The Senate Committee on Small Business & Entrepreneurship unanimously passed the SBIR/STTR Reauthorization Act of 2008 (S. 3362) to reauthorize the crucial Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The bipartisan bill is the result of months of deliberations among Committee members and includes a pivotal compromise that would allow limited investment in the SBIR program by majority-owned venture capital firms.

According to Senator Kerry, Chairman of the Committee on Small Business and Entrepreneurship, the government-wide program has generated more than 84,000 patents and millions of jobs.  The reauthorized SBIR and STTR programs will pump another $1 billion into our small business economy.

Federal agencies with an annual extramural research and development budget of over $100 million are required to allocate 2.5 percent of their extramural R&D dollars to the SBIR program. Currently, eleven agencies have SBIR programs. Approximately 1 in 4 SBIR projects will result in the sale of new commercial products or processes.

Historically, the SBIR program has provided critical financial support to biotech companies.  Of the 252 FDA-approved biologics, 32% of those companies received at least one SBIR/STTR award.

Specifically, the bill passed out of Committee:

• Reauthorizes the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for 14 years, making the new sunset dates September 30, 2022, and September 30, 2023, respectively.
• Includes a compromise on the issue of the participation of companies majority owned and controlled by multiple venture capital companies in the SBIR program, allowing NIH to award up to 18 percent of its SBIR dollars to companies majority owned and controlled by multiple VCs and the other ten SBIR agencies to award up to 8 percent of their SBIR dollars to this class of firms. The affiliation rule and the 500 employee standard remain unchanged in this bill.
• Increases the SBIR allocation from 2.5 percent of SBIR agencies’ extramural research and development budgets to 3.5 percent over the course of 10 years, 0.1 percent per year, for all SBIR agencies except for the Department of Health and Human Services, home to the National Institutes of Health.
• Doubles the STTR allocation from 0.3 percent of STTR agencies’ extramural research and development budgets to 0.6 percent, over the course of 6 years, for all STTR agencies.
• Increases the award size guidelines for the SBIR and STTR programs from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II. This is in line with the recommendation of the National Academy of Sciences.
• Attempts to increase geographic participation, particularly in rural states, by reauthorizing through 2014 and enhancing the Federal and State Technology Partnership (FAST) program and the Rural Outreach Program.
• Calls for better and streamlined data collection and assessment.
• Includes protections to address jumbo awards.

Venture capital companies have been pushing for changes to allow venture-backed companies compete for the money.  The compromise caps the percentages available.  There are provisions requiring each agency to track how many majority venture capital company proposals are received and the amount of venture capital a company has when it receives an award.

See more at the Committee on Small Business & Entrepreneurship

Posted August 29th, 2008 by Stephen Albainy-Jenei in Ventures
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The U.S. Small Business Administration (SBA) is proposing to ratchet up the Small Business Innovation Research (SBIR) Program award threshold amounts to offset the effect of inflation since the amounts were last set in 1992.

Current threshold amounts are $100,000 for Phase I awards and $750,000 for Phase II awards. The SBA can adjust the award amounts once every 5 years and is proposing to increase the award amounts to $150,000 and $1,000,000, respectively.

Why does the government want to give away money?

The purpose of the SBIR program is to stimulate innovation in the economy through federally-funded research and development (R/R&D).

Eleven federal departments participate in the SBIR program; five departments participate in the Small Business Technology Transfer (STTR) program awarding $2 billion to small high-tech businesses.

According to the Federal Register, you can submit comments on the proposal here:

1. On-line at: Federal Rulemaking Portal;
2. Mail: Office of Technology, 409 Third Street, SW., Washington, DC 20416; or
3. Hand Delivery/Courier: Edsel Brown, Assistant Director, Office of Technology, 409 Third Street, SW., Washington, DC 20416.

Comments must be received on or before September 15, 2008

Wanna play double or nothing?

In what is probably the most clever use of state funds, Kentucky is now the only state in the nation with a start-to-finish matching funds program for high-tech small businesses that receive federal SBIR and STTR awards.

Kentucky-based SBIR and STTR grant recipients can apply for matching funds of up to $100,000 to support Phase 1 exploration of the technical merit or feasibility of an idea or technology. Phase 2 federal awards, which support full-scale research and development, would be matched by the commonwealth up to $500,000 in each year of the award. Phase 0 and Phase 00 funds are available to assist with preparing proposals for Phase 1 and Phase 2 grants, respectively.

Guidelines for the Kentucky program are posted at ThinkKentucky.

SBIR FAQs

Do you have to be a Phase I awardee in order to be considered for Phase II of a project?

Yes.

What is the small business size standard for purposes of the SBIR Program?

A small business concern is one which, including its affiliates, has a number of employees not exceeding 500.

Can a firm go directly to a Phase II award without having to compete for Phase I?

No.

Is a small US firm still eligible to compete for an SBIR award if it forms a 50-50 joint venture with a nonprofit or foreign firm?

No.

Are foreign-based firms eligible for SBIR awards?

To be eligible, a small business concern has to be independently owned and operated principal place of business is located in the US at least 51 percent owned by US citizens or lawfully admitted permanent resident aliens.

Are nonprofit concerns eligible for SBIR awards?

No.

May a portion of an SBIR award be subcontracted?

For Phase I, a minimum of two thirds of the research and/or analytical effort must be performed by the proposing firm, and for Phase II, a minimum of one-half of the research and/or analytical effort must be performed by the proposing firm.

Will innovations that have been patented or have patents pending be considered under SBIR?

No.

Are data rights protected and for what length of time?

Data rights are protected by agencies for a period of not less than 4 years from delivery of the last deliverable.

Posted August 28th, 2008 by Stephen Albainy-Jenei in Ventures
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Gene Quinn, Jr., the force behind the Patent Briefs at the Practicing Law Institute, has struck out in a new venture.  Gene has now brought us a new patent blog, PatentFools.com.  PatentFools is described thusly:

The point of PatentFools is to try and identify wrongs, articulate positions, influence decision-makers and have some fun saving the world for generations to come. Essentially, we are fighting for truth, justice and the American way, not unlike Superman… well… very much unlike Superman if you are concerning yourself with the faster than a speeding bullet, more powerful than a locomotive and the ability to leap tall buildings with a single bound. We are, however, not affected by kryptonite, so at least we have that going for us, which is nice!

Why go for yet another patent discussion venue?  Well, according to Gene, while he will continue to write for PLI, there are some limitations on what he can write given the need for PLI, as a nonprofit, to keep its tax exempt status.

As an example of what to expect, Gene calls for the USPTO to withdraw its appeal of the permanent injunction enacted by a district court prohibiting the USPTO from putting the new rule changes into effect (Tafas v. Dudas).

The Court of Appeals for the Federal Circuit lowered any expectations the Patent Office and the Department of Justice had about getting the permanent injunction of the proposed claims and continuations rules overturned.

In Cooper v. Dudas, the Federal Circuit was asked to decide whether the the Patent Office had the authority to interpret the term “original application,” a term used in a section of the American Inventors Protection Act with respect to new provisions on filing for an inter partes reexamination of an issued patent.

The Federal Circuit reviewed the authority the Patent Office has to implement substantive changes to the law regarding patent applications:

We have also previously held that 35 U.S.C. § 2(b)(2) does not authorize the Patent Office to issue “substantive” rules. See Merck & Co. v. Kessler, 80 F.3d 1543, 1549-50 (Fed. Cir. 1996). “A rule is ‘substantive’ when it ‘effects a change in existing law or policy’ which ‘affect[s] individual rights and obligations.’” Animal Legal Def. Fund, 932 F.2d at 927 (quoting Cubanski v. Heckler, 781 F.2d 1421, 1426 (9th Cir.1986), vacated as moot sub nom., Bowen v. Kizer, 485 U.S. 386 (1988)). “In contrast, a rule which merely clarifies or explains existing law or regulations is ‘interpretative.’” Id.

Expressing the view that the USPTO stands virtually no chance that the Federal Circuit will overrule the permanent injunction stopping the implementation of the claims and continuations rules, Gene implores the Office to relent:

In fact, the Federal Circuit is not likely to even hear oral arguments in the GSK matter until late Fall 2008, which is after the next election.  Even if the Federal Circuit does hear the case late Fall 2008, no decision will be forthcoming until late Winter 2009 at the earliest, which means that by the time the Federal Circuit can agree with Judge Cacheris there will be a new President, a new Director of the Patent Office and a new Attorney General.  So why continue with a losing appeal?

Any fool could see the result.

See more here:  Tafas v. Dudas: The Continuation Wars

Posted August 27th, 2008 by Stephen Albainy-Jenei in Blawg Reviews
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Bloggers May Need to Yield Equal Time

FCC Commissioner Robert McDowell (R) recently warned bloggers that the Commission’s decision to smack down Comcast  for hobbling Bit Torrent could lead the government to start “dictating content policy” by requiring blogs to give equal time to opposing views under the Fairness Doctrine.  We’re not sure if criticizing the U.S. Patent Office practices would count as political speech but, if so, Greg Aharonian will have a lot of catching up to do.

Genentech Wants Bigger Dowry

Playing coy, Genentech rebuffed an offer from Swiss pharma Roche to buy the remaining shares in the firm it does not already own for $43.7 billion.  Roche, which has been the majority owner of Genentech since 1990 and owns 55.9% of shares, offered $89 per share for the outstanding stock in July.  Roche Holding AG is expected to increase its offer for the rest of Genentech by 21 percent to $53 billion.

Mass.  Enacts Pharma/Device Code of Conduct

Massachusetts enacted Senate Bill 2863, which requires the Massachusetts Department of Public Health to establish a pharmaceutical and medical device marketing code of conduct, and imposes compliance and reporting requirements on pharmaceutical and medical device companies that employ a person to sell or market prescription drugs or medical devices in Massachusetts. (via FDA Law Blog)

It’s Dress-Down Day Everyday

Condé Nast Portfolio noted that there are fewer distinctions between industries and power levels when it comes to apparel as “pretty much everyone looks more like they belong in tech support than in a partners’ meeting.”  Why?  “In a world where profits are down, bankruptcies are rampant, and the most entrenched I-bankers are getting the heave-ho, you can’t afford to look as though you spared an extra second thinking about the cut of your Charvet shirt.”

Patent Office Wants More Money

USPTO announced a 5 percent inflation adjustment in its patent user fees, reflecting the increase in the Consumer Price Index for 12 months.  Fees will increase effective October 2, 2008.  The increase proposed for public comment in June was 4 percent, but recent CPI data apparently looked better with a 5 percent increase.

New Tricks For Your iPhone

iSmashPhone has 12 iPhone Tricks You Might Not Have Known like how to scroll to the top of a page in any application (by tapping on the “top bar”)  and how to type alternate characters (hold a letter for a pop-up of various versions of the character).  Now updated with 8 More iPhone Tricks You Might Not Know.

Doping For Gold

In the Olympic spirit, Wired presents 10 next-generation doping methods.  The next headaches for the World Anti-Doping Agency include popping hypoxia-inducible factor (HIF) to stimulate red blood cell production without EPO and manipulating genes to block naturally occurring muscle-growth inhibitors –  blocking the protein myostatin gave the mice up to 60 percent more lean muscle mass. Even more promising, Johns Hopkins’ Se-Jin Lee recently found that overproduction of one myostatin inhibitor pumps the mice up even more: up to 81 percent in females and 116 percent in males. Results of human clinical trials are pending so you might want to hold off on self-exerimentation.

Posted August 15th, 2008 by Stephen Albainy-Jenei in Friday Round-Up
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The United States Patent and Trademark Office (Office) is adopting new rules governing the conduct of disciplinary investigations, issuing warnings when closing such investigations, disciplinary proceedings, non-disciplinary transfer to disability inactive status and reinstatement to practice before the Office. See Changes to Representation of Others Before the United States Patent and Trademark Office; Final Rule (14Aug2008).The Office is adopting a new rule regarding recognition to practice before the Office in trademark cases. The Office also is adopting a new rule to address a practitioner’s signature and certificate for correspondence filed in the Office.

Included in the rules for part 11 are rules governing the conduct of investigations, disciplinary proceedings, issuing warnings, disciplinary proceedings, reinstatement, recognition to practice before the Office in trademark cases, and a practitioner’s signature and certificate for correspondence filed in the Office.

The primary purposes for adopting procedures for disciplining practitioners who fail to conform to adopted standards and non-disciplinary procedures for transferring practitioners to disability inactive status include affording practitioners due process, protecting the public, preserving the integrity of the Office, and maintaining high professional standards. The final rules will be applied only prospectively, not retroactively.

Included in the rules is a clarification under Subsection 11.5(b) of practice before the Office as including a law-related service that comprehends any matter connected with the presentation to the Office or any of its officers or employees relating to a client’s rights, privileges, duties, or responsibilities under the laws or regulations administered by the Office for the grant of a patent or registration of a trademark, or for enrollment or disciplinary matters.

The section provides that nothing in § 11.5 prohibits a practitioner from employing or retaining non-practitioner assistants under the supervision of the practitioner to assist the practitioner in matters pending or contemplated to be presented before the Office.

Section 11.5(b)(1) provides a definition of practice before the Office in patent matters, which includes preparing and prosecuting any patent application, consulting with or giving advice to a client in contemplation of filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding. This section also provides that registration to practice before the Office in patent cases sanctions the performance of those services which are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office involving a patent application or patent in which the practitioner is authorized to participate. The services are identified as including consideration of the advisability of relying upon alternative forms of protection which may be available under state law, and drafting an assignment or causing an assignment to be executed in contemplation of filing or prosecution of a patent application if the practitioner is filing or prosecuting the patent application, and assignment does no more than replicate the terms of a previously existing oral or written obligation of assignment from one person or party to another person or party.

Section 11.5(b)(2) provides a definition of practice before the Office in trademark matters which includes consulting with or giving advice to a client in contemplation of filing a trademark application or other document with the Office; preparing and prosecuting an application for trademark registration; preparing an amendment or response which may require written argument to establish the registrability of the mark; and conducting an opposition, cancellation, or concurrent use proceeding; or conducting an appeal to the Trademark Trial and Appeal Board.

With regard to § 11.5, the final rule will be applied only prospectively to assignments and licenses written on or after the effective date of the final rules.

The Office of Enrollment and Discipline can be found here.

See also the Invent Blog.

Posted August 14th, 2008 by Stephen Albainy-Jenei in USPTO
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Today’s Washington Post features a story on Ismed’s efforts to promote a follow-on biologics approval pathway here in Washington.  The article outlines the campaign by Insmed’s chief exec, Geoffrey Allan, to give Congress a lesson in biotechnology.

The sudden outpouring of educational efforts on protein structures and drug pharmacology has to do with the fact that Insmed is looking to be the first U.S. company to develop biotech generics — a/k/a follow-on biologics (FOB), sometimes called biosimilars or biogenerics.

The question is whether the FDA should approve generic biotech drugs the way generic small molecule pharmaceuticals are approved.  Unlike with small-molecule drugs, there’s no mechanism for generic-drug makers to gain approval for follow-on biologics.   For some companies, an approval process could be a matter of survival.

The Public Health Service Act, under which biologics are licensed, does not contain any type of shortcut or abbreviated approval pathway analogous to the process used under the Food, Drug, and Cosmetic Act for generic drug approvals, according to the FDA.  However, the agency has approved some follow-on biologics under the FD&C Act, such as GlucaGen, Hydase, Fortical and Omnitrope.

Under any new law, a follow-on biologic applicant will be required to demonstrate that there are no clinically meaningful differences in safety, purity and potency between its product and the brand product in order for the FDA to approve a follow-on biologic as interchangeable. However, the applicant must provide evidence that its product will produce the same clinical result as the brand product in any given patient and that it presents no additional safety risks or diminished efficacy if a patient alternates or is switched between products.  This will be a tough road to travel.

A recent Congressional Budget Office analysis found that biosimilar competition would reduce expenditures on biologics by about $200 million by 2013 and about $25 billion by 2018. With savings amounting to about 0.5 percent of national spending on prescription drugs over the next decade, why isn’t Congress all over this idea? The main problem is the length of data exclusivity, which can run during and longer than the period of patent protection.

Earlier, the Senate Health, Education, Labor and Pensions Committee passed the Biologics Price Competition and Innovation Act, S. 1695, which would have established a way for the FDA to approve products as biosimilar to existing biologics. As a compromise, S. 1695 would have granted 12 years of data exclusivity to innovator biologic drugs.  Congress abandoned its efforts to include follow-on legislation in the PDUFA bill and has said it will address biogenerics in a separate bill.

Insmed, along with consumer groups such as AARP and the National Organization for Rare Disorders, are lobbying for five years, the same length as chemical drug data exclusivity, while the Biotechnology Industry Organization supports a 14-year period.  Hence, the intense efforts to educate Congress on protein chemistry.

Amgen’s biologic drug Neupogen, which stimulates white blood cell growth, generated $1.3 billion in worldwide sales last year.  Insmed, who would like a peice of that marker, has now demonstrated that its biosimilar version of Neupogen was equivalent in 32 healthy volunteers to the original product. But, for now Insmed’s version will have to wait.

Posted August 13th, 2008 by Stephen Albainy-Jenei in Biogenerics, Biotech, FDA
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Billed as the ONE AND ONLY course where you will learn how to add value to your practice by drilling into the complex nuances of pharmaceutical and biotech patent opinion writing to reveal the strategies, solutions, and tactics for successfully tackling the issues, ACI’s Intensive Course in Pharmaceutical and Biotech Patent Opinion Writing will bring you an exceptional faculty with deep expertise in this complex area of patent law.

An evolving impact of In Re Seagate, conflicting views on the necessity of a patent opinion, and the massive cost factor combine with other issues to create critical, timely, and multidimensional considerations for pharmaceutical and biotech patent attorneys.

To break through these considerations, you must have a thorough understanding of the diverse approaches that the experts use in counseling their clients.

In the course, you will learn how to master the new challenges in the dynamic labyrinth of patent opinion writing in this exclusive course. This course is the ONE place where you will find patent attorneys with the passion, reputation, and resource of knowledge required to give you crucial insights on:

• What to put in writing, what to leave out
• Determining whether the client needs a patent opinion
• Mastering the core complexities of writing validity and non-infringement opinions
• Defining the elements of an effective FTO search
• Measuring the scope of the patent opinion
• Clarifying, incorporating, and forecasting the impact of In Re Seagate in your analysis

American Conference Institute’s Pharmaceutical and Biotech Patent Opinion Writing will be held in three choice locations:

1. November 17-18, 2008, Boston, MA,
2. December 8-9, 2008, Atlanta, GA
3. January 12-13, 2009, San Diego, CA

Get all of the details here.

Patent Baristas is a Media Partner for this Event.

Posted August 12th, 2008 by Stephen Albainy-Jenei in Conferences
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In a notice labeled “Clarification of Patent Regulations Currently in Effect, and Revision in Applicability Date of Provisions Relating to Patent Applications Containing Patentably Indistinct Claim,” the US Patent and Trademark Office (USPTO) published a notice to “clarify” just which patent-related regulations are currently in effect.

The earlier proposed changes in the Claims and Continuations Final Rule were permanently enjoined by the district court in Tafas v. Dudas. That decision is currently on appeal to the U.S. Court of Appeals for the Federal Circuit.  The provisions of the Claims and Continuations Final Rule are not in effect.

The USPTO now just seemingly wants to appear helpful and generous to applicants by pointing out that those regulatory provisions relating to applications containing patentably indistinct claims which are enjoined in Tafas v. Dudas — should the injunction be lifted — will apply only to applications filed on or after any new effective date that would be published by the USPTO in the future.

In a nod that the Patent Office intends to fight on longer than Hideki Tojo, the USPTO noted that it “anticipates that it will be some time before the litigation concerning the Claims and Continuations Final Rule is finally resolved.”

They have therefore provided the following helpful guidelines:

The USPTO is concerned that some applicants may be taking preparatory action anticipating the new requirements of 37 CFR 1.78(f)(1) and (2), as added by the Claims and Continuations Final Rule, due to the possibility that the injunction by the district court in Tafas will be removed. The purpose of this notice is to aid applicants who might otherwise feel the need to take such preparatory actions by identifying the applicability date of the provisions of 37 CFR 1.78(f) in the event that the injunction by the district court in Tafas is removed.

Specifically, the changes in 37 CFR 1.78(f)(1) and (f)(2) will only apply to applications filed on or after any new effective date that would be published by the USPTO after the removal of the injunction. Thus, in the event the referenced injunction is lifted, applicants will only need to comply with the identification requirements of 37 CFR 1.78(f)(1) in applications having an actual filing date on or after this new effective date. Likewise applicants will only have to identify other commonly owned applications that satisfy the conditions set forth in 37 CFR 1.78(f)(1)(i) in applications that have a filing date on or after this new effective date.

Similarly, the rebuttable presumption of 37 CFR 1.78(f)(2) will only apply to applications having an actual filing date on or after the effective date. Furthermore, the rebuttable presumption will only exist with respect to an application that satisfies the conditions set forth in 37 CFR 1.78(f)(2)(i) and also has a filing date on or after this new effective date.

As pointed out by others, when the PTO WANTS you to know about a Federal Register notice, they can post it on the USPTO web site, and even make phone calls to reporters to let them know about it.   When the PTO does NOT want you to know about a Notice (like the Paperwork Reduction Act comment period, two months ago), they somehow “forget” to let anyone know.

This Federal Register Notice states that the PTO will not apply Rules 78(f)(1) and (2) (the presumption of double patenting and requirement to rebut) retroactively, even if the Tafas v Dudas injunction is lifted.

We’ll have to wait to see if the court is moved by this new-found generosity.   See the full Notice here.

More here

Tafas v. Dudas: The Continuation Wars
No Joke, Court Smacks Down New Patent Rules
Oops, They Did It Again — Patent Office has “Typographical Error”
Sides Line Up in Impending Patent Continuations Fight

Posted August 12th, 2008 by Stephen Albainy-Jenei in Patent Reform, USPTO
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