The Washinton Times reported that a so-called wild-card patent provision, expected to be proposed to Congress as part of the Bioshield II bill (Senate Bill S.3, Protecting America in the War on Terror Act of 2005), has been modified to overcome objections from companies that manufacture generic drugs.

S.3 would make changes to the earlier Project Bioshield, which authorizes $5.6 billion over 10 years to encourage pharmaceutical and biotechnology companies to work with the NIH to develop antidotes, vaccines and other products to treat and protect against a number of potential biological weapons.

The wild card provision, if enacted, would add up to two years to the exclusive patent term for a patented drug. It's called a wild card because its designee would get to apply it to any drug for which it holds a patent. For a major pharmaceutical, those two extra years could be worth billions of dollar in revenue. Generic firms are worried that drug companies would wait to apply the wild card until the last minute - thus throwing a monkey wrench into their business plans.

The draft language in the new bill was changed to require the winner of a contract to name the designated drug within 180 days of receiving the contract. Since the wild card cannot be applied until after the company actually gains FDA approval for the new countermeasure, there is a risk that the wild card could be applied to a drug that would go off patent before it can be used, effectively nullifying the whole scheme for the pharmaceutical company.

However, even then not all would be lost. If the patent on the wild-card product does expire, there is still an option in the bill to extend the patent on the countermeasure to make up the time lost getting FDA approval. Under a provision in S.3, the firm with a winning countermeasure drug can choose to have the life of the patent on the new product extended to 17 years. Again, this can mean a massive windfall for the pharma.

The Generic Pharmaceutical Association opposes the changes on serveral grounds. See their position paper here. More info here.

In general, S.3 sets forth provisions concerning bioterrorism preparedness and defense, including provisions for: (1) extending the patent terms for certain countermeasure products; (2) exempting meetings between the Secretary of Health and Human Services and parties developing priority countermeasures from antitrust laws; (3) establishing the Commission on Countermeasure and Vaccine Regulation; (4) prohibiting a State from establishing requirements different from certain Federal food and drug laws; (5) allowing tax credits for vaccine and countermeasures manufacturing and research; and (6) requiring procedures for inspecting imported live animals.

In a bit of a gruesome political tie-in, it also increases the death gratuity payable to survivors upon the combat-related death of a member of the Armed Forces and increases the maximum life insurance payable for a member of the uniformed service or a veteran. This will put anyone opposed to the bill in a bind - they have to choose between allowing the controversial measures or looking like they are "against the fallen troops" - a no win situation.

Several groups, such as the National Vaccine Information Center (NVIC), are concerned about vaccine safety and have come out against the bill because of its provision that would preempt any state legislation regulating vaccines or vaccine components (read: Thimerosal or mercury) and it proposes to take away the rights of states to even warn citizens about potential injuries attributable to vaccines and drugs.

Other proposed provisions that raise eyebrows include the broadening of the definition of "countermeasure," which could make almost any medicine eligible for patent extensions. The definition could be applied to commonly prescribed drugs that treat secondary effects of a bioterrorist attack, such as migraines, anxiety and even erectile dysfunction.

"To retain respect for sausages and laws, one must not watch them in the making."

- Otto von Bismarck

In what may be a sign that blogs have jumped-the-shark, the current issue of BusinessWeek has a cover story emblazoned with large letters that "Blogs Will Change Your Business. Look past the yakkers, hobbyists, and political mobs. Your customers and rivals are figuring blogs out. Our advice: Catch up...or catch you later." They cite some sobering statistics that there are now over 9 million blogs with about 40,000 sprouting up each day. Granted, a lot are the daily musings of the likes of Girly Shoes, who writes often about her last job (see "The Last Post Ever About My Old Job"). But others make you take a closer look at the business case for the use of a blog, e.g., the FastLane Blog set up by GM's Vice-Chairman, Bob Lutz. While the blog is carefully edited by the PR department, GM deserves some credit for opening up a window to one of its most senior executives. (Note to Bob: Love the site but you still need to build better cars)

This article may also come from the fact that BusinessWeek itself has spawned a half-dozen of its own, professionally run blogs, including a "new blog on blogs" called Blogspotting. Although, if you look at the posts on Blogspotting, it seems to have not found it's way yet. It features posts pondering "Mainstream press barely mentions blogs" and "Mainstream media's alleged strategy on blogs." Blogspotting even asks the question "What do you want this blog to be?" I suppose it's nice they asked but you'd think with having professional staffers running the blog they'd know what they wanted.

BW has several other blogs (all run by professionals) like Tech Beat, posted by a half dozen staffers. This has a fair bit of useful information, including the ironic Overcoming Blog Overload post on tagging.

But, I could be misguided. The Business 2.0 blog reported that the advertising on BoingBoing.net brings in about $500,000 a year in change for the group. Maybe the Baristas need to start talking to Starbucks about a joint venture.

Merck & Co. announced it intends to file an appeal with the U.S. Supreme Court asking to overturn the ruling that the patent on its blockbuster osteoporosis drug Fosamax will expire a decade earlier than expected.

The U.S. Court of Appeals for the Federal Circuit rejected a Merck & Co. request to reconsider a decision that the patent on its blockbuster Fosamax osteoporosis drug would expire by February 2008, a decade earlier than expected. Fosamax is Merck's second-best-selling drug with sales of about $3.2 billion worldwide last year.

Israeli-based generic drug maker Teva Pharmaceutical Industries Ltd. challenged the patent on the once-weekly version of Fosamax. A Delaware district court upheld the Merck patent in 2003 but in January 2005, the Federal Circuit overturned the decision and said the Fosamax patent would expire by February 2008.

Dennis Crouch has a nice summary on his Patently Obvious blog here.

Merck, with the amicus support of Pharmaceutical Research and Manufacturers of America (PhRMA), had filed a petition for rehearing en banc but the CAFC denied the request, thus maintaining the panel decision. The denial is here.

At the WIPO General Assembly meetings from September 27 to October 5, 2004 the governments of Argentina and Brazil submitted a proposal for "the Establishment of a Development Agenda for WIPO". The proposal was co-sponsored by Bolivia, Cuba, Dominican Republic, Ecuador, Egypt, Iran, Kenya, Peru, Sierra Leone, South Africa, Tanzania and Venezuela. The Development Agenda proposal asked for fundamental changes in WIPO. Some of the proposals were specifically directed at the special concerns of developing countries, while others were efforts to redirect WIPO to give more weight to general consumer and public interests in matters concerning patents, copyrights and other intellectual property rights. Among the proposals for a Development Agenda is a proposal for a "Treaty on Access to Knowledge and Technology". The Development Agenda proposal, the WIPO General Assembly decision and many of the comments and discussions are available here.

World Intellectual Property Organization (WIPO) took the step of agreeing to consider the impact of its decisions on developing nations — including assessing the impact of intellectual property law and policy on technological innovation, access to knowledge, and even human health. There is much at stake since WIPO decisions affect everything from the availability and price of AIDS drugs, to the patterns of international development, to the communications architecture of the Internet. As part of the agreement, WIPO held meetings to discuss the "Development Agenda", endorsed by hundreds of individuals and public-interest non-governmental organizations (NGOs) including EFF and the Consumer Project on Technology (CPTech) through the Geneva Declaration on the Future of WIPO.

As reported by the EFF, the first session of the Inter-Sessional Intergovernmental Meeting (IIM) on a Development Agenda for WIPO was held from April 11 to 13, 2005, where 99 Member States, 16 Intergovernmental Organizations (IGOs) and 41 Non-Governmental Organizations (NGOs) participated in the session. The IIM decided to admit, on an ad hoc basis, 17 non-accredited NGOs, as per the attached list, without implications as to their status for future WIPO meetings. More info is available here, here and here.

Wired ran an interesting article on the struggle relating to Bioprospecting detailing how companies are traveling to the deepest parts of the jungle, the highest mountains and, even the antarctic, to hunt for plants and animals with commercially valuable properties. The question, of course, is who should reap the rewards?

Thus, the discussion at U.N. headquarters was to debate strategies that developing countries can adopt to attract investments in drug research based on genetic resources.

The concept behind bioprospecting is not new and one of the first major deals was in 1991, when the pharmaceutical giant Merck made an agreement with Costa Rica's National Biodiversity Institute to collect and prepare specimens for inventory. The first payment was $1 million, but it's not clear how any future revenue generated from pharmacological discoveries would be shared with indigenous peoples.

However, many countries are looking to protect indigenous peoples' rights to ownership of the traditional knowledge associated with their land, and to promote sustainable development. The most important is the Convention on Biological Diversity, which came into effect in 1993, but which the United States has yet to ratify. And then there is the Agreement on Trade-Related Aspects of Intellectual Property Rights, commonly known as the TRIPS Agreement.

Although the Convention on Biological Diversity has established a framework for allowing access to biological resources, it assumes that individual states in fact have sovereignty over these resources, a presumption that does not hold for every resource. Additionally, it is already a problem to figure out who is doing the collecting and for what purpose. Bioprospecting often involves consortia composed of public and private entities. Delineating where scientific research ends and commercial activity begins becomes a difficult task, notes a report from the U.N. University Institute of Advanced Studies entitled "The International Regime for Bioprospecting: Existing Policies and Emerging Issues for Antarctica." The document was drafted in preparation for a biodiversity meeting, the Seventh Conference of Parties to the Convention on Biological Diversity, held in Kuala Lumpur, Malaysia, this past February.

The report calls for the development of regulations to govern bioprospecting that would address a series of basic questions: Who owns the continent's genetic resources? How can scientists legitimately acquire biomaterials? What measures should researchers take to protect extremophiles? Who owns the products that eventually get marketed commercially from these discoveries?

I wonder how this can be effectively enforced whenever plants and animals often can migrate and thrive (invade?) another territory. How can there be regulatory control over every species? I have a friend who, while doing studies on a plant from another continent, had its seeds put into the local area waters. (Basically, the cleaning people came into the lab and removed the special filters on the floor drain so they could wash the floor - and washed the seeds right down the drain!) These plants found a new, indigenous place to live.

Critics often condemn bioprospecting as a loss to Third World countries. Bioprospectors are seen as carrying off native plants, animals, microorganisms and other natural products with potential commercial value. Then science transforms these products into outrageous profits for wealthy investors.

Yes, abuses do occur but bioprospecting is not a get-rich-quick scheme. Out of 10,000 natural organisms screened for useful compounds, maybe one results in a new drug or other commercial product, and this only after many years of analysis and testing that typically cost hundreds of millions of dollars. Moreover, bioprospecting can be done responsibly. Development of products based on the genes, chemical compounds and structures of natural organisms can benefit not only consumers and commercial firms, but farmers, local communities and natural ecosystems as well.

Rather than bash bioprospecting, a more useful approach might be to understand how a poor country can maximize benefits from its biological resources.

Groklaw, which advertises itself as "When you want to know more but don't know where to look" has put together an exhaustive list of links in a Patent Resource Page. Frankly, I was starting to get carpal tunnel syndrome just scrolling through the list.

While heavy on software patent and Open Source issues, it is worth noting for those in virtually any field. Check out their great resources for info on patents, patent law, international aspects and even resources regarding patent busting and submarine patent issues.

The House Subcommittee on Intellectual Property circulated a discussion draft a Patent Reform Bill. Since it's just a draft, it's not worth over-analyzing at this point but it is interesting to get a glimpse at the topics that may be subject to amendment.

The proposed legislation includes changes to:

• Creating a post-grant opposition procedures
• Willfulness damages award not merely on the knowledge of a patent
• Remove right for an injunction for infringing activity
• First-to-file rights
• Expanded definitions of prior art (but see above)
• Assignee may file for the application
• Best mode requirement
• Duty of candor and unenforceability
• Limits on damages when invention is a portion of a larger product
• Publication of all patent applications after 18 months
• Prior user rights

I would like to see a first-to-file change to bring us into alignment with the rest of the world but I won't hold my breath. There is certainly going to be some arguments over these types of changes. A Senate Committee on the Judiciary, Subcommittee on Intellectual Property, will hold a hearing on "The Patent System Today and Tomorrow," Thursday, April 21, 2005 at 2:30 p.m. in Room 226 of the Dirksen Senate Office Building. Senator Hatch will preside.

Dennis Crouch has an excellent on-going discussion of the bill in a series of posts here, here and here. The Draft Patent Statute is posted here (182 KB).

The Baristas will need to mull over the details over a grande and a scone. We'll keep you posted on substantive changes.

Best Barista, Troels Overdal Poulsen of Copenhagen carried 12 liters of fresh, whole milk from his native Denmark to Seattle in beating five other finalists winning the sixth annual World Barista Championship.

The contestants competed in an against-the-clock competition that required each barista to make four espressos, four cappuccinos and four "signature" drinks in just 15 minutes. They were also allowed 15 minutes to set up and clean up, and were judged in part on cleanliness.

Poulsen’s signature drink, called ESB for "enhanced sensory balance," mixed pepper, espresso and lavendar. More here. Download poster here.

A federal judge in Indianapolis upheld Eli Lilly's patent on Zyprexa,(USP 5,605,897) a treatment for schizophrenia that was among the top-selling drugs in the United States last year, with $2.4 billion in sales.

Judge Young's verdict comes more than a year after the trial in the case. Lilly sued Zenith Goldline Pharmaceuticals, Dr. Reddy's Laboratories, and Teva Pharmaceuticals, which had filed applications with the Food & Drug Administration to make generic olanzapine, the active chemical in Zyprexa.

Lilly had sued three generic drug companies to protect its patent, after the generic companies claimed that the patent was invalid because Zyprexa is too similar to other chemical compounds whose patents have already expired. In a 224-page ruling, Judge Richard L. Young of Federal District Court backed Lilly's position, finding Zyprexa different from the other compounds and worthy of protection.
The verdict protects Lilly's monopoly on selling Zyprexa in the United States until 2011, when its patent expires.

Ivax had the most at stake. The company had obtained the right to six months of exclusive sales on five separate dosages of Zyprexa in exchange for being the first to file a challenge to the olanzapine patent. Dr. Reddy's had the right to marketing exclusivity on one dosage. Teva didn't actively participate in the lawsuit and agreed to abide by Young's ruling.

Ivax and Dr. Reddy's said they will appeal. The case is headed to the U.S. Court of Appeals for the Federal Circuit in Washington, which specializes in U.S. patent law. The Federal Circuit threw out the Prozac patent in 2000 after Lilly won the original case in Indianapolis.

Continue reading "The Difference a Single Atom Can Make? – Lilly’s Zyprexa Lives to See Another Day"

As Benjamin Franklin wrote in 1789, "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes." It's Tax Day and all the little people have to pay their taxes by today to the Internal Revenue Service. Well, at least April 17 is Tax Freedom Day! Just think, you only had to work 107 days to pay your share of taxes to the government.

The Baristas, of course, are sunning themselves and sipping Long Island Iced Tea in the beautiful Cayman Islands. (There are no taxes in the Cayman Islands - government revenue comes from indirect taxes such as customs duties, stamp duty and annual fees levied on corporations.)

As we're enjoying the proceeds of all the money we make off our Patent Baristas blog - which have been deposited in an Offshore Holding Company - we thought this would be a good time to ponder a few items about taxes.

The first U.S. income tax was in 1862 when the federal government was raising money for the Civil War. The first permanent U.S. income tax didn't come along until the 16th Amendment in 1913. The deadline for paying taxes, though, wasn't on April 15 until 1955 when it was moved later in the year to give the Tax Man more time to hang on to your money.

It's funny to imagine that a system designed so that only the wealthy paid taxes currently puts middle-class taxpayers in the rich category. Now, the alternative minimum tax, originally designed to catch just 155 super-wealthy Americans who paid no taxes at all, will hit nearly 3 million taxpayers, up from fewer than 200,000 in 1990. Unless something is done, some 20 percent of taxpayers will be caught in the AMT net next year, up from 4 percent currently.

"Worried about an IRS audit? Avoid what's called a red flag. That's something the IRS always looks for. For example, say you have some money left in your bank account after paying taxes. That's a red flag." -- Jay Leno

But the Baristas are not the only ones who can benefit from traveling to the Caribbean. Intellectual property is often the principal source of value and revenue for pharmaceutical and biotechnology companies. To lessen the tax burden, companies should consider whether to place their intellectual property rights in a holding company outside the United States.

Typically, this is a subsidiary intellectual property holding company in a tax-free foreign jurisdiction. The offshore holding company then grants a license to the parent company or other third parties in exchange for royalty payments. The goal, of course, is to minimize the parent company's tax burden and limit taxation on revenue. Not only should the royalties generated by this offshore subsidiary be tax-free, but also generally the profits made abroad aren't taxable in the United States until they've been repatriated.

Sound good? Consider these tidbits:

1. You need to establish the holding company early in the development of your intellectual property — before the IP has significant value (presumably prior to commercialization). You will be taxed on the transfer of the IP offshore, so you'll want to soften the bite. Consider seeking the advice of a valuation expert to help substantiate the IP's value.

2. Once IP rights are transferred, you usually pay royalties to the holding company in exchange for use of the IP. When you deduct these royalties from your company's taxable income, the royalty rates become subject to scrutiny by U.S. taxing authorities. To lessen such scrutiny, establish a royalty rate as if it were between third parties in an arm's-length transaction. Due to the complexities of setting royalty rates for IP — especially noncommercialized IP — seek advice from an independent expert.

3. Depending on which foreign jurisdiction you choose, your subsidiary may be required to withhold a percentage of the royalty payments for tax purposes. This is why you want to choose a tax-haven country with a favorable U.S. tax treaty — or no treaty at all. Jurisdictions with no U.S. tax treaties and no corporate tax infrastructure may appear the best choice, but in this post-Enron* business climate, U.S. tax authorities have heightened inspection of offshore holding companies.

Warning: Do not make this kind of move without seeking adequate legal and tax advice for your jurisdiction in order to pass scrutiny from the IRS.

Enjoy the weekend. You deserve it!

----------------
*Enron had about 800 Offshore Companies set up in the Cayman Islands for tax purposes. This was not the reason, by the way, that Enron had problems, in fact, it saved them millions of dollars in taxes. It was reported that Enron has not paid Federal income taxes for five years (since 1997) due to the tax credits, etc.

Its so nice to see Kos and Barr deciding to kiss and make-up and come to an agreement over the generic versions of Niaspan and Advicor. I am not taking sides in this dispute. Rather, I feel that this settlement agreement is in the best interest of the patients that need these drugs, and that should be the bottom line here, with issues of patent validity and infringement aside. So, regardless of how these two companies were brought to the negotiating table to come up with this three-part agreement, it would appear to be an equitable solution without court intervention and both parties should be applauded for their efforts at constructing this settlement agreement.

The Settlement and License Agreement permits Barr Laboratories to launch generic versions of Niaspan and Advicor, as well as future dosage formulations, strengths or modified versions of the Products, under terms of an exclusive license commencing on September 20, 2013, approximately four years earlier than the last-to-expire Kos patent. In other words, what this settlement agreement provides for is the certainty of generic entry by Barr four years before the Kos patents expire, or potentially earlier in certain circumstances.

Upon launch, Barr would pay Kos a royalty equal to a portion of profits generated from the sales of generic versions of the Products. As part of the settlement, Barr admits that Kos' patents are valid and enforceable and that Barr infringes the Kos patents.

Continue reading "Kos and Barr Kiss and Make-up and Announce Co-Promotion, Manufacturing, and Settlement Agreements"

The premier issue of Blawg Review was hosted Monday, April 11th, at Evan Schaeffer's Notes from the (Legal) Underground with 31 noteworthy posts from this past week in the blawgosphere. Presented as "a group of law bloggers who are committed to making the best of the blawgosphere more easily accessible and enjoyable to read," Blawg Review is a site for the review of law blogs and postings.

The Baristas have been tied up (Karlyn's move and all) and didn't manage a submission in this inaugural edition but we plan to be a regular contributors to this tremendous effort. The Blawg Review will be hosted by the Baristas on August 15th so be sure to check back.

Barr Pharmaceuticals Inc. announced that it dropped its lawsuit against the Food and Drug Administration (FDA) over exclusive marketing rights to a generic version of the Allegra allergy drug made by France's Sanofi-Aventis.

In February, Barr sued the FDA to challenge its decision to make the company share a 6-month exclusive selling period. The company said it is now dismissing the suit because the FDA has said it can obtain sole exclusivity by slightly modifying its application for the drug.

Barr's version of the 12-hour Allegra-D tablet has tentative FDA approval, meaning the company cannot sell the drug until its patent protection expires. Sanofi-Aventis' first patent related to the drug expires in 2012. Barr's stock was up on the news.

TheDeal.com has a nice article outlining the issues that can arise in a large pharma mega-merger such as between French pharmaceuticals company Aventis SA takeover by Gallic rival Sanofi-Synthélabo SA, in a €53.3 billion ($69.1 billion) after Paris intervened to fend off a Swiss attempt. The results are still mixed.

Sanofi-Aventis SA, the world's No. 3 drug company, faces patent challenges to its three biggest-selling drugs — blood thinners Plavix and Lovenox and allergy drug Allegra and the patent on a fourth blockbuster drug, Ambien, used in the treatment of insomnia, expires in 2006.

If Sanofi-Aventis loses the court cases, generic drugmakers will certainly take a substantial portion of the $5.3 billion in sales revenue the three products earned last year.

A preliminary hearing on Plavix is slated for May 13. The challenges to the patent's on Lovenox and Allegra could be heard in September. The outcome will certainly be looked at carefully by large pharmas and generics with equal interest.

The U.S. Federal Circuit voted en banc to vacate a holding from a panel opinion with regard to the issue of experimental use, and the panel (J. Rader) has issued a new decision regarding a previous holding that the paroxetine hydrochloride anhydrate product produced by Apotex Corp. infringes Smithkline's U.S. Patent No. 4,721,723 covering crystalline paroxetine hydrochloride hemihydrate, a form of Paxil that has some water molecules.

There is an exhaustive review and postings of the various opinions and brief's at Dennis Crouch's Patently Obvious blog here and here.

This case has quite a bit of history and in 2003, Seventh Circuit Judge Posner dismissed a patent infringement case involving paroxetine on the ground that the patent was not infringed. In 2004, a panel of the Federal Circuit affirmed the judgment, on the alternate ground that the patent was invalid due to public use of the invention more than a year before the patent was applied for because Smithkline conducted clinical trials more than one year prior to filing of the patent application. However, Smithkline argued that the clinical trials were an experimental use but the panel ruled that the use was not experimental. The Federal Circuit reversed the claim construction of the district court and held that claim 1 covers any amount of crystalline paroxetine hydrochloride hemihydrate without further limitation. Based on the factual findings of the district court, the Federal Circuit affirmed the district court’s finding that Apotex’s PHC anhydrate product will infringe claim 1 under that broad construction. Notwithstanding that conclusion, the Federal Circuit held, based on the undisputed facts, that SmithKline’s clinical trials constituted a public use under § 102(b) rendering claim 1 invalid. Apotex was thus not liable for infringing claim 1 of the ’723 patent.

In its new decision, the CAFC majority simply avoided the issue of experimental public use by finding alternative grounds to invalidate the patent, holding that the asserted claims "invalid for inherent anticipation by the ’196 patent under § 102(a)." This was originally rejected because Apotex "did not prove by clear and convincing evidence that it was impossible to make pure PHC anhydrate in the United States before the critical date." The appellate panel found that Judge Posner erred by requiring Apotex to meet this standard of proof.

Now, the Federal Circuit en banc issued an order that granted the parties' petition for rehearing en banc "for the limited purpose of vacating the panel's original opinion addressing the issue of experimental use" and "remanded to the panel for further proceedings," without analysis. Additionally, the panel issued a new opinion, "pursuant to an order issued by this court en banc," deleting its earlier public use/experimental use holding and replacing it with a new holding that the patent was invalid for a completely different reason.

There's a good discussion of the issues on Howard Bashman's blog, How Appealing.

I realize there are about 9 million blogs out there so new sites do not generate the excitement they once did. And while I can only monitor a handful, I keep finding news blogs that are quite worthwhile. In case you didn't see these, I wanted to mention a couple of new ones noted by Steve Nipper.

The first is billed as "the final resting place for all of our thoughts, comments, insight, podcasts, whitepapers, action figure order forms, etc." to come out of the ABA Techshow meeting: the rethink(ip) blog.

This is another effort (evolution, really) by Douglas Sorroco, Stephen Nipper, and Matthew Buchanan to go with their pocasting site RETHINK(IP) ALOUD (in MP3 format). These guys are like the Army. They do more before 9 a.m. than most people do all day.

Also of note, the folks at TechnoLawyer.com have officially launched the TechnoLawyer Blog, a legal technology resource that will supplement the TechnoLawyer website. It is cited as "an amalgam of pithy commentary, industry news, and other helpful information compiled by Neil Squillante and Sara Skiff."

• Patent Baristas: Can Patent Legal Work be a Commodity?
  (tags: USPTO patents law)
• Patent Baristas: USPTO Denies Patent for a Hybrid as Being Too-Human
  (tags: USPTO patents)
• Frost Brown Todd
  (tags: lawyers patent+attorneys)
• AIPLA | Home
  (tags: patent+law+association)

Extreme Makeover – Kids Edition:

A Cookie is a Sometimes Food? Sesame Street Re-packages its Beloved Cookie Monster

What is wrong with America these days? Must we be soooooooo PC that even Sesame Street’s beloved blue furry Cookie Monster needs to be harnessed in and white-washed like so much else in our culture (or now lack thereof)? Yes, it is sad but true. When Sesame Street opens its 36th season, Cookie Monster is going to learn some lessons about moderation and will now advocate eating healthy. Get this - his "C is for cookie" song has been replaced with a new song -- "A Cookie Is a Sometimes Food." That's right, the Muppet who once sang, "C is for cookie, that's good enough for me," is advocating eating a healthful diet and learns there are "anytime" foods and "sometimes" foods.

According to Rosemarie Truglio, the show's vice president of research and education, the focus of "Sesame Street" changes every year. This year, the show will focus not just on teaching numbers and letters but also on emotional and physical health. With the rise in childhood obesity, Truglio said "Sesame Street" is concentrating on the need to teach children about healthful foods and physical activity. This season, each episode opens with a "health tip" about nutrition, exercise, hygiene and rest. That will not go very far in my house.

"It's not a perfect solution. It's a 'Sesame' solution," admits "Sesame Street" executive producer Lewis Bernstein. "When we sat down to do the new curriculum, we thought, 'what are we going to do with (Cookie Monster) in health?' We are aware that children eat cookies. We've got a Cookie Monster. He's not going to become a Carrot Monster. We're not trying to get children to not eat cookies, but to eat other things, too."

And, in fairness to Bernstein, Cookie Monster will still get to eat cookies sometimes (remember, they're a sometimes food), including the Letter of the Day segment where poor Prairie Dawn habitually watches in dismay as Cookie Monster devours both the Letter and the cookie it's stamped on.

Now don’t misunderstand me, I am all about healthful eating and lifestyles. With childhood obesity rates soaring, something clearly needs to be done with our super-sized nation. Personally, I exercise 4-5 times a week in my own make-shift home gym, a lot of times with my kids present and watching what I am doing. I am careful about what I eat and try to purchase and serve healthy foods. My kids watch what I eat, purchase and serve. What I don’t do is preach to my kids about a healthy lifestyle and that they watch what they eat. Anyone who knows kids knows that is about as effective as putting a steak in front of a dog and asking the dog to not eat it. Kids learn best by the examples we as parents and family set everyday, year after year, as to what is acceptable and what is not acceptable.

Sesame Street certainly has a great idea about teaching these healthy lifestyle concepts to children and hopefully, the Sesame Street characters will be heard by our kids. But this cannot be the only voice they hear or examples they see. And someone needs to say that to our coach potato nation.

If you are like me and enjoy the economics of law practice as much as the practice itself, then you're probably familiar with Bruce MacEwen's blog, Adam Smith, Esq., where "law firm management comes under the microscope." (and what can I say about a guy who can work in the word "Jesuitical" in a blog article?*)

In a recent post (Deal Market is Back! But Hey, What About the Rest of Us?), MacEwen mentions an article by Aric Press describing that changes are afoot in the profession and that things are essentially unchanged, and that "both sentiments are exactly correct." This is because clients are dividing their legal work into two distinct categories:

Column A: These are the deals, cases, and issues where price is no object;

Column B: Everything else.

That is, companies hire firms at a money is no object level for their (perceived) mission critical work and then trying to get the rest of the work done at cut rates. I agree with the assertion that unless you have a tony NY address, you're not going to get the bulk of your revenue from Column A so that leaves a lot in Column B. What I have trouble with is how things get prioritized in column A versus B. My experience is that many clients (not ours, of course) are often penny-wise, pound-foolish. That is, they ask that you "commoditize" work that cannot be easily reduced to a commodity, e.g., patent work. They put Column A patents into Column B.

Clients will say they want an alternate billing arrangement (read: capped price) for patent applications when they really just want to lower the cost; not increase the value derived. Patent applications are as diverse as the inventors themselves. Almost without fail, the invention is presented as (quote) Just a simple invention (unquote) but then the inventor changes the invention in mid-stream or decides that he really has several related inventions. Recently, I had a single invention balloon into over a dozen applications - each one more complicated than the first - as we delved into the gritty details of just what it was the inventors had discovered.

Too often, patentees look to get a patent as cheaply as possible only to turn around and spend like there's no tomorrow in defending it. Often a lawsuit that could have been avoided had the patent been better crafted in the first place. Personally, I would not want my patent attorney to be incentivized to stop carefully crafting an application because too much time is being spent. Not if this patent covers my company's core technology. What, indeed, is to be done?

I don't mean that I'm against alternative arrangements. They can often make sense - just not always. Earlier, MacEwen put together the "Adam Smith, Esq." official "Savvy Blawgers Panel," a brain trust of outstanding members of the legal blogosphere and asked about the future of the billable hour (Savvy Blawgers Query #2: The Future of the Billable Hour). The answers often derided the billable hour as bad for the client, good only for the lawyers. But is this really so? No one pretends that the billable hours is perfect or all-wise but, as it has been said about democracy - it's the worst form of Government except all those other forms that have been tried from time to time.

I agree with Dennis Kennedy's take on the billable hour, that it is, by its definition, not the best way to make money for lawyers. There is only so much you can charge per hour. There are only so many hours in the day. Unfortunately, when clients ask for a patent application to be an alternative billing arrangement, they are asking that it be shifted from Column A to Column B. That is, they are treating it as a simple routine matter -- just file form 123PDQ and you're done. But patent drafting is not that way. It is an art, a craft, a give-and-take between the patentee and patent office.

This is not to say all patents must be in Column A. Certainly, sophisticated clients can and do decide that they do not intend to procure the best patent claim scope but merely some claim scope, knowing that they will never enforce the claims. Many companies just want patent numbers. For some, this is a way of keeping score. For others, it's a way to provide tender to barter with if a competitor ever comes knocking at their door.

There's certainly nothing wrong with trying to get a low cost patent - as long as careful thought goes into the decision. If one decides that a piece of intellectual property is important to the company's mission and business plan, then it should be treated like column A. If it is nothing more than a commodity-like procurement, then it could be a Column B item. Just be sure you can tell the difference. Like the saying goes, you can have cheap or good ... just not both.

Here's to savvy blawgers ... and clients and their attorneys.

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*Jes'u·it'i·cal (adj). One given to subtle casuistry -- the determination of right and wrong in questions of conduct or conscience by analyzing cases that illustrate general ethical rules.

I am glad right now that the only thing I am suffering from is a common head cold, thanks to my two toddlers wanting to “share.” If I had arthritis like my grandmother did, I would really be starting to worry. It seems that even after the talk of using “black box warnings” from this past February’s hearings at the FDA, today, the FDA asked Pfizer to pull Bextra (valdecoxib), another beleaguered Cox-2 inhibitor, from the market today as part of a broad-ranging Public Health Advisory on the entire class of NSAIDs.

In making this announcement, the FDA cited inadequate information on possible heart risks from long-term use of the drug as well as "life-threatening" skin reactions, including deaths. The regulatory agency also called for the strongest warning possible on Pfizer's other arthritis product, Celebrex. These decisions come about six months after rival drugmaker Merck & Co. pulled its blockbuster arthritis drug Vioxx off the market, also due to safety concerns.

In calling for a stronger warning on Celebrex labels, the FDA cited increased risk of cardiovascular "events" and gastrointestinal bleeding and said all similar drugs should have label warnings.

Pfizer said it "respectfully disagreed" with the FDA decision and it plans to hold talks with the agency about returning Bextra to the market.

Continue reading "Are any COX-2 inhibitors safe? The FDA does an about-face on Bextra"

Barr Pharmaceuticals, Inc., a holding company that operates through its principal subsidiaries, Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc., announced that the U.S. District Court in New Jersey has granted summary judgment of invalidity on an additional patent in their litigation challenging the patents on Allegra(R) (Fexofenadine Hydrochloride) allergy treatment products. The court had previously granted summary judgment of non-infringement with respect to three other patents in the case and has yet to rule on six patents remaining in the litigation.

Barr filed an Abbreviated New Drug Application (ANDA) for Fexofenadine HCI 60 mg capsules in May 2001, an ANDA for Fexofenadine HCI 30 mg, 60 mg, and 180 mg tablets in June 2001, and an ANDA for Fexofenadine Hydrochloride 60 mg and Pseudoephedrine Hydrochloride 120 mg Extended-Release Tablets (marketed by Aventis as Allegra-D) in September 2001.

Aventis filed suits in 2001 trying to prevent approval of Barr's ANDAs until after the expiration of various patents, the last of which expires in 2018. For the 12 months ending January 2005, Allegra tablets had sales of approximately $1.5 billion, while Allegra-D had annual sales of approximately $432 million.

More here.

In case you have not heard already from the many posts out there, Kevin Heller (Tech Law Advisor) and Evan Schaeffer (Notes from the (Legal) Underground) have rolled out Blawg Review, a site for the review of law blogs and postings.

It is not often you see a collaborative project like this from a group of lawyers on any topic, let alone blogging. As they put it, this site represents "a group of law bloggers who are committed to making the best of the blawgosphere more easily accessible and enjoyable to read."

The premier issue of Blawg Review will be hosted next Monday, April 11th, at Notes from the (Legal) Underground, where Evan Schaeffer is now accepting submissions all this week.

Blawg Review will have three general purposes:

Blawg Reviews: Readers and other bloggers will be able to submit reviews of various law blogs (hopefully with some thought involved). Since this covers all law blogs, this should prove to be a good way for specialty blogs to get noticed by those outside their practice niche. As they point out, "Reviews don't have to be serious; we'll accept hilarious."

Blawg Review Hosting: Various law bloggers are invited to host an upcoming Blawg Review on their own law blog, just let them know the Date Available that you would prefer to host, by sending an email addressed to: host at blawg review dot com

Blawg Postings: Everyone is invited to submit their own law blog posts for inclusion in the weekly Review by sending an email to: post at blawg review dot com. Apparently, using "technology that amazes us", this email address automatically forwards submissions to the attention of the next host.

Check out this great effort. We think this will be quite successful and, besides getting people noticed, will provide topics to people who would not otherwise see your posting. Sometimes, you don't know what you don't know. You know? Note: Not addressed is the question "Are Law Blogs Advertising?" as we posted earlier here. I don't think it's a problem with this very unique method of rotating hosts for the Review but let me know your thoughts.

Note that J. Craig Williams, on his blog May It Please the Court, after noting that blogging as a phenomenon is reaching epic proportions, believes they are ads noting that it would be difficult to identify a purely altruistic blog.

For the opposing view that blogs are not ads, see the post by David Giacalone of f/k/a ethicalEsq here.

I've held the view that a blog, even in one's own field, doesn't always constitute an advertisement but I have to admit it's vague. Hence, the Baristas have posted "This May be an Advertisement" on our own site. Vague enough for you?

The Baristas received a nice mention in Ben Cowgill's new blog, the Legal Ethics Blog where he mentions our web disclaimer.

Cowgill writes: "So what is the ethics angle of this post? It's this: I think the disclaimer is just right because it says what it needs to say while providing a little humor which actually makes it more effective in getting the attention of a sophisticated audience."

We'll keep trying to provide a little humor to a dry subject. In the meantime, check out the Legal Ethics Blog on issues related to professional ethics and don't miss the talking avatar on the About page.

[Update: The correct name of Ben Cowgill's Legal Ethics Blog has been added. -Ed.]