lead oncology compound, TPI 287, into multiple Phase II clinical studies. TPI 287, a proprietary third generation taxane, is Tapestry’s lead clinical compound. This compound was designed to overcome multi-drug resistance in solid tumors that have become resistant to taxane therapy.

Plasmid: Science and bio-tech research blog reports that scientists from the University of Pittsburgh, the University of Missouri and Massachusetts General Hospital made the switch to see if it was possible to create pork that contained the same omega-3 fatty acids as those in the cod-liver oil grandma used to give you. The scientists took a gene called fat-1 from a nematode and inserted it into fetal pig cells, The cells were then used to create transgenic pigs through cloning methods. The fat-1 gene makes an enzyme useful in converting omega-6 fatty acids into omega-3s, the type found in salmon, tuna and other fatty fish. The resulting pigs had a higher ratio of omega-3s. But how do they taste? And are they really good for you? The research continues…

Salata ponders that new-age old question “Profitable Biotech?” Which to many is simply an oxymoron. But, no – a New York Times article that states that: “Publicly traded American biotechnology companies lost only $2.1 billion in 2005, down from $4.9 billion in 2004, according to the latest annual scorecard compiled by Ernst & Young, the accounting and consulting firm.”

In most certainly one of the more controversial and commented posts I have seen in an age, Corante and his audience engage in a heated and provocative series of posts over the soon-to-be-released book “Against Intellectual Monopoly” by Michele Boldrin and David Levine.”

Treehugger reports on farmers working with scientists from Oregon State University to make biodiesel from their own soybean, canola, rape and mustard seed crops. Using microtechnology, the scientists have developed a new, faster way to create biodiesel. Microtechnology produces biodiesel about 100 times faster than the classical method.

Our Technological Future details the 10 medical breakthroughs to watch out for in the next 10 years.

BioBOOM explains how a Texas biotech company aims to clone 100 horses per year with a gene bank of more than 75 champion horses. And these guys have cool t-shirts.

The Biotech Stock Blog asks if Big Pharma Stocks are really cheap or value traps? Well, their future seems secure given that the pharmaceutical industry spent more than $44 million on lobbying state governments in 2003 and 2004.

myDNA describes how researchers at Johns Hopkins have invented a cost-effective and highly efficient way of analyzing what many have termed “junk” DNA and identified regions critical for controlling gene function. And they have found that these control regions from different species don’t have to look alike to work alike.

How about pest-proof, no-mow, genetically engineered lawn of the future? Scarier is the fact that at nearly 50,000 square miles, irrigated grass covers three times more land in the US than irrigated corn does. It sounds more appealing than biotech bacon, though.

Paul Kedrosky at Infectious Greed reports that total biotech industry losses since a 1976 inception are more than $100-billion. On the upside, annual losses are down.

And, even though it may not be pure biotechnology, per se’, the Baristas still find inspiration from the ladies of Go Fug Yourself, where many of these posts are clearly some horrific mutation nightmare (otherwise known as GMW – genetically modified wardrobes).

New blogs to look for:

Life Science Communicants is providing information and real-time commentary on BIO2006 in Chicago.

Patent Circle deals exclusively with issues related to patents and other IP in India.

Jon Dudas, Commissioner of the U.S. Patent and Trademark Office, urged Congress to move ahead with legislation to improve the patent system. He told a U.S. House of Representatives Judiciary subcommittee that it should adopt provisions that would prevent questionable patents from being approved and give companies more leeway to challenge patents after they’re issued.

Dudas singled out two improvements he said the patent office supports that are being considered by the House Judiciary subcommittee on intellectual property:

• One would give third party companies more leeway to challenge a patent that has been approved.
• The other would allow third parties to go to government examiners while they are still considering whether to grant a patent and point out similar existing technology to argue against granting a patent.

Both proposals “are widely supported throughout the intellectual property community and would directly improve patent quality,” Dudas said. But I’m sure someone will blame patent attorneys for everything.

Now, Matt Buchanan of Promote the Progress reports that a new patent reform bill, the Patents Depend on Quality Act of 2006 (“the PDQ Act”), was circulated yesterday by Representative Berman. Steve Nipper at the Invent Blog has a brief review and a .pdf of the bill.

The bill includes the opportunity for third party submissions during prosecution along with Post-Grant Opposition Procedures for opposing a patent. The opposition file would be open to the public. The bill also includes changes to inter partes reexamination and the permitted grounds for willful infringement damages. The bill includes the following limitations:

SEC. 8. INJUNCTION.

Section 283 of title 35, United States Code, is amended by adding at the end the following: “In determining equity, the court shall consider the fairness of the remedy in light of all the facts and the relevant interest of the parties associated with the invention. Unless an injunction is entered pursuant to a nonappealable judgment of infringement, a court shall stay the injunction pending an appeal upon an affirmative showing that the stay would not result in irreparable harm to the owner of the patent and that the balance of hardships from the stay does not favor the owner of the patent.”

In the Senate, Judiciary Committee Chairman Orrin Hatch, a Republican from Utah, is also preparing a patent reform bill.

Meanwhile, the U.S. Patent and Trademark Office started operating its “hoteling” program that allows patent examiners to telecommute from home four days a week and use a shared office space on the fifth day. About 500 of those employees each year are scheduled to be assigned to the hoteling program. The programs are called hoteling because employees must reserve a work space in the way a hotel guest makes a room reservation. With hoteling, many employees share a work space. The Patent and Trademark Office plans to add to its hoteling program as long as the quality of work is not compromised. Among the 4,300 patent examiners, 78 are hoteling as of this week. The agency is adding another 40 every two weeks.

The Patent and Trademark Office is one of the government’s fastest-growing agencies. It plans to add 1,000 examiners per year to its staff of 7,400 employees for the next four years to help clear up a backlog of patent applications. I’m OK with Examiners working in their bunny slippers if it would mean better examination (and an easing of the restriction craziness).

The Midwest will be showing its strengths, especially in the areas of agricultural biotech and in the convergence of the medical device, diagnostic and therapeutic companies, at the upcoming BIO 2006 in Chicago next week.

I will be among the predicted record attendance of over 25,000 registrants. If you’d like to take time to meet next Monday (April 10th), drop me a line and we’ll arrange a meeting at the McCormick Place Convention Center. I’ll be around the Exhibit Hall looking for a good cup o’ joe.

As pointed out by G. Steven Burrill, CEO of Burrill & Company, a San Francisco based global leader in life sciences whose principal activities are in Venture Capital, Merchant Banking and Media, the “Midwest is not the first place people think of when considering centers of biotechnology excellence (most of the biotech activity is concentrated on the East and West coasts) but it’s really more of an awareness issue than it is a fact issue.”

The Midwest is involved in the life sciences industry in a very broad way, from medical devices and diagnostics to biopharmaceuticals, agricultural technology and industrial biotechnology. The region is home to hundreds of life sciences companies and, as Burrill points out, medical devices in particular is one of the fastest growing sectors in the Midwest.

Well, I’m back from my hiatus now that the Google-Patent Baristas acquisition has fallen apart (they don’t even serve decent coffee). The WiredGC posted its own brand of foolery in an article about Large Firm Associates wanting to form a union to enforce wage and labor rules. Associates are upset over massive salary increases and “worker safety is a major concern as many associates cannot use their thumbs on the weekend due to excessive BlackBerry usage.”

I noticed that not everyone thinks that April Fool’s Day is fun. While I’ve received only positive feedback (to my face), Paul Kedrosky at Infectious Greed feels that April Fool’s Day is just irritating. I thought someone would mention our new hire, Staff Writer April Balatro (Latin for April Fool).

I have to admit, it’s difficult to be fresh and new whenever Google comes out with their own 4/1 announcement regarding their new Google Romanceâ„¢ service. Google gets to the bottom of things in noting: “When you think about it, love is just another search problem. And we’ve thought about it. A lot. Google Romanceâ„¢ is our solution.” Don’t forget to take the tour.

So, what’s not a hoax? Google’s push into multimedia. It appears that Google has begun looking for employees to make Google TV and radio products compatible with televisions, stereos, radios and cell phones.

While we’re at it, Bruce MacEwen at Adam Smith, Esq., writes about what should have been merely an April 1st joke. Not to mention the $400K entry-level hires.

Will the Baristas be back next April 1st for another round of fun? We’ll see.

Update: Don’t miss Buzzaire – Metered Dose Caffeine Inhaler.