Source: http://www.patentdocs.org/2010/04/index.html
Timestamp: 2014-07-25 13:40:47
Document Index: 378249611

Matched Legal Cases: ['§ 351', '§ 112', '§ 41', '§ 41', '§ 102', '§ 103', '§ 355', '§ 355', '§ 271', '§ 112']

Patent Docs: April 2010
Follow-on Biologics Conference
Institute (ACI) will be holding a conference on Follow-on Biologics on June
21-22, 2010 in New York, NY. ACI
faculty will help attendees:
follow-on patent litigation and understand what mechanisms are and will be in
place for resolving patent disputes;• Analyze the
impact of the 12-year exclusivity period on the financial viability of
development of follow-ons;• Develop methods
for demonstrating or disproving similarity "in terms of safety, purity and
potency of the product";• Determine what
safety data and technical level of support bio applicants will have to provide
in order to get approval of follow-ons;• Examine and learn
from the global development of biosimiliars;• Maximize the biologic
patent lifecycle and protect the value of intellectual property for biologics;• Investigate
alternative approval methods for biosimilars including BLA applications and
FD&C 505(b)2 applications; and• Evaluate the
impact of follow-ons on existing and future licensing agreements and strategic
• Overview, status
and history of biosimiliars legislation in the U.S.: The inside story;• Practical
implications for the biosimilars market under the new regime;• Current FDA
position and initiatives regarding follow-on biologics;• Defining
biosimilars: Proving (or
disproving) interchangeability and biosimilarity -- to be presented in part by Patent Docs author Kevin Noonan;• An overview of
dispute resolution mechanisms under PHS § 351;• Developing
procedures and strategies in preparation of follow-on litigation;• Maximizing the
biologic patent lifecycle and protecting the value of IP for biologics in light
of new legislation: Written
description, enablement, the doctrine of equivalents and more;• FTC
spotlight: Addressing the
antitrust concerns resulting from follow-on legislation;• Lessons learned
from the development of biosimilars on the international stage;• Understanding
proposed clinical trials requirements and overcoming safety concerns associated
with follow-ons;• Developing
alternative pathways for getting biosimilars on the market;• Renegotiating and
reworking licensing agreements with companies and universities in anticipation
of follow-on biologics; and• Overcoming
challenges to marketing, branding, and promotion of biosimilars.
workshop, entitled "Applying Patent Term Adjustments and Patent Term
Extensions to Biosimilars to Optimize the Biologic Patent Lifecycle," will
be offered from 9:00 am to 12:00 pm on June 23, 2010. The workshop will take attendees through the intricacies of
the major ways of getting an extension on biologics patents, and provide
attendees with the tools needed to accomplish this goal in a time of changing
for this conference, including an agenda, list of speakers, and registration
form can be obtained here.
fee for this conference is $2,195 (conference alone) or $2,795 (conference and
workshop). Those registering by
May 28, 2010 will receive a $300 discount. Those interested in registering for the conference can do so
here, by calling 1-888-224-2480, or
by faxing a registration form to 1-877-927-1563.Patent Docs is a media partner of ACI's Follow-on Biologics conference.
Webinar on Written Description Requirement after Ariad v. Lilly
will be offering a webinar entitled "Patents and the Written Description
Requirement: Meeting Section 112 Disclosure Obligations After Ariad v. Lilly" on June 10, 2010 from 1:00 - 2:30 PM (EST). Peter Pappas of Sutherland Asbill & Brennan will provide guidance to
patentees, patent challengers, and counsel for dealing with the written
description requirement of 35 U.S.C. § 112, first paragraph, and discuss the
implications of the Federal Circuit's opinion in Ariad v. Lilly for compliance and patent challenges. The webinar will review the following
What are the implications of Ariad
for the predictable and non-predictable arts?•
How will Ariad impact patent prosecution?• What steps can patentees and counsel
take to meet the written description requirement and withstand invalidity
challenges based on the written description?The
processing). Those registering by May 14, 2010 will receive
a $50 discount. Those interested in registering for the webinar, can do so here.
Ernst & Young Report: Biotech Industry Reaches Profitability for the First Time
On Wednesday, less than a week before the industry congregates in Chicago for the 2010 BIO International Convention,
Ernst & Young issued its 24th annual report
on the biotech sector. In the report,
entitled "Beyond Borders: Global Biotechnology Report 2010," the
professional services firm concludes that "[t]he global biotechnology
industry was able to weather the continued worldwide economic turmoil and
deliver a strong financial performance in 2009, with the world's established
biotech centers reaching profitability for the first time in history." Despite the good news, Glen
Giovannetti, Ernst & Young's Global Biotechnology Leader, predicted that
biotech companies would continue to face a challenging funding environment for
the foreseeable future. Mr.
Giovannetti's comments about biotech funding align with the results of the
latest MoneyTree report issued by the National Venture Capital Association
(NVCA), which showed that biotech venture funding between the fourth quarter of
2009 and the first quarter of 2010 dropped by 24% (see "NVCA Report Shows First Quarter Drop in Venture Funding").
The report's silver lining concerns its
finding that companies in the industry's established biotech centers of the United
States, Europe, Canada, and Australia posted an aggregate net profit of $3.7
billion in 2009, which constituted a $5.5 billion increase over the $1.8
billion net loss these four markets suffered in 2008. According to the report, this marked "the first time ever
that these markets have reached aggregate profitability." This declaration, however, contradicted a similar
announcement made by Steven Burrill, the CEO of Burrill & Co., when he asserted in
2009 that the biotech industry turned a profit for the first
time in 2008 (see "Bio-irony: Biotech Turns a Profit in 2008"). According to the report, the
improvement in the established biotech centers was driven by a "dramatic
increase" in net profit in the U.S., which was due, in turn, to the
adoption of cost-cutting and efficiency measures.While
the report indicates that biotech companies in the U.S., Europe, and Canada
raised 42% more capital in 2009, jumping to $23.2 billion, a significant
portion of this capital was raised by only a handful of established public
companies via follow-on offerings. The report noted that access to capital for many companies otherwise remained
scarce. This gap between the
industry's "haves" and "have nots" is expected to pose new
challenges for emerging companies in accessing capital in the coming year.
report concludes that biotech companies are now operating in a "new
normal," where access to capital will remain difficult. In this new normal, venture capitalists
are being more selective and are directing funding to existing projects rather
than to new companies. In
addition, IPO investors appear to be looking for "de-risked investments,"
and consequently, IPOs are pricing below companies' expectations. The report lists five guiding
principles for biotech companies operating in the new normal:
Broadening the search for capital to include nontraditional sources of funding;(2)
Learning to use scarce capital more efficiently;(3)
Focusing on reimbursement (payor acceptance) as an end goal in product
development rather than marketing approval;(4)
Using more creative partnering approaches; and(5)
Attracting potential buyers by demonstrating what truly differentiates one
company's products or platforms from those of its competitors.
breaking down the results by region, the report indicates that the U.S. biotech
industry's net income skyrocketed from about $400 million in 2008 to a record $3.7
billion in 2009, which was driven by revenue growth, cost cutting, and a change
in the accounting rules for acquisitions. Despite the positive results for the U.S. biotech industry's net income,
revenues of U.S. public companies fell 13% in 2009 to $56.6 billion. The report also noted that total U.S.
capital for the biotech industry increased by 39% in 2009 to $18.0 billion. Of this amount, venture capital constituted
$4.6 billion, which was the second-highest venture funding total in history,
behind the $5.5 billion raised in 2007.
Europe, revenues of public biotechs rose 8% to €11.9 billion, which was below
the 17% growth seen in 2008. Total
funding for the European biotech industry was up 48% to €2.9 billion in 2009,
with venture capital constituting €800 million of this total (a 21% decrease
from 2008 and the lowest amount since 2003). The Canadian biotech industry, meanwhile, raised more than $733
million in 2009, an increase of $255 million.
USPTO Announces Extension of Enhanced First Action Interview Pilot Program
Sarah Fendrick --
Enhanced First Action Interview Pilot Program, first implemented on October 20,
2009, was extended an additional six months beyond the original ending date of
April 1, 2010. The program permits
applicants to conduct an interview with an examiner after review of a
pre-interview communication that discloses the results of a prior art search
conducted by the Examiner. As
described in a notice the Office released on April 7, 2010, participants have experienced benefits
(1) The ability to advance prosecution
of an application;(2) Enhanced interaction between
applicant and the examiner;(3) The opportunity to resolve patentability issues one-on-one with the examiner at the beginning of the prosecution
process; and(4) The opportunity to facilitate possible early allowance.Under
the extension, any request for a First Action Interview filed before October 1,
2010 will be granted if eligibility and requirements of the First Action
Interview Pilot Program are satisfied.For additional information regarding this topic, please see:• "USPTO Expands First Action Interview Pilot Program," October 5, 2009• "PTO Announces New Program to Reduce
Pendency and Improve Patent Quality," April 15, 2008
Monday, the Court of Appeals for the Federal Circuit decided that the appeal in
Therasense, Inc. v. Becton, Dickinson & Co. warrants en banc consideration. In the Court's per curiam
order, it noted that the panel that heard the appeal considered the petition
for rehearing submitted by Plaintiffs-Appellants Abbott Diabetes Care, Inc.
(formerly Therasense, Inc.) and Abbott Laboratories; requested a response from Defendants-Appellees
Becton, Dickinson & Co., Nova Biomedical Corp., and Bayer Healthcare LLC;
granted Plaintiffs-Appellants leav to file a reply; and granted the Washington
Legal Foundation, Nine Intellectual Property Law Professors, Hon. Bruce A.
Lehman and the International Intellectual Property Institute, and Ole K.
Nilssen and Geo Foundation, Ltd. leave to file amici briefs. The
petition, response, reply, and amici
briefs were then referred to the other Circuit Judges, a poll on whether to
rehear the appeal en banc was
requested and taken, and the Court decided to hear the appeal en banc and vacate the panel's January
25, 2010 opinion.
parties have been asked to file new briefs addressing the following issues:
1. Should the materiality-intent-balancing
framework for inequitable conduct be modified or replaced?2. If so, how? In particular, should the standard be tied directly to fraud
or unclean hands? See Precision
Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas
Glass Co. v. Hartford- Empire Co., 322 U.S. 238 (1944), overruled on
other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone
Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard
for fraud or unclean hands?3. What is the proper standard for
materiality? What role should the
United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require
that but for the alleged misconduct, one or more claims would not have issued?4. Under what circumstances is it proper
to infer intent from materiality? See
Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir.
1988) (en banc).5. Should the balancing inquiry (balancing
materiality and intent) be abandoned?6. Whether the standards for materiality
and intent in other federal agency contexts or at common law shed light on the
appropriate standards to be applied in the patent context.
must file their brief by June 10, 2010, and Defendants-Appellees must file their
response 30 days from the date of service of Plaintiffs-Appellees' brief. Plaintiffs-Appellees' reply would be
due 10 days from the date of service of Defendants'-Appellees' response. The Court noted that it would entertain
briefs of amici curiae, and invited
the U.S. Patent and Trademark Office to submit an amicus brief.
Inc. v. Becton, Dickinson & Co. (Fed. Cir. 2010)Order,
USPTO Cancels Appeals and Interferences Rule 41.200(b)
In a notice published in the Federal Register (75 Fed. Reg. 19558),
the U.S. Patent and Trademark Office cancelled Rule 41.200(b) as a result of the decision
rendered in Agilent
Technologies, Inc. v. Affymetrix,
Inc., 567 F.3d 1366 (Fed. Cir. 2009). 37 C.F.R. § 41.200(b) (2004) provides: ''A
claim shall be given its broadest reasonable construction in light of the
specification of the application or patent in which it appears.'' The Federal Circuit in Agilent found that 37 C.F.R. § 41.200(b) did
not apply in an interference proceeding where one party challenges another's
Court held: ''[W]hen a party
challenges written description support for an interference count or the copied
claim in an interference, the originating disclosure provides the meaning of
the pertinent claim language.'' Agilent,
567 F.3d at 1375. Alternatively under the Court's ruling in Agilent, when a party challenges validity under 35 U.S.C. § 102 or § 103,
the claim must be interpreted in light of the specification in which it
appears.To conform to the Federal Circuit ruling, the USPTO has cancelled Rule
41.200(b).
April 13, 2010, Sloning Biotechnology announced the
issuance of U.S. Patent No. 7,695,906, which covers an optimized method of
Slonomics, the company's platform technology. Slonomics uses a set of double
stranded DNA triplets as universal building blocks for the synthesis of
combinatorial libraries. This triplet library contains all possible sequence
combinations necessary to build any desired DNA molecule.
the first phase of Slonomics (see below; click on image to enlarge), the triplet building blocks are sequentially
ligated in a series of cycles referred to as elongation. The output of this
elongation phase is a large number of sub-fragments of the target sequence
referred to as E-blocks, which together comprise the complete target sequence. These E-blocks are then assembled in a second synthesis phase, referred to as
transposition, to generate the desired DNA. Adjoining E-blocks are ligated
together to create T-blocks, which are then sequentially ligated to generate
larger fragments. This process is repeated until all the blocks are combined
into a single DNA molecule comprising the complete sequence.
this method is suitable to automation, the standard Slonomics method produces
an unacceptable number of side products. These incomplete side products can
ligate in the subsequent transposition reactions and lead to the formation of
incomplete T-blocks, thus reducing the yield of the correct product.
'906 patent describes the particular reaction steps in the elongation process
that results in a reduction of undesired by-products, thus increasing the
efficacy of the desired nucleic acid molecule. The patent provides three examples of this optimized process
and contains 16 total claims. The
independent claims read as follows:
1. A method for the manufacture of a
nucleic acid molecule comprising the steps of: (a)
providing a first at least partially double-stranded oligonucleotide which has
a modification allowing the oligonucleotide to be coupled to a surface, whereby
the oligonucleotide comprises a recognition site for a first type IIS
restriction enzyme which cuts outside its recognition site, and which
oligonucleotide comprises a single-stranded overhang; (b)
providing a second at least partially double-stranded oligonucleotide whereby
the oligonucleotide comprises a recognition site or a part thereof or a sequence
which is complementary thereto, for a second type IIS restriction enzyme which
cuts outside its recognition site, and which second oligonucleotide comprises a
single-stranded overhang; (c)
ligating the first and the second oligonucleotide via their overhangs
generating a first ligation product, wherein the first and second
oligonucleotides are not attached to a surface during the ligation; (d)
immobilising the first ligation product of step (c) to the surface via the
modification; (e)
cutting the immobilised ligation product with the first type IIS restriction
enzyme thus releasing an elongated oligonucleotide having an overhang; (f)
combining the elongated oligonucleotide with a further at least partially
double-stranded oligonucleotide which has a modification allowing the oligonucleotide
to be coupled, to a surface, whereby the further oligonucleotide comprises a
recognition site for a further type IIS restriction enzyme which cuts outside
its recognition site and which oligonucleotide comprises a single-stranded
overhang, and ligating the elongated second oligonucleotide and the further at
least partially double-stranded oligonucleotide via their overhangs forming a
further ligation product; (g)
immobilising the further ligation product to a surface via the modification; (h)
cutting the further ligation product with the further type IIS restriction
enzyme releasing an elongated oligonucleotide having an overhang; and (i)
optionally, repeating steps f) to h).2. A method for the manufacture of a
the oligonucleotide comprises a recognition site for a first type IIS restriction
enzyme which cuts outside its recognition site, and which oligonucleotide
comprises a single-stranded overhang; (b)
the oligonucleotide comprises a recognition site or a part thereof or a
sequence which is complementary thereto, for a second type IIS restriction
enzyme which cuts outside its recognition site, and which second
oligonucleotide comprises a single-stranded overhang; (c)
cutting the ligation product with the first type IIS restriction enzyme thus
generating an elongated oligonucleotide having an overhang and a shortened
first oligonucleotide; (e)
immobilising the shortened first oligonucleotide on a surface via the
modification; (f)
providing a further at least partially double-stranded oligonucleotide which
has a modification allowing the further oligonucleotide to be coupled to a
surface, whereby the further oligonucleotide comprises a recognition site for a
further type IIS restriction enzyme which cuts outside its recognition site and
which oligonucleotide comprises a single-stranded overhang; (g)
combining the elongated oligonucleotide with the further oligonucleotide and
ligating the elongated oligonucleotide and the further oligonucleotide via
their overhangs forming a further ligation product; (h)
enzyme generating an elongated oligonucleotide having an overhang and a
shortened further oligonucleotide; and (i)
optionally, repeating steps e) to h).7. A method for the manufacture of a
oligonucleotide comprises a single-stranded overhang, and whereby the
oligonucleotide comprises a part of the nucleic acid molecule to be
manufactured; (b)
immobilizing the first oligonucleotide on a surface; (c)
cutting the first oligonucleotide with the first type IIS restriction enzyme
releasing a double stranded oligonucleotide having a single stranded overhang at
each end and being a part of the nucleic acid molecule to be manufactured; and (d)
combining the double stranded oligonucleotide of step c) with a second at least
partially double-stranded oligonucleotide which has a modification allowing the
oligonucleotide to be coupled to a surface, whereby the oligonucleotide
contains a recognition site for a second type IIS restriction enzyme which cuts
outside its recognition site, and which oligonucleotide further comprises a
single-stranded overhang and a part of the nucleic acid molecule to be
manufactured, and ligating the double-stranded oligonucleotide of step c) with
the second oligonucleotide, wherein the double-stranded oligonucleotide of step
c) and the second oligonucleotide are not attached to a surface during the
ligation; whereby the overhang of the second oligonucleotide is essentially
complementary to the overhang of the double stranded oligonucleotide of step
c).9. A method for the manufacture of a
nucleic acid molecule comprising the following steps: (a)
providing a first ligation product, whereby the first ligation product consists
of a first oligonucleotide moiety comprising a recognition site for a first
type IIS restriction enzyme, a second oligonucleotide moiety comprising a
recognition site for a second type IIS restriction enzyme and a third
oligonucleotide moiety, whereby the third oligonucleotide moiety is a part of
the nucleic acid molecule to be manufactured, and whereby the first and the
second type IIS restriction enzymes each generate an overhang, whereby the
overhang generated by the first type IIS restriction enzyme has a length which
is different from the length of the overhang generated by the second type IIS
restriction enzyme; (b)
providing a second ligation product, whereby the second ligation product
consists of a first oligonucleotide moiety comprising a recognition site for a
third type IIS restriction enzyme, a second oligonucleotide moiety comprising a
recognition site for a fourth type IIS restriction enzyme and a third oligonucleotide
moiety, whereby the third oligonucleotide moiety is a part of the nucleic acid
molecule to be manufactured, and whereby the third and the fourth type IIS
restriction enzyme each generate an overhang, whereby the overhang generated by
the third type IIS restriction enzyme has a length which is different from the
length of the overhang generated by the fourth type IIS restriction enzyme; (c)
cutting the first ligation product with the second restriction enzyme
generating a first cut ligation product and cutting the second ligation product
with the fourth restriction enzyme generating a second cut ligation product; (d)
providing a third at least partially double-stranded oligonucleotide and
ligating the third oligonucleotide with the first cut ligation product, wherein
the first cut ligation product and the third oligonucleotide are not attached
to a surface during the ligation, whereby the third oligonucleotide comprises
an overhang which is complementary to the overhang of the first cut ligation
product generated in step c) and whereby the third oligonucleotide comprises a
recognition site for a fifth IIS restriction enzyme;(e)
providing a fourth at least partially double-stranded oligonucleotide and
ligating the fourth oligonucleotide to the second cut ligation product, wherein
the second cut ligation product and the fourth oligonucleotide are not attached
to a surface during the ligation, whereby the fourth oligonucleotide comprises
an overhang which is complementary to the overhang of the second ligation
product generated in step c) and whereby the fourth oligonucleotide comprises a
recognition site for a sixth type IIS restriction enzyme; (f)
immobilising the ligation product of step d) and step e) on a surface by means
of a modification of the third oligonucleotide and the fourth oligonucleotide; (g)
cutting the immobilised ligation product of step d) with the fifth type IIS
restriction enzyme releasing an oligonucleotide; (h)
cutting the immobilised ligation product of step e) with the third type IIS
restriction enzyme; and (i)
combining and ligating the oligonucleotide released according to step g) with
the immobilised reaction product of step h), whereby the overhang generated by
the first and the third restriction enzyme is complementary to the overhang
generated by the fifth and sixth restriction enzyme.James
DeGiulio has a doctorate in molecular biology and genetics from Northwestern University and is a third-year law
On April 14th, the Federal Circuit
rendered a decision construing statutory language in a rather straightforward
and unremarkable (albeit not unanimous) opinion. But the statutory language at issue involved the 2003
Medicare Prescription Drug Improvement and Modernization Act, which amended the
1984 Drug Price Competition and Patent Term Restoration Act (colloquially known
as the Hatch-Waxman Act), thus raising the opinion's significance.The statutory provisions at issue involve the
requirements for listing patents claiming drug products or their uses in the
Orange Book. The statute requires
an innovator and approved New Drug Application (NDA) holder to identify these
patents by patent number and expiration date. For patents claiming uses (more properly, methods of use) of
a regulated drug, the FDA proscribes "use codes" which are published
in the Orange Book as well.For a use not covered by an Orange Book listed
patent, a generic drug manufacturer who files an Abbreviated New Drug
Application (ANDA) must submit a proposed label for the unpatented use as well
as a statement under 21 U.S.C. § 355(j)(2)(A)(viii) (a "Section viii"
statement) that the use does not infringe any listed patent. Approval of the ANDA requires that the
proposed label does not overlap with any patented method (a "carve-out").As part of the litigation provisions of the
Hatch-Waxman Act, an ANDA filer can file a counterclaim in ANDA litigation that
challenges the accuracy of the patent information submitted by the innovator,
on two grounds -- either that the patent doesn't claim the approved drug or an approved
method for using the drug (which is defined by the use codes and the innovator
drug label). This part of the law
was enacted as part of the MMA amendments, in response to a Federal Circuit decision as
discussed in the opinion and below, and is codified as 21 U.S.C.
§ 355(j)(5)(c)(ii)(I):[The ANDA]
applicant may assert a counterclaim seeking an order requiring the holder to
correct or delete the patent information submitted by the holder under
subsection (b) or (c) of this section on the ground that the patent does not
claim either-- (aa) the
drug for which the application was approved; or (bb) an
approved method of using the drug.
The case involves Novo Nordisk's repaglinide drug
product marketed as PRANDIN®. Novo
listed two patents in the Orange Book associated with this drug: Reissue Patent
No. RE37,035, which claims repaglinide drug product itself; this patent
expired March 14, 2009. The other
patent, U.S. Patent No. 6,677,358, claims the method of using repaglinide in
combination with metformin; this patent expires June 12, 2018. There are two other approved uses for
PRANDIN®: as monotherapy and in
combination with thiazolidinediones (TZD's); neither of these indications is
claimed in any Orange Book listed patent. All indications are for treating Type 2 (adult-onset) diabetes.
Caraco filed an ANDA for generic repaglinide having
a Paragraph III certification regarding the '035 patent and a Paragraph IV certification
for the '358 patent, the latter leading to ANDA litigation pursuant to 35
U.S.C. § 271(e)(2). During the
litigation, Caraco stipulated in that action that its ANDA would infringe the '358
patent if it included a label describing the combination of repaglinide and
metformin, and at the same time submitting an amended ANDA with a Paragraph IV
certification and a Section viii statement that its ANDA would not seek
approval for the repaglinide + metformin combination. The "carve-out" label was acceptable to FDA.However, at that time the FDA changed the use code
associated with Novo's PRANDIN® product. The original use code, U-546, specified the combination of repaglinide +
metformin to lower blood glucose. The FDA changed this use code to U-968, for a method for improving glycemic
control in adults with Type 2 diabetes." This use code was not limited to the specific repaglinide +
metformin combination, and indeed was not expressly limited to Novo's drug
(i.e., it could encompass metformin monotherapy). (There was some dispute between the majority and the
concurring opinion, the concurrence asserting that the FDA changed the use code
sua sponte which was not asserted in
the majority opinion.)This change in the use code caused the FDA to reject
Caraco's Section viii certification and "carve-out" label, requiring
Caraco to include the rapaglinide + metformin combination on its label. Since Caraco stipulated that this
combination was an infringement, the FDA's decision essentially mandated
judgment for Novo absent a finding at trial of invalidity or unenforceability.In response to the FDA's determination, Caraco
counterclaimed for an injunction to return the use code to U-546. The District Court granted summary
judgment on this issue, granting Caraco the requested injunction. Specifically, the Court's injunction
ordered Novo to request the FDA to change the use code in the Orange Book for
Prandin® from U-968 to its former U-546 listing.The Federal Circuit granted Novo an expedited
appeal and briefing schedule, and stayed the injunction pending the
appeal. In its opinion, by Judge
Rader joined by Judge Clevenger (with concurring opinions by Judge Clevenger
and a dissenting opinion by Judge Dyk), the CAFC held that the statute
contained no provisions permitting an ANDA defendant to request or a district
court to grant such an injunction, reversing the decision and vacating the
injunction.The Federal Circuit characterizes the question as whether the
statutory language of "an approved method" means "any approved
method" (Novo) or "all approved methods" (Caraco). Novo contended that reciting one of the
patented uses was sufficient to preclude the statutory counterclaim, while
Caraco contended that reciting any unpatented use permits an ANDA defendant to
assert the counterclaim.In finding for Novo, the Court found "no ambiguity" in the language of
the statute:When an indefinite article is preceded
and qualified by a negative, standard grammar generally provides that "a"
means "any." See, e.g., American Heritage Dictionary of the English
Language 1 (4th Ed. 2006). The Court also says Caraco improperly focuses on
its proposed uses:[T]he statutory language "an
approved method of using the drug" refers to the approved methods of using
the listed drug, PRANDIN. This language cannot refer to the methods of using Caraco's
generic drug, because the FDA has not yet approved Caraco's ANDA.Thus, the Court concluded that Caraco can assert
its counterclaim only if no patent listed in the Orange Book claims "any
approved methods of using the listed drug." That was not the case here.The opinion also references the legislative history
"to make sure that it does not contain any clear intent to the contrary." It did not: the Court says that the counterclaim provisions of the
statute addressed the Court's own interpretation of the Hatch-Waxman Act to be
devoid of a "private cause of action to delist an allegedly irrelevant
patent from the Orange Book." See Mylan Pharms. Inc.
v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001). This intent was ascertained by the panel due to the use in
the statute of "exact language" from the Mylan decision, the Court concluding that "[t]his choice of legislative language
suggests that the 2003 Amendment sought to correct the specific issue raised in
Mylan, i.e., to deter pioneering manufacturers from listing patents that were
not related at all to the patented product or method." Accordingly, the opinion found this
legislative history to be consistent with its interpretation that "an
approved method" means "any approved method," because this
interpretation "bears a direct relation to the purpose of Orange Book
listings."The opinion
also asserts that, under its interpretation, the combination of a Section viii
certification and ANDA litigation will "ensure that a generic drug
[approved] for non-patented purposes will not be used for patented purposes via
a simple section viii certification." This is consistent , the court contends, with the
Hatch-Waxman Act's purpose of striking "a balance [between] the pioneering
and generic manufacturers' interests."Finally, the Court held that the statute has no provisions permitting a generic drug maker
to obtain an order from a court, like the injunction here, to compel a patent
holder to change or modify its use code. The plain language of the statute authorizes the generic drug maker to "request
an order compelling the 'holder to correct or delete the patent information
submitted by the holder'." (The Court notes that "the patent
information" under the statute is "the patent number and the
expiration date.") (emphases in original). Put simply, "the patent
information" does not include the use code narrative according to the
plain language of the statute, and thus does not grant an ANDA challenger to
obtain the injunction granted by the district court below.This
analysis is complicated by an FDA requirement, promulgated before passage of
the amendments in 2003, that "a pioneering manufacturer . . . submit not
only the patent number and the expiration date, but also the use code
narratives and other patent-related information" on specific FDA
forms. The panel refused to
conclude that the regulation "change[d] the ordinary meaning of the
statutory use of the term 'patent information,'" citing the Court's
opinion in Wyeth v. Kappos that clear
statutory meaning trumps any agency regulatory interpretation. And the Court reminds us all that
"no deference is due to agency interpretations at
odds with the plain language of the statute itself," citing Pub. Employees Ret. Sys. v. Betts, 492
U.S. 158, 171 (1989). Here, the
legislative intent sheds no light on any relevance of the agency provisions to
the plain meaning discerned by the panel.Judge Clevenger
concurred with the Court's judgment, but in his view Novo merely reacted to a
request by the FDA, and changed its use code narrative to match the new FDA use
code. "FDA, acting
independently, gummed up the works," according to the judge.
(at left) dissented, believing that the construction is contrary to the "manifest
purpose" of the statute, allowing "the same manipulative practices"
the statute was passed to prevent, i.e., "delay[ing] the onset of
competition from generic drug manufacturers." The dissent has a thorough explication of the Hatch-Waxman
act and the 2003 Amendments, particularly with regard to what Judge Dyk
characterizes as efforts by NDA filers to "block generic competition by
making unwarranted claims to patent coverage, for example, by listing in the
Orange Book a patent for a drug or method of use when in fact the patent was
clearly inapplicable."Since the
FDA "repeatedly declined to police Orange Book listings," and the
Federal Circuit refused to let ANDA filers use declaratory judgment
jurisdiction to do so (Mylan Pharms Inc.
v. Thompson), Congress intervened by passing the 2003 amendments, including
the Section viii certification provisions thereof.Judge Dyk
disagrees with majority on construing the term "patent information"
to be limited to patent number and expiration date. According to Judge Dyk, this information is not required "in
the abstract"; "the statute on its face contemplates that the scope
of the patent must be accurately described and that the patent must be related
to the drug or method of use for which the NDA application is submitted."In context,
the statute "contemplates the description of the scope of the patent and
of the relationship between the patent and the drug or the method of use; the
description of that scope and relationship is itself 'patent information.'"At least one
source of the majority's error, in Judge Dyk's view, is their erroneous
understanding of the Orange Book:[T]he majority's description of the
Orange Book likely bears no relationship to the actual document. The Orange
Book is not a list of patents from which a particular patent could be excised. The Orange Book is a list of NDAs that associates particular patents with
approved drugs or methods of use. Correction of an Orange Book listing does not
strike a patent from a list, it strikes (or corrects) the listing that
associates the patent with a particular NDA, approved drug, or method of use.Judge Dyk
also disagreed with the majority's treatment of the FDA's regulations promulgated
six months before enactment of the 2003 Amendments, stating that "Congress
was well aware of this regulatory interpretation of 'patent information'
when it enacted the counterclaim provision," and citing portions of the
legislative history illustrating this awareness (e.g., Senator Schumer's
statement that "[t]he bill provides a critical complement to the work the
FDA has done in clarifying its regulations on patent listing, but it goes much
further." Legislative and Regulatory Responses to the FTC Study on
Barriers to Entry in the Pharmaceutical Marketplace: Hearing Before the S.
Comm. on the Judiciary, 108th Cong. 19 (2003)). Judge Dyk believes that under circumstances
where "Congress was specifically aware of the agency's interpretation of a
statutory term at the time the statute was enacted, this is compelling evidence
of legislative adoption of the agency's interpretation," citing Supreme
Court precedent to this effect (including United
States v. Bd. of Comm'rs of Sheffield, Ala., 435 U.S. 110, 131-35 (1978);
Cammarano v. United States, 358 U.S. 498, 510 (1959); and Hartley v. Comm'r,
295 U.S. 216, 220 (1935)).Judge Dyk
also rejected the majority's interpretation of the term "any" in the
statute, citing (ironically in view of his Merck
v. Integra decision) Justice Scalia's admonition that, in construing a
statute, '[u]ltimately context determines meaning,'" citing Johnson v. United States, No. 08-6925, slip
op. at 5 (U.S. Mar. 2, 2010). He
illustrates this objection with the following hypothetical:Under the majority's view, no
correction of erroneous Orange Book information is permitted so long as the
patent covered any approved method of use covered by the NDA. The patent can be
listed in the Orange Book as erroneously covering approved use A, despite the
fact that the patent actually covers approved use B, and the counterclaim
provision provides no mechanism for correction. This cannot be what Congress
intended.Judge Dyk's
dissent adds more confusion to the history of the change in use code for
PRANDIN®; consistent with his view that NDA holders attempt to manipulate FDA
rules to maximize the time generic drug manufacturers are kept off the market, in
his description of the underlying facts Novo asked the FDA for the change in
use codes, and Caraco submitted its "carve-out" labeling proposal at
FDA's behest. According to Judge
Dyk:Here, the patentee did exactly what was
expressly forbidden. For the proposed use code description submitted on the FDA
Form 3542, Novo submitted the following: "A method for improving glycemic
control in adults with type 2 diabetes mellitus." J.A. 673. It thus
utilized that portion of PRANDIN's label that refers to the use of repaglinide
standing alone to treat diabetes (an unpatented use), not to the use of
repaglinide together with metformin (a patented use). There is no justification for using a
portion of the label referring to an unpatented use to describe a patented use.The manipulative nature of Novo's
actions is confirmed not only by the lack of justification for the change, but
also by the timing of the change (two years after the labeling change was
initiated by the FDA and immediately after the FDA approved Caraco's section
viii carve-out), and by its own admission that preventing approval of Caraco's
ANDA was part of the motivation for changing the use code. At oral argument,
Novo conceded that the decision to change the use code was in part "a
response to the section viii ruling . . . in December '08 from FDA." Oral
Arg. at 3:43-4:03."In summary, the majority's crabbed view of the statute
sanctions an unjustified manipulation
of the Orange Book," according to Judge Dyk. Perhaps hoping to provoke Supreme Court review, in the final
portion of the dissent, Judge Dyk characterizes as "notably inconsistent"
the majority's view and the views of the D.C. Circuit court regarding what
constituted whether the counterclaim is available under these circumstances.Novo Nordisk
A/S v. Caraco Pharmaceutical Laboratories, Ltd. (Fed. Cir. 2010)Panel: Circuit Judges Rader, Clevenger, and
DykOpinion for
the court by Circuit Judge Rader; concurring opinion by Circuit Judge Clevenger;
dissenting opinion by Circuit Judge Dyk
USPTO Administrator Arti Rai Responds to Patent Docs Post on PTO White Paper
Last week, Patent
Docs published a post on the recent White Paper issued from the U.S. Patent
and Trademark Office regarding provisions contained in the "Managers' Amendment" of
the Senate patent reform bill (S. 515) (see "USPTO White Paper Supports Patent Reform Proposals").
The first author of that Paper, Ms. Arti Rai (at right),
Administrator for External Affairs for the USPTO, has now
graciously responded to the post, pointing out areas of agreement and
disagreement with the views expressed in our post. We are grateful for her continued input, and post her response
here to further the discussion.
A response to Kevin Noonan:We read with interest Kevin Noonan's comments ("USPTO
White Paper Supports Patent Reform Proposals" in www.patentdocs.org, April 22) on the
Department of Commerce white paper I co-authored with Mark Doms and Stuart
Graham on patent reform, innovation, jobs, and economic growth. While some of
Dr. Noonan's assertions relative to the white
paper seem misplaced, others are fair and underscore the need for
additional research in this area of inquiry.The intended audience of this white paper is not,
as Dr. Noonan suggests, a "technology-savvy audience" but rather the
broader public audience. The
important role technology improvements play in economic growth, job creation,
and increased standards of living are not – regrettably – as widely appreciated
as Dr. Noonan suggests. The role
that a well-functioning patent system plays in spurring technology improvements
and enabling the diffusion of innovative goods and services is even less widely
appreciated. The white paper aims at educating the broader
audience about these two extremely important points, and at highlighting the
potential economic benefits of certain aspects of patent reform legislation.In many of his criticisms, Dr. Noonan faults the
paper for including too little theoretical or empirical evidence to support its
arguments. While we readily
acknowledge that in some areas the evidence is underdeveloped, our conclusions
are based on the best available evidence. And in many circumstances, like the research supporting post-grant
review, we believe the evidence to be overwhelming. There are also instances in which Dr. Noonan asserts a lack
of evidence where the evidence is in fact provided in the cited materials. Additionally, we note that in all but one instance in which he claims that
cited sources are not publicly available, they are -- in publicly available
sources like the Social Science Research Network (SSRN). His own links to the materials reflect
that.Nonetheless, Dr. Noonan is correct in recognizing
that the evidence is not complete and that that there is a clear need to
augment the literature on the relationship of patenting to economic
activity. That is precisely why
Director Kappos established the first-ever Office of the Chief Economist at the
USPTO, and why we are so pleased to have Dr. Stuart Graham on board.We thank Dr. Noonan for his thoughtful comments as
we work to improve the functioning of the patent system and to do further
economic analysis in this critical area.
Arti RaiAdministrator for External AffairsUnited States Patent and Trademark Office
Posted at 11:21 PM in Patent Legislation, Patent Office Rules & Procedures | Permalink
Oslick --About
Report: Each week we will report briefly on recently filed
biotech and pharma cases.
Ferndale Laboratories, Inc. v. PruGen, Inc. et al.2:10-cv-11644; filed April 22, 2010 in the Eastern
• Plaintiff: Ferndale Laboratories, Inc.• Defendants: PruGen, Inc.; IGI Laboratories, Inc.
Infringement of U.S. Patent No. 5,635,497 ("Topical
Application Compositions," issued June 3, 1997) based on PruGen's
manufacture and sale of its PruVel product (Eletone® cream, used for the
management and relief of burning, itching, and redness associated with atopic
dermatitis). View the complaint here.
Nuvasive, Inc. et al. v. Orthofix International N.V. et al.2:10-cv-01995; filed April 20, 2010 in the District
• Plaintiffs: Nuvasive, Inc.; Osiris Therapeutics, Inc.• Defendants: Orthofix International N.V.; Orthofix, Inc.; Orthofix Holdings, Inc.;
Orthofix Biologics; Orthofix Spinal Implants; Musculoskeletal Transplant
Infringement of U.S. Patent No. 6,355,239 ("Uses
for Non-Autologous Mesenchymal Stem Cells," issued March 12, 2002) based
on Defendants' manufacture and sale of a product line that competes with
Plaintiffs' OsteoCel® product line (allogeneic mesenchymal stem cell-based
products for use repairing defective connective tissues, such as bone). View the compliant here.
Synthon Pharmaceuticals, Inc. v. Eli Lilly and Company et al.5:10-cv-00150; filed April 19, 2010 in the Eastern
• Plaintiff: Synthon Pharmaceuticals, Inc.• Defendants: Eli Lilly and Company; ICOS Corp.
Declaratory judgment of non-infringement and
invalidity of U.S. Patent Nos. 6,821,975 ("Beta-Carboline Drug Product,"
issued November 23, 2004) and 7,182,958 ("ß-Carboline Pharmaceuticals
Compositions," issued February 27, 2007) based on Synthon's filing of an
ANDA to manufacture a generic version of Lilly's Adcirca® (tadalafil, used to
treat pulmonary arterial hypertension). View the complaint here.
Biovail Laboratories International SRL v. Watson
Pharmaceuticals, Inc. et al.1:10-cv-21241; filed April 16, 2010 in the Southern
• Plaintiff: Biovail Laboratories International SRL• Defendants: Watson Pharmaceuticals, Inc.; Watson Laboratories, Inc. – Florida;
Infringement of U.S. Patent Nos. 7,569,610 ("Modified
Release Formulations of a Bupropion Salt," issued August 4, 2009),
7,572,935 (same title, issued August 11, 2009), 7,649,019 (same title, issued
January 19, 2010), 7,563,823 (same title, issued June 21, 2009), 7,553,992
(same title, issued June 30, 2009), and 7,671,094 ("Bupropion Hydrobromide
and Therapeutic Applications," issued March 2, 2010) following a Paragraph
IV certification as part of Waton's filing of an ANDA to manufacture a generic
version of Biovail's Aplenzin ER (bupropion, used to treat depression). View the complaint here.
Endo Pharmaceuticals Inc. v. Roxane Laboratories Inc.2:10-cv-01964; filed April 16, 2010 in the District
• Plaintiffs: Endo Pharmaceuticals Inc.; Penwest Pharmaceuticals Co.• Defendant: Roxane Laboratories Inc.
Infringement of U.S. Patent No. 5,958,456 ("Controlled
Release Formulation (Albuterol)," issued September 28, 1999) following a
Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture
a generic version of Endo's Opana® ER (oxymorphone hydrochloride, used to treat
moderate to severe pain in patients requiring continuous, around-the-clock
opioid treatment for an extended period of time). View the complaint here.
Mylan Pharmaceuticals Inc. et al. v. Eurand Inc. et al.1:10-cv-00306; filed April 15, 2010 in the District
• Plaintiffs: Mylan Pharmaceuticals Inc.; Mylan Inc.• Defendants: Eurand Inc.; Cephalon Inc.; Anesta AGDeclaratory judgment of non-infringement,
unenforceability, and invalidity of U.S. Patent No. 7,544,372 ("Modified
Release Dosage Forms of Skeletal Muscle Relaxants," issued June 9, 2009),
licensed to Cephalon, based on Mylan's filing of an ANDA to manufacture a
generic version of Cephalon's Amrix® (cyclobenzaprine hydrochloride, used for
conditions). View the complaint here.
Posted at 11:05 PM in Court Report | Permalink
April 27-28, 2010 - 4th
Annual Paragraph IV Disputes*** (American Conference
Institute) - New York, NYApril
27-28, 2010 - Corporate
IP Counsel Summit (World
Group) - New
York, NYApril
2010 - 26th
Annual Joint Patent Practice Seminar (Connecticut,
Jersey, New York, and Philadelphia Intellectual Property Law Associations) - New York, NYMay
3-6, 2010 - 2010
BIO International Convention (Biotechnology
Industry Organization) - Chicago, ILMay
11, 2010 - Law
Symposium on Intellectual Property (George
University Law School, Howrey LLP & Cornerstone Research) - Washington, DCMay
18, 2010 - "The
of Patent Agents in Intellectual Property in the Changing Economy" (Intellectual
Property Law Association of Chicago) - Chicago, ILMay
20, 2010 - "The
Federal Circuit: A National Court of Appeals: Approaching 30 Years" (U.S.
Appeals for the Federal Circuit) - Washington,
2010 - Hatch-Waxman
Boot Camp*** (American
Institute) - San
Diego, CAMay
24-26, 2010 - Pharmaceutical
& Biotech Patent Litigation
Strategies*** (Pharma IQ) - London,
EnglandMay
25, 2010 - Corporate
Intellectual Property Law Conference (Law
Bulletin) - Chicago, ILMay
26-27, 2010 - 7th
International Forum on Freedom to Operate (C5) - Munich, GermanyJune
11, 2010 - "The
of U.S. Patent Law: An In-Depth
Discussion on the Congress, the Courts, and the USPTO" (Patent
Group) - Alexandria,
VAJune
2010 - IP
Business Congress (Intellectual
Management (IAM) magazine) - Munich,
Publishing Company will be holding its Corporate Intellectual Property Law Conference
on May 25, 2010 in Chicago, IL. The conference will address the following topics:
-- A discussion of conflicts and ethical challenges facing management and
outside counsel;• Patent Track
Sessions --• Patent Law
Update: A discussion of recent
case law led by Chief Judge James Holderman, U.S. District Court for the
Northern District of Illinois;•
"Unfair" patent marking: The law may be changing, but has management learned its valuable lesson?• Managing IP assets,
patent enforcement & damages, and the Patent Reform Act of 2010.
information regarding the conference can be found here. The registration fee for the conference
is $109. Those registering before May
10, 2010 will receive a $20 discount off the registration fee. Those interested in registering for the
Management (IAM) magazine will be hosting its next IP Business Congress on June
20-22, 2010 in Munich, Germany. The IP Business Congress is designed to meet the needs of senior
business executives responsible for the creation and management of IP value
inside corporations, as well as those who advise them. Among the plenary and breakout sessions
• The evolving IP
business market;• IP and small and
medium-sized enterprises (SMEs);• Patents in
Europe;• Patents in the
USA;• Chief IP Officer
(CIPO) clinic;• Meet the decision
makers;• Getting to grips
with non-practicing entities (NPEs);• IP markets;• Working together;• The future of
patent pools; and• The CIPO role in
knowledge-based business.
the IP Business Congress can be found here.The registration
fee for the IP Business Congress is EUR €1,500 ($2,006.42). Those interested in registering for the
USPTO White Paper Supports Patent Reform Proposals
On April 13th, the Department of Commerce released a White Paper entitled "Patent
Reform: Unleashing Innovation, Promoting Economic Growth & Producing High-Paying Jobs." All admirable goals, but unfortunately
the paper is more hortatory than informatory. Disappointingly, department economists, including Mark Doms,
the chief department economist, and Stuart Graham, Chief Economist of the U.S. Patent
and Trademark Office, offer precious little evidence or even data supporting
their assertions that the proposals they recommend will lead to these goals. (The first author of the report, Arti Rai, is the Administrator of the PTO's
Office of External Affairs and thus responsible for advocating for these
proposals, but realistically she can only work with what her economists provide
The Executive Summary sets forth some economic
statistics related to the goals contained in the Paper's title. According to this portion of the report,
75% of post World War II economic growth in America is "linked" to
technological innovation. This
statistic is extrapolated from the proportion of the average annual growth rate
(3.4%) due to capital investment and increased efficiency (2.5%). In addition, average compensation has increased from
1999-2007 at a rate 2.5-fold in "innovation-intensive" sectors (not
expressly defined) than in the economy as a whole. Not surprisingly, the Paper also states that 76% of venture
capital investors "consider" a company's patents when deciding to
fund "[h]ighly innovative firms." The consequences of delayed patent grant (purportedly due to
the backlog of 750,000 applications) has "substantial costs," which
the Paper estimates "could ultimately cost the U.S. economy billions of
dollars annually in 'foregone innovation'." The Executive Summary ends with the two proposed
solutions: giving the USPTO fee-setting authority, which the Paper states would "contribute
significantly" to a 40% reduction in patent pendency; and establishing an "enhanced
post-grant review" regime. Claims for the latter are even more dramatic: according to the Summary, "[t]he cost of such
proceedings is expected to be 50-100 times less expensive than litigation and
could yield $8 to $15 in consumer benefit for every $1 invested."
The Summary provokes the expectation that the rest
of the White Paper will disclose the economic and statistical underpinnings to
these claims (after all, in economics of all the sciences it seems reasonable
to expect to "see the work" underlying the conclusions). Unfortunately, that data is not
found in the Paper. The Discussion
following the Summary sets forth policy presumptions ("[s]timulating
economic growth and creating high-paying jobs are key priorities for the Obama
Administration"), a history of recent patent reform efforts, and the need
for the latter to achieve the former: "[p]atent reform legislation will
accelerate [a virtuous cycle of innovation, growth and additional innovation]
and speed the pace of growth and of job creation."
The Paper then cites academic sources relating
innovation/technological change and job growth, something akin to bringing
coals to Newcastle for an intended technology-savvy audience. (It is unlikely even any troglodytes in
Congress have failed to hear the message linking technology to Progress.) The 75% (2.5%/3.4%) statistic recited
in the Summary is supported by a 2007 paper by Jorgenson et al. ("Industry Origins of the American
Productivity Resurgence," 19(3) Economic Systems Research 229) and a 2000
National Bureau of Economic Research study (Boskin & Lau, "Generalized Solow-Neutral Technical Progress
and Postwar Economic Growth," Working Paper 8023). Innovation also produces high-paying jobs, the Paper
notes, citing Basu & Fernald (2009, "What
Do We Know (and Not Know) about Potential Output," 91(4) Federal Reserve Bank of St. Louis
Review 187), with 75% of the differences in industrial output between countries
being attributed to "innovation-driven productivity differentials,"
citing Hall & Jones, 1999, "Why Do
Some Countries Produce So Much More Output Than Others?" 114(1) Quarterly
Journal of Economics 83. Technology-related differences can be discerned between industries: while the Paper reports that "the
average rate of real compensation per employee" in the U.S. private sector
increased by 20.2% from 1997-2007 (supported by data in accompanying Table I),
in "the most innovative industries" (at least computers, electronics
and chemicals) the increase was more than 50% (a greater than 2.5-fold
New technologies are "disproportionally"
generated from venture capital-backed startup companies, and VCs rely on
patents when making investment decisions (assertions supported by Kortum &
Lerner, 1998, "Does Venture Capital Spur
Innovation?" National Bureau of Economic Research, Working Paper 6846; Mann &
Sager, 2007, "Patents, Venture Capital and
Software Startups," 36 Research Policy 193; and Graham et al., 2010, "High
Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey,"
forthcoming). (As has been noted by others, it is a
pity Dr. Graham's work is not yet available; it should be posted on the PTO
website.) The Paper also
cites certain "anecdotal" evidence supporting these "large-scale
empirical findings," ranging from medical device incubators to companies
acquired by big pharma companies. The Paper picks out the pharmaceutical industry as one dependent in
particular on "high-quality" patents, this being one of the reasons
why patents in the pharmaceutical industry do not support Bessen and Meurer's
conclusions that patents are inimical to innovation (2008, Patent Failure: How Judges, Bureaucrats and Lawyers Put Innovators At Risk). This produces a "patent premium" for biotechnology,
pharmaceutical, and medical device companies, according to the Paper (appropriately citing Arora et al., 2008, "R&D
and the Patent Premium," 26(5) International Journal of Industrial Organization 1153) for this
proposition. It should be heartening
for members of that sector to hear the Office understands the importance of
patents for these industries.
The Paper then identifies the problems it intends
to address: untimeliness in the
patent procurement process and inconsistent quality of granted patents. "Delay, uncertainty and poor
quality" are the principal characteristics of the current U.S. patent
system, according to the Paper, which "makes private investments in
innovation less likely," undermining economic growth and job
creation. The consequences of this
situation are not illustrated by academic studies but by anecdotal evidence,
using stories of companies that had not been able to obtain high-quality
patents in a timely fashion. The one large study cited, by London Economics (2010, "Economic Study on Patent Backlogs and a
System of Mutual Recognition"), was used as the basis for the
assertion that problems with patenting could account for "foregone
innovation" costing "billions of dollars annually" (albeit this
study was not confined to the U.S. but included the Japanese and European
Patent Offices, which are usually not thought of as suffering from the problems
of the U.S. Patent and Trademark Office addressed in the Paper).
patent quality (defined as "patents that are obvious, overly broad or
unclear in the inventive territory they cover"), Bessen and Meurer were
again cited, for the proposition that even low-quality patents can be "profitably
asserted against genuine innovators in litigation." (It would be a benefit to this debate
if examples were provided showing this morality play of "false"
versus "true" innovators; while this may happen, it seems to be an overreaction to overhaul the
U.S. patent system without evidence that such behavior is widespread.) Such "bad patents" are
also asserted to constitute a "tax" on innovation, purportedly
because they are more likely to be licensed than challenged, both because of
the inherent costs of patent infringement litigation as well as the economic
behaviorialist position that a challenger is unwilling to bear the cost and
risk for an outcome in which all potential infringers will share (i.e.,
invalidating a bad patent). While
these scenarios are plausible on their face, without evidence they are just
that -- mere scenarios.
Having discussed the problems the Paper provides
the solutions. The fee-setting
provisions of the Senate Manager's Amendment would provide as follows:
The Director shall have authority to
set or adjust by rule any fee established or charged by the Office under
sections 41 and 376 of title 35, United States Code, or under section of the
Trademark Act of 1946 (15 U.S.C. 1113), or any other fee established or charged
by the Office under any other provision of law, notwithstanding the fee amounts
established or charged thereunder, for the filing or processing of any
submission to, and for all other services performed by or materials furnished
by, the Office, provided that patent and trademark fee amounts are in the
aggregate set to recover the estimated cost to the Office for processing, activities,
services and materials relating to patents and trademarks, respectively,
including proportionate shares of the administrative costs of the Office.
The benefits of enactment of these provisions,
according to the White Paper, would be a decrease in the 750,000 application
backlog and a reduction in the average 34-month pendency for applications (the
time between original filing date and "a final disposition"). (Unexplained in these statistics is how
the 750,000 figure for the backlog was calculated, and whether a "final
disposition" is limited to allowance, abandonment, or appeal, or if
intermediate stages, such as a Request for Continued Examination, are
counted.) The Paper does correctly
point out that the pendency period is even longer than average for arts such as
information and communications technology, and that these delays can have
significant impacts in arts that are characterized by "rapid technological
turnover and short product life-cycles." Here, the Paper asserts, untimeliness in procuring patents
can lead to "worthless and obsolete" patents. While undoubtedly true, in such fields
it is reasonable to ask whether patent protection, procured at significant
investments of time and money, is an appropriate avenue for protecting
intellectual property that is ephemeral at best; such questions are not
addressed in the Paper.
Reducing pendency takes money, of course, and some
of the uses for the cash the Office anticipates it will collect if granted
fee-setting authority (and in the context of the economics set forth in the
Paper, this is really fee-increasing authority)
include "expenditure on IT infrastructure upgrades and additional hiring of
examiners." Fee-increasing
authority is needed, according to the Paper, because "the fee schedule in
the current patent statute fails to provide the USPTO with the flexibility it
needs to assure that its future revenues are commensurate with the costs it
will incur to modernize its operations." Further, "[t]he current fee structure is inflexible and
poorly aligned with actual costs, making it exceedingly difficult to fund
long-needed modernizations" according to the Paper. Some of the ways the fee structure is
thus "poorly aligned," the Paper asserts, is that applicants do not
pay fees sufficient to support the actual cost of the services the Office
provides them. The estimate set
forth in the Paper is that applicants pay fees equivalent to about one-third
the actual cost of examination, making "back-end" fees (such as issue
fees, publication fees, and patent maintenance fees) necessary to make up the
shortfall. And these fees are
sufficiently indeterminate that they do not provide the needed reliable source
The biggest strategic deficiency in this proposal
is that no matter what Congress does with regard to fee-setting authority, what
needs to be achieved is a commitment, backed by legislation, that that same
Congress will not expropriate the additional fees for its own, non-patent
related purposes (Indeed, after
several years of eschewing this type of fee-diversion, this Congress mandated
that any fees in excess of $100 million would go into the general coffers for
other expenses.) Arti Rai (at left), lead
author of the White Paper, explained to a gathering of the Biotechnology
Industry Organization (BIO) Intellectual Property Counsels Committee in New
Orleans this week that demanding this type of assurance was unwise because it annoyed
Congressional appropriators. Regardless of the soundness of this realpolitick,
however, without such a pledge
there is an automatic disconnect between the proposed solution and any evidence that it will achieve the
goal of appropriate funding for the Office. Additionally, permitting the Office to have fee-setting
authority creates the possibility that the fees will be used not just to
modernize the IT infrastructure or hire more examiners, but to modify applicant
behavior (as has been proposed in the past, unsuccessfully at least in part because
Congress would not adopt the proposed behavior-modifying fee structure in the
face of the resulting political firestorm of criticism). Having endured five years of the
Dudas regime, it is not irrational for members of the patent community to have
these fears; even with the general
acceptance of the benevolence of the Kappos administration, there is no assurance
that the next Director will have the public interest at least as much in mind
as meeting bureaucratic goals.
The other proposal for patent reform is post-grant
review, needed according to the Paper to ensure only "high-quality"
patents are granted (or at least maintained). The issue is framed in David v. Goliath terms, with patent
challenges being cast as particularly difficult for "small firms with
limited resources." While
certainly true, the Paper ignores the equally-likely converse situation: a resource-rich company using
post-grant review to harass a small firm with high-quality patents but limited
resources. While the Paper's
scenario poses a problem, the converse situation is even more fraught with
innovation-stifling potential, inter alia
because small firms with limited resources are highly dependent on patents for
investment (a reality discussed at the beginning of the Paper with regard to
VC-investment in technology-based companies), and anything that creates
uncertainty about such a small firm's patents will inhibit investment (making
acquisition by resource-rich companies of their undervalued patent assets more
likely). Regardless of these
unexplored possibilities, the Paper discusses threatened enforcement of "poor-quality"
patents by "large firms" that could "forc[e] small competitors
[of such large firms] with breakthrough technologies out of business,"
citing Benjamin & Rai, 2008, "Fixing
Innovation Policy: A Structural Perspective," 77 Geo. Wash. L. Rev. 1. The purported benefits of post-grant
review are supported by academic studies, including Graham & Harhoff, 2009, "Separating Patent Wheat from Chaff: Would
the U.S. Benefit from Adopting a patent Post-Grant Review?" (curiously, an
unpublished paper "on file
with the authors," which would benefit from being made publicly available
on the Patent Office website).
Disclosure of the bases for the assumptions is not set
forth in the Paper, however: in
the post-grant review section, the authors make most of the economic benefit
assertions, including that "the cost of post-grant review is expected to
be 50-100 time lower than the cost of patent litigation," that "between
one-third and one-half of [post-grant review] challenges can be expected to
result in an invalidity decision (which is frankly a dubious assertion unless
the post-grant review is expected to encompass the full range of invalidity
defenses available at trial), and cost-benefit analyses (which almost cry out
for data supporting them) estimating a return of from $8 to $15 for every $1 invested in the post-grant review
system. Instead of a quantitative
review of the assumptions behind these statements, the Paper merely asserts
that "almost every academic economist who has ever examined whether an
enhanced system of post-grant review should be adopted has favored such
adoption," and notes that the Federal Trade Commission, the National
Research Council, and the National Academy of Sciences also support this
reform. While comforting, this is
hardly a substitute for the kind of hard-headed, explicit economic analysis
that might be persuasive for such a proposal. The Paper does note that there is at least one academic
study that differs with the seemingly universal approval of another post-grant
review system (Shane, 2009, "Problems to
be Expected from Expanded Administrative Challenges to U.S. Patents," prepared for the Manufacturing Alliance for Patent Policy), but disputes its assumptions
(which are expressly set forth for examination). Benefits from decreasing the delay in invalidating patents
(which the Paper asserts can take 8-11 years in litigation) are supported by
another unpublished paper by Dr. Graham (2010, "Slow courts and the cost of uncertainty: How patent post-grant reviews
may offer a partial solution") (being another paper that would benefit the
public by being posted in the PTO website).The Paper is valuable in setting forth goals the
current PTO administration believes to be important and how they propose to
achieve those goals. It is less
valuable in providing the public with the evidence it needs to assess whether
these proposals are related to achieving the goals or whether the reasoning
behind choosing these goals is sound. The patent community cannot and should not be expected to blindly accept
these proposals or their relationship to the purported goals, and it is justified
in expecting and demanding that the Office provide sufficient evidence in favor
of these proposals. This White
Paper does not fulfill those needs and expectations.
MPEG LA Announces Formation of Gene Patent Pool
issued earlier this month, MPEG LA, LLC
announced that it was launching an initiative to enhance the availability of
gene patents for diagnostic testing. MPEG LA, which describes itself as the world's leading packager of
patent pools for standards and other technology platforms, would accomplish
this objective by creating a new gene patent pool. Currently, MPEG LA has formed patent pools for MPEG-2, ATSC,
AVC/H.264, VC-1, MPEG-4 Visual, MPEG-2 Systems, 1394, and MPEG-4 Systems, so the
company would be venturing outside of consumer electronics-related pools for
the first time in creating the gene patent pool.
LA notes that it neither owns nor uses the patents in its pools, but rather
seeks to create markets for patents that maximize profits for the patent
holders and make utilization of patents affordable for manufacturers,
consumers, and other users. According
to the company's press release, the new gene patent initiative will address
"the market's need for nonexclusive access to patents for diagnostic
genetics tests leading to personalized medical solutions that save lives and
reduce healthcare costs." While MPEG LA President and CEO Larry Horn described diagnostic genetics
testing as "hold[ing] great promise as a driver of precision therapy,"
he noted that patent thickets and restrictive licensing arrangements threaten the
delivery of such tests. Pointing
to the recent decision in Association for
Molecular Pathology vs. U.S. Patent and Trademark Office, Mr. Horn
contended that a solution that "balances social cost and open access with
innovation incentive" was needed.MPEG
believes that by aggregating patent rights for existing and emerging tests that
may lead to personalized treatment for diseases and disorders such as hereditary
hearing loss in infants, breast cancer, ovarian cancer, cardiovascular disease,
and Lynch syndrome, and licensing these patents nonexclusively for diagnostic
use, it can assist laboratories, testing companies and researchers in obtaining
the rights they need to design comprehensive diagnostic genetics tests, and as
a result, make such tests widely available through multiple channels at
NVCA Report Shows First Quarter Drop in Venture Funding
Friday, the National Venture Capital Association (NVCA), a trade association
representing the U.S. venture capital industry, released the results of its
latest MoneyTree Report on venture funding. The study, conducted with PriceWaterhouseCoopers based on
data from Thomson Reuters, indicates that venture capitalists invested $4.7 billion
in 681 deals in the first quarter of 2010, a 9% decrease in dollars and 18%
increase in deals as compared to the fourth quarter of 2009. After adjusting its fourth quarter
numbers, the NVCA determined that $5.2 billion had been invested in 832 deals,
as opposed to its initial determination that $5.1 billion had been invested in
794 deals. While the NVCA report
indicated that both the dollars and deals were down from the fourth quarter of
2009, the NVCA noted that the numbers for the first quarter of 2010 were higher
than for the same quarter in 2009, when $3.4 billion was invested in 635 deals. It
was a case of good news, bad news for the Life Sciences sector (biotechnology
and medical devices) in the first quarter. On the bad news side, Life Sciences investing dropped to $1.3
billion in 160 deals for the first quarter, which constituted a 26% drop in
dollars and a 21% decrease in deals as compared with the fourth quarter of
2009. On the good news side, Tracy
Lefteroff of PricewaterhouseCoopers noted that "Life Sciences continues to
be the number one sector for VC investing, with biotechnology being the
absolute single-industry leader in dollars invested over the past four quarters." In particular, the
sector drew $825 million in 99 deals in the first quarter. However, these numbers still
represented a 24% decrease in dollars (down from $1.1 billion in the fourth
quarter) and a 14% drop in deals (down from 115 deals in the fourth quarter).
President Mark Heesen said that
"[d]espite a great deal of economic uncertainty in the first quarter, the
venture capital industry moved forward with a more active start than it did in
2009, which bodes well for the remainder of the year." He expected venture funding to increase
moderately throughout the remainder of 2010, in part because of the passage of
health care reform legislation.Additional
information regarding the latest report can be found here.For
information on this and other related topics, please see:• "VentureDeal Report Shows 65% Increase in Fourth Quarter Biotech Venture Funding," March 16, 2010• "NVCA Report Shows Slight Drop in 4Q Venture Funding and Sharp Decline for 2009," January 24, 2010•
"Biotech/Pharma
Companies Look to Market for Capital," December 29,
"NVCA
Study Shows Increase in Third Quarter Venture Funding," October
Financing Improving, R&D Spending Up," August 31,
Saw Biotech Rebound Coming," August 17, 2009•
Biotech/Pharma Beginning to Bounce Back?" August 12, 2009•
Quarter Venture Capital Funding at 12-Year Low," April 23,
Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech
Rebound in 2009," February 16, 2009
Biovail Laboratories International SRL v. Paddock Laboratories,
Inc.0:10-cv-01571; filed April 15, 2010 in the District
IV certification as part of Paddock's filing of an ANDA to manufacture a
generic version of Biovail's Aplenzin ER (bupropion, used to treat
depression). View the complaint here.
Abbott Laboratories et al. v. Teva Pharmaceutical Industries
Ltd. et al.1:10-cv-00302; filed April 14, 2010 in the District
• Plaintiffs: Abbott Laboratories; Abbott Respiratory LLC• Defendants: Teva Pharmaceutical Industries Ltd.; Teva Pharmaceuticals USA
Infringement of U.S. Patent Nos. 6,129,930 ("Methods
and Sustained Release Nicotinic Acid Compositions for Treating Hyperlipidemia
at Night," issued October 10, 2000), 6,406,715 ("Intermediate Release
Nicotinic Acid Compositions for Treating Hyperlipidemia Having Unique Urinary
Metabolite Profiles," issued June 18, 2002), 6,676,967 ("Methods for
Reducing Flushing in Individuals Being Treated with Nicotinic Acid for Hyperlipidemia,"
issued January 13, 2004), 6,746,691 ("Intermediate Release Nicotinic Acid
Compositions for Treating Hyperlipidemia Having Unique Biopharmaceutical
Characteristics," issued June 8, 2004), 7,011,848 ("Hydrophobic
Component Free Sustained Release Nicotinic Acid Compositions for Treating
Hyperlipidemia and Related Methods Therefor," issued March 14, 2006),
6,818,229 ("Intermediate Release Nicotinic Acid Compositions for Treating
Hyperlipidemia," issued November 16, 2004), 6,080,428 ("Nicotinic Acid
Compositions for Treating Hyperlipidemia and Related Methods Therefor,"
issued June 27, 2000), and 6,469,035 ("Methods of Pretreating
Hyperlipidemic Individuals with a Flush Inhibiting Agent Prior to the Start of
Single Daily Dose Nicotinic Acid Therapy to Reduce Flushing Provoked by
Nicotinic Acid," issued October 22, 2002) following a Paragraph IV
certification as part of Teva's filing of an ANDA to manufacture a generic
version of Abbott's Simcor® (niacin extended release / simvastatin tablets,
used to treat hypercholesterolemia). View the complaint here.
Bayer Schering Pharma AG et al. v. Teva Pharamceuticals USA,
Inc. et al.1:10-cv-00299; filed April 13, 2010 in the District
• Plaintiffs: Bayer Schering Pharma AG; Bayer HealthCare Pharmaceuticals
Inc.; Schering Corp.• Defendants: Teva Pharamceuticals USA, Inc.; Teva Pharmaceutical
Infringement of U.S. Patent No. 7,696,206 ("2-phenyl
Substituted Imidazotriazinones as Phosphodiesterase Inhibitors," issued
April 13, 2010) as part of Teva's filing of an ANDA to manufacture a generic
version of plaintiffs' Levitra® (vardenafil hydrochloride, used to treat
erectile dysfunction). View the
Baker v. Bayer Aktiengescellschaft Corp. et al.2:10-cv-02271; filed April 13, 2010 in the Western
• Plaintiff: Charles R. Baker• Defendants: Bayer Aktiengescellschaft Corp. d/b/a Bayer AG; Bayer
Corp.; Bayer Healthcare, LLC; Bayer Healthcare Pharmaceuticals, Inc.
marking based on Bayer's marking of certain of its Baytril®, Cipro®, Ciprodex®,
Fludara®, Legend®, and Proleukin® products indicating that these products are
covered by one or more of U.S. Patent Nos. 4,670,444 ("7-amino-1-cyclopropyl-4-oxo-1,
4-dihydro-quinoline-and naphthyridine-3-carboxylic acids and antibacterial
agents containing these compounds," issued June 2, 1987), 4,844,902 ("Topically
applicable formulations of gyrase inhibitors in combination with
corticosteroids," issued July 4, 1989), 4,357,324 ("Prodrug
derivatives of 9beta-D-arabinofuranosyl-2-fluoroadenine," issued November 2, 1982), 4,808,576 ("Remote
administration of hyaluronic acid to mammals," issued February 28, 1989), 4,530,787 ("Controlled
oxidation of microbially produced cysteine-containing proteins," issued July 23, 1985), 4,569,790 ("Process
for recovering microbially produced interleukin-2 and purified recombinant
interleukin-2 compositions," issued February 11, 1986), 4,604,377 ("Pharmaceutical compositions
of microbially produced interleukin-2," issued August 5, 1986), 4,748,234 ("Process for recovering
refractile bodies containing heterologous proteins from microbial hosts,"
issued May 31, 1988), 4,572,798
("Method for promoting disulfide bond formation in recombinant proteins,"
issued February 25, 1986),
4,853,332 ("Structural genes, plasmids and transformed cells for producing
cysteine depleted muteins of biologically active proteins," issued August 1, 1989), and 4,959,314 ("Cysteine-depleted
muteins of biologically active proteins," issued September 25, 1990), all of which are expired. View the complaint here.
v. Novartis Pharmaceuticals Corp. et al.2:10-cv-02272; filed April 13, 2010 in the Western
• Plaintiff: Charles R. Baker•
Defendants: Novartis
Pharmaceuticals Corp.; Novartis Animal Health US, Inc.; Novartis
Opthalmics, Inc.
marking based on Novartis' marking of certain of its Denegard®, Milbemite®, and
Ocupress® products indicating that these products are covered by one or more of
U.S. Patent Nos. 4,278,674 ("Substituted 14-desoxy-mutilin compositions,"
issued July 14, 1981), 4,547,520
("5-Oxime derivatives of milbemycins and veterinary and agricultural use
thereof," issued October 15, 1985),
3,910,924 ("3,4-Dihydrocarbostyril derivatives and a process for preparing
the same," issued October 7, 1975),
and 4,309,432 ("Compositions for treating glaucoma containing a
carbostyril," issued January 5,
1982), all of which are expired. View the complaint here.
v. Bausch & Lomb, Inc.2:10-cv-02273; filed April 13, 2010 in the Western
marking based on Bausch & Lomb's marking of certain of its Xibrom® products
with U.S. Patent No. 4,910,225 ("Locally administrable therapeutic
composition for inflammatory disease," issued March 20, 1990) which is
expired. View the complaint here.
v. Glaxosmithkline Healthcare, LP et al.2:10-cv-02274; filed April 13, 2010 in the Western
Defendants: Glaxosmithkline
Healthcare, LP; Glaxosmithkline, LLC
False marking based on GSK's marking of certain of
its Alli® products with U.S. Patent No. 4,598,089 ("Leucine derivatives,"
issued July 1, 1986) and its
NicodermCQ ® products with U.S. Patent No. 5,004,610 ("Subsaturated
nicotine transdermal therapeutic system," issued April 2, 1991), which are expired. View the complaint here.
Warner Chilcott Co., LLC et al. v. Mylan Pharmaceuticals
Inc.1:10-cv-00059; filed April 9, 2010 in the Northern
• Plaintiffs: Warner Chilcott Co.; Hoffmann-La Roche Inc.• Defendant: Mylan Pharmaceuticals Inc.
Infringement of U.S. Patent No. 7,192,938 ("Method
of Treatment Using Bisphosphonic Acid," issued March 20, 2007), licensed
to Warner Chilcott, following a Paragraph IV certification as part of Mylan's
filing of an ANDA to manufacture a generic version of Warner Chilcott's
Once-a-Month Actonel® (risedronate sodium, used to treat and prevent
postmenopausal osteoporosis). View
Astrazeneca Pharmaceuticals LP et al. v. Anchen
Pharmaceuticals, Inc. et al.3:10-cv-01835; filed April 8, 2010 in the District
• Plaintiffs: Astrazeneca Pharmaceuticals LP; Astrazeneca UK Ltd.• Defendants: Anchen Pharmaceuticals, Inc.; Anchen, Inc.Infringement of U.S. Patent No. 5,948,437 ("Pharmaceutical
Compositions Using Thiazepine," issued September 7, 1999) following a
Paragraph IV certification as part of Anchen's filing of an ANDA to manufacture
a generic version of AstraZeneca's Seroquel® XR (quetiapine fumarate, used to
treat schizophrenia and bipolar disorder). View the complaint here.
At least since William Shockley's crackpot racial
theories had their brief moment in the public discourse, it has been evident
that merely achieving a Nobel Prize is not a guarantee of Solomonic wisdom,
particularly outside the recipient's field of expertise. Or perhaps it is just a reflection of
the human reality that the fickle finger of genius touches even the most
brilliant of us serendipitously and cannot be counted as a birthright of any
constancy -- strokes of genius perhaps being more like strokes of lightening than
we would care to admit.
This is particularly true of fields like economics,
where the complexities of the subject matter (and the difficulties is fashioning
meaningful "controls") frequently render conclusions that differ from
reality -- if it were different, we could just transport the Fed to the
University of Chicago's economics department and be done with it. But all too often, economic predictions
and even analyses fall short, not due to anything other than the impossibility
of accuracy in describing these aspects of the world around us.
These characteristics of economic analysis come to
mind in considering Professor Joseph Stiglitz's (at right) op-ed piece in Friday's Wall Street Journal, purportedly making "The
Case Against Gene Patents." (The
Professor is joined by another Nobelist, John Sulston (below), chair of the Institute
for Science, Ethics and Innovation at the University of Manchester; his Nobel
was for medicine, awarded in 2002.) Professor Stiglitz, who is at Columbia University, won the Nobel Prize
in 2001 for his work on information assymetry. He was Chair of the President's Council of Economic Advisors
under President Clinton, and in
addition to the Nobel, has won the John Bates Clark Medal (1979) and is "one
of the most frequently-cited economists in the world" according to the
University of Connecticut's Department of Economics.
And yet, Professor Stiglitz falls into the same
errors that far lesser pundits and polemicists have been prey to in the gene
patenting debate. Of course, the Professor was part of the
ACLU "team" that won a summary judgment verdict from a District Court
judge last month, so he is hardly unbiased on the issue. But he does make some idiosyncratic
errors that illustrate how far afield from reality the anti-gene patenting
folks are willing to go.
First, he states that "Myriad [has] had total control over the BRCA1 and BRCA2 genes since the
1990s. No other companies have been able to do research on the genes without
Myriad's permission." Partially true, with regard to companies -- it should come as no surprise
that patents prevent competing commercial
activity. But this is hardly total
control, since extensive basic research has been done on these genes since
Myriad (and their licensor, the University of Utah) were granted the
patents. And there are extensive
commercial uses for the genetic information that could have been pursued by
companies without infringing. What
other companies have not been able to do is practice the patented invention.
He then states that genes "contain
the most fundamental information about humanity -- information that should be
available to everyone." As
they are -- the information is not patented. It has been a consistent theme of the ACLU and their friends
that Myriad has somehow hijacked an individual's genes, when the fact is that
gene patents do nothing of the sort.
Speaking as an economist, Professor
Stiglitz then purports to introduce "a deeper understanding of the
economics and science of innovation" that, he says, "leads to exactly
the opposite conclusion" asserted by gene patent proponents, viz. that "private companies will
not engage in genetic research unless they have the economic incentives created
by the patent system." Unfortunately,
he then misconstrues the fundamental societal benefit conferred by the patent
system -- not incentives to innovate, and not even incentives to commercialize,
but the requirements for disclosure that are fundamental to the patent
grant. Again misunderstanding the
difference between the patented article -- an isolated nucleic acid encoding a
specific protein -- and the information content comprising the sequence,
Professor Stiglitz asserts that patents "not only prevent the use of
knowledge in ways that would most benefit society, they may even impede
scientific progress." His
basis for this statement? "Every
scientific advance is built on those that came before it. There is still a
great deal to learn about our genes, particularly how they contribute to disease. Gene patents inhibit access to
the most basic information."
Once again, actually that is simply not
the case. Not only is there no
evidence to support the statement that gene patents have impeded genetic
research, there is copious evidence to the contrary -- the almost 8,000 basic
scientific references that have been published since the Myriad patents at
issue in the ACLU lawsuit were granted. So the "patents impede scientific progress" argument does not
seem to have benefited from the Professor's deeper understanding of either
economics or science.
The next issue the Professor raises is
the potential "patent thicket" that might arise in an era of
personalized medicine when an individual's genetic information may be commonly
obtained, at least for genetic loci identified as being involved in the
etiology of common diseases. Here
he has a point, but it is a prospective one -- that era is not yet upon us, for
one, and the types of claims invalidated by the District Court are not the ones
that will impact personalized medicine. The invalidated claims were, in large part, directed to the isolated
genes themselves. These claims
were targets because they had sufficient potential political impact -- they
supported the "don't patent my genes" campaign mounted by the ACLU to
provide the background drumbeat of support from media and "grassroots"
outlets, they could be easily fashioned into a "message" with great
emotional impact, and they were the types of claims that are the bedrock of the
However, it is unlikely that any of
these claims are infringed in performing the types of genetic testing either as
performed by Myriad for the BRCA1 and BRCA2 genes, or that would be implicated
in personalized medicine. That is
because these claims have the following structure (illustrated for BRCA1 but in
common with most other claims to isolated genes):
1. An isolated
DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid
sequence set forth in SEQ ID NO:2. [U.S. Patent No. 5,747,282]
In order to be infringed, this claim
requires that the full-length BRCA1 gene be isolated, and that it encode the
polypeptide identified by SEQ ID NO: 2. For personalized medicine, on the other hand, the identification of
disease-related polymorphisms in BRCA1 (or any other gene) will not require
isolation of the full-length gene. Instead, the polymorphic site will be identified, and only that fragment
of the gene will need to be interrogated. However this is done, it will not infringe a gene claim like claim 1 of
the '282 patent unless the entire, full-length gene is isolated. For economic if not scientific reasons,
this will simply not be done because it doesn't need to be.
The Professor argues that in the brave new
world of personalized medicine, "free sharing of information about genes will be vital to understanding the role of
these variations in human disease and other
traits" (emphasis added). That, of course, is the world we have
today, since the unpatentability of genetic information (and the patentability
of isolated genes) has resulted in a free-flow of information from universities
and governmental and non-governmental research institutes. In short, there is no incentive to
suppress this information, since the aspects that are patentable -- isolated
genes -- can be protected. Indeed,
in view of the disclosure requirements of U.S. patent law -- specifically 35
U.S.C. § 112 -- such full and complete disclosure is required (said disclosure
requirements not being an aspect, for example, of scientific research
papers). So as things now
stand (before the ACLU took up the anti-gene patenting torch), "the basic
data" of our genes is "freely available to everyone to interpret and
develop." What is not
permitted -- during the temporary existence of a patent -- is commercial activity
in competition with the patent holder or her licensee.
Of course, cost comes into the
equation, and the fact that some women are not able to afford the Myriad
test. But those costs are not
completely the consequence of the tests being patented, and any unavailability
of the tests is more the result of the lunacy of permitting insurance companies
instead of doctors to decide who does (and who does not) get needed care. The Professor asserts that "[p]atents
are also not necessary for ensuring that genetic tests come to market"
based on the representations of "[o]ther
labs" that they are prepared to provide the test for "a few hundred
dollars" rather than what Myriad charges. This is not surprising -- these "other
labs" didn't have to incur the start-up costs and attract the investors at
a time when the success of Myriad's test was not assured. It is always easier to copy than to
innovate and commercialize, and the ex
post facto reasoning that these "other labs" can now provide
these tests more cheaply ignores the frank reality that the patent system
provides for that -- these labs, and every other lab, will be able to enter the
marketplace unfettered by Myriad's patent rights when the patents expire,
Professor Stiglitz saves some of the
best (or worst) flights of fancy until the end of the piece. The consequence of less private
investment in commercializing the fruits of genetic research by banning patents
would result in "a slight slowdown in private research expenditures,"
he says, which "can and should be made up for by an increase in public
expenditures." Governmental
control over the means for production was tried, famously and unsuccessfully,
in the 20th Century, and a non-existent limitation on genetic
information hardly justifies trying that experiment again, particularly in a
field like healthcare that is so important to everyone. The uproar over this administration's
healthcare initiative -- which hardly substituted private with public control
over the healthcare system -- should convince dispassionate observers that the "public option"
is not a viable one.
He also states that genes "are an
example of 'basic knowledge'" like mathematical theorems, again neglecting
the tangible/intangible, patent-eligible/ineligible distinction between genetic
information and isolated genes. He
compares patenting genes to patenting Alan Turing's "mathematical
insights," which if patented might have "greatly delayed" the
development of the modern computer according to the Professor. In this he neglects the unfortunate
facts that Turing's insights were made in the 1950's, while the personal
computer was developed in the 1970's - 80's. Moreover, even if patented, Turing's patents would have
expired 15-20 years before Steve Jobs and Bill Gates created the personal
computer revolution; an equally likely case might be made that patent protection would have provided the
incentive to commercialize the personal computer more rapidly by companies like
IBM and Xerox.
His conclusion shows how badly
Professor Stiglitz has assessed the reality of biotechnology innovation:
It's true that knowledge cannot be produced without cost,
but there is a proven alternative: government- and
foundation-supported research in universities and research laboratories.For over a generation, this is
precisely what has happened: universities and research institutes have performed the basic scientific
research, and the potential to protect the practical applications of that
research through patenting have provided the incentives (and the economic
benefits to those universities and research institutes) for companies to commercialize
them. This partnership has
propelled the U.S. to the forefront of biomedicine, providing biologic drugs
and diagnostic methods for important and previously-intractable diseases. The industry has in some ways been a
victim of these successes: the
uninformed and willfully misinformed see these beneficial consequences and
misunderstand or misrepresent the critical importance of patenting in its
historical development. Professor
Stiglitz characterizes the District Court's decision as a "critical
achievement"; in ways only an economist can be, he is completely wrong,
and the evidence of the past 30 years provides ample evidence of that fact.
Donald Zuhn -- On
last Thursday's "Colbert Report," host Stephen Colbert turned his
attention to the Association of Molecular
Pathology v. U.S. Patent and Trademark Office case that was decided on
March 29. Pointing to the result
in the BRCA1/2 gene patent case, Mr. Colbert said he had found "a reason
to be disappointed in the Federal benchwarmers," and noted that the
decision would be "a huge blow to the biotech industry." The Comedy Central comedian said that
he was "furious at the ACLU," and instead was "with Kevin Noonan
here . . . the man who defended Myriad's right to patent the genes." By defending Myriad, Mr. Colbert was
referring not to the District Court litigation, but rather Dr. Noonan's appearance
on "60 Minutes" earlier this month (see "'60 Minutes' and 'Newshour' Take Different Approaches to
Covering Gene Patenting Story"). Mr. Colbert then played the portion of
Dr. Noonan's interview in which he argues that patents are necessary in order
to promote investment. Now, Patent Docs is well aware that the
"Colbert Report" is
a satire of news shows that can be found on a certain conservative cable
network, and that there is a possibility that Mr. Colbert may actually side
with the plaintiffs and the ACLU. However,
when one strips away the jokes, the segment still makes a good case for gene
patenting (or at least a better case than "60 Minutes") -- other than the part about 401 Man Seed knock-offs, of course.The
"Colbert Report" segment on gene patenting can be viewed below:The Colbert ReportMon - Thurs 11:30pm / 10:30cFormula 01 Liquid Genetic Materialwww.colbertnation.comColbert Report Full EpisodesPolitical HumorFox News
19-21, 2010 - Intellectual
Property Counsels
Committee (IPCC) Spring Conference & Meeting (Biotechnology
Organization) - New
LAApril
22, 2010 - "Bio-Similars:
The New Litigation Landscape" (Intellectual
Property Owners Association) - 2:00
- 3:00 PM (EST)April
23-24, 2010 - 12th
Comprehensive PCT Seminar (Franklin Pierce Law Center &
World Intellectual Property Organization) - Concord,
NHApril 27-28, 2010 - 4th