Source: https://www.patentdocs.org/2009/05/index.html
Timestamp: 2019-04-18 10:31:54+00:00

Document:
Stiefel Laboratories Inc. v. KV Pharmaceutical Co.
Infringement of U.S. Patent No. 5,466,445 ("Topical Compositions Containing Bensoyl Peroxide and Clindamycin and Method of Use Thereof," issued November 14, 1995) following a Paragraph IV certification as part of KV's filing of an ANDA to manufacture a generic version of Stiefel's Duac® Topical Gel (clindamycin phosphate/benzoyl peroxide topical gel, used to treat acne). View the complaint here.
Declaratory judgment of invalidity and non-infringement of U.S. Patent No. 7,297,346 ("Pharmaceutical Formulations of Modafinil," issued November 20, 2007) so the FDA can provide Apotex with approval to market a generic version of Cephalon's Provigil® (modafinil, used to improve wakefulness in adults who experience excessive sleepiness due to one of the following diagnosed sleep disorders: obstructive sleep apnea, shift work sleep disorder, or narcolepsy). View the complaint here.
Infringement of U.S. Patent No. 6,677,358 ("NIDDM Regimen," issued January 13, 2004) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Novo Nordisk's Prandin® (repaglinide, used to treat non-insulin dependent diabetes mellitus in combination with metformin). View the complaint here.
E8 Pharmaceuticals LLC v. Navigenics, Inc.
Infringement of U.S. Patent No. 6,703,228 ("Methods and Products Related to Genotyping and DNA Analysis," issued March 9, 2004) based on Navigenics' providing and selling genetic counseling services that use certain GeneChip® products manufactured by Affymetrix, Inc. View the complaint here.
• When is a patent a "patent" under the statute?
• What have they done to 102(e)?
• Impact of proper/improper benefit claims on: a) prior art date of a reference, and b) effective filing date of the application being examined.
A. "Public knowledge" vs. "public use," "in this country"
B. 102(c) & (d): Abandonment and the "four steps"
A program schedule and list of speakers for the New York Patent Law Institute can be found here, and a program schedule and list of speakers for the San Franscisco Patent Law Institute can be found here.
The registration fee for the conference is $1,495. Those interested in registering for the conference can do so here (New York) or here (San Francisco).
• After the Markman hearing -- effect on further trial proceedings.
A program schedule and list of speakers for the seminar can be found here. The registration fee for the conference is $1,495. Those interested in registering for the New York seminar can do so here; those interested in registering for the Groupcasts can do so here (New Brunswick), here (Philadelphia) or here (Pittsburgh).
Last week, Biogen Idec sponsored a "Super Session" at the BIO 2009 International Conference entitled "Weathering the Perfect Storm of Financial Distress and Political Pressure." The session was moderated by Stephen Sands, Lazard Freres & Co., for a panel consisting of Broderick D. Johnson, Bryan Cave; Scott Gottlieb M.D., a senior fellow at the American Enterprise Institute; Vaughn Kailian, MPM Capital LLP; and David Pyott, Chairman and CEO of Allergan, Inc.
Mr. Sands echoed the pessimism over the financial state of the biotech/pharma sector voiced by Steve Burrill in his State of the Industry address at BIO (see "Docs at BIO: Steve Burrill's State of the Biotechnology Industry Report 2009"). Mr. Sands invoked the Chinese curse that we live in "interesting times" and a "very difficult environment," including uncertainties in intellectual property protection. He noted that the economic crisis is coincident with traditional pharmaceutical companies being expected to lose exclusivity for 40% of their proprietary compounds over the next five years as patent protection expires, and that overall, the percentage of branded drugs "on-patent" will fall from 80% to 20%. He said that in his view there are four fundamental principles industry participants must keep in mind: continuing to innovate for unmet medical needs, advancing pharmaceutical pipelines, demonstrating product efficacy, and providing investors with attractive returns.
None of these goals will be easy in the current capital climate, however, according to Mr. Sands, because the capital markets have become "fairly Darwinian." While it is true that the biotech sector has outperformed the market during the downturn (most major stock indices are down 30% while biotech is "only" down 15%), the effects on different biotechnology companies are strongly related to their market capitalization. Large-cap biotech companies are down as much as most other major industries, Mr. Sands said, but biotech companies with market capitalization between $300 million and $2 billion are actually up significantly. He characterized these companies as those that had gotten out of the general morass and have a successful product generating revenue. In contrast, biotech companies with market caps of less than $300 million, constituting 75% of the industry (with 50% having less than $100 million in market capitalization), are in trouble. Since the beginning of the year, 25 biotech companies have declared bankruptcy, a rate that Mr. Sands noted he had not seen in more than 20 years in the industry. He described the state of the industry as being "fragmented" on the low end, with a few "substantial" companies that are "sustainable" at the top end of the market capitalization spectrum.
Paradoxically, Mr. Sands noted that, until 18 months ago, the biotech sector had raised more money each year since 2000 than it did in the previous decade, and that investment was strong up until 2008. However, since last fall, this trend has reversed in view of the tightening capital markets: Mr. Sands used as an example the fact that there have been no initial public offerings (IPOs) since November 2008, and that even last September, investors polled by his company believed that the market would "stay the same or get worse." In the private markets, venture capital investment has dropped by about 50% in the first quarter of 2009, Mr. Sands reported, with 700-800 companies "starved for capital." Sixty percent of venture capitalists report that they are changing how they make investments, with half of them looking to invest in companies that will be sold before they go public. Mr. Sands also mentioned venture investment in public entity funds -- VIPEs -- had amassed capital but deployed little of it, in view of the distress being felt by most public biotech companies. At least one reason that VCs are standing on the sidelines recently is the history of how investment in biotech companies, in the form of IPOs, has worked out in the recent past. Citing the period between 2003-2009, Mr. Sands stated that 76% of the 82 biotech companies with IPOs during that time were valued under their IPO offering price, 75% were below $200 million in market value and 50% had less than two years cash on hand to fund their businesses. The result, according to Mr. Sands, is that these companies have had to return to the capital markets to raise money over and above their IPOs, further diluting the value of the VCs investment.
In answering the question, "What will it take for the biotech sector to come back," Mr. Sands asserted that market stability, combined with a rally in small cap stocks, is what's required, but that any recovery is at least six months away. When investors return to biotech, Mr. Sands thinks they can be expected to demand strong management and strong data, and to avoid investing in companies valued at less than $100-150 million. In addition, investors will be looking to manage risk by investing in "late stage" biotech companies according to Mr. Sands.
So, how to weather the perfect storm? Mr. Sands suggested that deal-making with traditional pharmaceutical companies should not be expected: although there have been 25-30 merger and acquisition deals per year recently, six of the biggest traditional pharmaceutical companies are involved in their own M&A activities, which are distracting them (generally) from reaching out to acquire biotechnology companies. In addition, Mr. Sands cited the increased activities in alliances and partnering, which are on a pace for about 100 deals this year. Mr. Sands put this number in perspective, by noting that in an industry sector with 1,000 companies, 100 deals involves less than 1 in 10 companies. Industry opinion on worldwide (i.e., overseas) alliances is evenly split between those who think it will create value and those who believe it diminishes value. However, if the investment is from outside the U.S., 80% think it will create value, reflecting desire for "undiluted" capital investment, according to Mr. Sands. However, Mr. Sands also mentioned that for investors, partnering is less a validation of a company's worth than it is an admission that a buyer cannot be found for the company.
Mr. Sands did leave this portion of the program on a positive note, however. He mentioned that 20-30% of the top 100 products in development are biotech products, illustrating the continuing truth that biotech is a source of innovation in the sector. His final thought was that a strong, healthy biotech sector was in the best interests of biotechnology, the pharmaceutical industry, and the country.
The remainder of the discussion was a free-flowing give-and-take between the members of the panel. Mr. Kailian began this part of the talk by questioning whether statements by VCs and traditional pharma companies might not be posturing and a negotiating position intended to drive down the price of investing or acquiring biotech companies caught in the capital market squeeze. He said that this is a cycle like other ones, and that while he expects the industry to come out the other side, in the meantime the way to survive is with cash. Mr. Pyott (at left) agreed that a company's focus should be to have sufficient cash on hand to weather the next 18-24 months, and that his job at Allergan was to try to manage the timing of an unpredictable product pipeline, since it cannot be expected that everything in a company's pipeline will fulfill all its promises. He characterized this as a "balancing" of high-risk and low-risk projects, across Allergan's diversified investment portfolio.
Mr. Johnson (at right) addressed health care reform and the effect of reform on the biotechnology industry. First, he said that he believed that President Obama had "staked the success of his first term" on healthcare reform presented as a comprehensive whole rather than piecemeal. He says that he expects healthcare reform to pass in Congress either with or without bipartisan support (he believes bipartisan support is a goal the administration should pursue zealously), and that the success of BIO's members companies depends on the success of healthcare reform. Mr. Sands asked him whether healthcare reform is in trouble since it is not moving forward, and Mr. Johnson said that while there were "monumental political challenges" to enacting reform, "the die is cast" for this administration.
Dr. Gottlieb (at left) noted that one reason why healthcare reform might not be so certain is its price -- he said there are estimates in Congress (from the Congressional Budget Office) that reform may cost $1.5-2 trillion dollars. In response to Mr. Sands comment that while reform might result in a greater patient (read: customer) population, there would also be pressure to reduce costs, Dr. Gottlieb noted that innovator companies would not be so focused on bigger markets per se. What does concern him, however, is the likelihood, or perhaps at least the propensity, that the Centers for Medicare and Medicaid Services (CMS) would expand its role under healthcare reform from merely being a healthcare cost payor to asserting its own clinical judgment on care decisions (something Dr. Gottlieb stated CMS did not have the trained staff to do properly). He said that instances of such CMS attempts to expand its authority were not new, and that the agency had previously tried to introduce concepts of functional equivalence for drugs, had tried to mandate the use of only the least costly alternative, drug and had taken the position that drugs approved by the FDA under accelerated approval regimes were not FDA-approved drugs and thus were not eligible for reimbursement. In addition to not having the clinical staff to make these decisions, Dr. Gottlieb also stated that the process for having the agency properly determine such questions was "opaque." He also accused CMS of being one of the reasons for healthcare sector inflation, due to how the agency reimbursed doctors and other medical personnel.
Mr. Johnson countered that the expense that would be incurred by not enacting healthcare reform was much greater than reform, and in addressing Mr. Kailian's (at right) earlier comment that BIO did not have a seat at the table at the White House when reform was discussed, reassured the audience that BIO was well-represented in the Senate committees and councils on these issues. (Mr. Kailian mentioned that not being invited to the White House might not be such a bad thing, since in his view most of the industry groups that had visited had later been "demonized.") He also said that the key even under reform will be innovation, because while reform puts at risk 3rd and 4th generation drugs produced by traditional pharmaceutical companies to generate revenue, truly innovative drugs will always get reimbursement. The biotech industry is in a perfect position to use its innovation to address unmet medical needs, he said.
Turning to follow-on biologics (FOBs) or biosimilars, Dr. Gottlieb stated that there will be legislation "in the near future" but that this had not advanced in Congress because Rep. Waxman could not move his own bill out of (his own) committee, and that there was a competing bill by Rep. Eschoo that had greater support in Congress. He also said that delaying passage of biogenerics legislation was beneficial because it increased the number of years that Epogen would be off-patent and would improve the estimates from the CBO. He also said that he expects the FDA to more slowly in approving FOBs and that they will not be approved as true "biogenerics," at least in part because the FDA would not approve them as being interchangeable with the innovator biologic drug. However, he cautioned that CMS could attempt to classify FOBs under the same reimbursement code as the innovator and in this way try to treat these drugs as generics despite FDA's determination to the contrary. He reminded the audience that CMS had tried to exercise this authority on other occasions, and that the chief counsel prevented it. Since neither statute nor regulation prevents it, a new chief counsel at the FDA could change the policy "by fiat," according to Dr. Gottlieb, or Congress could expressly grant that power to the agency.
Dr. Gottlieb went on to say that he expects that, with the exception of peptides or short proteins, FDA will require Phase III clinical trials and "switching studies" in anticipation of the likelihood that in practice an innovator biologic drug and an FOB would be switched (inadvertently, of necessity or otherwise). He said that the expectation in the industry is that traditional generics companies like Mylan and Dr. Reddy's would not be involved in FOBs, and that companies like J&J, Biogen, Genentech, and others would be. Mr. Johnson agreed that FOB legislation had stalled in Congress because Rep. Waxman cannot get the support he needs, even in his own committee, due to greater support for Rep. Eschoo's bill.
Mr. Kailian made one statement about FOB legislation, and that was that he believed that Rep. Waxman's five year data exclusivity proposal was "dead in the water," stating that in his opinion "rationality will prevail."
Mr. Johnson brought up patent reform legislation, which he believes will go forward. He said BIO was well positioned as a resource on this bill, being a "cool head" on the value of reform but that the mantra of "innovation must be supported" should be stressed.
The panel also took questions from the audience, Mr. Kailian garnering a chuckle with his response to the question of how to weather the "perfect storm." "Cash," he said, "you can hide in a bucket of cash for a long time."
In a Breakout Session entitled "The Narrowing Scope of Biotech Patent Claims: What Does It Mean for the Industry?" at last week's BIO International Convention, a panel consisting of Anne Dollard, the Deputy General Counsel and Chief Patent Counsel for Takeda San Francisco; Thomas Kim, Senior Director of Intellectual Property for VGX Pharmaceuticals, Inc.; Jane Gunnison of Ropes & Gray LLP; John Tessensohn of Shusaku Yamamoto Patent Law Offices; and Dr. Hans-Rainer Jaenichen of Vossius & Partner, discussed how practices in the United States, Europe, and Japan have led to a narrowing of biotech patent claim scope. The panel was moderated by James Haley of Ropes & Gray LLP and Len Smith, Senior Intellectual Property Counsel for Novo Nordisk, Inc.
Ms. Dollard began the presentation by discussing how the statutory subject matter requirement of 35 U.S.C. § 101 has recently moved to the forefront of biotech patenting. She reviewed the impact of Laboratory Corp. v. Metabolite Laboratories, Inc. (LabCorp), In re Bilski, Classen Immunotherapies, Inc. v. Biogen Idec, and the pending appeal in Prometheus v. Mayo on medical diagnostic claims, and then provided a review of Association for Molecular Pathology v. U.S. Patent and Trademark Office, a recently-filed case concerning gene patents assigned to Myriad Genetics. Speaking of the ACLU case, Ms. Dollard stated that the clear intent of the plaintiffs was "to take down patents on human genes." As for Bilski, Ms. Dollard compared the case with KSR International Co. v. Teleflex Inc., "where we thought the world was going to end," and stated that the impact of Bilski could ultimately be less significant than first thought.
Mr. Kim followed with a discussion of recent obviousness caselaw. After reviewing KSR International Co. v. Teleflex Inc. and Takeda Chemical Industries, Ltd. v. Alphapharm Pty., Ltd., Mr. Kim addressed two recent obviousness Federal Circuit decisions: Procter & Gamble Co. v. Teva Pharmaceuticals USA, Inc. and In re Kubin. With respect to the future of biotech claims in a post-KSR world, he cautioned that trouble may lie ahead since biotechnology was becoming more predictable. Mr. Kim also noted that while applicants might be able to point to secondary considerations of nonobviousness, such considerations would be unlikely to trump a strong case of obviousness.
Using antibodies as a paradigm, Ms. Gunnison next addressed the issue of written description. She first reviewed Examples 13 and 14 of the Written Description Training Materials issued by the Patent Office just over a year ago, and then turned to a recent Board decision (Ex parte Xia), where the Board determined that a description of an epitope was not required for compliance with the written description requirement. Ms. Gunnison then discussed Chiron Corp. v. Genentech, Inc., where the Federal Circuit determined that an antibody format that did not exist at the time of filing could not be adequately described. She concluded her presentation by observing that changes in the written description standard have been costly for applicants. Touching on a theme raised earlier by Mr. Kim, Ms. Gunnison responded to a question by stating that we could be reaching a point where monoclonal antibodies to known sequences would be considered obvious, but that this would depend on whether antibodies were viewed as chemical compounds (requiring application of structural nonobviousness caselaw) or whether Kubin would prevail.
The last two panelists, Mr. Tessensohn and Dr. Jaenichen provided informative presentations regarding the state of biotech practice in Japan and Europe, respectively. Mr. Tessensohn began his presentation by focusing on recent acquisitions by Japanese biotech companies, noting that these companies were facing the same issues (i.e., "anemic pipelines and expiring patents") that many U.S. biotech companies are currently facing. Turning to patent practice in Japan, Mr. Tessensohn argued that the environment was not "hostile," but acknowledged that patentability standards were evolving and becoming more narrow in Japan (he noted that he was "not here to be a JPO apologist, but you have to know what you're dealing with"). With respect to written description and enablement, he stated that the Japan Patent Office (JPO) required disclosure of pharmacological test results in the application, adding that if such results were submitted after filing that was "too bad." As for those who would suggest that the JPO was applying a heavier hand with regard to non-Japanese applicants, Mr. Tessensohn humorously contended that there was "no grand conspiracy theory" at work, and that the tough standards in Japan were affecting U.S. companies (e.g., Pfizer) and Japanese companies (e.g., Astellas) alike. And his solution for dealing with these tough standards was simple: "crank out as much disclosure as possible." He added that applicants could not go wrong by following his "ABCD" rule when drafting applications, and remember to provide data that is All-inclusive, Broad, Comprehensive, and Detailed. Mr. Tessensohn observed that it was best to avoid inferences and prophetic examples in favor of lots of data and working examples. On the issue of obviousness, he noted that many Japanese IP High Court decisions have been decided on an "obvious to try" standard, which is alive and well in Japan, but that the "silver bullet" for dealing with obviousness rejections in Japan was to show unexpected results (which can be submitted after filing in Japan).
The session's last panelist, Dr. Jaenichen, began by discussing a few favorable differences between European and U.S. patent practice. For example, he noted that in Europe, claims to hybridization variants are readily obtainable, provided that the claims include a functional limitation. He stated that the same is also true for claims reciting percent identity, adding that a functional limitation is not required for claims to allelic variants. Dr. Jaenichen also contended that the sequencing of the human genome did not mean that human genomics claims were all but dead, as there would be continue to be avenues open for genomics claiming (e.g., splice variants). With respect to the European Patent Office's recent decision to crack down on "abuses" related to divisional filings, Dr. Jaenichen argued that only 0.35% of all applications were considered to be abuses of the system, and thus concluded that the EPO's new rules regarding divisional practice were simply a money-making device.
Teva Pharmaceutical Industries Ltd. et al. v. Amgen Inc.
Infringement of U.S. Patent No. 7,449,603 ("Process for the Preparation of Cinacalcet Base," issued November 11, 2008) based on Amgen's manufacture and sale of its Sensipar® (cinacalcet hydrochloride, used to treat secondary hyperparathyroidism in patients on dialysis, and hypercalcemia in patients with parathyroid carcinoma). View the complaint here.
Takeda Pharmaceutical Co. et al. v. Teva Pharmaceutical Industries, Ltd. et al.
Infringement of U.S. Patent Nos. 5,965,584 ("Pharmaceutical Composition," issued October 12, 1999), 6,329,404 (same title, issued December 11, 2001), 6,166,043 (same title, issued December 26, 2000), 6,172,090 (same title, issued January 9, 2001), 6,211,205 (same title, issued April 3, 2001), 6,271,243 (same title, issued August 7, 2001), and 6,303,640 (same title, issued October 16, 2001) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Takeda's Actoplus MET® (pioglitazone hydrochloride and metformin, used to treat type II diabetes). View the complaint here.
CIMA Labs Inc. et al. v. Barr Laboratories Inc. et al.
Infringement of U.S. Patent Nos. 6,024,981 ("Rapidly Dissolving Robust Damage Form," issued February 15, 2000) and 6,221,392 (same title, issued April 24, 2001), licensed to Azur Pharma, following a Paragraph IV certification as part of Barr's filing of an ANDA to manufacture a generic version of Azur's FazaClo® (clozapine, used to treat schizophrenia). View the compliant here.
TET Systems Holding GmBH & Co. KG v. Pharmasset, Inc.
Infringement of U.S. Patent No. 5,464,758 ("Tight Control of Gene Expression in Eucaryotic Cells by Tetracycline-Responsive Promoters," issued November 7, 1995) based on Pharmasset's development of pharmaceutical compositions through the use of the plaintiff's TET System. View the complaint here.
Last week, Eli Lilly & Co. sponsored a "Super Session" at the BIO 2009 International Conference entitled "Biotechnology Intellectual Property at the Crossroads." The session was moderated by John Lechleiter, President and Chief Executive Officer at Lilly, for a panel consisting of Robert Armitage, Lilly's General Counsel; Gregory Glover of the Pharmaceutical Law Group; and H. Thomas Watkins, President and Chief Executive Officer of Human Genome Sciences, Inc.
In his opening remarks, Dr. Lechleiter (at left) called this a "historic moment" for the biotechnology and pharmaceutical industries, noting that the swine flu "crisis" might be focusing the public on the importance to them personally of the research done by these industries. He reminded the audience that new drugs for fighting old diseases had played a major role in increasing life expectancy in the last century (from 47 years to 78 years) and that two proposals in Congress -- patent "reform" and follow-on biologics legislation -- put intellectual property and companies that relied on it under threat. And he reminded the audience of Eli Lilly's credibility in the biotechnology area, from its introduction of human insulin in the 1980's to the fact that 40% of the drugs in the company's pipeline are biologics or the products of biotechnology, and that Lilly's sales of such drugs made it the fifth largest biotechnology company in the country.
Dr. Watkins spoke next and provided a biotechnology company's perspective. He recounted briefly HGS's involvement in the Human Genome Project and patenting numerous human genes, and how over the past 10 years or so the company has evolved into a new drug development company. In these efforts, he said patents were "critical" and "essential" in making business decisions, based in part on the great costs of developing new drugs. He highlighted the importance of market exclusivity and freedom to operate as being a major (but not the only) components of this analysis, and said that his scientists and researchers worked "hand in glove" in protecting HGS inventions through patenting.
• Most conventional drugs are small molecules with defined structures that can be easily copied once the structure is known; consequently, they are not dependent on production process.
• Biologics, on the other hand, are very large molecules with less defined structures, due to, inter alia, the effects of post-translational modifications such as glycosylation. These differences make biologic drugs much more complicated and "nearly impossible to copy" exactly. Moreover, the nature and properties of biologic drugs are very dependent on manufacturing process, introducing another level of difficulty for copying.
Turning to the current proposals for follow-on biologics (FOB) legislation, he noted three specific provisions and the differences regarding these provisions in the three FOB bills introduced in Congress to date: H.R. 1548 (Congresswoman Eschoo, principle sponsor), H.R. 1427 (Congressman Waxman, principle sponsor), and S. 726 (Senator Schumer, principle sponsor). These provisions are first, what kinds of products will be considered "biosimilar"; second, are the biosimilar and innovator biologic interchangeable"; and third, what is the period of data exclusivity? What constitutes a "biosimilar" can differ widely in definition, accommodating differences in primary amino acid sequence, post-translational modifications, level of impurities, the mechanism of action, and the mode of administration. The goal is to have the biosimilar have no clinically-meaningful differences in safety, purity, or potency, but the complexities of biologic drugs leave significant room for variability in FOBs that may be considered "biosimilar."
With regard to interchangeability, Dr. Glover said that the goal is that there would be no increased risk of an adverse event if the biosimilar is substituted for the innovator biologic drug, or if the patient is switched between the two versions (this property of small molecule generic drugs is the basis for pharmacies providing generic versions of drugs unless the doctor affirmatively contravenes them, rather than having to obtain the physician's permission to substitute.) Each of the bills has provisions for assessing whether the FOB is interchangeable with the innovator, but the complexities of these molecules increases the difficulties of achieving the interchangeability goal. Finally, Dr. Glover mentioned the differing periods of data exclusivity in the bills, ranging from 14 years in the Eschoo bill to 5 years in the Waxman bill.
These considerations led to a discussion of what Dr. Glover termed the RS/PS anomaly, i.e., the difference between the scope of regulatory protection (such as data exclusivity) and the scope of patent protection available for small molecule drugs as compared with biologics drugs. For small molecules, RS and PS "align," according to Dr. Glover, whereas for FOBs they do not. He illustrated this situation by reviewing the periods of data exclusivity for small molecule drugs, where new chemical entities (NCEs) have a 5-year period in which the FDA will not accept an application for generic version of an approved drug, coupled with the 30-month stay in approving a generic drug that is imposed when an innovator files suit in response to a Paragraph IV certification from the generic drugmaker than an Orange Book-listed patent on the innovator's approved drug is invalid or unenforceable.
These timelines line up well with the timeline for a new drug according to Dr. Glover's hypothetical. An innovator company files a provisional patent application followed by a utility application that issues within 3 years. The company also filed an IND followed by a NDA, which is approved by the FDA within 5 years of the IND filing date. For an NCE, the Hatch-Waxman Act provides 5 years of data protection, independent of patent protection. In addition, the innovator has up to 5 years of patent term extension.
Moving to follow-on biologics, however, the situation is very different. First, the regulatory standard is much more loosely applied for FOBs, since they are not required to be identical; the regulatory standard for small molecules is "sameness" whereas the standard for FOBs is "similarity," as a result of the complexities Dr. Glover discussed earlier in his talk. This results in the regulatory scope being restricted to about the same extent as the patent scope for traditional small molecule drugs: the innovator's safety and efficacy data available to the generic drugmaker is restricted to molecules that are substantially identical; similarly, the innovator's patent protection is limited to substantially identical molecules. Thus, Dr. Glover showed that the extent of regulatory protection (RS) was about equal to the extent of patent protection (PS) for small molecule drugs.
Dr. Glover diagramed the concrete consequences of this anomaly, and in doing so showed dramatically the significance of data exclusivity periods as proposed in the various competing FOB bills in Congress. Because FOB legislation permits biosimilar as well as bioidentical compounds to obtain regulatory approval, the possibility exists for a generic competitor to use the innovator's safety and efficacy data to obtain approval of a biosimilar drug that does not infringe the innovator's patent protection.
While Mr. Armitage mentioned that there were "dozens" of views on how to reform the patent system, he said that for BIO member companies the choice was between "putting a stake in the ground" and "putting a stake through the heart of the patent system" -- a position he ascribes to the Coalition for Patent Fairness and their member companies and organizations. In making this point he named names, identifying universities, labor unions, the National Association of Manufacturers, the Coalition for 21st Century Patent Reform, BIO, and PhRMA as favoring "stake in the ground" patent reform, and various CPF groups, including the Business Software Alliance, the Financial Services Roundtable, and dozens of "high tech" companies as favoring "stake in the heart" reform.
He stressed the concept of balance of competing interests, illustrated by the 2004 NAS report. He characterized the balance advocated by the Academy as requiring greater harmonization of patent law (such as adopting a "first to file" system), greater transparency (patent application publication at 18 months), increased public participation (wherein the public could provide prior art to an examiner during prosecution and have an avenue for challenging a patent shortly after grant), and better and more consistent funding of the Patent Office. With regard to litigation, Mr. Armitage stated that the Academy did not find fault in that there was an advantage for either patentees or accused infringers, but that there were too many subjective aspects (such as best mode and willfulness provisions in the law) that contributed to the expense and complexity of patent litigation. These are the kinds of provisions that the Coalition for 21st Century Patent Reform argue should be passed into law.
The agenda of the CPF is quite different, Mr. Armitage said -- this group argues that the issues are all related to patent litigation and abuses of such litigation. Their most sought-after goal is to change how compensatory patent damages are calculated by using an apportionment calculus, the consequences of which Mr. Armitage illustrated using Bell's telephone patent (something he said the CPF uses as one of their own examples.) In looking at the damages that should have been available to Bell if his patent were infringed, the CPF would "subtract" the components of the device that were "old" in the art, such as wires, and amplifiers, and speakers, and microphones. Having done that, Mr. Armitage characterized the CPF's position to be that there wouldn't be much left in damages for Mr. Bell, since after all he hadn't contributed much. (Mr. Armitage noted that this position has been "widely condemned," specifically by labor unions that recognize that maintaining a strong patent system is "a jobs issue.") In addition to the apportionment scheme for damages, Mr. Armitage mentioned that the CPF wanted to weaken injunctions (something accomplished for them by eBay v. MercExchange) and limit the availability of enhanced damages for willful infringement (something the Federal Circuit has done by the In re Seagate decision).
In his final remarks on patent reform, Mr. Armitage voiced the hope that the bill recently voted out of the Judiciary Committee (S. 515) on a 15-4 vote might be the "end of the beginning" of Congressional patent reform, and mentioned that even the CPF (whose concerns are "not illegitimate") have reacted favorably to the bill, giving it "high marks." The views of the Coalition for 21st Century Patent Reform on the bill can be found on the group's website.
Turning to follow-on biologics legislation, Mr. Armitage posed the question of whether reformed patent protection could be "enough" to promote and protect innovation in the biotech and pharma industries. Without expressly answering this question in the negative, he pointed out that data protection (a carefully considered semantic distinction from "data exclusivity," as it turned out) was "the big enchilada," characterizing these provisions as providing the term where a copier cannot copy the innovator "for free." The "exclusivity" in "data exclusivity" is not the same as the exclusivity provided by patent protection for example, Mr. Armitage explained. Nothing in the proposals for data exclusivity would prevent or preclude a generic competitor from "facing the same challenges" that the innovator did, and incurring the same costs. If a generic (or FOB) competitor is willing to incur these costs, then they can show the FDA that their biosimilar products are safe and efficacious just as the innovator did.
As for the appropriate term for data exclusivity, Mr. Armitage cited a report by Dr. Grabowski that showed that a term of between 12.8 and 16.2 years is needed for an innovator drug company to earn back the investment required to bring a new drug to market. Like Dr. Glover, Mr. Armitage aligned this term with the "modern patent term" -- 20 years from filing + any patent term extension available due to regulatory delay -- and found that most drug patents will have a term of from 8-12 years, and that only between one-third and 40% of drug patents will have 14 years in their term. Using these statistics, Mr. Armitage argued that patent protection would not be enough to protect innovation in the industry, a problem he characterized as involving the "survivability" of the industry. He said that this illustrated "the real problem" that the patent system was not designed to be the sole means for protecting medicines from copying. This is because there was no direct correlation between drugs that fulfilled the requirements for patentability -- new, useful and non-obvious -- and drugs that were safe and efficacious. There were many patentable molecules that could not be approved by the FDA, and many FDA-approved medicines that could not satisfy patentability requirements. Indeed, he said, there were many biotechnology-based medicines that had come to market with no patent protection at all. This model was viable so long as there were no FOB provisions in the law.
The final topic Mr. Armitage raised with regard to FOBs was what he called the "unkindest part of all" -- the "perversity" that results in medicines that take the longest time to get to market have the shortest patent term. But these drugs are just the ones that are likely to be pioneering or to have novel mechanisms of action or address the most intractable diseases (such as Alzheimer's disease). He used the example of a medicine for a toothache as one where the clinical trials would take "a couple of days" and that would encounter the fewest hurdles for FDA approval. In contrast, Mr. Armitage said he "would be a fool" to try to develop a drug for Alzheimer's disease. As a consequence of this situation, Mr. Armitage contended that it was just those drugs most needed by the public -- drugs for chronic diseases or disease prevention -- that have been disfavored under the current patent regime, and that would be most negatively impacted by an insufficient period of data exclusivity. He also mentioned that early generic entry discourages after-market research, for example to identify additional cancer targets for an anticancer drug, or to identify patient populations most (or least) responsive to a drug.
Mr. Armitage finished his talk with a plea for audience members to "get involved" in the debate, and remind their representatives of the consequences of making the wrong decisions regarding both patent reform and follow-on biologics legislation.
In a Breakout Session held last Wednesday at BIO 2009, a panel consisting of David Bassett, a Partner at WilmerHale; Genia Long, Managing Principal at Analysis Group; David Ridley, Assistant Professor of Business Administration at the Fuqua School of Business at Duke University; David Korn, Sr. Assistant General Counsel for the Pharmaceutical Researchers and manufacturers of America (PhRMA); and DR. Maggie Shafmater, Senior Vice President and Chief Patent Counsel for Genzyme Corp., presented a session entitled: "Shaping Follow-on Biologics Policy: The Interplay of Data Exclusivity, Patient Safety and Patents."
While the session did not reveal much in the way of new information or insights to those familiar with follow-on biologics legislation and its surrounding issues, it did provide a comprehensive and well-organized summary of the state of follow-on biologics policy, including the current state of follow-on legislation and the special challenges presented by biosimilars.
The session began with a discussion by Mr. Bassett of the current situation with biologics, which were noted to make up a rapidly growing area, to have provided breakthrough treatments in cancer and other diseases, and to possess unique scientific characteristics that make the challenge of bringing them to market more significant than small molecule drugs. Currently, however, there is no regulatory pathway for follow-on biologics. The key questions regarding follow-on policy were stated to be: What clinical and other evidence is needed to establish similarity? What exclusivity is to be given to the innovator? What should the standard of interchangeability be? How should economic incentives for continuing innovation be set -- in other words, how should the need for innovation be balanced with the need for lower cost drugs?
Addressing the fundamental differences between biologics and small molecule drugs, Mr. Korn noted that all the issues surrounding follow-on policy proceed from the fact that unlike small molecule drugs, follow-on biologics are similar to, but not the same as, the innovator drug. Relative to small molecule drugs, biologics are different in composition, size, and structure, and have special manufacturing concerns (e.g., are more sensitive to temperature and shear forces) and clinical safety testing concerns (e.g., species specificity may limit the standard pre-clinical models typically used for safety testing). For these reasons, different scientific and regulatory standards should be used for their approval -- due to molecular similarity rather than identity, clinical trials are a must as are different names, for example.
Mr. Ridley addressed the issues of patient safety and efficacy, noting that concerns in this area center on having a clear regulatory pathway in place for new product categories distinct from small molecules, including a system for distinct labeling and naming, and adequate quality standards of pre-clinical and clinical testing requirements. To the latter concern, it was noted that the scope of pre-clinical and clinical requirements for safety and efficacy would necessarily include some case-by-case elements. Appropriate risk management plans and active pharmacovigilance are also key elements of the regulatory pathway.
Addressing the issue of data exclusivity, and the need to balance long-run innovation incentives with short-term cost savings from price competition, Ms. Long initiated the discussion by noting that patent protection and data exclusivity provide complimentary incentives. Data exclusivity, noted Ms. Long, prevents "free riding" on the investments necessary to conduct clinical studies and provides protection where short remaining patent terms following approval may be an issue, as well against design-arounds (a particular issue with follow-ons). The key question, however, is what the length of the exclusivity period should be. According to Ms. Long, there are two ways to view the exclusivity time-frame: 1) the "break even" point of view in which the balance between innovation costs and exclusivity is just over even, which translates to a 12-16 year period; and 2) a timeframe comparable to what small molecules experience, which is roughly a 12 year period.
Patent protection, noted Dr. Shafmater, provides incentives for innovation by protecting investments in technological improvements (versus data exclusivity, which only protects against others relying on one's clinical trial data), but patent rights are often narrow (e.g., to a specific sequence with a limited range of homology, or having a host cell limitation) leaving room for design-arounds. And over time, patent rights become less and less certain as the requirements of patent law (e.g., novelty and non-obviousness) change. In short, legislation will need to recognize that follow-ons are different, including from a patent protection perspective.
• Pathways for Approval: 1) K3 -- where the follow-on biologic and the reference product have highly similar molecular structural features; the follow-on is biosimilar to or interchangeable with the reference product; the two biologics use the same mechanism of action; the route of administration, dosage form and strength are the same; or 2) K4 -- if the follow-on doesn't meet the requirements for K3, safety, purity, and potency must be show.
• Data Exclusivity: only for products approved after the bill passes; 5 year period for the first "major substance"; 3 years if the "major substance" was previously approved and the product represents a significant therapeutic advance; 6 month extension for a significant therapeutic advance or a new patient population.
• Patent Provisions: innovator has no access to application for follow-on; follow-on applicant can request patent information from innovator at any time; failure of the innovator to timely identify patents in response to such a request results in forfeiture of the patent; failure of the innovator (or patent owner) to sue within 45 days of notice results in the inability to obtain an injunction against the follow-on applicant.
• Pathway for Approval: process will require a showing of biosimilarity to reference product via analytic, animal, clinical and immunogenicity studies (unless waived by FDA); the FDA is to determine the feasibility of demonstrating "interchangeabilty" before a biosimilar can approved as interchangeable with the reference biologic.
• Data Exclusivity: 12 year period; 2 year extension if a new indication is found within the first 8 years of licensure; 6 months additional for pediatric exclusivity; also includes an exclusivity period of 2 years for the follow-on applicant with an interchangeable biosimilar.
• Patent Provisions: only applies to patents expiring after the 12 year exclusivity period; the FDA will publish receipt of a follow-on application with 30 days with direct notice to the innovator; follow-on applicant will show application to innovator and the innovator will provide patent information; follow-on applicant can certify specific patents, which creates an artificial act of infringement, allowing courts to decide infringement issues before the follow-on goes to market; remedy in court is delayed approval of follow-on until after exclusivity period.
UPDATE: For those interested in obtaining a copy of the slides for the above presentation, they can be accessed here.
• Licensing vs. litigation: When you have a patent portfolio worthy of licensing, how do you determine the appropriate strategy to meet your business goals?
The agenda for the seminar can be found here. A complete brochure for the seminar, including an agenda, list of speakers, and registration form can be downloaded here.
The registration fee is $447.50 for students and new employees, $695.00 for government employees, or $895.00 for all other attendees. Those interested in registering for the seminar can do so here.
The full program schedule for the Annual Meeting can be found here. The registration fee for individual CLE programs ranges from $35 for government lawyers and judges to $75 for ABA members (students will be admitted to all CLE programs at no additional charge). An All-Access CLE Badge (which can be used for admittance to governance meetings, non-CLE programs and all CLE programs) ranges from for $495 (ABA members registering before May 29, 2009) to $875 (non-ABA members). Those interested in registering for the Annual Meeting can do so here.
Your article inaccurately represented the gist of my comments at BIO. To be accurate, my position is that the success of the pharmaceutical and biotech industries are directly linked to the success of the US Patent Office. I said it is not just up to Congress, the courts or the new Commissioner to fix the Patent Office issues, it is up to all of us as stakeholders to play an active role to make sure the PTO's problems are solved. I concluded the session by saying we should all put the past frustrations and rhetoric behind us and fully support the new PTO Commissioner with a new spirit of cooperation.
Gene Quinn's articles in IPwatchdog.com on the new attitude of Dep. Commissioner Focarino are refreshing and show the PTO is trying to go in the right direction. We want to work closely with the new administration to accomplish these goals.
The comment about the potential "train wreck" referred to the statistics showing a decreasing allowance rate and decreasing filing rate (which leads to a smaller PTO budget) in combination with an increasing backlog of applications. This is a matter all of us must proactively propose solutions for.
I am of the opinion that the PTO fee sheet can be used to incentivize behavior and is a better means to regulate filings, submissions and claim presentation than absolute restrictions. A structure can be implemented that provides relief for small entities and patent applicants for whom this presents a hardship.
I would appreciate it if you post this response.
Our goal in reporting on the BIO session was to provide a fair summary of all of the panelists' comments for Patent Docs readers unable to attend the session. To the extent that the report did not accomplish this goal, the publication of Ms. Knowles' e-mail should help clarify her intended message. In addition, as regular readers are well aware, we have previously expressed the opinion that the patent community owes a debt of gratitude to GSK for leading the challenge (along with Dr. Tafas) against the continuation and claims rules (and, as a result, for perhaps playing a role in the USPTO's decision to put the IDS, Markush, and appeals rules packages on hold). Thus, in publishing our prior report, there was no intent to diminish these important efforts (see links below).
Last week, the U.S. District Court for the Southern District of California refused to dismiss an amended complaint filed by Bavarian Nordic A/S alleging that Oxford Biomedica infringes Bavarian Nordic's U.S. Patent Nos. 6,761,893, 6,913,752, 7,335,364, and 7,459,270 with respect to Oxford Biomedica's experimental cancer vaccine TroVax® (see "Court Report," July 6, 2008).
In its attempt to have the suit dismissed, Oxford claimed that Bavarian Nordic's action was premature, as TroVax® was still in the development phase. However, Bavarian Nordic argued that Oxford should be denied safe harbor because Oxford had already commercialized the TroVax® vaccine and entered into a $700 millon contract with Sanofi. The District Court agreed with Bavarian Nordic's arguments, ruling that Bavarian Nordic may continue its suit against Oxford.
Teva Pharmaceuticals Industries Ltd. announced the settlement of its patent infringement suit with Zydus Pharmaceuticals Inc. and Cadila Healthcare Ltd. concerning the process of making the key ingredient in Coreg®, a beta blocker used to treat high blood pressure. Teva launched lawsuits against Zydus and Cadila in 2007 asserting infringement of patents covering the preparation of carvedilol, Coreg's® active ingredient (see "Court Report," July 1, 2007). Coreg® is currently sold by GlaxoSmithKline PLC. The patents-in-suit, U.S. Patent Nos. 7,056,942, 6,710,184, 6,699,997, and 7,126,008, had all been assigned to Teva. In October, Teva learned that Zydus had submitted a new drug master file to the FDA that disclosed a new process for the manufacture of carvedilol.
After filing suit, Teva reviewed the FDA filing and withdrew the infringement suit as it pertained to the '184 and '942 patents. Teva also provided Zydus with a covenant not to sue regarding the two patents. The U.S. District Court for the District of New Jersey signed off on the dismissal last week. Details of the settlement have not been released.
Last week, the U.S. District Court for the Northern District of Illinois ruled that KGK Synergize Inc. could not avoid a determination of validity and infringement on the basis that the co-owner of the patent-in-suit is the United States government. SourceOne Global Partners LLC, a former licensee of KGK, sued KGK in December 2008 after KGK sent a cease and desist letter ordering SourceOne to halt manufacturing and marketing of a cholesterol-reducing nutritional supplement. In 2003, KGK and SourceOne entered into a licensing agreement providing SourceOne with the right to manufacture, distribute, and sell Sytrinol, a nutritional supplement used to lower cholesterol.
As part of its lawsuit, SourceOne sought a declaratory judgment of noninfringement or invalidity of a patent co-owned by the United States government (U.S. Patent No. 6,987,125) as well as two other patents not co-owned by the government. KGK argued that, because the United States was a co-owner of one of the patents-in-suit, the suits were immune from suit, thereby depriving the District Court of subject matter jurisdiction. In the alternative, KGK argued that the government was a required party for the suit due to its co-ownership of the '125 patent.
The District Court, however, disagreed with KGK's interpretation, holding that the government's co-ownership and inability to be joined as a defendant did not divest the Court of subject matter jurisdiction. Furthermore, the District Court concluded that SourceOne had standing to bring suit. In his ruling, Magistrate Judge Schenkier stated that he would not allow KGK to "retreat behind the government's cloak of immunity and prevent the infringement or validity of the '125 patent from ever being tested in court."

References: v. 
 v. 
 § 101
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.