Patent Baristas

In a new twist in the Tamiflu drama being playing out across the globe, it’s now being reported that Gilead Sciences, Inc., the developer of Tamiflu, is believed to have terminated its agreement with Roche, which has the exclusive marketing right on the drug. Now, generic manufacturers like India’s Cipla Ltd., are wondering who holds the patent rights on the drug.

According to a note from Gilead Sciences, dated June 2005, the company has “delivered a notice of termination to F. Hoffmann-La Roche Ltd (Roche) for material breach of the parties’ 1996 Development and Licence Agreement for Tamiflu (oseltamivir phosphate), an antiviral pill for the treatment and prevention of influenza. Through this action, Gilead is seeking to terminate the 1996 agreement, which would result in the rights to Tamiflu held by Roche reverting to Gilead.”

Nothing has been clarified yet by Roche or Gilead so the termination could be limited to certain markets and there could be a “cure” of any breach. Gilead’s note states: “Despite our repeated communication of concerns over the last several years, Roche has not adequately demonstrated the requisite commitment to Tamiflu since its launch in the US nearly six years ago, nor has it allocated the necessary resources to realise the potential of the product as a treatment and preventive for influenza,” said John C. Martin, President and Chief Executive Officer, Gilead Sciences.

Following the recent political-panic and stockpiling of Tamiflu, there has been a lot of pressure on Roche to scale-up production. This is probably what led to Roche agreeing to talk to generic manufacturers about additional production of Tamiflu.

See Notice here.

See Redacted License Agreement here.

As we’ve mentioned before, the entire planet seems to be getting jittery over the avian flu virus. Now, Roche AG has agreed to meet with generic manufacturers Teva Pharmaceutical Industries Ltd., Barr Pharmaceuticals Inc., Mylan Laboratories Inc. and Ranbaxy Laboratories Ltd. to license its patent and increase production of its antiviral drug Tamiflu (oseltamivir) to prepare for a possible bird flu outbreak. While only sixty-seven people in Asia are known to have been killed by the H5N1 virus, there is a real fear it could mutate and spark a worldwide pandemic.

Perhaps to avoid a public relations nightmare as well as a showdown on compulsory licensing for its drug, Roche now says it will sublicense Tamiflu production to any company that can produce it in sufficient quantities – now that just about every country is trying to stockpile the drug. Forty countries have placed orders with Roche so far and the company has been under pressure to allow others to produce Tamiflu so demand can be met. Some countries, such as Argentina, have said they will produce their own version of Tamiflu.

All of this is complicated by the fact that there isn’t really an emergency yet, only the heightened apprehension of an impending crisis. Unfortunately, it will be difficult for generics to manufacture Tamiflu. Tamiflu, a neuraminidase inhibitor, is a complex drug and takes 12 months to produce. While Roche claims it’s filling current Tamiflu orders on schedule, there could be a run on the drug if any major outbreak suddenly spooks the world. If generics are not licensed until its urgent, it may be too late. This gets trickier given that Tamiflu has a shelf life of five years and there is no way of knowing when an outbreak may occur.

And now there is the shortage of the raw material for Tamiflu!
Star anise, an unusual fruit grown in China with a pungent, licorice-like flavor, is the herb from which Tamiflu is made. It is grown in four provinces in China and “huge quantities” of its seeds are needed in order to be purified and the shikimic acid extracted at the start of a 10-stage manufacturing process which takes a year.

More commonly used in Chinese cooking and for flavoring liqueurs such as anisette and Pernod, Star Anise (Illicium verum, an evergreen tree of the Magnoliaceae family) is similar to Anise but not the same. Only star anise grown in the four provinces of China is suitable for manufacture into Tamiflu and 90 per cent of the harvest is already used by Roche.

While Roche has developed a synthetic source of acidinic acid, made from the bacterium E. coli, star anise remains the chief source. Once shikimic acid is extracted from the seeds of star anise it is converted to epoxide in a process requiring three chemical steps carried out at low temperature on seven separate sites.

We need to keep in mind that Tamiflu is not a cure for the flu but it can lessen symptoms if taken shortly after they first appear. Whileinternet firms are cashing in on the panic buying of $10-a-tablet anti-viral drug as a defense against bird flu, researchers warned last week that they have seen signs the avian flu virus is becoming resistant to the drug. UK Professor Hugh Pennington warned people risked being “ripped off” by buying a drug they did not need noting that “The risk of them getting bird flu is low. Tamiflu is not [a] wonder drug. It was given to some people in Asia and did not stop them dying.”

I guess fire and pestilence is next.

Update: One commenter below pointed out that, according to an article in Nature, a 14-year-old Vietnamese patient (probably the one referred to above), was treated, recovered and was discharged from the hospital on 14 March 2005.

The United States Court of Appeals for the Federal Circuit took up the question of internal use of an invention as it relates to a public use in determining patentability in Invitrogen Corp. v. Biocrest Mfg., L.P., Stratagene Holding Corp., & Stratagene, Inc., 04-1273, -1274.

On an earlier remand from the CAFC, the District Court, on summary judgment, determined that Biocrest Manufacturing, L.P., Stratagene Holding Corporation, and Stratagene, Inc. (collectively Stratagene) infringed Invitrogen Corporation’s (Invitrogen’s) U.S. Patent No. 4,981,797 (issued Jan. 1, 1991) (the ’797 patent), and that the ’797 patent was not invalid for indefiniteness, although it was invalid because of public use under 35 U.S.C. § 102(b).

The ’797 patent involves the introduction of recombinant DNA molecules into receptive E. coli cells to improve the cells’ “competence,” i.e., their ability to take up and establish exogenous DNA and replicate this DNA as they multiply. A cell that accepts alien DNA is called a transformable cell. Claim 1 of the ’797 patent claims:

A process for producing transformable E. coli cells of improved competence by a process comprising the following steps in order: (a) growing E. coli in a growth-conductive medium at a temperature of 18°C to 32°C; (b) rendering said E. coli cells competent; and (c) freezing the cells.

Stratagene made thirty-four competent E. coli cell lines by a process “including the steps of incubating cells at 37°C, growing the cells in a fermenter at 26°C, and freezing the cells.” Invitrogen sued Stratagene for infringement and the district court construed the claims and then granted Stratagene’s summary judgment motion of non-infringement. Invitrogen appealed, disputing the lower court’s construction of both “improved competence” in the preamble and “growing” in step (a).

The CAFC decided that the trial court had correctly construed the term “improved competence.” The CAFC noted that the term required only a general increase in competence, as compared with that generally obtained when cells are prepared by either (1) growing the cells at 37°C, rendering them competent, and freezing them, or (2) growing the cells at 37°C, rendering them competent, and not freezing them. The CAFC also noted that the trial court had incorrectly construed “growing.” The CAFC then construed that term to permit preparatory steps in advance of step (a), including growth of E. coli at a temperature outside the range in step (a).

On remand, the district court found literal infringement of the ’797 patent; decided that Claim 1 was not indefinite under 35 U.S.C. § 112, 2; and found the claims invalid under the public use provision of 35 U.S.C. § 102(b). The court dismissed all other motions as moot.

Undisputed was that Invitrogen used the claimed process before the critical date, in its own laboratories, to produce competent cells. Invitrogen did not sell the claimed process or any products made with it. Invitrogen kept its use of the claimed process confidential. The process was known only within the company. Stratagene did not dispute that the claimed process was maintained as a secret within Invitrogen until some time after the critical date.

35 U.S.C. § 102(b) states that a person shall be entitled to a patent unless “the invention was . . . in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” The Supreme Court considered the meaning of the phrase “the invention” in § 102(b) in Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 60 (1998). The Court explained that analysis under § 102(b) involves two separate inquiries, one evaluating whether “the invention” was complete and ready for patenting, and the other evaluating whether that invention was “on sale.”

The Court noted that both the on sale and public use bars of § 102 stem from the same “reluctance to allow an inventor to remove existing knowledge from public use.” A bar under § 102(b) arises where, before the critical date, the invention is in public use and ready for patenting. The proper test for the public use prong of the § 102(b) statutory bar is whether the purported use: (1) was accessible to the public; or (2) was commercially exploited. Commercial exploitation is a clear indication of public use, but it likely requires more than, for example, a secret offer for sale. Thus, the test for the public use prong includes the consideration of evidence relevant to experimentation, as well as, , the nature of the activity that occurred in public; public access to the use; confidentiality obligations imposed on members of the public who observed the use; and commercial exploitation,

The district court reasoned that Stratagene had used the claimed process in its own laboratories, more than one year before the ’797 application was filed, to “further other projects” beyond development of the claimed process and to acquire a commercial advantage. Stratagene admitted that it used the claimed process in its own laboratories before the critical date to grow cells to be used in other projects within the company. The district court determined that use of the invention in Stratagene’s general business of widespread research generated commercial benefits. The district court found that this use was “public.” Stratagene argued that this secret internal use was not “public use” under the applicable test, because it neither sold nor offered for sale the claimed process or any product derived from the process, nor did it otherwise place into the public domain either the process or any product derived from it.

The CAFC then held that:

The basic tenet of U.S. patent law is that an original inventor gains an exclusive right to the invention. U.S. Const. art. I, § 8, cl. 8. Thus, an inventor’s own work cannot be used to invalidate patents protecting his own later inventive activities unless, inter alia, he places it on sale or uses it publicly more than a year before filing. 35 U.S.C. § 102(b); see also In re Katz, 687 F.2d 450, 454 (CCPA. 1982); In re Facius, 408 F.2d 1396, 1406 (CCPA 1969) (“[C]ertainly one’s own invention, whatever the form of disclosure to the public, may not be prior art against oneself, absent a statutory bar.”). Section 102(a) denies any applicant for a patent an exclusive right to any invention already “known or used by others in this country” (emphasis added). On the other hand, § 102(b) can apply to the inventor’s own actions. Section 102(b) expressly requires a “public use” in this country for a statutory bar to arise based on use by the inventor himself. See Pennock v. Dialogue, 27 U.S. 1, 23 (1829) (an applicant must be the “first and true” inventor to obtain a patent, but “if he shall put [the invention] into public use, or sell it for public use before he applies for a patent . . . this should furnish , 104 U.S. 333, 336 (1881); another bar to his claim”); Katz, 687 F.2d at 454 (“Disclosure to the public of one’s own work constitutes a bar to the grant of a patent claiming the subject matter so disclosed (or subject matter obvious therefrom).”). Further, to qualify as “public,” a use must occur without any “limitation or restriction, or injunction of secrecy.” Egbert v. Lippmann; In re Smith, 714 F.2d 1127, 1134 (Fed. Cir. 1983).

* * *

While there are instances in which a secret or confidential use of an invention will nonetheless give rise to the public use bar, this is not such a case. In Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946), the patentee used a secret process to recondition worn metal parts for its customers before the critical date. The Second Circuit correctly held “that it is a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or [a patent].” Id. at 520. In contrast, there is no evidence that Invitrogen received compensation for internally, and secretly, exploiting its cells. The fact that Invitrogen secretly used the cells internally to develop future products that were never sold, without more, is insufficient to create a public use bar to patentability.

Get the opinion here.

Taiwan has come out saying it could produce up to a million doses of anti-influenza drug Tamiflu within months to counter a possible bird flu pandemic if it obtains a license from the drug’s manufacturers. Roche has said it is willing to share production with governments or other companies as fears of a pandemic rise after bird flu, which has killed more than 60 people in Asia, was discovered in Romania, Turkey and Greece.

Taiwan officials claim to have successfully produced the drug in the lab. Roche Holding AG confirmed yesterday it is examining a request from Taiwan’s Department Of Health (DOH) to discuss the manufacturing of Tamiflu by Taiwanese companies.

Also, the Korea Food and Drug Administration (KFDA) in South Korea announced that it is looking into the legality of producing a generic version of the patented antiviral drug Tamiflu to protect against an outbreak of the deadly bird flu.

[Note: The original report, from the Korean Overseas Information Service (KOIS), incorrectly calls the drug a vaccine. One site referred to overriding trademark regulations.]

The KFDA said it is hoping to produce a generic version of the drug Tamiflu that would not require approval from its patent holder, Swiss pharmaceutical company Roche , which has exclusive rights to produce the drug. Under international patent laws, the KFDA believes it is possible to make its own version of Tamiflu without prior consent from Roche. That is, there is an exception in which prior consent from a patent holder is not required when the patent is needed to prevent an extreme crisis.

This follows the earlier report that the Indian drug company Cipla Ltd., plans to bring a generic version of Tamiflu into the market early next year.

Meanwhile, Roche announced that it’s willing to negotiate to permit drug makers in poorer countries to produce a generic version of Roche’s Tamiflu, although some Asian governments say that if Roche demands too high a licensing fee, they’ll disregard the patent on Tamiflu.

Bill Heinze over at I/P Updates noted an article in Managing Intellectual Property on October 18, 2005, where USPTO Commissioner Jon Dudas is quoted as calling on companies and patent prosecutors to help the Office improve the timeliness and quality of patent examinations by calling for “a reduction in the number of continuations, fewer claims for each application and a limit to the number of supporting references.”

Limiting the number of references? Huh? And then be disbarred for failure of duty to disclose? As Bill notes:

Perhaps we could just start with eliminating restriction, election, and final action practices at the USPTO, before we dismantle the duty of disclosure. While the patent bar can no doubt do more to make claims easier to read, much less examine, I’m not sure that practitioners have that much control over the volume of continuing applications and supporting references.

Regarding continuations, Dudas said that applicants need to help by reducing examiners’ workloads:

As an example, Dudas cited the number of continuations – applications amended after an initial rejection – which the Office handled. “Out of 375,000 applications we received last year, 100,000 were [continuations]. When one-quarter of our work is rework, we look at that,” said Dudas, adding that “examiners are concerned about the quality of applications coming through the door”.

The fact that between 20,000 and 30,000 applications every year are second continuations makes the problem worse, said Dudas. As a result, he said, the Office is looking at whether there should be a limit to continuations.

It would be a financial disaster for applicants if continuations were limited. With restriction practice running out of control, especially in the biotech and pharmaceutical arts, how would companies know what to file in a single application? You would have to file numerous “original” applications for each invention.

I recently had an application that had a straight-forward set of claims with a composition and method of using the composition. The Examiner returned a two-way restriction: one for the composition, one for the method. I traversed arguing that the method is just used with the composition and requesting withdrawal of the restriction.

I got back a response from the Examiner stating that “Yes, I was right and the restriction was being withdrawn.” Then in the next paragraph I got “Oh, and by the way, I’m issuing a new restriction for these TWENTY-EIGHT inventions I think are included in the claims.”(!)

The one startling fact in the article was that USPTO figures show that 23% of all claims come from just 7% of applications. I guess someone is paying some hefty claim fees.

The USPTO published revised procedures for presenting preliminary amendments upon filing of a patent application. If on filing an application, an applicant includes a preliminary amendment to the specification, then the publication of the application must be based on the specification and drawings as amended by the preliminary amendment.

The only format for an amendment to the specification (other than the claims) that is usable for publication is a substitute specification in compliance with 37 CFR 1.121(b)(3) and 1.125. As a result, the USPTO has revised its procedures to mail a notice (e.g., “Notice to File Corrected Application Papers”) requiring a substitute specification in compliance with 37 CFR 1.121(b)(3) and 1.125, if an applicant included a preliminary amendment to the specification (other than the claims) on filing.

The specific reference to the prior application required by 35 U.S.C. 120 or 119(e) and 37 CFR 1.78(a) can be submitted in an application data sheet (ADC) under 37 CFR 1.76 rather than in a preliminary amendment to the first sentence(s) of the specification. See 37 CFR 1.78(a)(2)(iii) and (5)(iii). If the specific reference is submitted in a preliminary amendment, however, a substitute specification will not be required if the preliminary amendment only adds or amends a benefit claim to a prior-filed application under 35 U.S.C. 120,121, 365(c), or 119(e).

Because a preliminary amendment to the claims or abstract in compliance with 37 CFR 1.121 (c) or 1.121 (b)(2) would include a complete claim listing or replacement abstract, the PTO can publish the amended claims or a replacement abstract as submitted in the preliminary amendment without a substitute specification being filed.

Note, however, that there is no need to file a preliminary amendment to the claims on filing. By making the new claim set part of the originally filed specification, applicant may avoid having to pay an application size fee, as both the specification (including the claims) and any preliminary amendment are used in counting the number of pages for purposes of 37 CFR 1.16(s).

The claim set submitted should be the set of claims intended to be examined, and when the claims submitted on filing are part of the specification (on sequentially numbered pages of the specification), no status identifiers and no markings showing the changes need to be used. A preliminary amendment filed upon the entry of the national stage of an international application under 35 U.S.C. 371 is not part of the original disclosure so the patent application publication need not include such an amendment.

See the Notice here.

Blawg Review #28 is up and running at J. Craig Williams’ blog site May It Please The Court. There were a number of blog sites mentioned we haven’t seen before.

We particularly enjoyed reading about the USPTO’s decision in the Eolas matter finding the patent of Eolas’ web browsing technology valid and will issue a re-examination certificate of the patent first challenged by Microsoft Corp. two years ago. Steve Murphy’s Lawyers and Business Executives in the News highlights the significance that this brings to Microsoft.

Earlier, Eolas sued Microsoft, alleging that Microsoft had infringed on their patent by including Eolas technology in their web browser. In the jury trial against Microsoft, Eolas was awarded $521 million in damages as the jury found that Microsoft infringed on the patent. Microsoft then claimed that the patent was invalid since another similar technology was available to the public in 1993.

U.S. Patent No. 5,838,906 (the ‘906 patent) was first issued to the University of California on Nov. 17, 1998. Reexamination of the patent was initiated by the PTO director in October 2003 after Microsoft was found liable for patent infringement in a lawsuit brought by UC and Eolas Technologies Inc., the company to whom UC exclusively licensed the ‘906 patent.

In its Reasons for Patentability/Confirmation notice, the patent examiner rejected the arguments for invalidating UC’s previously approved patent claims for the web-browser technology as well as the evidence presented to suggest that the technology had been developed prior to the UC innovation. The examiner considered the Viola reference – the primary reference asserted by Microsoft at trial – and found that Viola does “not teach nor fairly suggest that instant ‘906 invention, as claimed.”

Douglas Sorocco over at rethink(ip) passed along a story about his encounter with a kind stranger at Starbucks. Naturally, he thought of us given the coffee theme of the event.

While we don’t endorse any particular coffee shop, we’ve been known to frequent the Starbucks at Fourth and Main quite a bit and have had many good exchanges there. But, more often that not, I hurry along about my business and forget to do something nice for others. This week, I’ll make an extra effort to pass along a bit of goodwill. It’s the little things that make the difference.

Let me know if someone’s done something nice for you lately.

*Side Note: Starbucks Gossip reported that Starbucks has opened 1,672 stores so far this year — exceeding its 2005 target of 1,500. Also, sales were up 10% in September, thanks in part to the Pumpkin Spice Latte.