Patent Baristas

Abbott is the exclusive licensee of a patent for crystalline cefdinir, which it sells under the trade name Omnicef. Unfortunately, it hasn’t been able to catch a break.

In dueling district court cases, the Eastern District of Virginia granted summary judgment of noninfringement for Lupin Pharma and the Illinois District Court denied a preliminary injunction to Abbott Laboratories against Sandoz, based on the claim construction from the Eastern District of Virginia over U.S. Patent No. 4,935,507.

Abbott’s appeal found an unreceptive audience in the Federal Circuit who held that the claims were correctly construed and there was no infringement. Abbott v. Sandoz (07-1400/1446).

In Virginia, Lupin sought a declaratory judgment of noninfringement against Abbott Laboratories and Astellas Pharma, owner of the ’507 patent. The FDA had approved Lupin’s Abbreviated New Drug Application (ANDA) to market a generic version of Omnicef. Lupin’s generic product contains almost exclusively the Crystal B form of crystalline cefdinir (cefdinir monohydrate), whereas Abbott’s Omnicef product contains the Crystal A form of crystalline cefdinir (cefdinir anhydrate). Further, Lupin makes its products with processes other than those claimed in the ’507 patent.

So, Lupin brought the Virginia action to settled the issue that its product would not infringe a valid patent. Abbott counterclaimed for infringement. The Eastern District of Virginia construed the claims and granted-in-part Lupin’s motion for summary judgment of noninfringement,

In the Illinois action, Abbott sued Sandoz (and Sandoz GmbH, Teva Pharmaceuticals, Ranbaxy Laboratories, Par Pharmaceutical) for infringement after they wanted to market generic versions of Omnicef. After disputing the meaning of terms such as “Crystal A,” “peaks,” and “about,” and seeking construction of “powder X-ray diffraction pattern,” Abbott appealed.

The ’507 patent claims crystalline cefdinir, using its chemical name crystalline 7-[2-(2-aminothiazol-4-yl)-2-hydroxyiminoacetamido]-3-vinyl-3-cephem.-4-carboxylic acid (syn isomer), and defining its unique characteristics with powder X-ray diffraction (PXRD) angle peaks as a way to claim the structure and characteristics of the unique crystalline form.

The ’507 patent claims priority to Japanese Patent Application No. 62-206199, which claimed two crystalline forms of cefdinir, “Crystal A” and “Crystal B.” Despite using the JP ’199 application for priority, the ’507 patent’s specification jettisoned the Crystal B disclosure and used broader claims. Because the JP ’199 applications defines Crystal A and Crystal B physiochemically rather than structurally, the forms actually represent subgenuses of crystalline cefdinir.

In looking at the claim construction, the court said it must take care not to import limitations into the claims from the specification when consulting the specification to clarify the meaning of claim terms:

When the specification describes a single embodiment to enable the invention, this court will not limit broader claim language to that single application “unless the patentee has demonstrated a clear intention to limit the claim scope using ‘words or expressions of manifest exclusion or restriction.’” Thus this court may reach a narrower construction, limited to the embodiment(s) disclosed in the specification, when the claims themselves, the specification, or the prosecution history clearly indicate that the invention encompasses no more than that confined structure or method. See Liebel-Flarsheim, 358 F.3d at 908.

The Eastern District of Virginia’s construction of “crystalline” in claims 1-5 as “Crystal A” since the specification uses the phrase “Crystal A of the compound (I)” appears throughout the written description, and the patent offers the following definition: “any crystal of the compound (I) which shows substantially the same diffraction pattern [as in the table in col.1/claim 1] is identified as Crystal A of the compound (I).”

It would appear that Abbott sunk its own boat in dropping Crystal B:

To distinguish the invention, however, the specification refers several times to “Crystal A of the compound (I) of the present invention,” see, e.g., ’507 patent, col.2 ll.15-17, and offers no suggestion that the recited processes could produce non-Crystal A compounds, even though other types of cefdinir crystals, namely Crystal B, were known in the art. As noted earlier, the Crystal B formulation actually appears in the parent JP ’199 application. Thus, Abbott knew exactly how to describe and claim Crystal B compounds. Knowing of Crystal B, however, Abbott chose to claim only the A form in the ’507 patent.

Thus, the Federal Circuit felt that the trial court properly limited the term “crystalline” to “Crystal A.”

Product-by-Process Claims

The court then addressed the proper interpretation of product-by-process claims in determining infringement.  Claims 2-5 recite a product, crystalline cefdinir, and then recite a series of steps by which this product is “obtainable.”

The Federal Circuit felt that the Supreme Court has consistently noted that process terms that define the product in a product-by-process claim serve as enforceable limitations. In BASF, the Court considered a patent relating to artificial alizarine:

If the words of the claim are to be construed to cover all artificial alizarine, whatever its ingredients, produced from anthracine or its derivatives by methods invented since Graebe and Liebermann invented the bromine process, we then have a patent for a product or composition of matter which gives no information as to how it is to be identified. Every patent for a product or composition of matter must identify it so that it can be recognized aside from the description of the process for making it, or else nothing can be held to infringe the patent which is not made by that process.

Thus, based on Supreme Court precedent and the treatment of product-by-process claims throughout the years by the PTO and other binding court decisions, this court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.”

The Federal Circuit went on to ponder what it thought was the early demise of product-by-process claims:

In the modern context, however, if an inventor invents a product whose structure is either not fully known or too complex to analyze (the subject of this case – a product defined by sophisticated PXRD technology – suggests that these concerns may no longer in reality exist), this court clarifies that the inventor is absolutely free to use process steps to define this product. The patent will issue subject to the ordinary requirements of patentability. The inventor will not be denied protection. Because the inventor chose to claim the product in terms of its process, however, that definition also governs the enforcement of the bounds of the patent right. This court cannot simply ignore as verbiage the only definition supplied by the inventor.

This court’s rule regarding the proper treatment of product-by-process claims in infringement litigation carries its own simple logic. Assume a hypothetical chemical compound defined by process terms. The inventor declines to state any structures or characteristics of this compound. The inventor of this compound obtains a product-by-process claim: “Compound X, obtained by process Y.” Enforcing this claim without reference to its defining terms would mean that an alleged infringer who produces compound X by process Z is still liable for infringement. But how would the courts ascertain that the alleged infringer’s compound is really the same as the patented compound? After all, the patent holder has just informed the public and claimed the new product solely in terms of a single process.

Furthermore, what analytical tools can confirm that the alleged infringer’s compound is in fact infringing, other than a comparison of the claimed and accused infringing processes? If the basis of infringement is not the similarity of process, it can only be similarity of structure or characteristics, which the inventor has not disclosed. Why also would the courts deny others the right to freely practice process Z that may produce a better product in a better way?

In sum, it is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has “particularly point[ed] out and distinctly claim[ed]” as his invention, 35 U.S.C. § 112 ¶ 6.

For all practical purposes, product-by-process claims are now now more than “method of making” claims since the product cannot be disentangled from the very specific process disclosed for making the product.

The U.S. Supreme Court has decided to take up the In re Bilski case.  The Court will review a decision in a patent case which questions what things are patentable, including software and business strategies.  The applicants have filed a Petition for Writ of Certiorari to the Supreme Court to appeal from the U.S. Court of Appeals for the Federal Circuit in In re Bilski.  See Bilski v. Doll (USPTO).

Questions Presented:

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”
2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.”  35 U.S.C. § 273.

The Supreme Court has not considered what is patentable subject matter since 1981. This case now raises the most question of what can be patented? Are patents only for manufacturing processes that are tied to a particular machine or produce some physical transformation? Or do patents also embrace modern business processes that do not depend on a particular machine or device?

The en banc Federal Circuit held that Bilski’s claims are not eligible for patenting and set forth a single, “definitive” test for determining whether a process is patent-eligible under § 101: a process is patent-eligible only if  “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”

In Bilski, the Federal Circuit seized on a sentence from Diamond v. Diehr, 450 U.S. 175, 184 (1981), quoted from Benson, 409 U.S. at 70, that “[t]ransformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines” (emphasis added).

The majority held that this test was not “optional or merely advisory” but rather “the only applicable test” for patent-eligible processes.  In doing so, the Federal Circuit majority overruled its earlier decisions in State Street Bank and AT&T to the extent they relied on a “useful, concrete, and tangible result” as the test for patent eligibility under § 101.

See the Bilski Petition here.

The U.S. Patent and Trademark Office (PTO) ordered the reexamination of Merck’s biggest selling product, Singulair.  The challenged patent, U.S. Patent No. 5,565,473 (“Unsaturated Hydroxyalkylquinoline Acids as Leukotriene Antagonists,” issued October 15, 1996), covers montelukast sodium, the active ingredient in the $4.5 billion-a-year allergy and asthma drug.

The request for reexam, No. 90/009,432, was made by an online community called Article One Partners LLC that recruits scientists worldwide to look for evidence patents have been improperly issued.  Article One Partners, a for-profit group formed by a group of patent attorneys and financial advisors, offered a $50,000 bounty for anyone who could come up with invalidating prior art.

The winning Advisors were a U.S. graduate student and an Advisor from Columbia, South America.   The U.S. graduate student was first to submit winning prior art (the Young journal article) and earned $35,000.  The South American Advisor was the second to submit winning prior art (the Young patent), earning $15,000.

The USPTO’s reexamination is in parallel to a pending court case where a ruling is expected from a trial in which Merck is asserting the patent against Teva Pharmaceuticals, who is challenging the patent.  The ‘473 patent was originally set to expire in 2010 but was eligible for patent term extension under 35 U.S.C. § 156 of 430 days.  The patent would expire on February 3,2012, if it survives.

Generic drug makers probably shouldn’t start stocking shelves with their own version of the drug just yet.  For starters, the USPTO is taking about 24 months to decide ex parte reexaminations.  In addition, claims 1, 7, 18-22 (as asserted by Merck against Teva) could survive the reexam as valid and enforceable in one form or another.  Even if it does not issue in its current state, it could issue with modified claims that provide substantial coverage necessary to protect the product.

The determination of winners by Article One was by analysis, including review and analysis of an independent law firm and a separate independent expert, leading Article One to reach the opinion that the prior art raises a substantial new question of validity for the ‘473 patent.

For “a substantial new question of patentability” to be present in order to provoke a reexamination, it is only necessary a challenger show that:

1. The prior art patents and/or printed publications raise a substantial question of patentability regarding at least one claim, i.e., the teaching of the prior art) patents and printed publications is such that a reasonable examiner would consider the teaching to be important in deciding whether or not the claim is patentable; it is not necessary that the prior art establish a prima facie case of unpatentability; and
2. The same question of patentability as to the claim has not been decided by the Office in a previous examination or pending reexamination of the patent or in a final holding of invalidity by the Federal Courts in a decision on the merits involving the claim.

In regards to the Young References (US 5,104,882), the patent generically discloses diarylstrylquinoline diacids and pharmaceutical composition thereof.  These compounds are leukotriene antagonists and inhibitors of leukotriene biosynthesis and are useful for treating asthma.

The Examiner determined that there is a substantial likelihood that a reasonable examiner would consider this teaching important in deciding whether or not claims 1, 7, 18-22 are patentable. The reference was cited, but was not applied during the prosecution of the patent. It is now being viewed in new light in combination with other references including “The Development of New Anti- Leukotriene Drugs: L-648,051 and L-649,923, Specific Leukotriene D4 Antagonists,” by Robert Young.

So, what does Article One get out of all this?  From their web site:

How does AOP make money?

AOP has 2 streams of revenue: 1. Our prior art collections can be sold directly to parties interested in the subject patent(s). 2. The research also allows us to execute market trades based on the expert analysis and opinions drawn from our Advisors’ research.

The American Conference Institute’s 11th Advanced Forum on Biotech Patents: Comprehensive & Practical Biotech Patent Prosecution and Litigation Strategies for an Evolving Legal Climate will be held at the Royal Sonesta Hotel, Boston, MA, on September 30-October 1.

At the conference, I will be on a panel discussion with Warren Woessner of Schwegman Lundberg & Woessner and Kevin E. Noonan of McDonnell Boehnen Hulbert & Berghoff LLP (and Patent Docs).  We will be teaming up to present a session entitled:

What’s patentable? The Impact of Bilski and Related Precedents to Diagnostic Testing & Treatment Claims in the Biotech Patent Industry

This looks to be a great conference on all the issues in biotech. The ACI Biotech Patent Conference is billed as the ONE place biotech patent practitioners come to learn and discuss the most recent and vital changes facing the industry today:

Emerging from a turbulent year of new case law, a resurgence of the proposed PTO rules, uncertainty associated with a new administration, and tough economic conditions, biotech patent practitioners must prepare for a new phase in this ever-evolving field. And with groundbreaking legislation regarding patent reform and follow-on biologics on the horizon, patent counsel must rise to the challenge to overcome increasing rejections, promote innovation and maximize profitability.

With this in mind, ACI’s 11th Advanced Forum on Biotech Patents once again brings together a high-caliber team of experienced biotech patent counsel who will share their collective knowledge and provide you with critical insights involving:

• Developing a practical approach to follow-on biologics
• Preparing for the rule changes rising out of the Tafas decision
• Strategically avoiding rejection in diagnostic, method of treatment, and method of screening claims
• Delving into techniques to defeat charges of inequitable conduct
• Insights into key rule changes in foreign patent offices, including a special presentation on the EPO and EU patent litigation
• Overcoming challenges to antibody patent prosecution

You can add value to your experience by attending our highly successful, interactive and in-depth Master Class on Drafting Successful Patent Applications for Biotechnology Inventions where you will learn how to master the art of drafting complex patent applications for your biotech inventions.

Register today to reserve your place at this timely event by calling 888.224.2480; by faxing your registration form to 877.927.1563; or registering online.

Let me know if you are interested in attending, anyone who attends the conference as a referral from us is entitled to $400 off the registration price. Just drop me a line for the keycode. Otherwise, I look forward to seeing you in Boston.

ide·a·tion \ˌī-dÄ“-ˈā-shÉ™n\ noun (c. 1818): the capacity for or the act of forming or entertaining ideas.

BIOSTART, a life science start-up center, invites you to participate in an ideation seminar, a practical and fun way to identify possible products or services that you can develop through a new start-up company. If you know someone who would be interested in attending, please forward this information.

Date: June 26, 2009
Time: 8:30-10:00 am
Location:      Health Foundation of Greater Cincinnati
3805 Edwards Rd. Suite 500
Cincinnati, OH 45209
Cost: FREE

The seminar, led by John Fox of John Fox Marketing Consulting, will provide key concepts and tools for ideation. It will include limited participation in a mock Ideation by the attendees, with a real life example, and using materials that assist the Ideation process.

Please see his website (www.JohnFoxMktg.com) for further details on his company, experience, products, philosophies and a lengthy list of clients.

Please RSVP to: ddunivant@biostart.org

After a final judgment upholding the validity of the Procter & Gamble Company U.S. Patent 5,583,122, Teva Pharmaceuticals appealed to the US United States Court of Appeals for the Federal Circuit claiming invalidity defenses of obviousness and obviousness-type double patenting.  It fell on deaf ears as the Federal Circuit affirmed the validity. P&G v. Teva Pharma (08-1404-1406).

The ’122 patent claims the compound risedronate, the active ingredient of P&G’s osteoporosis drug Actonel®. In August 2004, P&G sued Teva after Teva planned to market risedronate as a generic equivalent of Actonel®. Teva argued that the ’122 patent was invalid as obvious in light of P&G’s expired U.S. Patent 4,761,406. If that didn’t work, Teva also argued that the ’122 patent is invalid for obviousness-type double patenting.

Risedronate is a member of a group of compounds referred to as bisphosphonates. Bisphosphonates, in general, are active in inhibiting bone resorption. The first two promising bisphosphonates studied for the treatment of metabolic bone diseases, etidronate (EHDP) and clodronate, had clinical problems which prevented their commercialization. P&G conducted a significant amount of experimentation involving hundreds of different bisphosphonate compounds, but could not predict the efficacy or toxicity of the new compounds. Eventually, researchers at P&G identified risedronate as a promising drug candidate.

The district court concluded that the ’406 patent would not have led a person of ordinary skill in the art to identify 2-pyr EHDP as the lead compound. In light of the extremely unpredictable nature of bisphosphonates at the time of the invention, the district court also found that a person of ordinary skill in the art would not have been motivated to make the specific molecular modifications to make risedronate.

The obviousness determination turns on underlying factual inquiries involving: (1) the scope and content of prior art, (2) differences between claims and prior art, (3) the level of ordinary skill in pertinent art, and (4) secondary considerations such as commercial success and satisfaction of a long-felt need.

If a patent challenger makes a prima facie showing of obviousness, the owner may rebut based on “unexpected results” by demonstrating “that the claimed invention exhibits some superior property or advantage that a person of ordinary skill in the relevant art would have found surprising or unexpected.”

Identification of a Lead Compound

An obviousness argument based on structural similarity between claimed and prior art compounds “clearly depends on a preliminary finding that one of ordinary skill in the art would have selected [the prior art compound] as a lead compound.” Even then, the Federal Circuit saw no need to dwell on this point:

We need not reach this question because we conclude that even if 2-pyr EHDP was a lead compound, the evidence does not establish that it would have been obvious to a person of ordinary skill at the time of the invention to modify 2-pyr EHDP to create risedronate.

Obviousness of Risedronate in Light of the Prior Art

To decide whether risedronate was obvious in light of the prior art, a court must determine whether, at the time of invention, a person having ordinary skill in the art would have had “reason to attempt to make the composition” known as risedronate and “a reasonable expectation of success in doing so.”

The district court concluded that, even if 2-pyr EHDP were a lead compound, it would not render the ’122 patent’s claims on risedronate obvious because a person having ordinary skill in the art would not have had reason to make risedronate based on the prior art. The district court concluded that there could have been no reasonable expectation as to risedronate’s success. The Federal Circuit agreed:

The question of obviousness “often turns on the structural similarities and differences between the claimed compound and the prior art compound.”

To successfully argue that a new compound is obvious, the challenger may show “that the prior art would have suggested making the specific molecular modifications necessary to achieve the claimed invention.” Thus, in addition to structural similarity between the compounds, a prima facie case of obviousness may be shown by “adequate support in the prior art” for the change in structure.

In light of the Supreme Court’s instruction in KSR, the Federal Circuit has stated that, “[t]o the extent an art is unpredictable, as the chemical arts often are, KSR’s focus on ‘identified, predictable solutions’ may present a difficult hurdle because potential solutions are less likely to be genuinely predictable.” Eisai, 533 F.3d 1353, 1359 (quoting KSR, 127 S. Ct. at 1742). The district court found that Teva failed to clear that hurdle, establishing insufficient motivation for a person of ordinary skill to synthesize and test risedronate. This finding was not clearly erroneous.

Cases following KSR have considered whether a given molecular modification would have been carried out as part of routine testing. See, e.g., Takeda, 492 F.3d at 1360 (discussing the district court’s finding that a modification was not known to be beneficial and was not considered “routine”). When a person of ordinary skill is faced with “a finite number of identified, predictable solutions” to a problem and pursues “the known options within his or her technical grasp,” the resulting discovery “is likely the product not of innovation but of ordinary skill and common sense.”

In this case, there is no credible evidence that the structural modification was routine.

Altana and Wyeth were thwarted in their attempt to block Teva Pharmaceuticals from infringing U.S. Patent No. 4,758,579, directed to the compound pantoprazole, the active ingredient in Altana’s antiulcer drug Protonix®. The compound pantoprazole belongs to a class of compounds known as proton pump inhibitors (“PPIs”) that are used to treat gastric acid disorders in the stomach.

Although the operation of the gastric acid pump was known at the time of the invention at issue, the mechanism by which PPIs inhibit the gastric acid pump was not understood in the art until after the effective filing date of the ’579 patent. Part of the uncertainty surrounding the method of action for PPIs is attributable to the fact that PPIs are prodrugs, which are drugs that convert to their active form after they are delivered within a patient’s body, which typically exhibits a pH of about 5 to about 7. In this regard, PPIs are acid-activated prodrugs that are converted into their active form in the highly acidic environment, having a pH of about 1, within the secretory canaliculus of parietal cells. Once converted to its active form, the PPI thereafter binds to one or more cysteine amino acids in the acid pump. This binding inhibits the operation of the gastric acid pump.

Altana’s research efforts resulted in the issuance of U.S. Patent No. 4,555,518 (“the ’518 patent”) and the ’579 patent. The application for the ’518 patent was filed before the ’579 patent, and contained a pharmacology section that compared the effectiveness of 18 claimed compounds against four prior art compounds. The ‘518 patent refers to one of the 18 compounds chosen for testing as compound 12. The ’579 patent, which is not related to the ’518 patent, claims PPI compounds that are structurally similar to the compounds claimed in the ’518 patent. Pantoprazole, the compound at issue in this litigation, exhibits a structure that is very similar to compound 12 from the ’518 patent.
There are three main structural elements to the PPI molecular backbone: the benzimidazole ring, the methylsulfinyl bridge, and the pyridine ring. The general formula of the PPI disclosed in the ’579 patent is reproduced below:

The issues in this case primarily relate to the pyridine ring (the right-most structure on the above compound), specifically, the radicals located on the pyridine ring (indicated by R2, R3, and R4). The ’579 patent teaches that “R3 represents a 1-3C-alkoxy radical, one of the radicals R2 and R4 represents a 1-3C-alkoxy radical and the other represents a hydrogen atom (–H) or a 1-3C-alkyl radical.”

Teva filed an Abbreviated New Drug Application (“ANDA”) requesting FDA approval to sell a generic version of Protonix® prior to the expiration of the ’579 patent along with paragraph IV certifications. Altana filed a motion for preliminary injunction and Teva and Sun conceded infringement; however, they maintained that the ’579 patent is invalid. Specifically, they argued that the ’579 patent was obvious in light of the teachings in Altana’s ’518 patent, the Sachs article, the Bryson article, and the ’431 patent (covering omeprazole).

The obviousness analysis focused on the selection of compound 12 from the ’518 patent as a lead compound for modification. The defendants argued that the Sachs article provided motivation for one of skill in the art to lower the pKa of a PPI to a value of 4 in order to provide better stability of the compound in the patient’s body.

The district court found that the defendants had demonstrated a substantial question of invalidity and the plaintiffs had not shown that it lacked substantial merit. In particular, the court found that one of skill in the art would have selected compound 12 as a lead compound for modification.

So, the district court denied the motion for preliminary injunction. Altana Pharma AG and Wyeth went crying to the Court of Appeals for the Federal Circuit and the Federal Circuit said “too bad.” Altana Pharma Ag v. Teva Pharma (08-1039).

To obtain a preliminary injunction, a court examines four factors:

1. a reasonable likelihood of success on the merits;
2. irreparable harm if an injunction is not granted;
3. a balance of hardships tipping in its favor; and
4. the injunction’s favorable impact on the public interest.

Altana argued that the district court was wrong for allowing the defendants to select compound 12 of the ’518 patent as a lead compound when the prior art suggested the availability of numerous other compounds that were at least as promising to modify as compound 12.

This Federal Circuit has said that “[w]here, as here, the patent at issue claims a chemical compound, the analysis of the third Graham factor (the differences between the claimed invention and the prior art) often turns on the structural similarities and differences between the claimed compound and the prior art.” Eisai Co. Ltd. v. Dr. Reddy’s Labs., Ltd., 533 F.3d 1353, 1356-57 (Fed. Cir. 2008). Thus, to establish a prima facie case of obviousness in cases involving new chemical compounds, the accused infringer must identify some reason that would have led a chemist to modify a known compound in a particular manner.

Obviousness based on structural similarity may be proven by the identification of some motivation that would have led one of ordinary skill in the art to select and modify a known compound in a particular way to achieve the claimed compound. The requisite motivation can come from any number of sources and need not necessarily be explicit in the art. Instead, “it is sufficient to show that the claimed and prior art compounds possess a ‘sufficiently close relationship . . . to create an expectation,’ in light of the totality of the prior art, that the new compound will have ‘similar properties’ to the old.”

In the end, the Federal Circuit agreed with the district court’s finding that the defendants raised a substantial argument that compound 12 was a natural choice for further development in this regard:

Ample evidence supported this finding. First, the ’518 patent claimed that its compounds, including compound 12, were improvements over the prior art, specifically omeprazole (the first successful PPI). In addition, compound 12 was disclosed as one of the more potent of the eighteen compounds of the ’518 patent for which data was provided during prosecution. Moreover, the patent examiner relied on the compounds of the ’518 patent during the prosecution of the ’579 patent. Cf. Eisai, 533 F.3d at 1357 (“Indeed, Teva’s pharmacology expert . . . declined to opine on lansoprazole’s relevance to an examiner assessing the patentability of rabeprazole.”).

Beyond the finding that those of skill in the art would have pursued the 18 exemplary compounds in the ’518 patent, the district court also found that one of skill in the art would have found compound 12, in particular, a natural choice for further development efforts. This finding is supported by evidence that compound 12 was one of the more potent PPI compounds disclosed in the ’518 patent. Although potency is not dispositive, the district court believed–not unreasonably–that the potency of the compound was a factor that would have led one of skill in the art to select compound 12 from the group for further study.

After Autogenomics sued Oxford Gene Technology in U.S. District Court for a declaratory judgment of invalidity and non-infringement of claims of U.S. Patent No. 6,054,270, the court dismissed for lack of personal jurisdiction. On appeal, the U.S. Court of Appeals for the Federal Circuit agreed because the district court had neither general nor specific personal jurisdiction over Oxford. Autogenomics v. Oxford Gene Technology (08-1217).

Oxford, a British biotechnology company, owns the ’270 patent, which relates to oligonucleotide microarrays for analysis of polynucleotides. Oxford is not registered to do business in California and doesn’t have any facilities, assets, employees, or agents there. Autogenomics is a California biotechnology company, which uses microarray technology in its business.

To support jurisdiction, Autogenomics cited:

1. Licensing Negotiations Between Autogenomics and Oxford: In early 2006, Oxford contacted Autogenomics regarding the ’270 patent, which Oxford contends is infringed by Autogenomics’s manufacture and sale of microarray products.
2. Licenses: Oxford entered into non-exclusive licenses with “about ten” California companies with respect to its microarray technology.
3. The Agilent Agreement: According to an Oxford press release and an article from a publicly available website, Oxford and Agilent Technologies (Agilent)—a company with offices in California—completed a collaborative agreement in 2007.
4. Conferences: Oxford attended three scientific conferences—trade shows in Autogenomics’s terminology—in California in 2003, 2005, and 2007.
5. Sales: In April 2006, Oxford sold 20 microarrays to a California company for $7,600. According to Oxford, the sale constituted about 1% of its revenue that year.
6. Publication: Oxford published an “application note” on Nature.com, the globally-accessible website of Nature, a United Kingdom scientific publication. Autogenomics characterizes the application note as an advertisement to California companies, noting that the University of California is one of the top ten institutional visitors to Nature.com.

Autogenomics argued that the district court has personal jurisdiction over Oxford on two bases: general and specific personal jurisdiction. General jurisdiction, on one hand, “requires that the defendant have ‘continuous and systematic’ contacts with the forum state and confers personal jurisdiction even when the cause of action has no relationship with those contacts.”  Specific jurisdiction, on the other hand, must be based on activities that arise out of or relate to the cause of action, and can exist even if the defendant’s contacts are not continuous and systematic.

The Federal Circuit felt this was not enough:

The district court correctly ruled that it lacked general personal jurisdiction over Oxford. Oxford does not have contacts with the forum state that qualify as “continuous and systematic general business contacts.” Helicopteros, 466 U.S. at 416. Rather, this “is a classic case of sporadic and insubstantial contacts with the forum state, which are not sufficient to establish general jurisdiction over the defendants in the forum.” Campbell Pet Co. v. Miale, 542 F.3d 879, 884 (Fed. Cir. 2008).

Where a defendant is not subject to general personal jurisdiction in the forum state, a district court may nonetheless exercise specific personal jurisdiction over the defendant subject to a three part test:

(1) the defendant purposefully directed its activities at residents of the forum, (2) the claim arises out of or relates to those activities, and (3) assertion of personal jurisdiction is reasonable and fair. With respect to the last prong, the burden of proof is on the defendant, which must “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable” under the five-factor test articulated by the Supreme Court in Burger King.

In Avocent, the court concluded the following:

While exclusive licensing agreements and other undertakings that impose enforcement obligations on a patentee or its licensee reflect the kind of “other activities” that support specific personal jurisdiction in a declaratory judgment action, the defendant patentee’s own commercialization activity does not. What the patentee makes, uses, offers to sell, sells, or imports is of no real relevance to the enforcement or defense of a patent, because “the federal patent laws do not create any affirmative right to make, use, or sell anything.”

Despite the uneveness of the decision, the Federal Circuit felt that remedies could still be had:

Although we too are concerned that foreign patentees like Oxford may engage in significant commercialization and licensing efforts in a state while benefiting from the shelter of the Avocent rule, we are nonetheless bound by Avocent. We note, however, that it is not the case that the 50% of all patentees who are foreign “are always immunized from adjudication” as the dissent suggests. Jurisdiction over foreign patentees like Oxford continues to be available in the United States District Court for the District of Columbia. See 35 U.S.C. § 293.