Patent Baristas

The U.S. Court of Appeals for the Federal Circuit ruled that the manufacture, marketing, or sale of a medical device, which is used in the development of FDA regulatory submissions, but is not itself subject to the FDA premarket approval process, is not entitled to the protection of the Hatch-Waxman Act section 271(e)(1) safe harbor provision.  Proveris Scientific Corp. v. Innovasystems (07-1428).

Innova makes and sells a device known as the Optical Spray Analyzer (OSA).  The OSA itself is not subject to FDA approval.  It is, however, used in connection with FDA regulatory submissions.  In that setting, the device measures the physical parameters of aerosol sprays used in nasal spray drug delivery devices.

Proveris filed suit against Innova for infringing U.S. Pat. No. 6,785,400.  The ’400 patent is directed to a system and apparatus for characterizing aerosol sprays commonly used in various drug delivery devices, such as nasal spray pumps and inhalers.  According to the ’400 patent, spray characterization also plays an important role in the regulatory approval process of the Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act (FDCA).

As part of its defense, Innova invoked the safe harbor provision of the so-called “safe harbor” provision of the Drug Price Competition and Patent Term Restoration Act of 1984, known as the “Hatch-Waxman Act.”  The safe harbor provision is codified at 35 U.S.C. § 271(e)(1), which states in relevant part:

It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

Innova argued that its allegedly infringing activities are immunized by the safe harbor provision because its OSA devices are used by third parties solely for the development and submission of information to the FDA.

After a district court found Innovasystems infringed the ‘400 patent, Innovasystems appealed arguing that the district court erred in ruling that the does not immunize its accused activity from infringement of the ’400 patent.

Under section 156, the Act seeks to eliminate de facto patent term reduction by providing patent term extension for those patents claiming a “product” subject to regulatory delays caused by the FDA premarket approval process.  The term “product” means a “drug product” and “[a]ny medical device, food additive, or color additive subject to regulation under the [FDCA.]”

Then, section 271(e)(1), provides a safe harbor that immunized competitors from infringement on account of making, using, offering to sell, or selling within the United States or importing into the United States a  “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”  The basic idea behind this provision was to allow competitors to begin the regulatory approval process while the patent was still in force, followed by market entry immediately upon patent expiration.

Here, Innova argued that it is entitled to the benefit of the section 271(e)(1) safe harbor because it only offered to sell the OSA to pharmaceutical companies and the FDA and the OSA was used exclusively in applications for regulatory approval in accordance with the requirements of the FDCA.  Innova pushed the idea that “Congress wrote § 271(e)(1) extremely broadly” when it said that it was not an act of infringement to sell a “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

Proveris countered that section 271(e)(1) extends only to the infringement of patents that claim “products” as that term is defined in section 156(f) and to other patented inventions that are inherent to the development of “products.”  The Federal Circuit sided with Proveris:

… Innova’s OSA device is not subject to FDA premarket approval.  Rather, FDA premarket approval is required only in the case of the aerosol drug delivery product whose spray plume characteristics the OSA measures.  In short, Innova is not a party seeking FDA approval for a product in order to enter the market to compete with patentees.  Because the OSA device is not subject to FDA premarket approval, and therefore faces no regulatory barriers to market entry upon patent expiration, Innova is not a party who, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion.  For this reason, we do not think Congress could have intended that the safe harbor of section 271(e)(1) apply to it.

… At the same time, because Innova’s OSA device also is not subject to a required FDCA approval process, it does not need the safe harbor protection afforded by 35 U.S.C. § 271(e)(1).

In the book “How to Get Sued” (Kaplan Publishing, NY), J. Craig Williams of May It Please the Court blog fame, has come out with a book on the lighter side of how “real life” becomes “real litigation.”  As a sort of how-to guide, the book points out that all you really need is to give somebody a reason to sue you.  And there are plenty of reasons.

In what is set out as the top ten options for getting sued, Williams guides the reader through the most common human activities that tend to end up with a bill from a lawyer.  These are set forth in individual chapters as:

1. Fall in Love
2. Own a Business
3. Commit a Crime
4. Go to Work
5. Live on Earth
6. Have Children
7. Enjoy Yourself
8. Indulge a Few Vices
9. Own a Pet
10. Own a Home

While certainly not a legal text book, How to Get Sued lays out a series of short vignettes for each topic describing the hapless characters that provide guidance for the reader.  It’s perfect for someone with a short attention span like me — I can put the book down and come back to it later without having to remember everything I read earlier.  In addition, each chapter ends with “Seriously Now: Lessons Learned” section that gives you the straight dope on the best way to stay out of trouble.

In one instructive section under step 4, entitled Go to Work, we learn about travel agent Sherman Gottlieb and the 1,000 faxes he received from Carnival Corp. (parent of Carnival Cruise Lines).  He faxed a request to be removed from their list but they just wouldn’t listen.  Invoking the Telephone Consumer Protection Act (TCPA), Gottlieb sued and may be able to collect as much as $500 per fax or $500,000 in damages in the pending suit.

Whether or not dwelling on all this misfortune is a good thing is another matter.  In a forward, Alex Kozinski, Chief Judge of the US Court of Appeals for the Ninth Circuit, states thusly:

There’s a certain schadenfreude aspect to reading the cases J. Craig Williams has collected.  But it’s not just the misfortune of others that is chronicled here, but also their very human weaknesses and foibles — and there hysterical efforts to overcome them once they get trapped inside the litigation machine.

Modern society (especially in the U.S.) tends to not just be litigation-focused but something-bad-is-going-to-happen-focused.  Part of it is probably due to the news media’s penchant for giving a lopsided view of the risks faced by the public.  It sure doesn’t help that governments and politicians want you to be very afraid.  Having said that, How to Get Sued can be a fun read.  Just remember to go out and get some fresh air now and again.

“How to Get Sued” (Kaplan Publishing, NY) is available from Amazon.  Mr. Williams can also be found at Lawyer2Lawyer, A Criminal Waste of Space and Sharks in the Water.

Victoria Pynchon at the IP ADR Blog, fulfilled her promise to put forth “one of the best [Blawg Review]’s ever.”  She set out a massive, link-filled review that will last all week.

Pynchon states that if intellectual property had a theme song it would have to be “Like a Virgin.” Why?

Because IP is all about “the very first time,” the “aha” moment, the creative spark that gives rise to previously undreamed imaginings.  The restrictions of “how we’ve always done things” fall away and the numbing repetition of days become vibrant.   The rest, of course, is work.  Trial and error.  Success.  Failure. Rearranging the disaligned.  Completion.

Among the many nuggets in this week’s review, the Art Law Blog has a nice article on a 62-year old Scottsdale real estate agent who “is the latest person to publicly come forward with the claim that she may own a Jackson Pollock painting.” And she says it’s not just about the money.

In addition, Suits in the Workplace describe why it’s best not to have just one person control your network after a mid-level computer network administrator for San Francisco shut down the city’s wide-area network.  In describing his refusal to give anyone else the password:

If you remember Jurassic Park, think of him as the fat guy who was stealing the dinosaur eggs and shut down the entire facility network for the dinosaur park to cover his getaway.  Fortunately, the results here were not quite so dramatic.  At least, no lawyers were eaten.

We’ll add one extra:  Above The Law discusses how some NYU Law School students were trying to trade their place in class for cash — until the administration got wind of it and cracked down.

Earlier, Dr. Triantafyllos Tafas’ lawsuit, arguing that the proposed U.S. Patent Office continuation rules are void for exceeding its authority, won a permanent injunction prohibiting the USPTO from putting the new rules changes into effect (Final Rules; 72 Federal Register 161 at 46716).  Triantyfyllos Tafas v. John Dudas and the United States Patent and Trademark Office.

Dr. Tafas had complained that the USPTO exceeded its Congressionally-delegated rulemaking authority and that the new rule changes specifically violate the Patent Act.  He was joined by SmithKline Beecham in claiming that the Final Rules, which change the patent system by modifying several long-established rules governing patent examination by the USPTO, are unlawful agency action under Section 706(2) of the Administrative Procedure Act (APA).

The District Court found that the Final Rules were substantive in nature and exceed the scope of the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2). Consequently, the Court granted summary judgment to GSK and Tafas and voided the Final Rules as otherwise not in accordance with law and in excess of statutory jurisdiction and authority.

As we’ve said before, like the villain in a B-movie horror flick, expect the Patent Office to keep coming back.  Now, the USPTO has filed it’s appeal brief with the US Court of Appeals for the Federal Circuit.  The Office has asked the Court to consider the following questions:

1. Whether the USPTO’s revised rules of practice for patent cases are within the scope of the Office’s statutory rulemaking authority.
2. Whether the revised rules conflict with the Patent Act.
3. Whether the USPTO must provide public notice and comment for rules that are not subject to notice and comment under the Administrative Procedure Act.

Showing that the Patent Office sees applicants as the source of all their problems, they claim that:

[U]nlimited recourse to continuation applications and RCEs has led to misuse and abuse.  Some applicants “rely on an unlimited number of continued examination filings to correct deficiencies in the claims and disclosure” that could have been avoided by greater diligence and care in the preparation of the initial applications.

The Office’s arguments for authority come down to:

1. The Final Rules are within the scope of the USPTO’s rulemaking authority under the Patent Act. The Act’s primary grant of rulemaking authority, Section 2(b)(2), authorizes the Office to issue rules that “govern the conduct of proceedings in the Office,” “facilitate and expedite the processing of patent applications,” and “govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.”
2. In the course of its ultra vires analysis, the district court held that the Final Rules are inconsistent with other provisions of the Patent Act.  That holding is likewise incorrect. The court mischaracterized the effects of the Final Rules, misconstrued the statutory provisions, misunderstood the judicial precedents concerning those provisions, and failed to give the USPTO’s construction of the provisions the deference required by Chevron.

Read the entire brief here (Dudas Appeal Brief)

More here:

No Joke, Court Smacks Down New Patent Rules
Patent Rule Injunction, Court To Sleep On It
Examination Support Document (ESD) Could Add $26,000 to Patent Costs
Is the Public Interest Really Upheld by the New USPTO Rules?
Court Blocks New USPTO Rules on Continuations and Claims — For Now
Patent Wars Episode II: GSK Strikes Back

Well, we wrapped up the Patent Baristas iBarista contest after two lucky winners were picked to receive iBarista iPods.

Winner #1.

Elliot Mendelson, a patent attorney at Marshall, Gerstein & Borun in Chicago, was randomly selected as the winner of an Apple iPod shuffle 1 GB for submitting a new comment on the PatentBaristas.com website in the month of July.  Basically, my administrative assistant randomly pulled a name from all the eligible entries.  Elliot wrote back saying “Thank you (and your secretary) so much! News like that is indeed a pleasant way to wrap up [the] week.”

Winner #2.

Chris Truelove, an Editor at Med Ad News and R&D Directions, was randomly selected as the winner of another Apple iPod shuffle 1 GB for posting a new link to the PatentBaristas.com website in the month of July.  The link, on Pharma Blog Review, mentioned our interview with USPTO Director John LeGuyader about alternate claiming strategies and restrictions. Chris was happy to win noting “This is very exciting, as I have never won anything like this before, ever.”

Congratulations to our winners!  We hope they enjoy their new iPods (despite the evil DRM restrictions).  Also, thanks to everyone who participated, it was fun.

FDA Sets New User Fee Rates

FDA published a Federal Register notice announcing the 2009 user fee rates under the Prescription Drug User Fee Act (PDUFA).  A similar notice  will also be issued with the FY 2009 user fee rates established under the Medical Device User Fee Amendments.  (via FDA Law Blog)

Homeland Security Can Take Anything Of Yours and Rifle Through It

According to the Washington Post, the Department of Homeland Security (DHS) can and will find it.  They will have permission to take your laptop (or just about anything else) to an off-site location indefinitely and they can share its contents with other agencies or private entities (or just about anyone else) for translation, decryption, or “other reasons.” (via Gizmodo)

Associates Say “No, Thanks” To Partnership

In an new midlevel associate survey, which polled 7,259 associate lawyers from 180 firms, more than 70 percent of respondents said they are on their firm’s partnership track.  The report shows that although most associates think they could make partner, they’re not sure they want to. Why not, you ask?

For one thing, they see some junior partners working even more ferocious hours than their own. “There have been times when I have been watching a movie late at night that I’ve gotten an e-mail from a partner,” says a Latham and Watkins third-year who, like the other respondents quoted here, spoke on a confidential basis. Adds a Finnegan, Henderson, Farabow, Garrett & Dunner midlevel: “When you see how many hours [junior partners] put in, you realize there really is no end to it.”

(via Law.com)

Government Probes NIH & Stanford

It looks like the Senate Finance Committee is continuing its investigation into research grants and conflicts of interest by the NIH and universities, whose academic researchers receive both NIH funding and have ties to drugmakers. Stanford University and its psychiatry department chair, Alan Schatzberg, came under special scrutiny as Schatzberg owns about $6 million in stock in Corcept Therapeutics while studying its drug mifepristone for treating psychotic depression. He is also a co-patent holder for the drug and he received an NIH grant to oversee the research. In response to the charges that Schatzberg failed to properly disclose this tangled web, Stanford issued a statement defending Schatzberg by saying, among other things, that all conflicts were properly disclosed.  But, then, doctors and researchers would never take kick-backs.  Right?   (via Pharmalot)

Update: Stanford suspends Schatzberg Grant

Apple Puts The Kibosh On Tethering Application For The iPhone

As much as I’d like to use my iPhone 3G for modem access/tethering, I can’t. Even though AT&T has data tethering options for its other smartphones, it doesn’t offer a similar feature with the iPhone. Why? Because Apple and AT&T hate their customers.  But who doesn’t?   Anyway, NullRiver, Inc. (apparently) slipped a data tethering application called NetShare into the iTunes App Store that would have allowed you to share your iPhone’s EDGE or 3G Internet connection with your computer.  The application was summarily removed from the App Store some time Thursday afternoon.  What other toys won’t we get?  (via ZDNet)

Update:  The NetShare App is back up on the iTunes App Store, only about 13 hours after it was yanked and replaced with a “Not available in the US Store” message.  What the?!

Update 2:  The NetShare App is removed from the iTunes App Store (again).

YGTBK.  Dont B2 Casual w/ BFF Clients.  TTFN.

Whether you are sending an email message from your Blackberry or desktop, don’t try to be too clever with business communications, especially with clients.  Why? According to the Legal Marketing Blog, it isn’t cute any more and it could send an undesirable message like “I’m too busy to be bothered with politeness” or “You aren’t important enough for real dialog.”  See related Marketing Pilgrim post “R U 2 Casual w Your Biz Talk?,” which refers to a Wall Street Journal post entitled “Thx for the IView! I Wud ♥ to Work 4 U!! ;).

Patent Office Tries To Raise New Generation of Applicants to Hate

Despite it’s 2+-year backlog of pending patent applications, the U.S. Patent and Trademark Office, along with the National Inventors Hall of Fame Foundation and the Ad Council, are trying to encourage children to invent stuff. The public service ads tell kids, “Anything’s possible. Keep thinking,” and direct them to Invent Now, a social networking site sponsored by the same groups. Children can upload designs of their inventions, comment on other kids’ ideas and play games. The site even walks them through the steps needed to get a real patent. It’s like a mini-lesson in intellectual property law.  (via LA Times)

The U.S. Patent and Trademark Office (USPTO) sent out a gentle reminder in the Federal Register to all patent applicants and registered patent practitioners that the export of subject matter (transfer of information) abroad under a foreign filing license is limited to purposes related to the filing of foreign patent applications.

The Notice states:

Applicants who are considering exporting subject matter abroad for the preparation of patent applications to be filed in the United States should contact the Bureau of Industry and Security (BIS) at the Department of Commerce for the appropriate clearances.

Why?

If an invention was made in the United States, technical data in the form of a patent application, or in any form, can only be exported for purposes related to the preparation, filing or possible filing and prosecution of a foreign patent application, after compliance with the EAR or following the appropriate USPTO foreign filing license procedure. See 37 CFR 5.11(c). A foreign filing license from the USPTO does not authorize the exporting of subject matter abroad for the preparation of patent applications to be filed in the United States.

Exports of technology related to commercial and  dual-use items are generally subject to the Export Administration Regulations (EAR)  administered by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS); exports of technology related to defense articles are subject to the International Traffic in Arms Regulations (ITAR), administered by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). However, jurisdiction is granted to the USPTO under both the EAR and ITAR for technical data that is exported for limited the purpose of filing or possible filing and prosecution of a foreign patent application.  The scope of a foreign filing license granted by the USPTO is set forth in 37 CFR 5.15.

It is noteworthy that foreign filing licenses (for the filing of a patent application in a foreign country) do not cover all information related to the invention — only that which is truly necessary for the preparation of the application.  They also do not authorize the export of any technology that is not specifically submitted to the USPTO as part of a U.S. patent application or a petition for a foreign filing license. The USPTO explains:

For example, the USPTO has received short abstracts, PowerPoint® slides and even titles of inventions as the disclosure for which a foreign filing license is requested. Although the USPTO will usually process such requests, any foreign filing license granted under 37 CFR 5.15(a) or 5.15(b) on such short description may not authorize filing abroad the ultimate resulting patent applications and may not authorize any additional material added after the initial foreign filing license request. Such additional material that was not submitted to the USPTO for its review may be deemed to have altered ‘‘the general nature of the invention in a manner which would require such application to be made available for inspection under such section 181.’’

Furthermore, a foreign filing license does not permit transfers of technology that occur between employees of a company located in the U.S. and employees of an affiliated company overseas. A license must be obtained from the U.S. Department of Commerce or U.S. Department of State (depending on the technology) in order to  report on new inventions to a foreign parent company.  A foreign filing license also does not authorize the transfer of controlled technology to foreign nationals located in the U.S. as this is also classified as an export.

The USPTO has established a Licensing and Review web page that includes frequently asked questions regarding foreign filing licenses and related matters.   Information regarding the EAR may be obtained from the BIS Web site here.

This notice does not change existing law or regulations so it doesn’t mean exports without a license before the Notice were OK.  Now’s a good time to rethink outsourcing.

See: Outsourcing Legal Work (to the Midwest)

Well, it looks like Margaret Peterlin, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office (USPTO), has announced that she will be leaving the USPTO in August with plans to pursue employment opportunities in the private sector.  It was probably going to happen some time after January 20th of next year anyway.

Commerce Secretary Carlos Gutierrez appointed Margaret J.A. Peterlin, formerly a national security House aide, to serve as Deputy Under Secretary.  Before joining the USPTO, Ms. Peterlin was Counsel for Legal Policy and National Security Adviser for the Speaker of the U.S. House of Representatives, J. Dennis Hastert.

Earlier, patent antagonist Greg Aharonian complained that the appointment of Ms. Peterlin to her position was unlawful because she does not have “a professional background and experience in patent or trademark law” as is apparently required under 35 U.S.C. § 3(b).

After a short run in the courts, U.S. District Court for the District of Columbia dismissed a lawsuit against the Secretary of Commerce for hiring an allegedly incompetent person to office. See Gregory Aharonian, et al. v. Carlos Gutierrez, Secretary of Commerce (07-1224) .  See the complaint at: http://www.bustpatents.com/peterlin.pdf.

The U.S. District Judge held:

A claim alleging violation of the standard in 35 U.S.C. § 3(b) is unreviewable under the [Administrative Procedure Act], however, because 35 U.S.C. § 3(b) lacks standards that a court could meaningfully use in evaluating this type of high-level personnel decision. Because the only statutory standard is vague and highly subjective, the decision whom to appoint Deputy Director must be considered “committed to agency discretion by law.”

This kind of case makes you wonder why we have a rule that can’t be enforced because it’s too vague.  I’m sure we’ll see more political appointees leaving their posts as January nears.

See more:

Can You Sue to Remove a Political Appointee Who Doesn’t Meet the Job Description?
When is a Patent Office Appointee Qualified? Judge Says Always.