Source: https://www.patentdocs.org/2012/09/index.html
Timestamp: 2019-04-18 10:35:12+00:00

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How do we create success in an age of fierce competition and accelerating globalization? America no longer has a lock on any industry or technology. That is why it is important to do all we can to sustain America's global leadership in biopharmaceutical research and development which provides quicker access to innovative medicines, jobs and economic growth to build stronger communities, and new technologies, spin-off industries and a stream of exports to keep America competitive for decades to come.
To secure America's continuing biopharmaceutical leadership, policymakers must not trade away the economic and systemic advantages that made our sector the world-leader. We need public policies and incentives that support and grow the biopharmaceutical sector domestically and promote access to global markets.
The Obama Administration must protect intellectual property (IP) in ongoing trade negotiations. A critical issue at the center of far-reaching Trans-Pacific Partnership (TPP) negotiations is biologics data protection. Biologics are pharmaceutical products that are generally derived from living material -- human, animal, or microorganism. Many future therapies will depend on the ability of our innovative companies to produce these complex, life-saving medicines. This was recognized by overwhelming bipartisan support for a provision in the healthcare reform law that provided a 12-year period during which competitors' products may not be approved on the basis of the complex scientific data generated by a biologic product's inventor. This provision fosters new biopharmaceutical R&D by giving companies time to recoup their significant investment while providing patients with access to innovative biopharmaceutical products.
As U.S. negotiators sit down with other TPP parties and those who may soon join these talks, including Canada and Mexico, it is essential that they secure strong IP provisions that reflect U.S. law, including the 12 years of data protection for biologics. For decades, U.S. negotiators have worked tirelessly to bring other countries up to the IP protection standards that we have in the U.S. This is no time to change course.
There is a lot at stake in these negotiations.
First is America's global leadership in developing innovative medicines. Since 2000, the U.S. Food and Drug Administration (FDA) has approved nearly 400 new medicines for patient use -- most pioneered in the U.S. There are more than 3,000 new medicines to treat a wide range of conditions and rare diseases in late-stage development or pending FDA approval. These include therapies to treat the diseases that plague us and our loved ones, including Alzheimer's, cancer, HIV/AIDS and many more. These compounds are being developed across the country by literally hundreds of American companies, from large global firms to small biotech start-ups.
Next, there is the economic impact. A National Academy of Sciences study shows this sector's R&D investment represents an astonishing 20% of all domestic R&D funded by U.S. businesses. This investment supports 4 million direct and indirect American jobs. These are good-paying jobs that help to build and grow local, state and the national economies.
Finally, there is the contribution to America's exports. Today, nearly 60 % of U.S. trade is with countries in the Asia-Pacific market. This will grow so long as American companies can compete and their IP is respected. Holding firm on 12 years of biologics data protection is a four-fold win: bringing cutting-edge medicines to patients, fostering a critical American industry, bolstering exports, and keeping America competitive in global markets.
Strong IP protections are not barriers to access. The progress made in developing new HIV/AIDS treatments and their wide availability globally help demonstrate how IP protections can simultaneously reward R&D investment and improve therapies available to patients worldwide. As our trading partners, through contexts like the TPP, work to strengthen their IP systems, they will provide the necessary platforms for local innovators, spurring greater global competition that will ultimately benefit the world's patients.
The bottom-line is that the biopharmaceutical research sector is a national asset and is essential to our health and economic future. If we fail to act, including in the current TPP negotiations, there will be profound consequences -- for patient access to innovative medicines as well as for our economy.
American global leadership in biopharmaceutical research is not a given. Our international competitors understand the value of a strong biopharmaceutical research sector, the patients it helps and the jobs it creates. They are doing all they can to encourage domestic production and R&D. Our companies at home work hard to stay the best and compete globally, but they can only continue doing so if American trade policies support and defend innovation and progress.
• Weigh the risks and benefits of at-risk launches and assess potential damages.
• Updating the standards in inequitable conduct post-Therasense: Ethical considerations for Paragraph IV cases.
In addition, two pre-conference workshops will be offered on December 3, 2012. The first, entitled "Hatch-Waxman and BPCIA 101 -- A Primer on IP Basics and regulatory Fundamentals" will take place from 9:00 am to 12:30 pm, and the second, entitled "AIA/PTO Working Group Session: Assessing The Impact of New PTO Procedures Under the AIA on Paragraph IV Litigation" will take place from 2:00 pm to 5:30 pm. A post-conference working group session entitled "Biosimilars: Product Development Strategies, Regulatory Review, and Anticipated Litigation Through A Hatch-Waxman Lens" will be offered from 3:00 to 6:00 pm on December 5, 2012.
The agenda for the Paragraph IV Disputes conference can be found here. More information regarding the workshops and master class can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.
The registration fee for the conference is $2,295 (conference alone), $2,895 (conference and one workshop), $3,495 (conference and two workshops), or $4,095 (conference and all workshops). Those registering by October 5, 2012 will receive a $300 discount and those registering by November 2, 2012 will receive a $200 discount. Patent Docs readers who reference the discount code "PD 200" will receive $200 off the current price tier when registering. Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.
Patent Docs is a media partner of the Paragraph IV Disputes conference.
The registration fee for the webinar is $297 ($362 for registration and CLE processing). Those registering by October 5, 2012 will receive a $50 discount. Those interested in registering for the webinar, can do so here.
Bayer Corp. and Bayer AG have filed an amicus brief in support of a grant of certiorari by the Supreme Court in the K-Dur case (In re K-Dur Antitrust Litigation). Being a branded drug maker, it is no surprise that Bayer argues in its brief that the Third Circuit's decision created a circuit split that unsettled the balance created by other circuit courts of appeal. Two aspects of the brief stand out: first, that Bayer was itself involved in a Federal Trade Commission (FTC) challenge to a reverse payment settlement agreement over the antibiotic Ciprofloxacin®, specifically Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 106, 110 (2d Cir. 2010) (per curiam), and In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008), cert. denied, 557 U.S. 920 (2009); and second, by taking the position expressly that the "scope of the patent" test used by the Second, Eleventh, and Federal Circuits was the correct test for assessing whether a reverse payment settlement agreement is lawful.
• That the Third Circuit opinion was based on flawed studies, predominantly ones promulgated by the FTC.
In addition, the brief states that the Third Circuit opinion is incorrect in reciting a rule of "presumptive [antitrust] liability" because it presumes (as does the FTC) that reverse payment settlement agreements are only contemplated by innovator drug companies to protect "weak" or "bad" patents. On the contrary, Bayer argues generic drug companies "routinely" challenge even patents believed to be "the strongest and most secure" so that preventing settlement will lead to more litigation and fewer new drugs (and preclude settlements that permit generic entry earlier than would occur otherwise).
The brief's arguments regarding the correctness of the "scope of the patent" test are grounded in Supreme Court precedent, particularly Bement v. Nat'l Harrow Co., 186 U.S. 70, 88 (1902), for the principle that when agreements exclude no more competition than the patent itself, they do not restrain lawful competition. Moreover, Bayer argues that the Bement case was decided when the antitrust laws were most expansively applied, so the import of the decision that patenting precludes antitrust liability was even more significant. Also, Bayer argues, Supreme Court precedent sanctions patent infringement litigation settlements because settlements are "a legitimate and desirable result in itself." In this regard the brief cites United States v. General Elec. Co., 272 U.S. 476, 493 (1926), which found price setting under a patent license to be lawful.
The brief then makes the case that antitrust laws are directed to lawful competition and not unlawful, with the burden on the antitrust plaintiff properly to require a showing that the acts prevented were lawful ones (which patent infringement is not), citing Rubber Tire Wheel Co. v. Milwaukee Rubber Works Co., 154 F. 358, 364 (7th Cir. 1907), for the proposition that "the public [i]s not entitled to profit by competition among infringers." This theme is continued in a discussion of Walker Process Equipment, Inc. v. Food Machinery & Chemical Co., 382 U.S. 172, 177 (1965), which requires proof of actual fraud in obtaining a patent ("beyond such intentional misconduct in obtaining the patent, the patentee's 'good faith would furnish a complete defense' to antitrust claims"). The brief notes that the Third Circuit erred (at least) in not considering Walker Process in its discussion of the antitrust implications of reverse payment settlement agreements. The proper conclusion, according to Bayer, is that the Second, Eleventh, and Federal Circuits, and the "scope of the patent" test were correct, because exclusion under patent law does not constitute an antitrust violation unless it is outside scope of patent right to exclude, citing Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 708 (Fed. Cir. 1992); USM Corp. v. SPS Techs., Inc., 694 F.2d 505, 513 (7th Cir. 1982); and SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 (2d Cir. 1981).
Unless and until the patent is shown to have been procured by fraud, or a suit for its enforcement is shown to be objectively baseless, there is no injury to the market cognizable under existing antitrust law, as long as competition is restrained only within the scope of the patent.
In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514, 522 (E.D.N.Y. 2005). The Third Circuit's opinion was wrong ("remarkable"), according to the brief, because it departs these principles, based on a misapplication of two "policies," one based on the desire of the public to "test" weak patents and the other based on the desire of Congress to provide consumers with generic drugs." But, according to the brief, each of these "policy" questions has a countervailing consideration. Counter to the desire to test patents is the interest in protecting patent holders from infringement (citing Lear, Inc. v. Adkins, 395 U.S. 653, 663-64 (1969) (quoting Pope Mfg. Co. v. Gormully, 144 U.S. 224, 234 (1892)). Counter to the desire to provide cheaper generic versions of drugs is the interest in not discouraging innovator drug companies from developing new drugs (citing aaiPharma Inc. v. Thompson, 296 F.3d 227, 231 (4th Cir. 2002). The brief also notes that the Third Circuit declared the agreements presumptively invalid and ignored the question of whether infringement was admitted or contested (as it was in K-Dur), and criticized the third Circuit for ignoring Bement and Walker Process while relying on cases that were not relevant to the question of antitrust liability. These criticisms extended to the Third Circuit's citation of United States v. Masonite Corp., 316 U.S. 265 (1942), which the brief argues was a patent exhaustion case, and cases like Lear, Pope, Edward Katzinger Co. v. Chi. Metallic Mfg. Co., 329 U.S. 394 (1947), and Sola Elec. Co. v. Jefferson Elec. Co., 317 U.S. 173 (1942), which related to whether a licensee could challenge a patent. Finally, Cardinal Chemical Co. v. Morton International Inc., 508 U.S. 83 (1993), merely stated that patent invalidity was not mooted by a determination that a patent was not infringed and similarly did not support or compel the Third Circuit's opinion regarding the antitrust implications of reverse payment settlement agreements.
The brief also criticizes the Third Circuit for holding that "there is no need to consider the merits of the underlying patent suit because' . . . it is logical to conclude that the quid pro quo for the payment was an agreement by the generic to defer entry beyond the date that represents an otherwise reasonable litigation compromise,'" a statement the brief calls "erroneous." First, the value of an agreement to the parties differ, because the branded innovator will make much more for every month it is on the market exclusively than the generic will make sharing the market; money can balance these considerations, and money would need to flow from the branded to the generic. The brief cites Marc G. Schildkraut, Patent-Splitting Settlements and the Reverse Payment Fallacy, 71 Antitrust L.J. 1033, 1062 (2004), in support of this argument. Further, the brief argues that courts do not get to "hypothesize a 'better' settlement" than the ones at issue between the parties, citing Verizon Commc'ns Inc. v. Law Offices of Curtis v. Trinko, LLP, 540 U.S. 398, 415-16 (2004) ("The Sherman Act is indeed the Magna Carta of free enterprise, but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition."), and Am. Motor Inns, Inc. v. Holiday Inns, Inc., 521 F.2d 1230, 1249 (3d Cir. 1975). There is no precedent for finding liability because the parties settled, according to the brief, but that is precisely what the Third Circuit's opinion does: under the "presumptive liability" standard contained in the opinion, antitrust liability arises as a direct consequence of the settlement (albeit here the brief ignores the requirement for some sort of payment, "anything of value").
The Third Circuit also errs, according to Bayer's brief, because it "reads out" of the statute the presumption of validity, and because it expressly ignores the "merits" of the case by not requiring the antitrust plaintiff to rebut that presumption. Effectively, this "eviscerates" the presumption of validity and it shifts the burden to the patentee to "disprove antitrust liability."
[F]ocusing solely on lowered prices of the generic drugs "ignores the first principle that enforcing valid patents makes a major contribution to consumer welfare by providing the incentive for innovation. We ignore that incentive at our peril,"
Consequently, the court simply discarded the scope of the patent rule, calling it a "bad policy from the perspective of the consumer." Pet. App. 31a. A worse policy is to ignore the incalculable benefits of new, life-saving drugs made possible by the incentives for innovation. Without those drugs being created in the first place, there will be no prices to lower.
Finally, the brief opines that the studies the Third Circuit relied upon are "fundamentally flawed." Interestingly, these are FTC studies (FTC, Generic Drug Entry Prior to Patent Expiration (2002); FTC, Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions (2010); see "FTC Disapproves of 'Pay-for-Delay' Drug Deals") in large part. Bayer argues that these opinions are "flawed" because the FTC used statistical sleight-of-hand to arrive at the number of ANDA litigations it maintains are won by generic challengers. On the contrary, the brief cites other studies that expressly criticize the FTC studies, including Adam Greene & D. Dewey Steadman, Pharmaceuticals, Analyzing Litigation Success Rates, RBC Capital Markets 1 (2010), and Bret Dickey et al., A Preliminary Economic Analysis of the Budgetary Effects of Proposed Restrictions on 'Reverse Payment' Settlements (2010), and states that the frequency with which generic drug makers prevail in ANDA litigation is much lower than the 78% success rate espoused by the FTC and relied upon by the Third Circuit. As a consequence, "[t]hese flawed premises of the Third Circuit's rationale only underscore the need for this Court's review."
The Pharmaceutical Research and Manufacturer's of America (PhRMA) have filed an amicus brief in support of a grant of certiorari by the Supreme Court in the K-Dur case (In re K-Dur Antitrust Litigation). Not surprisingly, like the branded and generic drug makers, PhRMA argues that the Third Circuit's decision created a circuit split that unsettled the balance created by other circuit courts of appeal. While generally making the same arguments in this regard as the briefs of the parties (and other amici), PhRMA adds a few particular nuances to these arguments that bear consideration.
The brief characterizes the Third Circuit's K-Dur decision as imposing an "unwarranted presumption of illegality" regarding reverse payment settlement agreements in ANDA litigation that will harm consumers. The brief asserts its members interest in the litigation as stemming from investment in drug discovery, stating that its members invested "an estimated $49.5 billion in discovering and developing new medicines" in 2011, citing the list of PhRMA members appended to the brief. It frames the issue the Court should consider as "whether innovator companies can lawfully settle Hatch-Waxman patent litigation on terms that restrict the alleged infringer's activities within the scope of the patent and also include a payment (or other consideration) to the alleged infringer." The practical reality, according to the brief, is that these reverse payment settlement agreements are often the only way to settle ANDA litigation under the Hatch-Waxman Act, and thus should not be "presumptively suspect." And the consequences of the decision ignoring these practical realities can be expected to be "protracted litigation and, in some instances, delay the introduction of generic medicines."
The brief echoes reasoning from the other circuit courts of appeal who found reverse payment settlement agreements to be free of antitrust liability on the grounds that courts cannot "restrict the ability of innovator companies to manage risk and avoid the costs and uncertainty of litigation" without "dramatically diminish[ing] incentives for innovation and product development." These incentives are necessary, according to PhRMA's brief, because pharmaceutical drug development it time-consuming (taking from 10-15 years) and costly (averaging about $1.3 billion when the cost of drug development failures are taken into account), and anything that increases risk to potential return on investment (like the limitations imposed by the Third Circuit's decision) jeopardizes innovation to the consumers' detriment.
The brief calls this issue "tremendously important" to the pharmaceutical industry, because it upsets the "carefully balanced regulatory regime" under Hatch-Waxman Act. Some of the reasons that limiting the ability of branded drug makers to manage litigation and business risk by reverse payment settlement agreements in ANDA litigation asserted by the brief have been cited before in decisions from other circuit courts of appeal in upholding these agreements. For example, the brief cites the differences in relative risk between branded and generics between ANDA litigation and conventional patent infringement litigation, and that settlement permits market entry by generics before expiry of the innovator's patents, and that there are uncertainty costs imposed by litigation that are eliminated by the possibility of settlement. PhRMA adds to that calculus by considering the generic side of the equation: because generic drug makers have no risk of infringement liability, financial incentives for delaying product launch are necessary because there would otherwise be no incentive for the generic drug maker to settle (such payments "may provide the only reasonable terms on which a settlement can be achieved"). In this regard the brief cites 7th Circuit Judge Richard Posner, long a proponent of the "economy and law" school of thought centered at the University of Chicago, who has argued that a ban on reverse payment settlement agreements could itself be anticompetitive because it would reduce the generic challenger's incentives to bring a Paragraph IV challenge in the first place. Also, according to the brief a "cash-strapped generic company" might need the reverse settlement as the only way to accommodate the costs of delayed entry. For both parties, "deterring patent settlements and encouraging protracted litigation will increase costs and consume judicial resources, prolong uncertainty, deter innovation, delay activities to invent around patents, and, ultimately, harm consumers" according to the brief. All of these arguments are supported by academic legal scholarship that is directly contradictory to the Third Circuit's decision and the FTC's continued legal challenges to reverse payment settlement agreements over the past decade.
PhMRA also mentions that "the FTC is now taking the broadest possible view of the Third Circuit's opinion -- disregarding the Eleventh Circuit's opinion directly to the contrary with respect to the very same agreements -- and claims it imposes a blanket prohibition on settlements containing any consideration whatsoever flowing from innovators to alleged patent infringers." As an example, the PhRMA cites the FTC's brief in an antitrust action relating to a settlement agreement in ANDA litigation over the drug Effexor®. According to the brief, the FTC has taken the position that an agreement where the innovator does not market its own authorized generic is the equivalent of a payment and hence anticompetitive (despite the fact, as noted in the brief, that the branded drug company will remain in competition with the generic under the terms of the agreement). In addition, the brief cites statements by the FTC Chairman that if the Supreme Court refuses to grant certiorari the agency will just bring all its actions under the Clayton Act in district courts in the Third Circuit. Even without this threat, the Third Circuit's opinion warrants Supreme Court review (and reversal) because of the concentration of ANDA litigation in that circuit; the brief cites 80 ANDA cases having been filed in 2012 in that circuit versus five ANDA suits brought in the other circuits combined.
The brief ends with a frank expression of the seriousness of these issues to PhRMA's members: "The stakes are too high for the Third Circuit's rogue decision to go uncorrected."
Several other amici (including Bayer, the Washington Legal Foundation and the New York Intellectual Property Law Association) have filed briefs, which will be the subject of later posts.
1. Are human genes patentable?
2. Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court's ruling in Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)?
3. Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court's decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad's "active enforcement" of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally and directly threatened with an infringement action?
I. THE QUESTION OF WHETHER HUMAN GENES AND THE INFORMATION THEY CONVEY ARE PATENTABLE IS OF PARAMOUNT IMPORTANCE TO THE FUTURE OF PATENT LAW, THE ADVANCEMENT OF MEDICAL SCIENCE, AND THE HEALTH OF PATIENTS.
II. PATENTS ON "ISOLATED" DNA ARE INVALID UNDER THIS COURT'S SECTION 101 JURISPRUDENCE AND THE U.S. CONSTITUTION.
The first reason once again reiterates the plaintiffs (willful) conflation of the gene itself (patentable under current law) and the information it encodes (which is not patentable and is freely used by all). The second reason presents specific grounds for the Supreme Court to overturn the Federal Circuit, insofar as the appellate court's grounds for reversing the District Court unconstitutionally extended the scope of patent eligibility under Section 101.
The second Question Presented is treated only briefly but appears to be based on the incorrect notion asserted during oral argument that the cells used in the method are "conventional products widely available for purchase."
The third Question Presented, and the reasons for it, are a bit curious considering that the Federal Circuit found that at least one named plaintiff, Dr. Harry Ostrer, had standing to bring the lawsuit. But it is clear that plaintiffs and their legal representatives are interested in not only reducing the scope of patent eligibility but in expanding the scope of declaratory judgment jurisdiction, so that members of the public affected by a patent but not threatened by suit would have standing. In many ways, this argument is much more threatening to an effective patent regime in this country, since garnering Supreme Court agreement would make the recent spate of patent litigation (that has raised so many concerns across all technology sectors) look benign (for example, if every consumer who purchases a patented product had standing to challenge the patent).
Patent Docs will provide more in depth coverage of the petition after taking time to consider its implications more thoroughly.
It is an occupational hazard for patent attorneys to be tempted to over-interpret Supreme Court and Federal Circuit opinions relating to certain areas of patent law or their applications to certain technologies. This is particularly true with regard to the question of obviousness for biotechnology inventions, in the aftermath of the Court's implementation of the Supreme Court's KSR v. Teleflex opinion in its In re Kubin opinion. This temptation arises again when considering the Federal Circuit's In re Droge opinion, where the Court affirmed a determination by the U.S. Patent and Trademark Office that claims for recombination methods were obvious.
The technology involved recombination of exogenous DNA introduced into eukaryotic cells. As explained in the opinion, the exogenous DNA comprises a bacteriophage λ vector wherein the vector sequences are important for specific recombination of the exogenous DNA into the cellular chromosomal (genomic) DNA. Bacteriophage λ has a storied history in molecular biology. It is a temperate phage, meaning that in bacteria it has two life cycles. The first, the lytic phase, displays conventional viral behavior, wherein the virus infects the bacterial cell, replicates exponentially and eventually lyses the cell with release of the multiplied viral particles. In the other phase (termed the lysogenic phase), the bacteriophage inserts itself into the bacterial chromosome where it resides until a stimulus (for example, irradiation with ultraviolet light) causes the virus to enter the lytic phase. Elucidation of the molecular basis for these alternative behaviors was one of the first tours de force of molecular biology; it is elegantly described (befitting its biological elegance) in A Genetic Switch by its elucidator, Mark Ptashne.
But phage λ played an even more important role in biotechnology, a role directly related to the lytic/lysogenic alternative life cycles. Because the genes encoding the proteins that mediated the lysogenic life cycle are unnecessary for the lytic phase, the virus was an ideal candidate for use as a cloning vector. Deleting these genes, and substituting this DNA with fragments of human cellular DNA, for example, enabled scientists to create libraries of genomic DNA that were used to isolate and identify genes during the golden age of biotechnology in the 1970's and 80's. While such inserted human cellular DNA fragments were limited to a size (~20 kilobases) that would fit inside the proteinaceous phage head, >95% coverage of human genomic DNA could be achieved in a library of about 1 million recombinant phage.
(c) further comprising providing to said cell a modified bacteriophage lambda integrase Int, wherein said modified Int is Int-h or Int-h/218, which induces sequence specific recombination through said attB and attP or attR and attL sequences.
(emphasis in opinion). As set forth in the opinion, the integrase recited in the claims was a mutant integrase, termed Int-h or Int-h/218. The prior art cited against the Droge claims were two references, the primary reference being the Crouzet reference that disclosed "methods of making therapeutic DNA molecules using sequence-specific recombination either in a host cell or in vitro" and that specifically disclosed embodiments using λ phage and wildtype Int for integration of exogenous ("foreign") DNA into a mammalian host cell "using the attB and attP recognition sites." Relevant to the Board's decision and the Federal Circuit's assessment of it, the Crouzet reference also disclosed that these methods "'may be carried out in any type of cell host,' such as 'bacteria or eukaryotic cells (yeasts, animal cells, plant cells).'" Droge, the Board, and the Federal Circuit agreed that the Crouzet reference did not disclose the mutant integrases recited in the Droge claims.
These elements of the claims were disclosed in a second reference to Christ and Droge, which also disclosed that the mutant integrases were active (could "mediate sequence-specific recombination") in prokaryotic cells. In addition, the Christ and Droge reference disclosed that these mutants were capable of mediating recombination even in the absence of accessory proteins produced in bacteria but not in eukaryotic cells. As set forth in the Federal Circuit's opinion, the Droge applicants conceded that the combination of the references disclosed all the elements of their claims, but contended that the skilled worker would not have had a reasonable expectation of success that the mutant enzymes that worked in prokaryotic cells would also work in eukaryotic cells and thus their claims were non-obvious. This assertion was supported by a Rule 132 declaration by inventor Droge, but while the Office considered the opinions and evidence in the declaration, the Examiner and Board determined that the allegations in the Droge declaration was rebutted by the disclosure of another reference, the Lange-Gustafson and Nash reference.
The Federal Circuit affirmed the Office's obviousness rejection, in an opinion by Judge Moore joined by Judges Newman and O'Malley. The opinion recognized that the crux of the matter was whether a person skilled in the art would have had a reasonable expectation of success in substituting the wildtype integrase disclosed in the Crouzet reference with the mutant integrases disclosed in the Christ and Droge reference for sequence-specific integration of exogenous DNA into eukaryotic chromosomal DNA. The Federal Circuit, pursuant to In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000) (a decision that implemented the Supreme Court's direction in Dickinson v. Zurko, 527 U.S. 150 (1999)), deferred to factual determinations made by the Office (while exercising plenary review over the ultimate legal question of obviousness). In this case, the panel found "substantial evidence" that "supports the Board's determination that a person of ordinary skill in the art would have had a reasonable expectation of success when combining" the references. Importantly, the opinion found that the Lange-Gustafson and Nash reference "directly contradicts the assertion in the Droge Declaration that a skilled artisan would not expect the modified integrases Int-h and Int-h/218 to work in eukaryotic cells" based on arguments relating to the topography of the DNA molecules involved in integration.
Having determined that substantial evidence supported the factual determinations by the Office, the panel concluded that the claims were obvious. Regarding Droge's allegations that the skilled worker would not have a reasonable expectation of success in using the mutant integrases in eukaryotic cells, the panel opined that "absolute predictability" was not the standard: "all that is required is a reasonable expectation of success." In re Kubin, 561 F.3d 1351, 1360 (Fed. Cir. 2009) (citing In re O'Farrell, 853 F.2d 894, 903-04 (Fed. Cir. 1988))."
It is an unconsidered reading of this citation that leads to mischief and over-interpretation of Federal Circuit precedent (particularly as that precedent is viewed as an accommodation of Supreme Court decisions). What is significant about the legal basis for the panel opinion is the citation to In re O'Farrell (a decision by Judge G.S. Rich that was cited by the Supreme Court regarding its KSR v. Teleflex opinion). This citation points to the fact that these rubrics of obviousness do not represent a sea change (and not even a change in how obviousness is applied to biotechnology, when it is recalled that O'Farrell was a biotechnology case). The almost per se non-obviousness of claims to nucleic acid was impacted by the Federal Circuit's implementation of KSR v. Teleflex in its In re Kubin opinion. But in truth, the time for per se non-obviousness had passed for nucleic acids after the disclosures of the Human Genome Project and advances in DNA cloning technology. The test will be when this precedent is applied to the cucumber genome, which is likely to have much less prior art to be applied. But obviousness will always be plagued by the siren song of hindsight balanced by evidence of unexpected results; provided that this balance is properly maintained it is unlikely that per se rules (of obviousness or non-obviousness) will imbalance the extent of patent protection available for biotechnology inventions.
Cubist Pharmaceuticals Inc. v. Hospira Inc.
Infringement of U.S. Patent Nos. 6,468,967 ("Methods for Administration of Antibiotics," issued October 22, 2002), 6,852,689 (same title, issued February 8, 2005), RE39,071 ("Anhydro-and Isomer-A-21978C Cyclic Peptides," April 18, 2006), 8,058,238 ("High Purity Lipopeptides," issued November 15, 2011), and 8,129,342 (same title, issued March 6, 2012) following a Paragraph IV certification as part of Hospira's filing of an ANDA to manufacture a generic version of Cubist's Cubicin® (daptomycin for injection, used for the treatment of skin infections caused by certain Gram-positive microorganisms). View the complaint here.
Otsuka Pharmaceutical Co., Ltd. v. Silarx Pharmaceuticals, Inc.
Infringement of U.S. Patent Nos. 6,977,257 ("Aripiprazole Oral Solution," issued December 20, 2005) and 5,006,528 ("Carbostyril Derivatives," issued April 9, 1991) following a Paragraph IV certification as part of Silarx's filing of an ANDA to manufacture a generic version of Otsuka's Abilify® (aripiprazole, used to treat bipolar disorder and schizophrenia). View the complaint here.
The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Cross Winds in the Safe Harbor: Classen v. Biogen and Momenta v. Amphastar" on September 27, 2012 beginning at 1:00 pm (ET). A panel consisting of Paul Golian, Assistant General Counsel at Bristol-Myers Squibb Company; John Griem, Jr. of Loeb & Loeb, LLP; and Steven Lee of Kenyon & Kenyon LLP will discuss the current state of the case law concerning the scope of the § 271(e)(1) safe harbor of the Hatch Waxman Act and its future.
The registration fee for the webinar is $120 (government and academic rates are available upon request). Those interested in registering for the webinar can do so here.
• Mitigate the risks of shareholder derivative litigation stemming from recall and adverse event activity.
• Taking the social media plunge: Engaging customers online while minimizing the inherent litigation risks of viral communication.
In addition, a pre-conference jury selection session on "Novel Strategies, Tactics and Ethical Considerations for Selecting the Right Jury" will be offered from 9:00 am to 12:30 pm on December 3, 2012, and a pre-conference group meet-up will be held from 3:00 to 5:00 pm on December 3, 2012. A post-conference business development master class entitled "In-House Counsel Perspectives on Selecting and Evaluating Outside Counsel" will be offered from 3:30 pm to 5:30 pm on December 5, 2012.
The agenda for the Drug and Medical Device Litigation conference can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.
The registration fee for the conference is $2,695 (conference and group meet-up), $3,295 (conference, group meet-up, and workshop or master class), or $3,695 (conference, group meet-up, workshop, and master class). Those registering by September 27, 2012 will receive a $500 discount, and those registering by November 2, 2012 will receive a $200 discount. Patent Docs readers who reference the discount code "PD 200" will receive $200 off the current price tier when registering. Those interested in registering for the conference can do so here, by calling 1-888-224-2480, by faxing a registration form to 1-877-927-1563, or by e-mailing CustomerService@AmericanConference.com.
Patent Docs is a media partner of the Drug and Medical Device Litigation conference.
Additional information about the seminar, including a program, list of speakers can be found here. The registration fee for the seminar is $600. Those interested in registering for the seminar can do so here.
Should Presumptions Be Avoided in the Reverse Payment Debate?
Presumptions (rebuttable or otherwise) are, intentionally, distortions in the law that have the effect of increasing the difficulty of proving a proposition. Their purpose is typically policy-motivated, to indicate a favored outcome that will not prevail only if the basis of the presumption (and the policy behind it) is not satisfied. The statutory presumption of patent validity, codified at 35 U.S.C. § 282, is an example, reflecting the policy that patent examination should be assumed to be properly performed and that courts should defer to agency expertise unless (and until) an accused infringer can show by clear and convincing evidence that the agency has granted the patent in error.
SEC. 28. PRESERVING ACCESS TO AFFORDABLE GENERICS.
(1) ENFORCEMENT PROCEEDING- The Federal Trade Commission may initiate a proceeding to enforce the provisions of this section against the parties to any agreement resolving or settling, on a final or interim basis, a patent infringement claim, in connection with the sale of a drug product.
(ii) the ANDA filer agrees to limit or forego research, development, manufacturing, marketing, or sales of the ANDA product for any period of time.
(B) EXCEPTION- The presumption in subparagraph (A) shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.
(7) any other factor that the fact finder, in its discretion, deems relevant to its determination of competitive effects under this subsection.
(2) that the agreement's provision for entry of the ANDA product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is pro-competitive, although such evidence may be relevant to the fact finder's determination under this section.
(B) any patent right or other statutory exclusivity that would prevent the marketing of such drug.
(2) A payment for reasonable litigation expenses not to exceed $7,500,000.
(3) A covenant not to sue on any claim that the ANDA product infringes a United States patent.
(6)(A) In recent years, the intent of the 1984 [Hatch-Waxman] Act has been subverted by certain settlement agreements between brand companies and their potential generic competitors that make 'reverse payments' which are payments by the brand company to the generic company.
(B) These settlement agreements have unduly delayed the marketing of low-cost generic drugs contrary to free competition, the interests of consumers, and the principles underlying antitrust law.
(C) Because of the price disparity between brand name and generic drugs, such agreements are more profitable for both the brand and generic manufacturers than competition, and will become increasingly common unless prohibited.
(D) These agreements result in consumers losing the benefits that the 1984 Act was intended to provide.
A party likely to win might not want to play the odds for the same reason that one likely to survive a game of Russian roulette might not want to take a turn. With four chambers of a seven-chamber revolver unloaded, a party pulling the trigger is likely (57% to 43%) to survive, but the undertaking is still one that can lead to undertaking.
No matter how valid a patent is -- no matter how often it has been upheld in other litigation or successfully reexamined -- it is still a gamble to place a technology case in the hands of a lay judge or jury. Even the confident patent owner knows that the chances of prevailing in patent litigation rarely exceed seventy percent. Thus, there are risks involved even in that rare case with great prospects.
However, there is another presumption at work in many of the district and appellate court opinions that have upheld these agreements, and that is the presumption of patent validity. While many decisions upholding reverse payment settlement agreements are based on the "strength of the patent" test rejected by the Third Circuit in the K-Dur case (including Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 344 F.3d 1294 (11th Cir. 2003); Schering-Plough Corp. v. Federal Trade Commission, 402 F.3d 1056 (11th Cir. 2005); In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187 (2d Cir. 2006), Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 105 (2d Cir. 2010); and In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008)), the presumption of patent validity is an express or implied basis for permitting branded drug makers to exclude generic challengers from the marketplace (provided the patents are not misused by exceeding their lawful scope).
Perhaps one way to address these agreements clearly would be to remove presumptions of both types. Reverse payment settlement agreements in ANDA litigation are already subject to FTC review under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Instead of placing the patent or antitrust thumb on the policy scale, these agreements may best be subject to unbiased scrutiny asking a simple question: is the result anticompetitive? This question would involve an assessment of many of the considerations contained in S. 27, including whether the generic drug will enter the marketplace prior to the expiration of Orange Book patents, the type of consideration flowing from the branded drug maker to the generic challenger, the number of other competitors filing ANDA and Paragraph IV challenges (including whether the branded drug maker has entered into multiple reverse payment settlement agreements) and the strength of the challenge(s) mounted under Paragraph IV. This would not be a relitigation of patent validity or unenforceability but rather administrative agency review of the totality of the circumstances including the "strength of the patent." In the absence of presumptions, the agency having responsibility for protecting the consumer from unjustified anticompetitive activity could discharge its statutory authority, subject to judicial review. However, any such review should be accompanied by some sort of statute of repose for the parties, preventing continual relitigation of the antitrust issues by other plaintiffs in other fora. Provided that the FTC itself applies these principles in an unbiased fashion and not as a consumer advocate (despite recent efforts and pronouncements that make that agencies capacity for objectivity severely suspect; see "FTC Disapproves of 'Pay-for-Delay' Drug Deals"), whether the agreements pose actual harm to the public can provide the only justified grounds for preventing private parties from resolving litigation in a way that best satisfies their interests while safeguarding the public's interest in lower drug costs.

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