Patent Baristas

In a session on Case Law Updates, a panel discussion at the the BIO Intellectual Property Counsel Committee’s Fall Conference and Committee Meeting brought up that there was previously a lot of attention on infringement but lately it has been off radar except for joint joint infringement.

Joint infringement comes up as a big issue in method claims and devices.  Medical device inventions often have critical method claim that involve a combination of steps by more than one of :

1. Device company;
2. Doctor; and/or
3. Patient.

It had generally not been necessary for the acts that constitute infringement to be performed by one person or entity. When infringement results from the participation and combined action(s) of more than one person or entity, they are all joint infringers and jointly liable for patent infringement.

The basic principal being that infringement of a patented process or method cannot be avoided by having another perform one step of the process or method. Where the infringement is the result of the participation and combined action(s) of one or more persons or entities, they are joint infringers and are jointly liable for the infringement.

In MuniAuction v. Thomson, a case involving a patent directed to electronic methods for conducting “original issuer auctions of financial instruments,” the case stands for the premise that where the difference in claims over the prior are was “do on the internet,” it is clear that merely doing something over internet instead of in reality, not a patentable distinction over land-based activities.

But, the case also showed that one needs one party to infringe or, if two parties, one party must control the other party.  The question that comes up is would technological control be enough?

It is a Vicarious liability standard where a mere arms length cooperation will not give rise to direct infringement.  The claim is directly infringed only if one party exercises “control or direction” over the entire process such that every step is attributable to the controlling party i.e., the evil mastermind standard.

The Federal Circuit stated thusly:

The control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.

The law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete performance of a claimed method.  But, often incredibly difficult to prove direct infringement.  Now, need to show vicarious liability.

How avoid this result?  Try to get infringement of at least one claim without requiring multiple parties to come up with infringement.  One way is to try to have what amounts to a system claim.

In RIM v. NTP, NTP had system claims.  Since the Blackberry relay was all in Canada, the court said the method claims were not infringed for that reason.  But, NTP had system claims and the court looked at 35 USC 271, which states:

[W]hoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

So, although the system was out of US, the beneficial use of the system is within the US.

Therefore, while joint infringement can be established where one party performs some/most of the steps of a patented process and the other steps are performed at the first party’s direction, the recommendation now is to ensure you at the very least have a claim drafted in a manner that all of the steps of the claimed method can be performed by a single infringer.

In a session on Case Law Updates at the the BIO Intellectual Property Counsel Committee’s Fall Conference and Committee Meeting, Chad Shear led a panel discussion with John Dragseth and Dr. John Garvish through a discussion of Bilski and how we got to Bilski.  The case, involved a patent application seeking exclusive rights to a method of using hedge contracts to reduce the risk that a commodity’s wholesale price might change.  In re Bilski raises the question of whether business methods and other inventions devoid of technology can be patented.

Section 101 of the Patent Act defines what types of inventions are patentable as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” The Supreme Court construed this section broadly, stating it includes “anything under the sun that is made by man” with three exceptions of “laws of nature, natural phenomena and abstract ideas.”

In State Street Bank v. Signature Financial Group, the Federal Circuit held that ideas about how to conduct business aren’t always unpatentably abstract. So, any business method that produces a “useful, concrete and tangible result” can be patented as a “process” under Section 101.

In re Nuijten

Our problems start back at In re Nuijten (en banc denied 2008), a case that looked at whether a transitory propagating signal is proper patentable subject matter.  Here, the court looked at patent claims to signals and ruled that signals are “just too transient” to be patentable subject matter  because it does not fit within any of the four statutory categories of process, machine, manufacture, or composition of matter.  This case is an example of the court parsing technological differences as a politician would, not as a scientist would.

In re Comisky

We continue on to In re Comisky where the courts looked at claims directed to a method and system for mandatory arbitration involving legal documents, such as wills or contracts.

The Court concluded that the independent method claims “claim the mental process of resolving legal disputes between two parties by the decision of a human arbitrator[,]” and are therefore, “directed to an abstract idea itself rather than a statutory category” and are unpatentable. However, two independent system claims in Comisky’s application did incorporate various modules and a database as part of the system and were found to contain patentable subject matter for purposes of section 101. The Court explained that “[w]hen an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter[.]” 

As a result of this decision, applications involving mental processes will be required to combine a particular technology such as a computer with such mental processes for the subject matter to meet the statutory requirement of patentable subject matter.  

In re Bilski

Finally, we get to In re Bilski, in which the Federal Circuit looked en banc at when does a claim that contains both mental and physical steps create patent-eligible subject matter and whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101.

Here, the court looked at an abstract idea or mental process.  But, what about where a claim contains both mental and physical steps to create patentably eligible subject matter?  Must a method claim need to result in physical transformation of an article or be tied to machine under 101?

For the biotech industry, to see the possible effects it’s important to also look back at LabCorp v. Metabolite for determining patentably eligible subject matter under section 101, which looked at whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to “correlat[e]” results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

The application claimed a method for detecting a deficiency of cobalamin or folate by assaying homocysteine and correlating elevated level with a deficiency.  The Supreme Court declined to weigh in but we know that Justice Breyer wanted this decided and said that the Court should invalidate as “claim 13 is invalid no matter how narrowly one reasonably interprets” the claim.

The problem here is that anyone performing the test for other reasons can’t avoid infringing if do test and “think” about the correlation knowing it exists.

The panel wrapped up stating that the consequences of LabCorp and Bilski for the biotech business is the impact on:

• Mechanism of action claims
• Pro-drug claims
• Diagnostic tests
• Adverse effects or other clinical trial/regimen claims

Clearly, claims will need to rely on more than “mental steps” and claims should always be included that tie the steps to physical materials or transformation.

To see the courts movement on invalidating methods on natural phenomenon see the pending case of Classen Immunotherapies v. Biogen, awaiting an appellate decision. This case, seemingly a do-over of the Metabolite case, involves patents involving a mechanism for evaluating the safety of vaccine administration schedules by comparing or identifying the adverse events associated with various vaccine schedules.

The district court held that the claims were invalid as an attempt to patent the idea of a correlation between vaccine schedules and immune mediated disorders (natural phenomenon).

Editor-in-Chief Barista, Stephen Jenei, will be live-blogging the BIO Intellectual Property Counsel Committee’s Fall Conference and Committee Meeting on Oct. 20-22, 2008, at the Hard Rock Hotel at Universal Orlando, Orlando, Florida.

The Conference should be an excellent opportunity for BIO members to hear, listen, and learn about current and projected topics related to biotechnology IP.  So, why not get a free gift?

Since we ended up having some iPod Shuffles left over from the BIO2008 International Convention, in San Diego, Calif., after running the Patent Baristas’ iBarista contest, I thought I’d give everyone a shot at picking up the last remaining iBarista iPod.

Basically, all you have to do to win is be the first person to find me at the Fall Conference and ask for the iBarista iPod. That’s it.  (Don’t forget to see all the iPod Giveaway Terms and Conditions here).

Otherwise, if you’d like to meet up during the conference, drop me a note and we’ll schedule some time to have coffee together.

It’s a well-known fact that drug industries pursue patents with a zeal that few possess – after all, a patent in the hand is worth millions in the bank and a relative monopoly over the pharmaceutical market. They lobby for political support to push these patents through, even if they know that the drugs have not been tested thoroughly for their efficacy and safety.

This ardent rush and the intense lobbying done to be the first on the medical scene with a new, breakthrough wonder drug that turns out to be the goose that lays the company’s golden eggs is “simply unacceptable”, in the words of Thomas Pogge, Professor of Philosophy and International Affairs at Yale University. The academic, who spoke at length on the subject in his lecture titled, “Advanced Medicines: Must We Exclude the Global Poor?” at the Federation of European Pharmacological Societies (EPHAR) 2008 Congress hosted by the British Pharmacological Society at the University of Manchester and sponsored by AstraZeneca, said that the current patent system followed by the pharmaceutical industry and the tactics used by the industry to protect the system were not morally acceptable because they “violate the human rights of the poor by denying them access to vital medicines.”

In a humanitarian effort to bring down the mortality and morbidity rates found among the poor all over the world, the professor proposes an alternative licensing system which he has named the “Health Impact Fund” (HIF). The HIF seems to be more of an accessory than an alternative, with Prof. Pogge wanting governments across the globe to bankroll this initiative and offer the patent holder of any new medicine annual payments that are directly proportional to the global health impact of the medicine. In short, the more effective the drug is at alleviating the health problems of the world’s poor, the more lucrative it will be for the manufacturer.

While this is an altruistic model that also has the potential to be profitable for drug manufacturers, there’s just one major drawback – the assumption that drug companies are willing to even consider that there’s a moral aspect to their trade. All they seem to be looking for is instant and immense profits, and the larger their monopoly, the more the money they make before any side effects are found and a public outcry and subsequent pull-out ensue.

Prof. Pogge states that his model is bound to be both humanitarian and profitable for the drug companies, but the latter will not be willing to wait for the efficacy of their drug to be proved before they receive the windfall they think they deserve. Rather, they are all for pressurizing experts in the medical field to testify to the wonders that their drug can work, especially when it comes to controlling the symptoms of lifestyle diseases. We’ve seen and heard of cases where experts who wrote glowing testimonials of a cholesterol-lowering drug were found to have vested interests in the profitability of the drug since they themselves were shareholders in the company.

So you see, when it’s a question of a patent in the drug industry, man proposes and the big Pharma disposes!

This post was contributed by Guest Barista Kelly Kilpatrick, who writes on the subject of the top ten pharmacy schools. She invites your feedback at kellykilpatrick24 at gmail dot com.

There has been a lot of activity at the Supreme Court and at the PTO in the last year. The increase in litigation increases the cost of pursuing patents and the serious pitfalls companies will face if they are not careful.

It doesn’t take the Amazing Kreskin to realize that the PTO is rejecting a significantly higher number of patents as a result of mounting pressures over patent quality as well as the outcomes of recent Supreme Court cases.

Now, you can join a lot of your very smart colleagues at the American Conference Institute’s High Tech Patent Prosecution seminar to be held Tuesday, January 20, 2009 to Wednesday, January 21, 2009, in San Jose, California.

Also to be offered:  Master Class on Advanced Claim Drafting Techniques for High-Tech Patent Holders (January 22, 2008).

This course is directed to Patent Counsel, Patent Agents, Directors of IP, Strategic Planning Professionals, Intellectual Asset Management Professionals, and Technology Planning Professionals.  If you are a practitioner in one of the High Tech Industries (Semiconductors, Telecomm, Software, Electronics, Mechanics, Computer), you need this course.

This is your opportunity to join fellow high-tech patent practitioners as they discuss PTO and recent legal developments, claim drafting, and the changing nature of the industry.

Register on-line with ACI here.

Pointing out that Senators Obama and McCain agree on the need for affordable biologic medicines, Biologicsland now offers a game for testing your knowledge about biogenerics.

Biologicsland, brought to you by Teva Pharmaceuticals, is an on-line board game where you pick a person to act as your player, like politician or scientist (and why is the floor being sawed out from under the lobbyist?), and then answer questions about the generic biologics framework (or lack thereof) in the U.S.

In the game, you can answer questions like “Which of the following is NOT a biologics drug?” (You do know that statins are small molecule pharmaceuticals, right?).  The game is short and not too difficult.  If you get the question right or wrong, each answer set provides links to fact sources about biogenerics.

Wherever you stand on approval of generic biologics, the game does provide some facts that surprise you.  Learn some key facts about the issue of biogenerics while having some fun at the same time.  Test your knowledge here.

Noting that the KSR v. Teleflex decision had immediate effect of making patents more difficult to obtain — allowances of patent applications declined 43% in the first quarter of this year alone — Robert Yeager of the law firm K&L Gates LLP discusses these matters in a recently published “Legal Backgrounder” by the Washington Legal Foundation.

Mr. Yeager discusses how the U.S. Supreme Court’s KSR decision, and the PTO’s implementation of it, could lead to a significant increase in claims that successful applicants obtained patents through inequitable conduct.

The PTO’s summary in the Examination Guidelines for Determining Obviousness Under 35 U.S.C. 103 In View of the Supreme Court Decision in KSR of how to make a determination of obviousness sums up the situation thusly:

In short, the focus when making a determination of obviousness should be on what a person of ordinary skill in the pertinent art would have known at the time of the invention, and on what such a person would have reasonably expected to have been able to do in view of that knowledge.  This is so regardless of whether the source of that knowledge and ability was documentary prior art, general knowledge in the art, or common sense.

That last factor – common sense – is a subjective hammer to reject claims for obviousness without the need for messy facts.  Once the PTO has established the Graham factual findings and concluded that the claimed invention would have been obvious, the burden then shifts to the applicant.  The applicant’s response will be in arguments that the PTO erred in making its findings and may include one or more declarations that refute the PTO’s conclusion.

Mr. Yeager foresees that the use of declarations to challenge the PTO’s findings on obviousness will tempt applicants to overreach — leading to inequitable conduct charges.

The Backgrounder can be downloaded on WLF’s website here.

With billions of dollars at stake as global business practices are scrutinized in the United States, the EU, and Asia, the challenges and consequences could not be greater for high-tech companies. The competition issues raised require detailed analysis of fast-moving areas of technology, such as the Internet, computer software and hardware, platform competition and technology standards.

Now, gain practical guidance on how to combat the threat of the costly, high-profile anti-competitive allegations and litigation facing innovation driven companies today at the American Conference Institute’s Summit on Technology Antitrust Law:  Avoiding and Protecting Against Anti-competitive Conduct in the Global Economy to be held Monday, January 26, 2009 to Tuesday, January 27, 2009, at the Grand Hyatt San Francisco , San Francisco, California.

Counsel from the companies on the front line in the most closely watched recent antitrust cases will show you how to:

• ANALYZE whether partnerships can be viewed as inhibiting competition
• AVOID claims relating to product “tying” and “bundling”
• IDENTIFY problematic licensing provisions
• RESPOND to government inquiries and react to actions by competitors
• OVERCOME the challenges raised by participating in standard-setting
• NAVIGATE varying international attitudes towards particular business practices and prepare for the new regulations in China

Government enforcers are raising difficult questions relating to exclusionary conduct, predatory design, bundling, software integration, and technological tying, and things are further complicated by the different approaches taken in the U.S. and by the European Commission. Tech companies must also be increasingly aware of activities taken by Asian regulators including the Korean Fair Trade Commission, and comply with the new anti-monopoly law in China.

Many pitfalls must be avoided, particularly when engaging in joint ventures and strategic licensing. When technology companies consider opportunities for IP licensing, negotiating alliances, and participating in standard-setting, there are evolving antitrust implications that must be navigated from a global perspective. And in trying to anticipate how antitrust principles will be applied to developing technologies, it is difficult to estimate how key factors such as market share and dominance will be calculated.

At ACI’s Summit on Technology Antitrust Law, people who have been on the front line of this recent onslaught of scrutiny will explain where the greatest risks are, and what they are doing to protect their companies. You will meet people from the companies that have been in the headlines, and learn from their experiences. Speakers from the EU and from Asia will share their critical knowledge of diverging international enforcement priorities and regulations.

Officials from the Federal Trade Commission and the Department of Justice will provide invaluable feedback on the matters that are looked at most critically by government enforcers and regulators. With the new administration in Washington, the new law in China and the increase in global enforcement, Technology Antitrust Law will be the best opportunity to learn where things are heading from the people who successfully navigate through this complex area.

In addition, an Interactive Master Class on Applying Divergent International Antitrust Standards will be held Wednesday, January 28, 2009, 9:00 a.m. – 12:00 p.m.

To register call 1-888-224-2480, or fax your registration form to 1-877-927-1563, or register online here.

Patent Baristas is a Media Partner for this event.