Patent Baristas

The U.S. Patent and Trademark Office has acknowledges that it might have been miscalculating patent term adjustment (PTA) for patents issued from 35 U.S.C. 371 national stage filings.

Fish & Richardson and their pharmaceutical client Japan Tobacco Inc. (JT) discovered a significant error in the manner by which the U.S. Patent and Trademark Office (PTO) calculates the amount of patent term adjustment to which a patent is entitled under 35 U.S.C. 154(b).  This error is different than the one found in the Wyeth v. Dudas case (580 F. Supp. 2d 138), which concerned the PTO’s method of calculating overlap between “A Delay” (resulting from the PTO’s failure to issue actions within specified time frames) and “B Delay”(resulting from application pendency that exceeds three years).

Here, the error concerned how the PTO calculates the length of B Delay for patents granted from most 35 U.S.C. 371 national stage filings. The PTO’s practice has been to award B Delay beginning three years after completion of the requirements under 371(c) (e.g., submission of inventor’s oath or declaration).

However, the statute and regulations require that this period begin three years after the national stage has “commenced” under 35 U.S.C. 371(b) or (f). This commencement is often, though not always, prior to completion of the requirements under 371(c). As a result, PTA resulting from B Delay is often longer than that provided by the PTO’s practice. This difference can be many months or even more than a year.

The time at which the three year “B Delay” clock starts for a 371 national stage filing depends upon whether the national stage commences under 35 U.S.C. 371(b) or 35 U.S.C. 371(f).

35 U.S.C. 371(b)

The U.S. national stage commences under 35 U.S.C. 371(b) on the date that is 30 months from the priority date of a PCT application unless the applicant files an express request for early processing and completes the requirements of 371(c) prior to the 30 month date.

If an application is filed at the PTO without one or more of the items required by 371(c) (e.g., an inventor’s oath or declaration), the PTO issues a Notification of Missing Requirements. The PTO practice has been to start the B Delay clock three years after completion of the 371(c) requirements. However, the B Delay clock should have started three years after commencement. Here, months of potential PTA is lost by misapplication of the rule.

35 U.S.C. 371(f)

The B Delay clock can be started three years after a date that is before the 30 month date if the national stage is commenced under 371(f). This requires that that the applicant file an express request for early processing and complete the requirements of 371(c) prior to the 30 month date. If either one of these requirements is not met, then the national stage (and the reference date the B Delay clock) will commence on the date that is 30 months from the priority date of the PCT application.

For biotech and pharma patents in particular, these additional days of patent term can be of significant value since every day represents significant sales.  There are currently over 100 “blockbuster” drugs — those drugs with $1 billion annual sales or more.  That works out to over $2.7 million in sales per day.

Fish & Richardson challenged the PTO’s practice on behalf of one of JT’s patents and has recently received a favorable Decision from the Office of Petitions.  The USPTO intends to eventually change its internal system to apply the correct PTA calculation method going forward.

However, you should confirm the PTA term for all patents derived from 371 national stage filings.

Fish & Richardson now has a page explaining how to correctly measure this B delay.

(via Fish & Richardson)

Strategy is a solution that takes you from your current situation “A” to a new situation “B.” ~ Robert Cantrell

Outpacing the Competition: Patent-Based Business Strategy, by Robert L. Cantrell (Wiley, John & Sons, Inc., 343pp), is a book written for business-people and attorneys who are charged with developing business opportunities using practical patent strategies.

Patents on their own are just pieces of paper (with a fancy seal).  What really matters, is how you make use of patent rights.  Here, the author has provided a practical guide to the use of patents as effective business tools. This book is not an introduction to patent law but is a thorough discussion of key approaches to make intellectual property serve a company’s business plan and goals.

In Outpacing the Competition, Robert Cantrell sets out that a patent strategy is composed of decision cycles that include:

1. Access (understand the situation);
2. Decide (choose a course of action); and
3. Act (execute the decision)

Cantrell describe the situation as this:

Decision cycles are not one-pass-through events. They are continuous cycles of assess, decide, and act, whereupon each action leads to new assessments, new decisions, and new actions, the complexity of which increases proportionally to the ambiguity of the objective.

The main body of the book then describes using the decision cycle as the primary guideline for how an organization should plan its patent strategy and organize its intellectual property.  Whether your organization is IP driven or not (and it probably is even if you don’t know it), there are lots of lessons here.

With the changing business landscape, assessing the situation requires understanding that all successful enterprises have a central idea that defines the company, its centers of excellence. As a model example, Cantrell shows how Federal Express set one of the best descriptions of a central idea set out in its tag line, “When it absolutely, positively has to be there overnight.®”

Federal Express patents are oriented around fulfilling the promise of this idea. A review of Federal Express patents will show that they describe packaging, labeling, and logistic methods oriented toward getting packages from point A to point B proficiently and at high (i.e., overnight) speed. It’s entire intellectual property suite — the brand name, the trademarked tag line, the patents, plus trade secrets … — are all oriented toward delivering that promise.

Can you say the same for your business?

Drawing heavily from Sun Tzu’s The Art of War, a Chinese military treatise written in the 6th century BC, Cantrell shows how to use patents to your advantage. In one example, asymmetry is used as a strategic tool to take actions that line up a companies strengths against a competitors weaknesses, the idea being to engage a competitor on your own terms.

We highly recommend that you read Outpacing the Competition. You are sure to walk away with insights into business action that go well beyond just intellectual property strategies.

Robert L. Cantrell is a professional strategist and Director of Consulting at Landon IP, Inc. He has managed multiple consulting and analytical engagements across a wide range of technology sectors that include the communications, electronics, medical devices, pharmaceuticals, energy, and consumer goods fields.  He is on the faculty of Patent Resources Group (PRG).

Outpacing the Competition: Patent-Based Business Strategy, by Robert L. Cantrell, is available from Amazon.

Gene Quinn, at IPWatchdog, has been working on developing a list of the top 50 patent blogs based on a combination of objective and subjective criteria.

These are all great blogs and trying to put them in any kind of “ranking” makes little sense since many are narrowly tailored and have different emphasis and audiences.  I was pleasantly surprised that I’ve had a chance to meet many of the bloggers at various events and I’m going to make it a goal to meet all of them.

Without fanfare, here is the top 50:

1. Patently-O
2. IPWatchdog.com
3. IP Kat
4. Spicy IP
5. Patent Baristas
6. Intellectual Property Watch
7. Patent Docs
8. 271 Patent Blog
9. BlawgIT
10. Patent Prospector
11. The Invent Blog
12. IP Think Tank and The Prior Art
13. –
    
14. Orange Book Blog
15. IPJUR and European Patent Caselaw
16. –
    
17. Promote the Progress
18. IP NewsFlash
19. Anticipate This!
20. Patentably Defined
21. India Patent
22. Intellectual Asset Management
23. Against Monopoly
24. Patent Circle
25. I/P Updates
26. PHOSITA
27. IP Spotlight
28. Chicago IP Litigation
29. The IP Factor
30. Patent Arcade and File Wrapper
31. –
    
32. Securing Innovation
33. Patents 101 and IP Estonia
34. –
    
35. PatLit
36. Just An Examiner
37. The Business of Patents
38. Patentability
39. Inventive Step
40. Holman’s Biotech IP
41. Washington State Patent Law
42. California Biotech Law
43. Patent Infringement Updates and Patent Assassins
44. –
    
45. Russian Patents
46. Georgia Patent Law
47. Patentnapsis
48. Honoring the Inventor
49. OC Patent Lawyer
50. Nanomedicine & IP

Innovation patents are second tier patents similar to utility models, having a lower threshold for patentability and a relatively short term of eight years compared to standard patents.

A recent appeal court decision confirms that inventions that include features that are known and obvious can still sustain valid innovation patent protection in Australia.

The Decision

• encourages the filing of applications for innovation patents, as many new products and methods will qualify for innovation patent protection in Australia, and
• confirms that when faced with an allegation of infringement of an innovation patent, it is difficult to successfully challenge the validity of the innovation patent.

On 30 June 2009, three Judges of the Federal Court handed down their decision in Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81. In this decision, their Honours upheld the validity of three innovation patents relating to roadside posts. A consistent feature of the patent claims was the formation of the posts from sheet spring steel so as to make them ‘elastically bendable’ and the specification as filed asserted this to be a development of the invention over the prior art. A similar post formed from laminated sheet spring steel was found in a prior art document and Dura-Post asserted that the claims of the innovation patent were invalid over this prior art document.

However, the patents also claimed in combination with the use of spring steel, a number of other features that were not described in the prior art document:

1. a marker hole to help install the post at the correct depth
2. a barb serving to anchor the post into the ground
3. a tapered end to help with driving the post into the ground
4. ribs to resist buckling, and
5. certain specific dimensions.

These additional features were all separately known features of prior art roadside posts made from materials other than sheet spring steel. In issue was whether the threshold for a valid innovation patent of an ‘innovative step’ was satisfied by a spring steel roadside post with any of these features.

The Australian Patents Act 1990 (Cth) provides that an invention is taken to have an innovative step if it has a point of difference over the prior art that makes a ‘substantial contribution to the working of the invention’. Their Honours rejected the contention by Dura-Post that this inquiry involved first identifying the purported advance in the field of the invention and then asking whether the differences between the claims and the prior art make a substantial contribution to that advance. Instead, the Court said that the invention is defined by the claims alone and falls to be determined on a claim by claim basis.

In the context of the claimed roadside post, this meant the question was whether the claimed features (1 to 5 above) made a substantial contribution to the way the roadside post functions. The question was not whether the claimed features contributed to the claimed function of the roadside post of being elastically bendable.

Their Honours therefore affirmed the first instance decision that each of features 1 to 5 above made a substantial contribution to the working of the post and therefore were each sufficiently innovative to sustain valid patent protection.

What does this mean?

The Full Court has confirmed that it is difficult to successfully challenge the validity of an innovation patent on the basis of a lack of innovative step. Even though all of the features of a claim may be known and obvious to combine together, this alone will not invalidate a claim for lack of innovative step. This places the owner of an innovation patent in a powerful position when seeking to assert its patent rights. Combined with the accelerated grant and examination procedure for innovation patents, there should be a strong incentive to file applications for innovation patents.

Overall, the decision of the Full Federal Court confirms that innovation patents are a powerful tool to rapidly obtain and enforce exclusive rights to an invention.

Today’s post is by Guest Baristas Ben Mott, Patent Attorney, Patrick Sands, Senior Associate, Melbourne and Carl Harrap, Senior Associate, of Freehills in Sydney.

“To amend the public health service act to establish a pathway for the licensure of biosimilar biologic products, to promote innovation in the life sciences.” Amendment No. 297.

The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee voted Monday in favor of a proposal by Sens. Kay Hagan (D-NC), Michael Enzi (R-WY), and Orrin Hatch (R-UT) to create a follow-on biologics (FOB) pathway that provides 12 years of data exclusivity for brand-name biologic drugs.

The measure passed 16 to 7, despite an earlier decree by the Obama administration that a seven-year exclusivity limit sounded good.

The committee considered several other proposals including voting down one by Sen. Sherrod Brown (D-OH), which would have provided only 7 years of exclusivity for brand name biologics.  Sen. Edward M. Kennedy (D-MA), chairman of the HELP committee, voted by proxy to support the 12-year limit.

The vote was a small victory for major biotech drugmakers, which have been pushing for a period of 12 to 14 years before generic equivalents could be approved.  Biotech companies have been pushing for a longer period of data exclusivity saying that it can take 15 years and a $1 billion to develop and market a biotech drug so they need the longer period to make back their investment.  Generic drugmakers, not surprising, would like the exclusivity period limited to five or seven years.

This is just as small step since the Senate plan could change when the healthcare bill goes to the floor for a vote. It also must be approved by the House.

So, what will the final number be for exclusivity?  Try Follow-On Blackjack.

Battelle Memorial Institute, an an international science and technology enterprise that explores emerging areas of science, develops and commercializes technology, and manages laboratories, is offering a seminar on medical device development through it’s Life Science Solutions division.

What: Medical Device Development 101 Seminar

Who: Presented by BIOSTART

Where: Health Foundation of Greater Cincinnati
3805 Edwards Road Cincinnati, OH 45209

When: 1:00pm to 6:00pm on Tuesday, August 4, 2009.

RSVP: by Friday, July 24th to Diane Dunivant, BIOSTART, at 513.475.6610 or ddunivant@biostart.org

Come and learn how Battelle’s unique integration of science and technology delivers innovative life science solutions.  A networking reception is included.

Get the flyer here (pdf).

The recent (and ongoing) scare about swine flu has invited queries about the arrangements which governments have in place to deal with outbreaks of epidemic diseases in their populations. Many governments, including Ireland, have agreements in place with pharmaceutical companies to produce and supply anti-viral or other appropriate treatments within a certain time-frame.

The usual trigger for such agreements to kick into effect is the elevation of the particular illness to “pandemic” status by the WHO. Swine flu was declared a pandemic by the WHO on 11 June 2009. This contractual route appears to be the most appropriate way of dealing with the problem.

However it is also worth noting that many governments have made provision in their patent laws to side-step the patents which might apply to protect pandemic treatments, in order to enable them to deal with a crisis effectively including by arranging to produce medical treatments themselves. While there is currently no proposal to invoke such provisions in Ireland,  it is likely to be impractical for the government to invoke such provisions and could risk damage to the State’s relationships with pharmaceutical manufacturers.

Part V (Sections 76 – 78) of the Irish Patents Act 1992 (as amended) permits the use of inventions “for the service of the State”. This is separate to the compulsory licensing provisions under Part IV of the Act, which can also be invoked by any Minister of Government as well as by private parties. Section 77 provides an express exemption to the government or any of its Ministers to do “for the service of the State” certain acts which would otherwise amount to an infringement of a patent: they may (a) make, use, import or stock any product which is the subject-matter of a product patent or which is obtained from a process patent, or may sell or offer that product for sale; and (b) supply or offer to any person the means for putting the relevant invention into effect.

These provisions would extend as far as to permit the government to parallel-import medicines from outside the EU, notwithstanding patent rights which might normally be relied upon to prevent such importation. “Service of the State” means, simply, a service financed out of government funds. In other words, if the State pays for the product, then the State will be deemed to be using the invention which is represented by the product for the “service of the State” and so will meet the pre¬condition imposed by Section 77. The State does not need to show that there is some underlying immediate social need or emergency to able to rely on the exemption. Section 78 specifies certain express uses which the State is entitled to make of the relevant product, for example for “the maintenance of supplies and services essential to the life of the community”, but these are additional provisions only, and the use of the general power in Section 77 is not dependent on them.

However, the government is not entitled to a free ride under Section 77. Instead, the relevant government minister who is invoking the provision must agree licensing terms with the patent proprietor, either before or after the use of the patent by the State has occurred. If terms cannot be agreed, the matter must be referred to the Irish High Court, who in turn may appoint an arbitrator to determine the dispute.

Unfortunately, Section 77 does not lay down any particular matters for the Court/arbitrator to consider in determining an appropriate level of compensation for the proprietor or any other terms, save that they can take account of any benefit or compensation which the proprietor may have already received (directly or indirectly) from the State.

There are also a few interesting add-ons to Section 77:  in any Court proceedings to adjudicate disputed terms, the Government is entitled to put the validity of the relevant patent in issue and to apply to have it revoked; also, if the Government no longer requires the relevant products, it may sell off its extra stock and any subsequent purchaser of the product cannot be attached for patent infringement for dealing in those products.

What is interesting (and probably ultimately limiting) about the provisions is that they make no reference to medicinal product licensing rules. Arguably, therefore, any medicine imported into the State in reliance on Section 77 would still require a marketing authorization which was valid for Ireland. Ireland’s marketing authorization legislation does not exempt the State from these rules nor does it make any provision for the State to side-step those rules.

At best, the government would be forced to rely on exemptions permitting named-patient supply under individual prescriptions issued by doctors on a patient-by-patient basis, which would not seem to be very satisfactory. Further, the State would still be liable to purchase the products in compliance with public procurement rules, which would seem odd given that there is an underlying assumption (at least politically) that the provisions should only be used to deal with emergency situations or exceptional circumstances.

There is an individual defense available to patent infringement claims under Section 42(c) of the Patents Act 1992 (as amended) which permits pharmacies to prepare individual treatments for patients on foot of a doctor’s prescription. This mirrors the exception in the marketing authorization legislation for unlicensed medicines to be supplied to named patients under an individual prescription. However, Section 42(c) is unlikely to provide a basis for a widespread, strategic approach by the government for dealing with a pandemic outbreak, unless it was confident of individual pharmacists’ abilities to make up complicated treatments, which they are highly unlikely to have the facilities or expertise to do.

(via Philip Lee Solicitors, Dublin, Ireland)

The saga of the PTO’s rulemaking authority continued on March 20, 2009 when the Federal Circuit issued its 55 page decision in Tafas v. Doll holding that aside from the rule limiting continuations, the other rule changes were procedural in nature and the PTO does have the rule-making authority to implement the rules limiting the number of claims in each application, providing for Requests for Continued Examination (RCEs) and requiring Examination Support Documents (ESDs).

Now, an eleven member en banc panel has voted to rehear the case en banc. Tafas v. Doll, 2008-1352 (Fed. Cir. 2009)(Order, per curiam). In its en banc order, the Federal Circuit vacated the panel decision, set up a briefing schedule and said it would announce an oral argument at a later date.

Two of the new rules, Final Rule 78 and Final Rule 114, pertain to continuation applications and requests for continued examination (“RCEs”) and were issued – according to the USPTO — to address the “large and growing backlog of unexamined patent applications.”  Final Rule 75 requires an applicant who submits either more than five independent claims or twenty-five total claims to provide the examiner with information in an examination support document (“ESD”).  Final Rule 265, requires an applicant to conduct a pre-examination prior art search.

On one hand, the Federal Circuit said the Patent Office can make up procedural rules all it wants, saying:

[On] review of a procedural rule that has been issued by the USPTO, we will give Chevron deference to the USPTO’s interpretation of statutory provisions that relate to the exercise of delegated authority. …

The Final Rules may “alter the manner in which the parties present . . . their viewpoints” to the USPTO, but they do not, on their face, “foreclose effective opportunity” to present patent applications for examination.

On the other hand, it agreed with the district court finding that Final Rule 78’s requirement for the third and subsequent continuation applications was inconsistent with the text of 35 U.S.C. § 120, saying:

Thus, Rule 78 is invalid because it attempts to add an additional requirement—that the application not contain amendments, arguments, or evidence that could have been submitted earlier—that is foreclosed by the statute.  Because the statute is clear and unambiguous with respect to this issue, the USPTO’s reliance on Chevron and Brand X is unavailing.

It’s not clear why the Federal Circuit is revisiting the case en banc.  It could be to clarify the groundrules for procedural rulemaking.  It could be to reverse itself on Rule 78.  Either way. look for additional rounds of briefing.