The Court of Appeals for the Federal Circuit held that the effectiveness of the prior art is not relevant but rather whether it describes the claimed invention sufficiently to enable a person of ordinary skill in the art to carry out the invention.

After Impax sued Aventis in District Court for a declaratory judgment that Impax did not infringe, induce infringement of, or contribute to the infringement of U.S. Pat. No. 5,527,814 by filing an Abbreviated New Drug Application for the sale of riluzole, the district court found that Impax failed to prove the patent as invalid. Impax Laboratories v. Aventis Pharmaceuticals (05-1313).

Riluzole, sold under the name Rilutek, is the chemical compound 6-trifluoromethoxy-2-benzothiazolamine used for the treatment of patients with amyotrophic lateral sclerosis (“ALS”). ALS, commonly referred to as Lou Gehrig’s disease, is a disease of the central nervous system involving the progressive degeneration of the nerves that carry impulses to muscles.

Under 35 U.S.C. § 271(e)(2), it is an act of infringement to submit an ANDA under 21 U.S.C. § 355(j) for a drug claimed in a patent before the patent’s expiration. Therefore, Impax needs to knock out the ‘814 patent.

So, Impax asserted that the claims of the ’814 patent were invalid over the prior art and invalid by reason of incorrect inventorship. Impax later amended its complaint to add allegations of inequitable conduct.

In the district court Impax claimed that claims 1-5 of the ’814 patent were anticipated by the ’940 patent. The ’940 patent, which is owned by Aventis, is directed to a class of compounds disclosed in formula I:

The ’940 patent includes many different compounds, but it exempts 6-trifluoromethoxy-2-benzothiazolamine. That is, 6-trifluoromethoxy-2-benzothiazolamine could fall within the literal scope of formula I but is explicitly exempted from formula I. The ’940 patent states that 6-trifluoromethoxy-2-benzothiazolamine is not new, and thus does not form part of the invention. The ’940 patent goes on to state that the compounds of formula I are useful in treating medical conditions associated with the effects of glutamate such as ALS.

The ’940 patent claims priority from the ’624 application, which has a disclosure similar to that of the ’940 patent. However, the ’624 application does not exempt 6-trifluoromethoxy-2-benzothiazolamine from the family of formula I compounds as a claimed compound.

Impax argued that every limitation of claims 1-5 of the ’814 patent was disclosed by the ’940 patent in describing a class of compounds generally encompassed by formula I, including riluzole, and that the ’940 patent taught that riluzole is useful in treating ALS and also taught effective administration.

Aventis argued that the ’940 patent excluded riluzole from the compounds and that even if the ’940 patent included riluzole, it did not anticipate the ’814 patent because it failed to disclose the invention in the ’814 patent and was not enabling because it did not provide specific instruction for using riluzole and actually taught away from riluzole.

The district court concluded that the ’814 patent was not anticipated because “formula I entails such a large number of compounds . . . [that] one of ordinary skill in the art would not have recognized that riluzole was effective in treating ALS without additional detail or guidance that is not found in the disclosure of the ’940 patent.” Therefore, the court reasoned, formula I was not enabling.

In order to be anticipating, a prior art reference must be enabling so that the claimed subject matter may be made or used by one skilled in the art. Prior art is not enabling so as to be anticipating if it does not enable a person of ordinary skill in the art to carry out the invention.

The CAFC held that:

The enablement requirement for prior art to anticipate under section 102 does not require utility, unlike the enablement requirement for patents under section 112. Rasmusson v. SmithKline Beecham Corp., 413 F.3d 1318, 1325-26 (Fed. Cir. 2005) … Significantly, we have stated that ‘anticipation does not require actual performance of suggestions in a disclosure. Rather, anticipation only requires that those suggestions be enabled to one of skill in the art.’” (citations omitted).

“Whether a prior art reference is enabling is a question of law based upon underlying factual findings.” Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002). In Amgen, we stated that, when, as here, an accused infringer asserts that either claimed or unclaimed material in a prior art patent anticipates patent claims asserted against it, the infringer is entitled to a presumption that the allegedly anticipating material is enabled.

The district court found that the ’940 patent did not anticipate the ’814 patent because the disclosure of the ’940 patent was not enabling at least in part because there was no evidence that it would be “effective.” Id. Under Rasmusson, the effectiveness of the prior art is not relevant. Id. Rather, the proper issue is whether the ’940 patent is enabling in the sense that it describes the claimed invention sufficiently to enable a person of ordinary skill in the art to carry out the invention. The CAFC then remanded to allow the district court to make a factual determinations and then reach its own legal conclusion as to whether the ’940 patent is enabled.

The CAFC thought differently, however, of the ‘624 patent holding:

As found by the district court, riluzole is just one of hundreds of compounds included in formula I. When a reference discloses a class of compounds, i.e., a genus, a person of ordinary skill in the art should be able to “at once envisage each member of th[e] . . . class” for the individual compounds, i.e., species, to be enabled. In re Petering, 301 F.2d 676, 681 (C.C.P.A. 1962). If the members cannot be envisioned, the reference does not disclose the species and the reference is not enabling. Here, with the large number of compounds included in formula I and no specific identification of riluzole by the ’624 application, the ’624 application does not disclose riluzole, and therefore, cannot enable treatment of ALS with riluzole. The ’624 application cannot anticipate any of claims 1-5 of the ’814 patent.

Judge Rader, concurring in part, opined that:

[T]he court determined that the language of the ‘940 patent itself created “substantial uncertainty” regarding use of glutamate inhibiting compounds in the treatment of ALS. Id. The court determined that the language in the patent discussing conditions implicating glutamate to be speculative, at best. Id. Thus, I read the district court to have found that the ‘940 disclosure did not put one of skill in the art in possession of the invention at all. Elan Pharms., Inc. v. Mayo Found., 346 F.3d 1051, 1057 (Fed. Cir. 2003). When it found that the disclosure leaves “substantial uncertainty,” the trial court sufficiently supported its holding. Id. The ‘940 disclosure does not make it a potential treatment in any way.

Anticipation does not require proof of “utility,” or (in other words) “actual performance of suggestions in a disclosure,” Bristol-Myers Squibb Co. v. Ben Venue Labs., 246 F.3d 1368, 1378 (Fed. Cir. 2001), but in this case, the district court has found that the disclosure does not make even a suggestion of disclosure to one of skill in the art. Beyond the efficacy question, the ‘940 patent does not even disclose the necessary suggestion to enable one of ordinary skill in the art to look to riluzole for the treatment of ALS in the first place. Thus, I would affirm the district court’s determination of anticipation without requiring a remand in this case.

The Supreme Court today heard oral arguments in the case of KSR International v. Teleflex. Already a group named the Coalition for Patent Fairness sent in a press release that it "welcomes" the Supreme Court review of the case of KSR International v. Teleflex. It states: "By choosing to hear this patent case, the highest court in the land is signaling its belief that there are serious imbalances in our nation’s patent litigation system. The many companies and industries that make up the Coalition for Patent Fairness agree. Inventors, consumers and businesses large and small will benefit from bright legal lines drawn by the court."

The Coalition for Patent Fairness is a lobbying group backed by a number of high-tech companies in support of S. 3818, the Patent Reform Act of 2006, introduced by Senators Orrin Hatch (R-Utah) and Patrick Leahy (D-Vt.), to reform patent laws. Coalition members include Intel, Cisco Systems and Hewlett-Packard. The Coalition is concerned about the so-called patent trolls - companies that exist primarily to make money from patents through litigation instead of commercialization.

The tech companies want to put a damper on all the patents on all the patents on business methods, designs and undeveloped technologies that casues them to spend lots of money to defend. While Microsoft Corp., Cisco Systems Inc., Intel Corp. and other tech companies have filed amicus briefs calling for a change to the system, Johnson & Johnson, GE and DuPont, have filed their own briefs arguing that major changes to the patent system would jeopardize billions of dollars invested in product innovation. They want to protect pharmaceutical and chemical products from generic manufacturers and counterfeiters.

In the KSR case, KSR manufactures gas pedals that can be adjusted for the height of the driver and uses electronic signals rather than a mechanical cable to accelerate when the pedal is pushed. Both features were developed separately but Teleflex sued KSR claiming that KSR's combination of the two features infringed on a patent it was issued in May 2001. KSR argues that the patent should be invalidated because the combination of the two features is obvious.

In KSR, the Federal Circuit held that the prior art did not render the claimed invention unpatentable because they had not proven, beyond genuine dispute and by clear and convincing evidence, that there was a suggestion or motivation to combine the teachings of the prior art in the particular manner claimed by the patent at issue (U.S. Patent No. 6,237,565).

The Supreme Court granted cert to answer the following question:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held obvious, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven "'teaching, suggestion, or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed."

Section 103 was first enacted in 1952; it provides that a patent cannot issue on subject matter that would have been "obvious" to a hypothetical "person having ordinary skill in the art" or PHOSITA. Four factual inquiries underlie an evaluation of obviousness: (1) the scope and content of the prior art; (2) the differences between the claimed invention and the prior art; (3) the level of ordinary skill in the art; and (4) any other objective indicia of non-obviousness, such as commercial success of the claimed invention, long felt but unmet need.

KSR argues that under the Supreme Court's interpretation of § 103, a combination of pre-existing elements does not constitute an "invention", and does not meet the "condition for patentability" specified in § 103(a), if each element in the claimed combination does nothing more than what it was previously known or designed to do. They argue that the Federal Circuit's interpretation of § 103 is wrong in holding that a combination of pre-existing elements will always constitute an "invention", and will always meet the "condition for patentability" specified in § 103, unless there is proven "some 'suggestion, teaching, or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed." They argue that the "teaching-suggestion-motivation test" has no basis in the text of § 103 or in any decision of the Supreme Court.

Critics of the test argue that this has made it too difficult to prove that a claimed invention is obvious. This is of particular importance to pharmaceutical and biotechnology research-based companies who are against any change to the test (and might make it difficult to patent known drugs for new uses).

We will probably see some modification to the obviousness test but I don't think the Court will swing wildly against the "teaching-suggestion-motivation" test.

For more on KSR, see Denis Crouch's Patently-O.

For a less sympathetic view of the Coalition, see the Patent Prospector's take here.

Earlier, the Court of Appeals for the Federal Circuit affirmed a District Court's decision that Transkaryotic Therapies Inc. (TKT) and Aventis Pharmaceuticals Inc. infringe Amgen's erythropoietin (EPO) patent estate. Amgen Inc., v. Hoechst Marion Roussel, Inc. (Now Aventis) and Transkaryotic Therapies, Inc., (05-1157). The court's decision upheld the validity of two of Amgen's EPO patents and the infringement by TKT of three patents and 12 claims, including a patent that does not expire until 2015.

Now, Amgen's petition for a panel rehearing and rehearing en banc has been denied by the Court of Appeals for the Federal Circuit.

The issue remains over the District Court's findings on the infringement and validity of two patents with claims to the production of erythropoietin, the infringement of one product patent under the doctrine of equivalents, and the validity of one product patent. The Federal Circuit found the production patents valid and infringed (U.S. Patent Nos. 5,618,698 and 5,756,349). The court reversed the District Court's determination that TKT infringed Amgen's U.S. Patent No. 5,621,080 under the doctrine of equivalents, and remanded to the District Court for further consideration of the remaining validity issue on one of the other product patents (U.S. Patent No. 5,955,422).

The patents at issue are directed to recombinant DNA technology relating to the production of the hormone erythropoietin (“EPO”). Epogen a form of the protein erythropoietin that is produced outside of the human body and delivered by injection. Transkaryotic's product Dynepo, however, is a gene. When injected, Dynepo leads to the production of a slightly different form of erythropoietin inside the body.

Transkaryotic uses what it calls gene-activation technology. It relies on the fact that all human cells have a complete set of genes, even though the gene for producing EPO is not active except in kidney cells. So Transkaryotic inserts an on switch into human cells grown in culture, activating the gene for EPO. The switch is surrounded by genetic sequences that match those found upstream of the EPO gene on the chromosome. That guides the switch to the spot where it will turn on the EPO gene and not any other gene.

On remand, the trial court construed "therapeutically effective amount" in claim 1 of the '422 patent to require that the claimed EPO increase hematocrit and also be useful in healing or curing certain patients identified in the specification (those with anemia-like disorders). The CAFC held that the language used in the specification indicated that the invention was used in therapy to produce any or all of five identified effects; increasing hematocrit was only one of the biological effects produced by the invention. Thus, the trial court misinterpreted this part of the specification when it read the passage as limiting the invention to products with any or all of the first four effects ascribed in vivo to EPO and also an increase in hematocrit.

The CAFC felt that the trial court made an artificial distinction between the first four effects and the fifth effect (an increase in hematocrit). Also the CAFC believed that "therapeutic utility" was not dependent on the product having an effect in a living being, such as curing disease believing that the patentee used the words "therapeutically effective" in order to broadly claim a pharmaceutical composition with a wide range of effects.

The trial court ruled that claims 2-4 of the '080 patent were not invalid and that Amgen was not estopped from asserting infringement under the doctrine of equivalents. The trial court found that the presumption was rebutted because the amendment limiting the claims of the '080 patent to EPO with the amino acid sequence of Figure 6 was tangential to EPO having a 165-amino acid sequence and also set forth an alternative rationale based on the "some other reason" language.

The Federal Circuit upheld the trial court's finding that Amgen failed to show that EPO with a 165-amino acid sequence was not foreseeable at the time of the amendment. However, the CAFC held that the trial court erred when it found that Amgen had met its burden of rebutting the presumption under both the tangentiality and "some other reason" rationales. Amgen's third preliminary amendment limited the '080 patent to EPO having 166 amino acids. As for the "some other reason" rationale, the patentee knew of the 165-amino acid sequence at the time of the amendment, but chose to limit the claims to the 166-amino acid sequence.

Amgen argued that the district court correctly interpreted the term since only amounts of EPO producing effects—particularly increased hematocrit—that counteract these anemia-like diseases are “therapeutically effective.”

Chief Judge Michel, dissenting-in-part, summed up things thusly:

[S]ince the majority holds that other asserted patents are not invalid and are literally infringed by HMR 4396, (and here I agree), the district court likely will enter an injunction … Prolonging this litigation seems futile when, in the end, an injunction will likely issue regardless of how "therapeutically effective" is construed or whether claim 1 of the '422 patent is invalid.

In my view, four practical problems have emerged under the Markman-Cybor regime: (1) a steadily high reversal rate; (2) a lack of predictability about appellate outcomes, which may confound trial judges and discourage settlements; (3) loss of the comparative advantage often enjoyed by the district judges who heard or read all of the evidence and may have spent more time on the claim constructions than we ever could on appeal; and (4) inundation of our court with the minutia of construing numerous disputed claim terms (in multiple claims and patents) in nearly every patent case.

Our standard of review of no deference to the trial judge's claim constructions, expressed in Cybor, rests upon the premise that claim construction is always a purely legal exercise, devoid of factual content. We have likened claim construction to statutory construction. I believe that this analogy is open to serious question. In interpreting statutes, a judge, whether trial or appellate, essentially asks himself/herself, "What does the disputed term mean to me, the judge, as an artisan in the law?" With claim construction, on the other hand, the judge is supposed to inquire, essentially, "How would the average artisan in the relevant field of technology understand the disputed claim terms in the context of the rest of the patent, the prosecution history, and the prior art?"

This petition order also had a dissents from Judges Newman and Moore with concurrences by Judges Lourie, Gajarsa, Linn and Dyk. With such a divided court, we may well see Amgen VI in the Supreme Court. All over a product that Transkaryotic dropped years ago.

The doctrine of equivalents was upheld for AstraZenaca's patent on Propofol, used to induce and maintain general anaesthesia and sedation in patients. After the district court found Mayne had infringed AstraZeneca's U.S. Pat. Nos. 5,714,520, 5,731,355 and 5,731,356, literally and under the doctrine of equivalents, the CAFC found that the district court erred in its construction of “edetate” and reversed the finding of literal infringement but affirmed since the district court did not err in determining that the accused product infringes under the doctrine of equivalents. Abraxis Bioscience (f/k/a Astrazeneca) v. Mayne Pharma (f/k/a Faulding Pharmaceutical) (06-1118).

AstraZeneca sold DIPRIVAN® for treatment in humans and RAPINOVET® for veterinary use. The composition consists of an injectible oil-in-water emulsion containing propofol, or 2,6-diisopropylphenol, as its active ingredient. DIPRIVAN® is administered to patients by infusion, which involves the use of a “giving set.” A giving set involves connecting a reservoir containing the propofol emulsion with the patient’s vein via the appropriate tubing.

AstraZeneca researchers began developing an improved formulation using preservatives and discovered that one preservative in particular, disodium edetate, was unexpectedly effective in retarding microbial growth in the propofol formulation without disrupting the oil-in-water emulsion for at least twenty-four hours. In March 1995, the inventors applied for a patent on their improved DIPRIVAN® formulation. In December 1995, AstraZeneca also filed a supplemental New Drug Application (“NDA”) on the new formulation.

In 1995, scientists at ESI Lederle (later part of Baxter) learned of the reports of infection relating to original DIPRIVAN®. ESI decided to develop a similar generic formulation and screened antimicrobial agents in an effort to replace the edetate in the improved DIPRIVAN® formulation with a different agent. They found that the calcium trisodium salt of diethylenetriaminepentaacetic acid (pentetate), which is also referred to as DTPA, was a promising candidate as an antimicrobial agent.

In selecting that compound, they noted that since calcium trisodium DTPA is “structurally similar to edetate, product stability is predicted to be unaffected.” ESI filed a patent application on its pharmaceutical composition and was later granted U.S. Patent 6,028,108. ESI filed an ANDA with a Paragraph IV Certification asserting that the patents in suit were invalid, unenforceable, or would not be infringed by its generic propofol formulation, which led to this suit.

The district court issued a Markman ruling construing the term, “edetate" as “EDTA as well as compounds structurally related to EDTA regardless of how they are synthesized.” Based on the district court’s construction of edetate as encompassing structural analogs of EDTA, the court found that Mayne’s generic propofol formulation literally infringed claims 1 and 3-14 of the asserted patents, and claim 38 of the ’520 patent and claims 38 and 39 of the ’520 patent under the doctrine of equivalents.

Claim construction is an issue of law reviewed de novo while the district court’s determination of infringement is a question of fact that we review for clear error. In construing edetate, the court noted that the patentees defined edetate in the specification as EDTA and derivatives thereof. The court proceeded to define the term derivatives by adopting a broad definition, specifically one that encompasses structural analogs of EDTA as well as synthetic derivatives.

The CAFC disagreed with the district court’s definition of derivatives as unsupported by the intrinsic evidence. The part of the specification describing “edetate” reads:

By the term “edetate” we mean ethylenediaminetetraacetic acid (EDTA) and derivatives thereof, for example the disodium derivative is known as disodium edetate. In general suitable edetates of this invention are those salts having lower affinity for EDTA than calcium. Particular derivatives of use in the present invention include trisodium edetate, tetrasodium edetate and disodium calcium edetate.

The CAFC concluded that

[T]he listing of EDTA salts as “[p]articular derivatives of use in the present invention,” coupled with the statements regarding the uniqueness of edetate as the only successful antimicrobial agent, and the patentees’ description of EDTA salts as advantageous, preferable, and “exceptional,” limit the term “derivatives” to EDTA salts or compounds that maintain the EDTA free acid structure. Those statements are inconsistent with a definition of “derivatives” that includes structural analogs that can encompass a large number of non-derivative compounds. That definition fails to recognize that the patentees’ discovery focused on the unexpected effectiveness of edetate and its salts as antimicrobial agents.

Under the DOE, Mayne argued (1) that the court clearly erred in its analysis with regard to the “way” prong of the function-way-result test by improperly defining the “way” in which edetate works (that it should have been one that incorporates the specific metal ions that are chelated, the strength of the bonds that are formed during chelation, and the stability constants); (2) that it was impermissible as a matter of law for the meaning of edetate to extend to calcium trisodium DTPA by equivalence because the patentees chose to narrowly claim their invention (i.e., using the narrower term “edetate rather than broader terms such as “polyaminocarboxylates” or “metal ion chelators”); and (3) that the lack of known interchangeability between calcium trisodium DTPA and edetate as an antimicrobial agent indicates that the substitution of calcium trisodium DTPA is a “substantial” change weighing against a finding of equivalence.

The district court concluded that calcium trisodium DTPA and edetate were equivalent after finding that the differences existing between the two were insubstantial. In reaching this conclusion, the court performed a function-way-result analysis. The court identified the “function” of edetate as “retard[ing] microbial growth in propofol oil-in-water emulsions.” The court then defined the “way” that edetate worked as by metal ion chelation and found that the result achieved was “retard[ing] microbial growth to the extent required by the microbiological test set forth in the claims.”

In reaching a conclusion that the compounds are equivalent, the CAFC held that:

Contrary to Mayne’s assertion, the inventors did not clearly disavow other polyaminocarboxylates, including DTPA, by claiming edetate. There is no evidence that the patentees made a clear and unmistakable surrender of other polyaminocarboxylates, or calcium trisodium DTPA in particular, during prosecution. See Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1363 (Fed. Cir. 2003) (noting that a “clear and unmistakable surrender of subject matter” is required to find estoppel by argument). Indeed, the district court found that “the antimicrobial activity of calcium trisodium DTPA was unforeseeable during prosecution.” Nov. 2, 2005 Opinion, slip op. at 37-38. Mayne itself acknowledged the unforeseeability of DTPA while prosecuting its own patent. Id. at 38. Thus, a person of ordinary skill in the art reading the patent would not conclude that by claiming “edetate,” the patentees surrendered or waived coverage of all polyaminocarboxylates, including DTPA, as an equivalent, particularly in light of the unforeseeability of calcium trisodium DTPA as an equivalent.

The CAFC also rejected the conclusion that the accused product does not infringe under the doctrine of equivalents based on the fact that Mayne was able to receive a patent on its generic propofol formulation stating:

As stated in Warner-Jenkinson, known interchangeability is only one factor to consider in a doctrine of equivalents analysis. It aids the fact-finder in assessing the similarities and differences between a claimed and an accused element. … As discussed above, the court made factual findings that insubstantial differences exist between calcium trisodium DTPA and edetate, and further found that the separate patentability of Mayne’s generic formula did “not outweigh the substantial evidence of equivalence between Mayne’s calcium trisodium DTPA and the claimed edetate.” Nov. 2, 2005 Opinion, slip op. at 39. We see no clear error in that finding.

Affirmed

The U.S. Court of Appeals for the Federal Circuit again hammers home the message that you can't make a silk purse from a sow's ear – or, at the very least, you can't turn a known compound into an unknown (novel and, therefore, patentable) compound.

In Abbott Laboratories v. Baxter Pharmaceutical Products (Fed. Cir. 06-1021, -1022, -1034; Nov. 9, 2006), the CAFC held that Abbott’s asserted claims on the formulation of an inhaled anesthetic called sevoflurane, U.S. Patent No. 5,990,176, were anticipated by the disclosure in U.S. Patent No. 5,684,211.

Claim 1 of the ’176 patent reads:

An anesthetic composition comprising: a quantity of sevoflurane; and a Lewis acid inhibitor in an amount effective to prevent degradation by a Lewis acid of said quantity of sevoflurane, said Lewis acid inhibitor selected from the group consisting of water, butylated hydroxytoluene, methylparaben, propylparaben, propofol, and thymol.

Sevoflurane is an inhalation anesthetic. However, pure sevoflurane degrades in the presence of Lewis acids (a substance that can accept an electron pair from a base). Among the products of the degradation reaction is hydrofluoric acid, which is highly dangerous if inhaled.

Abbott found that water mixed in with sevoflurane will bind to and deactivate Lewis acids, protecting the sevoflurane from the degradation reaction. A deliberate addition of water to sevoflurane ran counter to the conventional wisdom at the time. Abbott filed a patent application on the degradation-preventing combination of water or other “Lewis acid inhibitors” with sevoflurane, which issued as the ’176 patent.

Baxter filed with the FDA a certification of noninfringement and invalidity of the ’176 patent pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) (commonly known as a “paragraph IV certification”), which caused Abbott to sue under 35 U.S.C. § 271(e)(2).

Earlier, the district court construed of the phrase “amount effective to prevent degradation” to require at least 131 parts per million (“ppm”) of water in its consequent summary judgment of noninfringement. The CAFC disagreed with that construction, noting that “an effective amount of any given Lewis acid inhibitor will vary according to the conditions to which sevoflurane is subjected,” making construction referencing particular ranges of water content inappropriate. The CAFC then vacated the district court’s summary judgment and remanded.

On remand, the district court determined that the term “to prevent degradation” had been left unconstrued and concluded that “sevoflurane is degraded if it contains degradants in amounts greater than 300 ppm.” Baxter then appealed arguing that the ’211 patent disclosed a composition of water-saturated sevoflurane that met all the limitations of the asserted claims.

The CAFC agreed holding:

Our cases have consistently held that a reference may anticipate even when the relevant properties of the thing disclosed were not appreciated at the time. The classic case on this point is Titanium Metals Corp. v. Banner, 778 F.2d 775 (Fed. Cir. 1985). In Titanium Metals, the applicants sought patent protection on an alloy with previously unknown corrosion resistance and workability properties. Id. at 776. The prior art reference was an article by two Russian scientists that disclosed in a few data points on its graphs an alloy falling within the scope of the claims of the patent in suit. Id. at 776-77. There was no sign that the Russian authors or anyone else had understood the later-discovered features of the alloy thus described. Id. at 780-81. Despite the fact that “the applicants for patent had discovered or invented and disclosed knowledge which is not to be found in the reference,” we held that the Russian article anticipated the asserted patent claims. Id. at 782.

…

The general principle that a newly-discovered property of the prior art cannot support a patent on that same art is not avoided if the patentee explicitly claims that property. “[A] prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.” Schering, 339 F.3d at 1377 (citing Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991)). “[I]nherent anticipation does not require that a person of ordinary skill in the art at the time would have recognized the inherent disclosure.” Id. (citing Cruciferous Sprout, 301 F.3d at 1351).

The district court noted CAFC holdings finding anticipation even where, as here, there was no knowledge at the time of the relevant properties of the prior art. However, it concluded that the ’211 patent did not anticipate since the ’211 patent disclosed an “intermediate step” in the manufacture of sevoflurane, “the patent’s purpose was not to produce sevoflurane in its final useable form,” in distinction to the purpose of the ’176 patent, which “involves a final step in production.” At the time, however, knowledge of the beneficial nature of a water-sevoflurane mix was wholly lacking in the art.

The CAFC didn’t buy it stating that:

We also do not find it material that the district court found the anticipating method in the ’211 patent to be “an intermediate step” in the manufacture of sevoflurane. Abbott, No. 01-CV-1867, slip op. at 42. The product of that method was an anesthetic sevoflurane composition with sufficient water to prevent Lewis acid degradation—exactly what is claimed by the ’176 patent. Commercial finality is not claimed.

This really won't have a market impact since Baxter already started selling its generic version of the anesthetic.

Update: IPBiz points out the CAFC's curious definition of a Lewis acid.

In Go Medical v. Inmed Corp, the Federal Circuit reviewed the decision of the US District Court for the Northern District of Georgia concerning patent invalidity, trademark infringement and damages awards related to licensing of a patented catheter. The urinary catheter had been licensed to Medical Marketing Group (MMG) by Go Medical. The Federal Circuit, affirming the lower courts findings that the patent was invalid and trademark infringement and damages, reversed the lower court's award of contract damages, citing misapplication of the Lear doctrine.

In Lear Inc. v. Adkins, 395 U.S. 653 (1969), the Supreme Court held that a licensee was not estopped from challenging the validity of the licensor's patent. Under the Lear doctrine, as applied by the Federal Circuit in Studiengesellschaft Kohle, MBH v. Shell Oil Co., 112 F.3d 1561 (Fed. Cir. 1997), a licensee will not be relieved from paying royalties until the date the licensee first challenges the validity of the patent. The licensee must first i) actually cease payment of royalties, and ii) provide notice to the licensor that the reason for ceasing payment of royalties is because it has deemed the relevant claims of the patent to be invalid.

The Federal Circuit, in reviewing the district courts opinion, held that the lower court had failed to properly apply this standard. During the course of the agreement between Go Medical and MMG as licensee, Go Medical sued a third party (Bard) for infringement of the patent. The patent was found invalid. Several months after this decision, MMG notified Go Medical that they believed they no longer had a contract because the district court had found the '259 patent invalid, and began placing royalty payments "in an escrow account, until such time as the appeal [was] decided." The district court held that MMG was relieved of the obligation to pay any royalties-- not after the date of the letter-- but immediately following the finding of patent invalidy during Go's litigation with the third party. The Federal Circuit held that this application of Lear was in error, and remanded for a recalculation of the contract damages.

The Federal Circuit accused MMG of "trying to have it both ways," in urging Go Medical to sue Bard from infringement, then benefiting from the later reversal of invalidity. Tthe Federal Circuit also found it significant that while MMG urged Go Medical to sue the third party, MMG failed to file its own declaratory judgment suit to challenge the patent's validity. Further, Federal Circuit noted that the letter itself failed to state that the reason for ceasing payment of royalties was that the MMG deemed the '259 patent invalid. The Court held that, even if the letter had been sufficient to consitutue the requisitre notice under Lear, the district court still erred in finding that Lear relieved MMG from all royalty payments immediately following the judgment of invalidity in the action involving the patent holder and a third party, prior to the letter sent by MMG.

Thus, Go Medical makes clear that a licensor cannot merely look towards litigation with a third party in ceasing royalty payments to a licensor, assuming that a finding of invalidity relieves the duty to pay under a license. Rather, as set forth by Kohle and Go Medical, a licensee is relieved of the royalty payments under Lear only if payment of royalties is actually ceased, and clear notice is given to the licensor stating that the relevant claims are believed invalid. Only from this date can a licensee be relieved of paying royalties under a license.

After a jury determined that Stratagene infringed on Invitrogen's U.S. Patent No. 4,981,797 by making and selling its competent E. coli cell products (see earlier note), the court has now entered judgment awarding Invitrogen $16.2 million plus prejudgment interest, as well as reasonable attorney fees to be determined by the court. The judgment included a court-ordered enhancement of the original damages awarded by the jury due to the court's determination of Stratagene's willful infringement of Invitrogen's patent. The court also entered an injunction against further infringement by Stratagene.

The new decision by the United States District Court for the Western District of Texas awarded Invitrogen treble damages, which approximately triples the earlier jury award. Invitrogen had moved for entry of judgment based on the jury’s verdict, moved that the enhanceable portion of the damage award ($4,759,779.60) be trebled pursuant to 35 U.S.C. § 284, moved for an award of prejudgment interest under 35 U.S.C. § 284, and moved to have the case deemed "exceptional" pursuant to 35 U.S.C. § 285 and for leave to submit evidence of its attorneys’ fees and costs. The court entered its order disposing of all pending motions after having previously determined as a matter of law that Stratagene infringes claims 1, 2, 4, 5, 7, 8, 11, 14 and 15 of United States Patent No. 4,981,797, and that Stratagene’s indefiniteness defense should be dismissed as a matter of law.

The earlier jury award gave Invitrogen a 15% royalty rate on sales between the years 1997 and 2004 (for a total of $7.8 million in damages) and found Stratagene to have willfully infringed the patent only between the years 1997 and 2001. The jury found that Invitrogen was not entitled to lost profits because Stratagene has had a non-infringing manufacturing process for competent cells. Stratagene had previously modified its process for manufacturing competent E. coli cell products and Stratagene products sold in recent years and currently offered for sale will not be affected by the jury verdict.

The '797 patent involves the introduction of foreign, recombinant DNA molecules into receptive E. coli cells to improve the cells' "competence," i.e., their ability to take up and establish exogenous DNA and replicate this DNA as they multiply. A cell that accepts alien DNA is called a transformable cell. Claim 1 of the '797 patent claims:

A process for producing transformable E. coli cells of improved competence by a process comprising the following steps in order: (a) growing E. coli in a growth-conductive medium at a temperature of 18°C to 32°C; (b) rendering said E. coli cells competent; and (c) freezing the cells.

Stratagene made thirty-four competent E. coli cell lines by a process "including the steps of incubating cells at 37°C, growing the cells in a fermenter at 26°C, and freezing the cells." Invitrogen sued Stratagene for infringement and the district court construed the claims and then granted Stratagene’s summary judgment motion of non-infringement. Invitrogen appealed, disputing the lower court’s construction of both "improved competence" in the preamble and "growing" in step (a).

The district court found literal infringement of the ’797 patent; decided that Claim 1 was not indefinite under 35 U.S.C. § 112, 2; and found the claims invalid under the public use provision of 35 U.S.C. § 102(b).

Stratagene said it had previously modified its process for manufacturing competent E. coli cell products and Invitrogen had agreed that Stratagene products sold in recent years and currently offered for sale will not be affected by the jury verdict.

Stratogene said it will appeal, challenging the finding of validity of the patent, the appropriateness of the damages determined by the jury and the award of attorney's fees.

In Pfizer v. Mylan Labs (02cv1628) a patent infringement action was brought by Pfizer under U.S. Pat. Nos. 4,572,909 and 4,879,303, which cover an amlodipine besylate product sold under the trade name Norvasc®.

Mylan filed an Abbreviated New Drug Application (“ANDA”) for approval to sell generic amlodipine besylate. Mylan certified pursuant to 21 C.F.R. 314.94(a)(12)(i)(A)(4) (paragraph IV certification) that it was seeking approval to market its generic copy of Norvasc® prior to the expiration of the ’909 and ’303 patents. The application stated that to the best of Mylan’s knowledge neither the ’909 nor the ’303 patents would be infringed by the manufacture, use or sale of the proposed generic amlodipine besylate.

Pfizer sued Mylan for infringement of both patents and sought “[a]n order preliminarily enjoining and permanently enjoining [Mylan] from making, using, selling, offering to sell, or importing into the United States the Mylan Amlodipine Tablets described in ANDA No. 76-418 until after the expiration of the ‘909 patent term, . . ., and after the expiration of the ‘303 patent term . . .”

Mylan argued that Pfizer’s claims for inducing infringement and infringement of the ‘909 patent should be dismissed for lack of subject matter jurisdiction. According to Mylan, since the ‘909 patent expired on July 31, 2006, there is no longer a case or controversy with respect to the ‘909 patent. Pfizer responded that the district court retains jurisdiction over a patent infringement case when the patent has expired but the period of pediatric exclusivity remains at issue. Because the ‘909 patent expired on July 31, 2006, the court found that the rights secured by the patent are no longer protectable and entitlement to injunctive relief becomes moot because such relief is no longer available.

Pfizer had sought to continue to include the '909 patent in the litigation in an attempt to reinstate pediatric exclusivity as to Mylan. The FDA has confirmed that Mylan was the first generic company to file on all strengths of Norvasc(R) Tablets and is therefore eligible for 180 days of market exclusivity. The FDA has indicated that the exclusivity will begin to run from the earlier of the commercial launch of the Mylan product or a final court decision concerning the pending litigation between Pfizer and Mylan.

In Ortho-McNeil Pharmaceutical v. Mylan Laboratories (04-cv-01689), Ortho (a subsidiary of Johnson & Johnson) claimed that its U.S. Pat. No. 4,513,006 was infringed by Mylan. The claims of the ’006 patent cover the drug topiramate, pharmaceutical compositions containing topiramate, and a method of using topiramate to treat convulsions. Ortho holds an approved New Drug Application (“NDA”), under Section 505(a) of the Federal Food Drug and Cosmetic Act (“FFDCA”), 21 U.S.C. § 335(a), for topiramate tablets and topiramate capsules, which are marketed in the United States as the anticonvulsant Topomax®.

In 2001, Mylan filed an Abbreviated New Drug Application (“ANDA”), pursuant to Section 505(j) of the FFDCA, to market topiramate before the expiration of the ’006 patent claiming that the ’006 patent is invalid. Ortho then filed a motion for a preliminary injunction to enjoin Mylan from marketing or selling topiramate.

To get a preliminary injunction, a plaintiff must show: (1) a reasonable likelihood of success on the merits of its claims; (2) irreparable harm if an injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction’s favorable impact on the public interest. In order to demonstrate a likelihood of success on the merits on a particular claim of patent infringement, Plaintiffs must show that (1) Defendants likely infringe the patent, and (2) the claims of the patent will likely withstand Defendants’ challenges to validity. The court found that Ortho has demonstrated a likelihood of success in establishing that Mylan would infringe the ’006 patent and that the infringed claims of the ’006 patent will likely withstand Defendants’ challenges to validity.

In arguing that claim 1 of the ’006 patent (the only independent claim) is invalid as obvious, Mylan relies entirely on the expert opinion of Dr. Laurens Anderson. The court held that:

The approach espoused in Anderson 1 has significant problems that lead this Court to conclude that, in relying on it, Mylan has not raised a substantial question of obviousness. To begin with, as Ortho contends, Dr. Anderson has merely followed the path of development that Dr. Maryanoff claims to have followed. (See New Product Conception Record, Harth Conf. Decl. Ex. Q.) Dr. Anderson begins with the problem he believes Dr. Mayanoff was attempting to solve, follows the path he believes Dr. Maryanoff took, and ends up with topiramate. This is a hindsight-based obviousness analysis. The Federal Circuit has made clear that the inventor’s chosen path is irrelevant: “[T]he path that leads an inventor to the invention is expressly made irrelevant to patentability by statute. . . [T]his inquiry, as a matter of law, is independent of the motivations that led the inventors to the claimed invention.” Life Techs., Inc. v. Clontech Lab., Inc., 224 F.3d 1320, 1325 (Fed. Cir. 2000). Rather, § 103 requires that the obviousness inquiry must be performed from the perspective of one of ordinary skill in the art. 35 U.S.C. § 103(a).

...

Furthermore, applying the “motivation-suggestion-teaching” test, this Court finds significant gaps in the path Dr. Anderson follows: 1) Dr. Anderson implies that knowledge of Thomas “inspired” the idea of substituting a sulfamate group for a phosphate group. (Anderson 1 at 12.) This leaves unexplained, however, how knowledge that replacing a part of 5'-AMP with a sulfamate group produces an antibiotic would motivate the idea of sulfamoylation of a fructose derivative to produce a FBPase inhibitor. Furthermore, Dr. Danishefsky contends that the research on 5'-AMP and nucleocidin should not be considered to be part of the analogous prior art. (Danishefsky Decl. 19.) Even if it were shown to be relevant prior art, Dr. Anderson does not explain how knowledge of modifications to produce antibiotic potency would motivate modifications to produce gluconeogenic enzyme inhibition. 2) Dr. Anderson states that Dr. Maryanoff selected the “well-known” 2,3:4,5-di-isopropylidene fructose (“DPF”). (Anderson 1 at 17.) Dr. Anderson gives no explanation of what would have suggested DPF to one of ordinary skill in the art. Dr. Anderson states that Dr. Maryanoff “suggested that the desired inhibitory properties might be present in fructose derivatives . . .” (Id. at 12.) Dr. Anderson’s statement that it was Dr. Maryanoff himself, and not something in the prior art, that suggested researching fructose derivatives for enzyme inhibitors raises the inference that Dr. Anderson’s ideas in this regard may have been original and inventive. Certainly, Dr. Anderson has not pointed to anything that would have suggested the use of fructose derivatives to Dr. Maryanoff. This is a crucial gap in the theory, since Dr. Anderson proposes that by choosing a particular fructose derivative (DPF), and then choosing to sulfamoylate it, one ends up with topiramate. There is no basis to infer that one of ordinary skill in the art would have been motivated to select DPF to sulfamoylate.

Ortho argued that the claimed invention would not have been obvious based on four categories of objective evidence of non-obviousness: (1) Unexpected results; (2) Commercial success - Topamax® is the top-selling branded neurology product in the US.; (3) Copying - FDA has received nine ANDA applications for topiramate formulations; and (4) Industry recognition.

Overall, the Court found that all four factors in the preliminary injunction analysis weigh in favor of granting Ortho’s motion for a preliminary injunction.

Earlier, Eli Lilly and Company lost a jury trial in the U.S. District Court of Massachusetts in the case of Ariad Pharmaceuticals et al. v. Eli Lilly and Company. The jury awarded the plaintiffs approximately $65 million in back royalties and a 2.3 percent royalty on future U.S. sales of Evista and Xigris until the patent's expiration in 2019.

The Jury decided that U.S. Pat. No. 6,410,516, owned by Harvard, the Massachusetts Institute of Technology, and the Whitehead Institute and licensed to Ariad Pharmaceuticals, was valid and infringed by Lilly's sale of Evista® and Xigris®.

The '516 patent claims methods based on the discovery of a naturally-occurring biological pathway, the NF-kappaB pathway. While Ariad contends that the patent covers all means for modulating the NF-kappaB pathway, Lilly's contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees' scientists made their discovery.

We don't think Ariad will be spending that $65 million any time soon. This decision goes against long-standing patent practice in that one cannot get a patent that would remove known materials from the public. In addition, it has always been the case that one may patent a drug without knowing how it works.

This case begs the question of if a researcher discovers a drug without ever knowing the drug acts on a patented pathway or before the pathway is understood, does that constitute infringement? If the drug was acting on the pathway before the pathway was discovered, does the existence of the drug invalidate the patent on the pathway by rendering it not "new"? This could also give rise to an ever-increasing number of conflicting patents.

A separate bench trial with the U.S. District Court of Massachusetts was held in August based on Lilly's contention that the patent is unenforceable and will also consider the patent's improper coverage of natural processes.

This bench trial addresses patent validity and enforceability issues different from those considered in the jury trial. Lilly contends that the asserted claims of U.S. Pat. No. 6,410,516 are invalid for including non-statutory subject matter, for being obtained through inequitable conduct, and are unforceable due to prosecution laches.

Lilly argues, and of course Ariad disputes, that the claims cover unpatentable naturally-occurring phenomena, that Ariad withheld critical documents from the patent examiner not only to get the patent issued, but to avoid the risk of losing 13 years of patent term.

Of these, the patent term argument is probably the most compelling. In any case, particularly in light of the parallels with the Court of Appeals for the Federal Circuit decision in University of Rochester v. G. D. Searle et al., the likelihood that Ariad's victory will survive the bench trial and the inevitable appeal(s) is quite low.

See the following court documents (these are large files so only download if you need them):

Pre-Trial Brief by Ariad Pharmaceutical.

Supplemental Pre-Trial Brief by Ariad Pharmaceutical.

Pre-Trial Brief by Eli Lilly & Co.

Motion to Supplement Trial Exhibit PTX 2 in Order to Complete the PTO Prosecution File of U.S. Patent No. 6,410,516 by Eli Lilly & Co.

Motion to Preclude a Claim Construction That is Barred by Judicial Estoppel by Eli Lilly & Co.

Opposition re Motion to Preclude a Claim Construction That is Barred by Judicial Estoppel filed by all plaintiffs.

Proposed Findings of Fact by all plaintiffs.

Response by Eli Lilly & Co. to Proposed Findings of Fact.

More on Ariad v. Lilly to come.

In Apotex v. Pfizer (Sup. Ct. 05-1006), the Supreme Court said that it will not hear a case brought by generic pharmaceutical company Apotex that was trying to have Pfizer's Zoloft patent invalidated. Zoloft (sertraline hydrochloride) is a selective serotonin reuptake inhibitor (SSRI) used to treat depression.

Earlier, Pfizer sent Apotex an unconditional covenant not to sue Apotex with respect to U.S. Pat. No. 5,248,699. It also announced that Teva Pharmaceutical had begun marketing its generic version of Zoloft®, starting the 180-day exclusivity period that Apotex sought to trigger with a court judgment. Therefore, any future court judgment regarding the ’699 patent would no longer have any effect on the exclusivity period.

In its supplemental brief, Pfizer argued that the case is now moot and requested that Apotex withdraw its petition for a writ of certiorari. Apotex, however, said that it did not consider the case moot and that it would not withdraw the petition. The Court had asked the Solicitor General to offer the views of the U.S. on the merits of the declaratory judgment jurisdiction question.

While Pfizer unconditionally promised that Pfizer will not sue or otherwise enforce the ‘699 patent against Apotex in connection with the manufacture, sale, offer for sale, use, or importation of Apotex’s proposed generic sertraline hydrochloride drug product, that is the subject of ANDA No. 76-882, it did not constitute any kind of license so Apotex would still need to wait out the 180-day exclusivity period.

A generic company that is first to break a branded drug's patent is awarded a 180-day period of exclusivity over other generics. But an authorized generic can compete in this period. Generic companies are mad about the Teva deal because it means they don't get a 180-day period of market exclusivity. Teva inherited the rights to generic Zoloft through its acquisition of Ivax Corp. earlier this year.

Ivax received FDA approval in December 2004 to sell a generic version of Zoloft after the patent expires and 180 days of marketing exclusivity upon launch. However, the exclusivity period does not apply to authorized generics. By launching their own generic products, branded companies hope to hang on to a bigger portion of sales from the drugs they developed and discourage generic companies from making patent challenges.

Now, Pfizer's covenant not to sue can leave the status of the patent unresolved and create uncertainty for a generic drug company, since the brand-name company could later sue for patent infringement once the generic firm begins manufacturing and selling the drug. This threat can prevent generic companies from proceeding in the first place.

In Teva v. Pfizer, the CAFC had held that the court does not have declaratory judgment jurisdiction over a case between an ANDA filer and the patent holder unless the patent holder at least threatens suit stating that a listing in the Orange Book listing alone does not create a reasonable apprehension of suit.

In the present case, Apotex faces the same issue and Apotex argued that the unsure situation should give the generic a right to pursue declaratory relief. The FTC has argued that this is anticompetitive under antitrust laws.

The Supreme Court heard oral arguments in a case asking whether companies can sue to invalidate another's patent even when they don't face an infringement suit, a case that may affect thousands of drug and biotechnology inventions. The case, MedImmune, Inc. v. Genentech, Inc. et al. (No. 05-608), looks at whether a company must stop paying royalties on a patent license to challenge the validity of the patent. MedImmune is paying licensing fees to Genentech for an antibody technology used in MedImmune's pediatric respiratory drug Synagis, while at the same time challenging Genentech's patent in court.

The patents at issue, U.S. Pat. Nos. 4,816,567 and 6,331,415, relate to antibodies and to non-specific immunoglobulins formed by recombinant techniques using host cell cultures. The antibodies can be manipulated at the genomic level to produce chimeras of variants, which draw their homology from species, which differ from each other. They can also be manipulated at the protein level, since all four chains do not need to be produced by the same cell.

Genentech argued that the federal courts do not have jurisdiction over the case without a breach of contract or other actual dispute between the two parties. By paying royalties, MedImmune has acknowledged the validity of the patent, Genentech said in court briefs, and as a result there is no actual dispute in the case. Instead, the company argues that MedImmune is essentially seeking an advisory opinion about how it would fare legally if it broke the contract, which the court cannot provide. Under the Constitution, the federal courts do not have jurisdiction to rule on hypothetical questions.

The Court is reviewing the Federal Circuit decision that a licensee may not use a declaratory judgment action to challenge the validity of the licensed patent where the licensee is paying royalties and observing the terms of the patent license agreement. The Federal Circuit ruling rejected the view that licensee rights established under Lear v. Atkins, 395 U.S. 653 (1969), permit the validity challenge, stating that this case is governed not by the bar against licensee estoppel, but by the Constitution’s requirement of a case or controversy.

MedImmune, a licensee of a patent owned by Genentech, sought a declaratory action to challenge the validity and enforceability of the licensed patent on various grounds flowing from the settlement of a patent interference between Genentech and Celltech R&D, Ltd. The U.S. District Court held that because MedImmune continues to comply fully with the license terms, leaving no possibility of infringement suit or license cancellation by Genentech, there is no "case of actual controversy" as required by the Declaratory Judgment Act, 28 U.S.C. §2201. The district court also dismissed MedImmune's antitrust and unfair competition counts claiming that Genentech illegally obtained a patent on an antibody synthesis technology used in the production of Synagis, a MedImmune drug that prevents certain respiratory infections in babies. The U.S. Court of Appeals for the Federal Circuit affirmed (See MedImmune Inc. v. Genentech, 04-1300, -1384).

MedImmune, meanwhile, argues that to breach its contract with Genentech would expose it to potentially significant damages for patent infringement and could also result in an injunction halting sales of Synagis, which brought in over $1 billion in revenue in 2005. MedImmune says that it is paying the royalties only under protest and that federal law and previous court cases allow it to challenge the patent without suffering the negative consequences of halting royalty payments.

While some argue that allowing a company to challenge a patent while continuing to pay licensing fees reduces the risks to companies like MedImmune and could encourage more disputes and could destabilize thousands of existing patent settlements and license agreements, Justice Anthony Kennedy expressed a concern that this could "flood the courts" with lawsuits. On the other hand, others believe that allowing companies to continue to pay royalties while disputing patents could bring more challenges of bad patents. Chief Justice John G. Roberts Jr. asked, if firms could always sue over patents they had agreed to respect, then "How do you ever end these things?"

The case has lined up a good number of supporters on both sides. MedImmune is supported by the Generic Pharmaceutical Association and by the current administration while Genentech is backed by the Pharmaceutical Research and Manufacturers of America, Qualcomm Inc., 3M Co., General Electric Co., Procter & Gamble Co. and DuPont Co. A decision is expected by July. With concerns raised on the merits of both sides, the case is too close to call.

In the meantime, the U.S. Patent and Trademark Office is reviewing Genentech's Cabilly patent under concurrent proceedings for an Inter Partes Reexamination (RE Appl. No. 90/007,542) and an Ex Parte Reexamination (RE Appl. No. 90/007,859). In an earlier ruling, the U.S. Patent and Trademark Office (USPTO) issued an obviousness-type double-patenting rejection and a "Schneller-type" double patenting rejection on the Genentech patent indicating that the patent, awarded in 2001, covered basically the same invention as an earlier Genentech patent that was set to expire next March.

MedImmune is now claiming that Genentech and Celltech conspired improperly to secure for themselves, through 2018, a dominant and exclusive position in the recombinant antibody field. As we've said before, it's too early to try to predict the outcome so it is not clear yet if companies developing recombinant antibody-based products will become free and clear of the Boss and Cabilly patents anytime soon.

See more at: Patently-O and SCOTUS Blog.

If you've ever worked with university inventors, you know that the pressure to publish is intense. Sometimes, that drive to publish comes back to bite you.

An invention can only be protected by patent if it is novel (that is, no prior publication of the invention has been made by the inventor or others). While the U.S. allows a one-year grace period, most countries follow a policy of absolute novelty, that is, no patent can be obtained if the invention has been publicly disclosed. Therefore, it is essential not to disclose the invention publicly until after a formal patent application has been filed.

Any printed publication in a newspaper, scientific journal, or other written form available on an unrestricted basis is considered a public disclosure, as is an oral presentation at a public meeting. Note that an abstract and, in some cases, even a title may act to bar patentability if it discloses all the necessary elements of the invention.

This is the result in the recent case where the inventors published an abstract that disclosed the necessary elements of the invention even though they did not appreciate what they had at the time they published.

In Nichols Institute Diagnostics v. Scantibodies (06-1087; September 20, 2006), the Federal Circuit reversed a district court's grant of summary judgment of no anticipation and held that all of the asserted claims were anticipated under 35 U.S.C. § 102 by an earlier published abstract.

Nichols' patent, U.S. Patent No. 6,030,790, covered compositions of antibodies that selectively bind to specific peptide sequences of hPTH 1-37, methods of using the antibodies to detect biologically active hPTH, and immunoassay test kits containing the antibodies for detection of biologically active hPTH. Representative claim 17 recites:

A composition comprising an antibody or antibody fragment and a suitable carrier: wherein the antibody or antibody fragment selectively binds a peptide of human parathyroid hormone (hPTH) selected from the group consisting of peptides having SEQ. ID Nos. 1-6.

SEQ. ID Nos. 1-6 being the sequence for hPTH 1-10, hPTH 1-9, hPTH 1-8, hPTH 1-7, hPTH 1-6, and hPTH 1-5, respectively.

Human Parathyroid Hormone (hPTH) is a protein comprised of 84 amino acids that plays an important role in regulating calcium metabolism. Various fragments of hPTH may circulate in the bloodstream; however, to be biologically active, a fragment of hPTH must include the first two amino acids and must be at least 34 amino acids long. The amount of biologically active hPTH may be measured by creating antibodies that bind to specific amino acid sequences of hPTH and then using those antibodies in an immunoassay.

The inventors published an abstract disclosing that they created ten antisera, labeled K1 through K10, each of which contained a mixture of antibodies that bound to specific peptides of a fragment of hPTH that contained amino acids 1 through 37 (represented as hPTH 1-37).

The abstract explained that the disclosed sera "provide the possibility to specifically detect the physiologically circulating fragment of human PTH in serum." The abstract discloses that some of the sera, labeled K1 through K3, bound predominantly to hPTH peptides having the first two amino acids. Because the antibodies in the K1 through K3 sera bound predominantly to peptides containing the first two amino acids, and the antibodies in the other sera bound to peptides of hPTH containing blocks of amino acid sequences through 37, the sera could be used in combination to specifically detect hPTH fragments that include the first two amino acids and are 37 amino acids long.

The abstract was published and distributed to the public on September 12, 1994. It was not until after that date that the authors of the abstract discovered that, to be biologically active, a fragment of hPTH must have both the first two amino acids and be at least 34 amino acids long. Thus, it was not until after the abstract was published that the authors recognized the significance of the disclosure in the abstract.

On September 22, 1995, they filed the patent application, more than one year after the publication of the abstract.

Basically, the sera disclosed in the abstract contained a mixture of antibodies and the claimed antibody was present in the K2 serum. At trial, the district court concluded that the abstract did not inherently anticipate the claimed antibody because the claimed antibody "differentiates between biologically active and inactive hPTH," whereas the abstract "does not disclose or suggest the means of differentiating between biologically active and inactive hPTH."

On appeal, Scantibodies argued that, because it is undisputed that the antiserum disclosed in the abstract contained the claimed antibody, and because it was well known how to isolate the claimed antibody from the other antibodies in the disclosed serum, the abstract inherently anticipates the asserted claims.

The CAFC agreed:

We also hold, for the reasons below, that the abstract anticipates the asserted claims, because no reasonable juror could have found that the abstract does not inherently disclose the claimed antibody. SmithKline, 403 F.3d at 1343. The abstract itself and the testimony of Dr. Magerlein conclusively demonstrate that the abstract expressly or inherently discloses each element of the asserted claims. The abstract states that the authors have obtained antibodies and that "the different regions of hPTH 1-37 are covered by the produced antibodies. Furthermore, the combinations of two antibodies in a two-side assay are tested." The abstract also discloses that sera mixture K1 through K3, which contains the K2 antibody (and) … the claimed antibody was isolated from the K2 antiserum using affinity purification, which was well-known in the art.

It is thus beyond dispute that the K2 antibody disclosed in the abstract is the claimed antibody and the claimed antibody could be isolated from the K1 through K3 sera by a technique that was well-known in the art.

Because the abstract inherently meets each and every element of the asserted claims, the asserted claims are anticipated and hence invalid. Id. at 1379.

Nichols tried arguing that the abstract did not anticipate because it was not until after the abstract was submitted that the inventors appreciated the significance of the claimed antibody, namely that it could be used to detect biologically active hPTH.

The CAFC didn't buy that argument holding that:

Nichols's argument that the abstract does not anticipate because the significance of the claimed antibody was not known until after the abstract was submitted is without merit. "[I]nherent anticipation does not require a person of ordinary skill in the art to recognize the inherent disclosure in the prior art at the time the prior art is created." SmithKline, 403 F.3d at 1343 (citations omitted); see also Schering, 339 F.3d at 1377 (holding that "inherent anticipation does not require that a person of ordinary skill in the art at the time would have recognized the inherent disclosure"); MEHL/Biophile Int'l Corp. v. Milgraum, 192 F.3d 1362, 1366 (Fed. Cir. 1999) ("Where . . . the result is a necessary consequence of what was deliberately intended, it is of no import that the article's authors did not appreciate the results.").

Nichols also asserted that the abstract was not a printed publication under 35 U.S.C. § 102(b) because it was not adequately indexed but that was soundly rejected.

There is a lesson here for anyone rushing to publish their results. When faced with an abstract or paper that is to be published prior to filing a patent application, one might want to try to omit critical details from the manuscript in order to keep it from being enabling in a patent sense. But, this could be living dangerously. It's always better to file an application first.

I've said it before and I'll say it again, if you do research you must keep meticulous notes of the inventive process. Laboratory notebooks often play an important role during the patent prosecution process and even after a patent has issued. A properly kept notebook is invaluable in cases in which another party claims a patent to be invalid or in interference cases in which two or more patents have been issued on the same invention and the true inventor must be ascertained.

In Yeda Research And Development Co. v. ImClone Systems and Aventis Pharmaceuticals (03 Civ. 8484), a federal judge ruled that three scientists from Israel are the true inventors of a patent used for ImClone Systems' cancer drug Erbitux rather than the seven people listed on the patent after finding no documentary evidence suggesting that any of the other named inventors contemplated the claimed invention. ImClone, as you know, is the company whose founder, Sam Waksal, is serving a prison sentence for his role in the stock scandal that also involved Martha Stewart. In a lengthy, 140-page opinion the court found the Yeda scientists had proved they were entitled to sole inventorship of the patent.

Yeda sued ImClone and Aventis alleging improper inventorship of U.S. Pat. No. 6,217,866, entitled "Monoclonal Antibody Specific to Human Epidermal Growth Factor Receptor and Therapeutic Methods Employing Same." Yeda is the assignee of the legal interests of three scientists (Sela, Pirak and Hurwitz - collectively, the "Weizmann scientists"), who maintain that they are the true inventors of the '866 patent. ImClone is the assignee of the interests from the named inventors.

Earlier, the named inventors created two monoclonal antibodies for use as research tools and gave samples of the antibodies to the Weizmann scientists. The Weizmann scientists performed experiments with the antibodies and discovered that when one of the two antibodies, known as mAb 108, was administered in vivo in a mixture with chemotherapy drugs, the effect on human tumor cells was synergistic.

One named inventor, Schlessinger, testified that he "knew" that this mixture experiment would be performed based on his knowledge of Hurwitz's prior work. Hurwitz, however, testified that the Weizmann scientists only decided to conduct the mixture experiment more than a year after the research began.

Soon after the discovery, Schlessinger was told of the discovery and sent a draft manuscript. Meloy Labs (later became Rorer then part of Aventis) began pursuing patent protection for both the antibodies themselves and for the method of administering them with chemotherapy drugs that had been developed by the Weizmann scientists. Only the scientists employed by Meloy/Rorer were included as inventors on its patent applications. Not only that, Meloy/Rorer and later, ImClone, directly copied the text and figures from the manuscript into their patent applications.

During prosecution, the USPTO also raised questions about the fact that the patent application seemed to be drawn directly from work done by the Weizmann scientists. Defendants overcame this objection by suggesting that they had entirely conceived of the research conducted by the Weizmann scientists, who had simply followed their directions as to what experiments to perform.

The issued patent only included those claims drawn to the method of administering an antibody in a mixture with chemotherapy drugs; the PTO did not permit the antibodies themselves to be patented. The issued '866 patent claims:

1. A method for inhibiting the growth of human tumor cells that express human EGF receptors and are mitogenically-stimulated by EGF, the method comprising administering an effective amount of an anti-neoplastic agent to a human cancer patient having said tumor cells; (i) wherein said antibody binds to the extra-cellular domain of the human EGF receptor of said tumor cell; (ii)wherein the antibody is not conjugated to the anti-neoplastic agent; and (iii) wherein the antibody inhibit [sic] the binding of EGF to the EGF receptor.

ImClone obtained FDA approval for the treatment of certain types of human cancer, permitting it to distribute Erbitux under the protection of the '866 patent. As of the date of trial, ImClone had received about $900 million in revenues under a distribution agreement with Bristol Myers Squibb.

The court looked at (a) which scientists invented the subject matter of the '866 patent; and (b) whether the affirmative defense of laches is available to ImClone.

In looking at inventorship, the court said it must begin "with a construction of each asserted claim to determine the subject matter encompassed thereby." Trovan Ltd. v. Sokymat SA, Irori, 299 F.3d 1292, 1302 (Fed. Cir. 2002) (citations omitted). After defining the invention, the Court "is then to compare the alleged contributions of each asserted co-inventor with the subject matter of the properly construed claim to then determine whether the correct inventors were named." Id. (citing Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998))."

Disturbingly, one of the determining factors cited by the court was the defendant having too good of a memory! The court stated that:

We find Schlessinger's account of this conversation not credible for several reasons. First, nearly twenty years have passed since the conversation occurred, such that we doubt Schlessinger remembers its details, especially considering the contorted testimony Schlessinger offered on cross-examination, in which he seemingly attempted to "remember" those details that would bolster defendants' case.

I'm not sure what that means for future cases – perhaps prepping witnesses to not remember so good? However, the court also noted that "despite providing the Court with hundreds of exhibits, defendants have failed to present a single piece of physical or documentary evidence suggesting that Schlessinger or any of the other named inventors contemplated that any particular type of testing would be conducted."

ImClone also argued that the legal doctrine of laches bars Yeda's claims in light of the fact that the lawsuit was initiated more than a decade after defendants first submitted an application for a patent. The affirmative defense of laches applies when: (1) a plaintiff unreasonably delays bringing suit; and (2) the delay results in material prejudice to a defendant.

Laches is an equitable defense, and is thus committed to the sound discretion of the trial judge. The period of delay is measured from when the claimant had actual notice of the claim or would have reasonably been expected to inquire about the subject matter, i.e., "knew-or-should-have-known." But, ImClone was sunk given that the court found the defendants at fault, stating:

Because we find that defendants' hands are unclean, i.e., they are responsible for plaintiff not finding out about their patent applications, the laches defense is unavailable to defendants.

In finding for Yeda, the court held that:

Having considered all of the evidence, we now find that the Weizmann scientists are entitled to sole inventorship of the '866 patent. In so holding, we make the following factual determinations, all of which are discussed at length infra: (1) Schlessinger did not give Hurwitz specific information regarding the properties of the antibodies or any intended uses; (2) Schlessinger did not specifically contemplate that the Weizmann scientists would perform the mixture experiment that forms the basis for the '866 patent; (3) the named inventors' creation of the antibodies used by the Weizmann scientists does not entitle them to inventorship; (4) the Weizmann scientists solely conceived of the idea embodied in the '866 patent; and (5) in light of the defendants' unclean hands, i.e., their copying from the Weizmann scientists' draft paper and their efforts to prevent Yeda from discovering defendants' patent applications, Yeda did not unreasonably delay asserting its rights relative to the '866 patent.

ImClone is now considering a three-way strategy for dealing with the decision including an appeal of the court decision, a motion to invalidate the patent turned over to three Israelis and exercising an option to license the patent from Yeda Research & Development Co.

See my suggestions on documenting inventions here.

In a follow-up to my discussion on the Alza case, it is important to note that the U.S. Supreme Court agreed to review an appeal of a key patent case that could set a standard for when an invention is obvious. The Court has taken up the appeal by KSR International Inc., a Canadian manufacturer of gasoline pedals for cars and light trucks, arguing that a patent held by a rival manufacturer is invalid because it was obvious at the time it was patented.

In Teleflex Inc. v. KSR Intern. Co. (Fed. Cir. 2005), the CAFC held that when combining two or more references in an obviousness finding, there must be a suggestion or motivation to combine the teachings. This "teaching-suggestion-motivation test' has been applied by the Federal Circuit in hundreds of cases since set out in 1985. The Federal Circuit applies this test even where a patent claims nothing more than a combination of pre-existing, off-the-shelf components in which each component performs exactly the same function that it had been known and was designed to perform.

In KSR, the Federal Circuit held that the prior art did not render the claimed invention unpatentable because they had not proven, beyond genuine dispute and by clear and convincing evidence, that there was a suggestion or motivation to combine the teachings of the prior art in the particular manner claimed by the patent at issue (U.S. Patent No. 6,237,565).

Now, the Supreme Court has granted cert in KSR Intern. Co. v. Teleflex Inc., Supreme Court No. 04-1350. In its Petition For A Writ Of Certiorari, KSR presented the following question:

Whether the Federal Circuit has erred in holding that a claimed invention cannot be held obvious, and thus unpatentable under 35 U.S.C. § 103(a), in the absence of some proven "'teaching, suggestion, or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed."

This case raises a question of broad and general importance: What is the proper interpretation of the patentability standard set forth in § 103 of the Patent Act? The answer to this question affects every pending U.S. patent application, every issued U.S. patent, and every U.S. federal court challenge to the validity of a patent.

Section 103 was first enacted in 1952; it provides that a patent cannot issue on subject matter that would have been "obvious" to a hypothetical "person having ordinary skill in the art" or PHOSITA. Four factual inquiries underlie an evaluation of obviousness: (1) the scope and content of the prior art; (2) the differences between the claimed invention and the prior art; (3) the level of ordinary skill in the art; and (4) any other objective indicia of non-obviousness, such as commercial success of the claimed invention, long felt but unmet need.

KSR argues that under the Supreme Court's interpretation of § 103, a combination of pre-existing elements does not constitute an "invention", and does not meet the "condition for patentability" specified in § 103(a), if each element in the claimed combination does nothing more than what it was previously known or designed to do. They argue that the Federal Circuit's interpretation of § 103 is wrong in holding that a combination of pre-existing elements will always constitute an "invention", and will always meet the "condition for patentability" specified in § 103, unless there is proven "some 'suggestion, teaching, or motivation' that would have led a person of ordinary skill in the art to combine the relevant prior art teachings in the manner claimed." They argue that the "teaching-suggestion-motivation test" has no basis in the text of § 103 or in any decision of the Supreme Court.

It seems Alza was the Federal Circuit's attempt to shore up it reasoning behind the test with their statement that obviousness is a question of law, reviewed de novo, based upon underlying factual questions while the presence or absence of a motivation to combine references in an obviousness determination is a question of fact.

This is of particular importance to pharmaceutical and biotechnology research-based companies who are against any change to the test (and might make it difficult to patent known drugs for new uses).

Dennis Crouch's Patently-O has more details on the case, including links to filings and briefs.

Alza Corp. appealed a district court's finding of noninfringement and invalidity of claims 1-3, 11, 13 and 14 of U.S. Patent No. 6,124,355 for a generic version of the once-a-day extended release formulation of the anti-incontinence drug oxybutynin, which Alza has been marketing as Ditropan XL®. Alza had sued after Mylan and Impax filed ANDAs for generic once-daily, controlled-release oxybutynin formulations.

The ‘355 patent claims:

A sustained-release oxybutynin formulation for oral administration to a patient in need of treatment for urge incontinence comprising a therapeutic dose of an oxybutynin selected from the group consisting of oxybutynin and its pharmaceutically acceptable salt that delivers from 0 to 1 mg in 0 to 4 hours, from 1 mg to 2.5 mg in 0 to 8 hours, from 2.75 to 4.25 mg in 0 to 14 hours, and 3.75 mg to 5 mg in 0 to 24 hours for treating urge incontinence in the patient.

The district court found that Alza had failed to meet its burden of proof on infringement. The district court also found the asserted claims of the '355 patent to be invalid as both anticipated and obvious in light of the prior art. The Federal Circuit agreed in Alza v. Mylan (Fed. Cir. 2006, 06–1019).

The standard for obviousness is that a claimed invention is unpatentable if the differences between it and the prior art are "such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art." 35 U.S.C. § 103(a) (2000); In re Kahn, 441 F.3d 977, 985 (Fed. Cir. 2006) (citing Graham v. John Deere Co., 383 U.S. 1, 13-14, (1966)).

Obviousness is a question of law, reviewed de novo, based upon underlying factual questions while the presence or absence of a motivation to combine references in an obviousness determination is a question of fact.

The "motivation to combine" requirement prevents hindsight reasoning when determining the obviousness of an invention. The CAFC pointed out that according to the "motivation-suggesting-teaching" test, a court must ask "whether a person of ordinary skill in the art, possessed with the understandings and knowledge reflected in the prior art, and motivated by the general problem facing the inventor, would have been led to make the combination recited in the claims." Kahn, 441 F.3d at 988 (citing Cross Med. Prods., Inc., v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1321-24 (Fed. Cir. 2005)).

The CAFC repeated the analysis in Kahn:

A suggestion, teaching, or motivation to combine the relevant prior art teachings does not have to be found explicitly in the prior art, as "the teaching, motivation, or suggestion may be implicit from the prior art as a whole, rather than expressly stated in the references. . . . The test for an implicit showing is what the combined teachings, knowledge of one of ordinary skill in the art, and the nature of the problem to be solved as a whole would have suggested to those of ordinary skill in the art." However, rejections on obviousness grounds cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness. This requirement is as much rooted in the Administrative Procedure Act [for our review of Board determinations], which ensures due process and non-arbitrary decision-making, as it is in § 103.

In the present case, the patent at issue is directed to an extended release form of oxybutynin. After roughly 8-12 hours a typical drug dosage form will reach the colon. If, hypothetically, a particular drug is simply not absorbed from the colon into the bloodstream, then it may make little sense to develop an extended-release dosage form that is capable of "withholding" the release of some fraction of that drug until it reaches the colon. In other words, under these hypothetical conditions, there may be little motivation to design an oral dosage form capable of releasing drug more slowly than over an approximately 8-12 hour time course, because such drug would be released in the colon, where it is (hypothetically) not absorbed.

The '355 patent claims an extended release oxybutynin formulation, which Alza argued one of ordinary skill in the art would not have believed that oxybutynin could be absorbed in the colon. Absent such absorption, Alza contends that one of ordinary skill in the art lacked the motivation to make the claimed extended release formulation.

The CAFC was not persuaded. Although the district court based its invalidity holding both on anticipation and obviousness grounds, the CAFC affirmed based only on obviousness.

Because Alza's argument was that no one of ordinary skill in the art would have been motivated to adapt the known technology to oxybutynin in the first place, because a person of ordinary skill in the art would have had no reason to expect that such an extended release oxybutynin formulation would have therapeutic value, the CAFC merely looked at whether one of ordinary skill in the art in 1995 would have had a reasonable expectation that oxybutynin would be colonically absorbed and therefore would have been motivated to produce the claimed extended release formulation.

Alza argued that the district court erred when it concluded that the evidence established that a person of ordinary skill in the art in 1995 would reasonably expect oxybutynin to absorb in the colon and have a reasonable expectation of success of producing a 24 hour oxybutynin formulation meeting the claims of the '355 patent. Alza argued that there was no contemporaneous documentation supporting the view that any one factor—lipophilicity or anything else—existed to identify successful candidates for once-a-day delivery.

The CAFC set out that:

As an initial matter, it is essential to recognize that, as we have explained above, under our non-rigid "motivation-suggesting-teaching" test, a suggestion to combine need not be found in the prior art. See Cross Med. Prods., 424 F.3d at 1322 ("[T]he motivation to combine need not be found in prior art references, but equally can be found in the knowledge generally available to one of ordinary skill in the art . . . ."). Accordingly, where the testimony of an expert witness is relevant to determining the knowledge that a person of ordinary skill in the art would have possessed at a given time, this is one kind of evidence that is pertinent to our evaluation of a prima facie case of obviousness. We now turn to consider whether the relevant evidence, including the expert testimony and the prior art, when viewed as a whole supports the findings of the district court. We conclude that the findings of the district court were not clearly erroneous.

Mylan's expert, Dr. Amidon, testified that based on its lipophilicity, he would "expect oxybutynin to be a highly permeable" compound that is "rapidly absorbed" along the length of the GI tract, including the colon.

In looking at the references cited by Alza to refute the testimony, the Court concluded that:

Far from teaching away or detracting from the weight of Dr. Amidon's testimony, these prior art references, taken as a whole, are entirely consistent with the finding that in 1995 a person of ordinary skill in the art would have expected a general, albeit imperfect, correlation between a drug's lipophilicity and its colonic absorptivity. Accordingly, we cannot perceive clear error in the district court's factual findings that while colonic absorption was not guaranteed, the evidence, viewed as a whole, is clear and convincing that a person of ordinary skill in the art would nonetheless have perceived a reasonable likelihood of success and that she would have been motivated to combine prior art references to make the claimed invention.

…

Likewise, we find no error in the district court's consideration of secondary indicia of obviousness. We therefore affirm its legal conclusion of obviousness, finding the district court to have correctly held that Mylan met its burden of overcoming the presumption of validity that attaches to an issued patent.

See also Alza v. Impax (Fed. Cir. 2006, 06–1047)

A jury unanimously found that Abbott Laboratories willfully infringed Innogenetics’ U.S. Patent No. 5,846,704, which covers a method of genotyping the Hepatitis C Virus ("HCV") using probes targeting sequences from the 5' untranslated region of HCV.

Hepatitis C viruses (HCV) are a family of positive-stranded, enveloped RNA viruses causing the majority of non-A, non-B (NANB) hepatitis. The ‘704 patent claims:

1. A method of genotyping HCV present in a biological sample comprising hybridizing nucleic acids in a biological sample with at least one probe and detecting a complex as formed with said probe and said nucleic acids of HCV, using a probe that specifically hybridizes to the domain extending from the nucleotides at positions -291 to -66 of the 5' untranslated region of HCV.

The U.S. District Court judge still has the discretion to up the award to triple the amount - so-called treble damages (35 U.S.C. § 284) - since the jury specifically determined Abbott's patent infringement was willful. Innogenetics also has said it will seek an injunction against Abbott diagnostic products that infringe its '704 patent and any other available remedies.

On September 2, 2006, a jury returned a unanimous verdict for Innogenetics that the '704 patent was valid and has now determine damages and whether the infringement had been willful. Upon a finding of infringement, a court may increase damages, but a finding of increased damages is not mandatory. Under the statute, a court "may increase the damages up to three times the amount found or assessed." Further, a court may award attorney's fees as well. However, willful infringement is merely a predicate act to the enhancement of damages as a finding of willful infringement, though a sufficient basis for an award of increased damages does not mandate them.

Whether a finding of willful infringement is warranted depends on what the Federal Circuit has characterized as "the totality of the circumstances" presented, namely, whether a reasonable person would prudently conduct himself with any confidence that a court might hold the patent invalid, not infringed or unenforceable.

One factor is whether the infringer has obtained an opinion of counsel regarding infringement and/or validity. The Federal Circuit has held that once a party has actual notice of another's patent right, that party has an affirmative duty to respect those rights, and that this affirmative duty normally entails obtaining advice of legal counsel.

In another update to the preliminary injunction issued August 29 in the Plavix case, the cheeky Apotex has filed an appeal with the Court of Appeals for the Federal Circuit against the preliminary injunction preventing the drug company from selling a generic version of the heart drug Plavix. The request came a day after a federal judge had denied Apotex's request to postpone his order last week to halt the company's sales of generic Plavix.

The district court judge had said Sanofi had demonstrated that questions Apotex raised as to the validity and enforceability of its patent were without substantial merit and he also concluded Sanofi would suffer irreparable harm if Apotex were permitted to continue selling the generic while any detriment to Apotex was a result of the company's own calculated risk-taking. A trial is set for January on the infringement suit.

In its appeal, Apotex claims the court failed to properly consider Apotex's "massive irreparable harm, including the loss of its enormously valuable exclusivity and the great harm to third parties." ... "The injunction will wreak havoc in the pharmaceutical markets where statutes and insurers require that prescriptions be filled with generic product."

There will be plenty more to come in this high stakes game. We'll keep you posted.

On April 20, 2006, Amgen filed a lawsuit against Ariad in the U.S. District Court for the District of Delaware seeking a declaratory judgment that each of the claims contained in U.S. Patent No. 6,410,516, covering methods of treating human disease by regulating NF-κβ cell-signaling activity, are invalid and that Amgen has not infringed any of the claims of the ‘516 Patent based on activities related to Amgen’s products, Enbrel® and Kineret®.

The '516 patent claims methods of treating disease by regulating a family of molecules known as NF-κβ. While Ariad contends that the patent covers all means for modulating the NF-κβ pathway, Lilly's contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees' scientists made their discovery. Ariad asserts that the claims of the '516 patent cover "methods of treating human disease by regulating NF-κβ activity," "methods of treating disease by inhibiting NF-κβ," and "methods useful for treating various disease conditions through modulation of NF-κβ activity."

On April 4, 2005, Eli Lilly and Company filed an ex parte request in the United States Patent and Trademark Office, or PTO, to reexamine the patentability of certain claims of the ‘516 Patent. In addition, an unrelated third party filed an ex parte request in the PTO on December 2, 2005 to reexamine the patentability of certain claims of the ‘516 Patent. The PTO has granted both of these reexamination requests. On April 4, 2006, counsel for the patentees of the ‘516 Patent filed separate Petitions requesting the PTO to merge these two reexamination requests, which were granted by the PTO on May 4, 2006. Additionally, on April 7, 2006, counsel for the patentees of the ‘516 Patent filed a third ex parte request in the PTO with respect to one claim of the ‘516 Patent, which was denied by the PTO on May 5, 2006. As a result of the PTO orders described above, Lilly’s ex parte request has been merged into a single action to look at the patentability of certain claims of the ‘516 Patent by newly cited references which (i) either inherently or expressly disclose the use of a variety of prior art compounds as reducing NF-κβ activity and resulting gene expression, or (ii) are directed to the use of oligonucleotides having an NF-κβ binding site for reduction of NF-κβ activity (Reexam. C.N. 90/007,503).

The Examiner has now rejected 160 of the 203. In a quite lengthy and detailed 66- page Nonfinal Office Action, the Examiner rejected various subsets of claims as anticipated and/or obvious in light of a long list of prior art references. For example, many claims were rejected over Meichle (J. Biol. Chem. 265 (5/90) 8339-43), which teaches the reduction of NF-κβ activity in induced cells using agents that inhibit protein kinase C. In addition, because Meichle used the HIV LTR in their experiments, this reference anticipates, or alternatively, makes obvious claims drawn to regulating expression of viral genes.

The Examiner contends that the ‘516 claims are drawn to reducing NF-κβ activity in eukaryotic (e.g. claims 1 or 2) or mammalian cells (e.g. claim 11) to effect inhibited expression of a gene under transcriptional control of NF-κβ. For example, NF-κβ activity can be effected by diminishing induced NF-κβ mediated intracellular signaling (claims 6-9) to inhibit associated gene (viral gene such as HIV: claims 1-4) expression of a cytokine protein(claim 5) in a eukaryotic cell. Meichle teaches the use of Protein Kinase Inhibitor H8 (among others) to reduce NF-κβ-mediated gene transcription by reducing NF-κβ activity and reducing the binding of NF-κβ to NF-κβ binding sites.

It is noteworthy that the USPTO states that claim 1's sole method step is functional, i.e., reducing NF-κβ activity and, therefore, the claims would encompass any in vitro or in vivo, natural (indirect) or man-made (direct) means of reducing NF-κβ activity. The Examiner contends that most of the method steps recited in the patent are purely functional with the exception of claim 7 and dependent claims 81, 83 and 85-87 which require "modifying NF-κβ activity" (which are partially functional) and claim 203 which requires "introducing a nucleic acid decoy molecule into the cell" which requires an active step.

The problem with biochemical pathway patents for generic treatments is that they represent methods of treating disease by modulating a particular pathway in the body without claiming a specific drug or class of drugs that may effect the modulation. While this may provide broad (over)reaching claims, the reverse applies, too. That is, all the Examiner needs to show is that someone, somewhere modulated the pathway - whether they knew it or not.

Prior to the '516 patent, there were agents that existed that are now known to act by inhibiting NF-κβ activity, e.g., ibuprofen, which has been around since 1969 even if it's mode of action wasn't known until 1998. The mode of action was inherent even if not appreciated. Heck, even vitamin E inhibits NF-κβ activity. There's just going to be a lot of prior art out there.

Of concern to Amgen, of course, is that claim 69 recites "a method for diminishing induced NF-κβ-mediated intracellular signaling comprising reducing NF-κβ activity in cells such that NF-κβ-mediated intracellular signaling is diminished, wherein reducing NF-κβ activity comprises reducing binding of NF-κβ to NF-κβ recognition sites on genes which are transcriptionally regulated by NF-κβ." Ariad claims that Evista acts by inhibiting NF-κβ binding to its binding site.

As we've said earlier, this is far for over. Given the time for responses and extensions, it could be a year or two before this is settled (if then). We'll keep you posted as to a response by Amgen.

In another update to the preliminary injunction issued August 29 in the Apotex case, The Fire of Genius writes that there are two interesting things to note about Judge Stein’s decision: (1) it nowhere mentions the eBay v. MercExchange case, at all (!); and (2) Judge Stein applies the traditional pre-eBay “presumption of irreparable harm” standard.

In eBay, the CAFC had stated that courts must grant preliminary injunctions (alleged) infringers under very weak conditions in ruling that the standards for preliminary injunctions for patents should be as stringent as those in other forms of legal actions. The Supreme Court ruled unanimously that there is no “general rule” to permanently enjoin patent infringement. Instead the Court held that “the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity.”

Here, Judge Stein states that:

Having found that Sanofi has clearly established a likelihood of success on the merits, the Court also finds that Sanofi receives the benefit of a presumption of irreparable harm. Not only does Sanofi receive the benefit of that presumption, but it has also offered independent evidence of irreparable harm, namely, evidence that this Court credits that it will suffer irreversible price erosion, loss of good will, and will be forced to lay off personnel and discontinue research devoted to developing other medical uses for Plavix.

...

Apotex has not produced evidence sufficient to rebut the presumption of irreparable harm to Sanofi, or to adequately explain away the other forms of irreparable harm for which Sanofi has adduced credible evidence.

...

Because Sanofi has demonstrated a likelihood of success on the merits, and thereby secured the statutory presumption of irreparable harm, and has, moreover, proffered further persuasive evidence of irreparable harm, the Court concludes for the purposes of this motion that Sanofi will indeed suffer such harm in the absence of a preliminary injunction.

The order does seem to strengthen Sanofi's infringement case given that Judge Stein sums up stating that "Sanofi has adequately demonstrated that the questions Apotex raises as to the validity and enforceability of Sanofi’s ‘265 patent are without substantial merit based on the evidence adduced to date, Sanofi has demonstrated a likelihood of success on the merits at trial."

Apotex tried to get the court to stay the injuction but was turned down. See the motion here.

U.S. District Judge Sidney H. Stein in Manhattan issued an injunction blocking the sale of generic Plavix® (clopidogrel bisulfate) after a two-day hearing (Sanofi-Synthelabo v. Apotex Inc., 02cv2255, U.S. District Court for the Southern District of New York). Sanofi-Aventis SA and Bristol-Myers Squibb sought the preliminary injunction against Apotex Inc . to stop sales of the generic drug citing the likelihood that they will prevail in the patent case and that Apotex's launch last week is causing them irreparable harm. The judge also denied demands by the companies that Apotex be forced to remove from the market the generic product it had already sold to distributors.

The judge said Sanofi had demonstrated that questions Apotex raised as to the validity and enforceability of its patent were without substantial merit and he also concluded Sanofi would suffer irreparable harm if Apotex were permitted to continue selling the generic while any detriment to Apotex was a result of the company's own calculated risk-taking. The judge also considered the public interest of permitting competition to continue noting that "although there are competing — and substantial — public interests at stake on both sides of this litigation, the balance of those competing public interests slightly favors Sanofi, the public interest in lower-priced drugs is balanced by a significant public interest in encouraging the massive investment in research and development that is required before a new drug can be developed and brought to market."

The judge said he based his decision on the chances that Apotex could ultimately prove it is entitled to sell its generic drug; the level of irreparable harm each side might suffer; the balance of hardships; and the impact on the public. He also ordered Sanofi to put up bond of $400 million, an amount meant to cover losses Apotex will have suffered if it eventually wins the case. The Canadian drug maker had requested $4 billion; Sanofi and Bristol-Myers argued for $25 million. Apotex said the bond amount was "grossly inadequate" to compensate for the damages it was in jeopardy of incurring, which gives you a glimpse at just what's at stake in this case - last year's sales of Plavix were $6.3 billion. It didn't hurt that an accountant testified for Apotex that the company stood to lose up to $4 billion in costs, future sales and lost opportunity if it was forced to withdraw its drug from the marketplace.

Earlier, Apotex agreed to delay selling its drug in return for a minimum of $40-million from Bristol and Sanofi. In return, Apotex would be allowed to introduce its version of Plavix before the patent expired sometime in 2011. State attorneys general, who must approve arrangements between Bristol-Myers and generic drug makers as a result of earlier litigation, rejected the deal between the drug companies. As we said before, this is far from over since the U.S. Federal Trade Commission has initiated a criminal investigation by the Department of Justice. FBI agents have already confiscated documents at Bristol-Myers' New York headquarters, and both companies received grand jury subpoenas to determine if the agreement broke antitrust laws.

The disputed patent, U.S. Patent No. 4,847,265 (the ’265 patent), covers Plavix’s main ingredient and does not expire until 2011. The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas the '265 patent, due to expire in 2011, claims only the (+)-enantiomer. Apotex claims the '265 patent is either invalid or would not be infringed by its proposed generic product.

While Sanofi could win the suit against Plavix over the generic, the preliminary injunction may only buy some extra time. Then again, even if the patent is later upheld in court, penalties would be limited under the terms of its deal with Sanofi and Bristol-Myers.

Apotex said it will appeal and it is filing an emergency motion with the Court of Appeals for the Federal Circuit to stay the injunction pending the appeal.

See earlier posts from the Patent Baristas:

Update: Sanofi and Bristol-Myers File for Preliminary Injunction Against Apotex
Apotex To Launch Generic Plavix At Its Own Risk
FTC Rejects Patent Deal by Bristol-Myers and Sanofi
Does Sanofi-Aventis Patent Settlement With Apotex Reveal a Trend?

Novozymes has won a patent infringement suit against Danisco concerning infringement of a Novozymes patent on enzymes for bioethanol. Danisco has withdrawn the infringing product (Spezyme Ethyl) from the market. Spezyme Ethyl is a thermostable alpha-amylase enzyme for the liquefaction of starch at high temperatures and is used in the production of bioethanol.

Amylase (1,4-a-D-Glucan glucanohydrolase; EC 3.2.1.1) is a digestive enzyme (present in saliva, for example) that breaks down long-chain carbohydrates (such as starch) as an initial step in the production of ethanol from grain starch. In this type of production, corn or starchy grain is ground into flour ("meal"), which is then slurried with water to form a mash. Enzymes are added for the conversion of starch to sugar, the whole mash is processed in a high-temperature cooker and then transferred to fermenters where yeast is added and the conversion of sugar to ethanol and CO2 begins.

Most of the ethanol in the U.S. is made using the dry mill method. In the dry mill process, the starch portion of the corn is fermented into sugar then distilled into alcohol. The starch is usually heated at around 105°C or higher in the presence of thermostable alpha amylase, and then liquefied further at a lower temperature (around 90ºC). The high temperatures help reduce bacteria levels in the mash (high bacteria levels reduce yield).

In March, 2005, Novozymes A/S filed a complaint against Danisco’s subsidiary Genencor in the United States District Court for the district of Delaware for patent infringement under U.S. Patent No. 6,867,031. The complaint, which was filed the same day Novozymes’ patent was issued, focuses on the manufacture, use and or sale of Genencor’s SPEZYME® Ethyl, a high performance amylase enzyme that is sold to the fuel ethanol industry.

The '031 patent claims a variant of a parent Bacillus stearothermophilus alpha-amylase. The variant improves the stability of alpha-amylases which are obtainable from Bacillus strains and which themselves had been selected on the basis of their starch removal performance in alkaline media.

The court concluded "that the Defendants have infringed claims 1, 3 and 5 of the ´031 patent, that those claims are valid, and that the ´031 patent is enforceable. Accordingly, this case will proceed to the second phase trial to decide the issues of willfulness and damages." The size of the damages will be decided in the fall. Novozymes has claimed several million US dollars in damages for loss of profits.

Danisco announced today that the company has withdrawn the product that infringed Novozymes’ patent (Spezym Ethyl)

Novozymes now plans to sell replacement products, Liquozyme and Termamyl, to customers replacing the infringing product that Danisco has withdrawn from the market.

We’ll leave the discussions of the politics and economic long-term viability of bioethanol as an alternate fuel to others.

Last year, we detailed that the U.S. Court of Appeals for the Federal Circuit upheld a trial court decision that three patents held by Purdue Pharma LP couldn't be enforced because of misrepresentations to the U.S. Patent and Trademark Office about the painkiller's effectiveness thus giving Endo Pharmaceutical Holdings Inc. the right to sell a generic version. OxyContin, a time-release painkiller generally prescribed to cancer patients and chronic-pain sufferers, had about $2 billion in sales last year.

This was a patent infringement case in which the patents were held unenforceable by the trial court due to inequitable conduct during prosecution before the USPTO. The district court found that Endo would infringe Purdue's patents, but determined the patents were unenforceable due to the inequitable conduct that occurred during prosecution. Purdue then appealed the inequitable conduct judgment. Purdue Pharma was filed a combined petition for panel rehearing and rehearing en banc.

We then reported that the CAFC granted the panel rehearing and withdrew the previous opinion and issued a new one. The CAFC vacated the trial court’s judgment that the patents-in-suit are unenforceable due to inequitable conduct and remanded the case for further proceedings consistent with this opinion. The trial court’s judgment of infringement was affirmed.

Purdue and Endo have now settled the patent infringement lawsuit between them that was pending in the United States District Court for the Southern District of New York. According to the agreement, Endo will stop selling infringing versions of OxyContin by the end of 2006. In exchange, Purdue Pharma will not pursue damages against Endo for Endo's past infringement of its OxyContin patents.

On February 1, 2006, the Court of Appeals for the Federal Circuit ruled that Endo's extended-release oxycodone products infringe the Purdue Pharma patents. In its ruling, the Court also vacated a trial court finding that the Purdue Pharma patents were unenforceable and sent the issue back to the trial court for reconsideration.

Under the terms of the settlement agreement, Endo will no longer dispute that the Purdue Pharma OxyContin patents are valid, enforceable and infringed by Endo's extended-release oxycodone product. The parties also have agreed to propose to the Court a consent judgment holding that Endo is infringing the Purdue patents and prohibiting Endo from infringing sales after December 31, 2006.

In a classic tale of who said what to whom, the Court of Appeals for the Federal Circuit overturned an earlier infringement ruling of Purdue University’s patent by ACell, Inc. and denied adding a Purdue inventor to the ACell patent based in part on the inventor’s testimony to the USPTO. Cook Biotech Inc. and Purdue Research Foundation v. Acell, Inc. et al. (Aug. 18, 2006; 05-1458, -1558, -1559)

The technology involves tissue-engineered biomaterial that was developed by ACell, but allegedly infringed on a patent owned by the Purdue Research Foundation and licensed to Cook Biotech Inc. The graft material can be implanted at the site of an injury or damaged tissue to stimulate a unique healing response. Instead of scar tissue, the extracellular matrix remodels new tissue, allowing the body to heal almost as if it had not been injured.

This was an appeal of a jury’s finding that ACell’s product, ACell Vet™, infringed U.S. Patent No. 5,554,389, owned by Purdue Research Foundation and that Drs. Badylak and Spievack willfully induced ACell to infringe. Purdue Research Foundation is responsible for Purdue University's technology-transfer program.

The CAFC found that the district court erred in its claim construction and that the ACell Vet™ product cannot infringe the ’389 patent. The CAFC also denied Purdue's appeal of the district court's rulings in favor of ACell and co-defendants Alan Spievack and Stephen Badylak regarding who was the inventor.

The ’389 patent is directed to a urinary bladder submucosa derived tissue graft composition comprising bladder submucosal tissue “delaminated from the abluminal muscle layers and at least the luminal portion of the tunica mucosa of the urinary bladder tissue,” that can be implanted to replace or support damaged or diseased tissues. Claim 1 is for “A composition comprising urinary bladder submucosa delaminated from both the abluminal muscle layers and at least the luminal portion of the tunica mucosa of a segment of a urinary bladder of a warm blooded vertebrate.” The ’389 patent names four inventors, one of whom is Badylak who assigned his rights to Purdue.

Spievack, a Harvard University professor and surgeon, visited Badylak at Purdue University and discussed his work on graft compositions. Spievack tried to obtain a license from Purdue for non-SIS products but when turned down, he worked on what he considers to be his own UBM technology, the subject of the ’265 patent and U.S. Patent No. 6,579,538 claiming a tissue graft composition including an epithelial basement membrane (UBM).

While the ’265 patent was still pending, Purdue asked the USPTO to declare an interference claiming that four other individuals, including Badylak, were co-inventors with Spievack of the invention claimed in the ’265 patent.

Purdue sought to establish on summary judgment that Badylak is a joint inventor of the ’265 patent alleging that he collaborated with Spievack in developing the urinary bladder as a tissue graft composition. But, since they failed to assert that Badylak is the sole inventor, they were limited to “omitted” inventors.

The district court didn’t buy it based in no small part on the fact that Badylak had filed papers under oath with the PTO in which he denied inventorship of the ’265 patent (oops!).

Whilte Purdue argued that Badylak worked on a graft composition that included the basement membrane as early as 1994 and that Badylak collaborated with Spievack before the priority date of the Disputed Patents, The CAFC was unmoved. Specifically, Purdue argued that the only other evidence offered as corroboration of Spievack’s alleged completion of the invention was Spievack’s unwitnessed laboratory notebooks, which are legally insufficient corroboration.

However, ACell asserted: (1) there is no evidence that Badylak communicated a contribution to Spievack’s invention during the relevant time period, (2) Purdue admitted under oath that Spievack is an inventor of the ’265 patent, (3) the 1994 Disclosure does not reveal a basement membrane composition, and (4) Badylak disavowed any role in the conception of the invention claimed in the ’265 patent in his testimony and in a letter he sent to the PTO.

The CAFC held that:

First, we do not read Purdue’s brief as challenging the district court’s determination that Spievack is an inventor of the ’265 patent. In fact, Purdue admitted as much when it represented that Spievack was a co-inventor in an application it submitted to the PTO to provoke an interference with the ’265 patent.

Second, the only record evidence argued by Purdue to create a genuine issue of material fact is the 1994 Disclosure and Spievack’s testimony in which he stated that “[Badylak] and I had talked about the basement membrane stuff somewhere along in ’97 and ’98, because I know at some point I had told him about my―the studies I had done in Boston with the dog bladders that we were talking about.” (Spievack Dep. 38:4-7, Aug. 24, 2004.) Spievack’s testimony, however, is not sufficient to create a genuine issue of material fact as to whether Badylak contributed “to the conception of the claimed invention that is not insignificant in quality” by sharing his knowledge of graft compositions, some of which is reflected in the 1994 Disclosure. See Eli Lilly & Co. v. Aradigm, 376 F.3d 1352, 1358-59 (Fed. Cir. 2004). This is especially so in light of Badylak’s disavowal of having conceived of, reduced to practice, or recognized the importance of a basement membrane graft composition.

ZymoGenetics, Inc. filed an infringement suit against Bristol-Myers Squibb over its patents related to fusion protein technology. The lawsuit, ZymoGenetics, Inc. v. Bristol-Myers Squibb Co., et al., District Court of Delaware, is for injunctive relief and damages over infringement, contributory infringement and/or inducement of infringement of US Patent Nos. 5,843,725 and 6,018,026.

The '026 Patent and the '725 Patent are directed to biologically active polypeptide fusion compositions and methods for producing biologically active polypeptide fusion compositions. Immunoglobulin fusion proteins are proteins that are produced using recombinant DNA technology where a portion of an antibody (e.g., heavy chain constant domain) is combined with the portion of a second protein (typically the portion of a cell-surface receptor that is responsible for binding to a growth factor). Amgen and Regeneron have previously licensed the use of the fusion protein technology.

Specifically, the ‘725 patent discloses a method for producing a secreted, biologically active dimerized polypeptide fusion. The method generally comprises a) introducing into a eukaryotic host cell a DNA construct comprising a transcriptional promoter operatively linked to a secretory signal sequence followed downstream by and in proper reading frame with a DNA sequence encoding a non-immunoglobulin polypeptide requiring dimerization for biological activity joined to a dimerizing protein; (b) growing the host cell in an appropriate growth medium under physiological conditions to allow the secretion of a dimerized polypeptide fusion encodes by said DNA sequence; and (c) isolating the biologically active dimerized polypeptide fusion from the host cell.

The ‘026 patent discloses a biologically active, dimerized polypeptide fusion, comprising first and second polypeptide chains, wherein each of said polypeptide chains comprises a non-immunoglobulin polypeptide requiring dimerization for biological activity joined to a dimerizing protein heterologous to said non-immunoglobulin polypeptide.

ZymoGenetics now alleges that Bristol is infringing the '725 and '026 patents by making, using, selling, distributing, advertising and marketing products, including but not limited to abatacept, that infringes the '725 and '026 Patents.

Abatacept (CTLA-4Ig; sold by Bristol-Myers Squibb as Orencia ®) is a fully human recombinant fusion protein categorized as a costimulatory or second-signal blocker of T cell activation. Abatacept disrupts the activation pathway of T cells causing a disturbance in key mechanisms of inflammation and progressive joint destruction in rheumatoid arthritis (RA). Because a large number of patients with RA have an inadequate or unsustained response to anti-tumor necrosis factor (TNF) therapy, abatacept, with its novel mechanism of action, has been studied in this population.

In Amgen Inc., v. Hoechst Marion Roussel, Inc. (Now Aventis) and Transkaryotic Therapies, Inc., (05-1157), the Court of Appeals for the Federal Circuit affirmed a District Court's decision that Transkaryotic Therapies Inc. (TKT) and Aventis Pharmaceuticals Inc. infringe Amgen's erythropoietin (EPO) patent estate. The court's decision upheld the validity of two of Amgen's EPO patents and the infringement by TKT of three patents and 12 claims, including a patent that does not expire until 2015.

The current appeal reviewed the District Court's findings on the infringement and validity of two patents with claims to the production of erythropoietin, the infringement of one product patent under the doctrine of equivalents, and the validity of one product patent. The Federal Circuit found the production patents valid and infringed (U.S. Patent Nos. 5,618,698 and 5,756,349). The court reversed the District Court's determination that TKT infringed Amgen's U.S. Patent No. 5,621,080 under the doctrine of equivalents, and remanded to the District Court for further consideration of the remaining validity issue on one of the other product patents (U.S. Patent No. 5,955,422).

The patents at issue are directed to recombinant DNA technology relating to the production of the hormone erythropoietin (“EPO”). All five patents share a common specification and descend from Application No. 06/561,024, filed on December 13, 1983.

EPO, which is a naturally occurring hormone, stimulates the production of red blood cells in the bone marrow through a process called erythropoiesis. Thus, the production of EPO is useful in treating blood disorders characterized by low hematocrit, which is a low ratio of red blood cells to total blood cells. Amgen markets and sells its EPO product under the brand name “Epogen.”

This case has a sorted history dating back to 1997 when Amgen brought a declaratory judgment action against Hoechst (now Aventis) and Transkaryotic Therapies (“TKT”) alleging that TKT’s Investigational New Drug Application (“INDA”) for an EPO product infringed the five patents.

In what is known as Amgen I, the district court held the claims of the ’080, ’349, and ’422 patents valid and infringed with the exception of claim 7 of the ’349 patent and held the ’698 and ’933 patents not infringed. In Amgen II, the CAFC vacated and remanded the case to the district court to construe the term “therapeutically effective amount” in claim 1 of the ’422 patent and then determine whether certain claims are anticipated or obvious or if they are infringed. In Amgen III, the district court entered judgment in favor of Amgen. They're now back for Round IV.

The patents at issue in this case relate to recombinant DNA technology for the production of EPO. In the invention of the five patents, prior to production of a protein from the mRNA with the sequence coding for EPO, the mRNA sequence is spliced to remove introns and to connect exons. After splicing, the mRNA is translated into the 166-amino acid protein shown in Figure 6 of the common specification of the patents.

Prior to secretion from the cell, the 166-amino acid EPO protein undergoes cleaving. In this process, the final amino acid in the sequence shown in Figure 6 of the ’422 patent, arginine, is cleaved off, leaving a 165-amino acid protein. This 165-amino acid protein is then secreted as mature human EPO by the cell. HMR and TKT collaborated to develop a drug known as HMR4396. HMR4396 consists of human EPO produced from TKT’s R223 cell line.

The ’422 patent claims: “A pharmaceutical composition comprising a therapeutically effective amount of human erythropoietin and a pharmaceutically acceptable diluent, adjuvant or carrier, wherein said erythropoietin is purified from mammalian cells grown in culture.”

On remand, the district court construed “therapeutically effective amount” in claim 1 of the ’422 patent to require that the claimed EPO increase hematocrit and also be useful in healing or curing certain classes of patients, e.g., patients generally requiring blood transfusions.

Amgen argued that the district court correctly interpreted the term since only amounts of EPO producing effects—particularly increased hematocrit—that counteract these anemia-like diseases are “therapeutically effective.”

The CAFC held that:

In Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), we stated that claim construction must begin with the words of the claims themselves. Id. at 1312. A claim term has “the meaning that the term would have to a person of ordinary skill in the art. . . .” Id. at 1313. This meaning is ascertained “in the context of the entire patent, including the specification.” Id. In particular, we stated in Phillips that “we must look at the ordinary meaning in the context of the written description and the prosecution history.” Id. (quoting Medrad, Inc. v. MRI Devices Corp., 401 F.3d 1313, 1319 (Fed. Cir. 2005)). When dealing with technical terms, we noted, a court should look to “the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art.” Id. (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)).

We think the district court made an artificial distinction between the first four effects listed in column 33, lines 11-22, stimulation of reticulocyte response, development of ferrokinetic effects, erythrocyte mass changes, and stimulation of hemoglobin, and the fifth effect, an increase in hematocrit. The specification lists all five effects after stating that “any or all” of them may be an effect of therapy with the claimed invention. Thus, this section of the specification supports the construction that the ’422 patent encompasses a pharmaceutical composition which produces “any or all” of the five listed effects.

This doesn’t seem to take into account the fact that increasing hematocrit is the mechanism in all of the patient treatments listed.

In looking at infringement under the doctrine of equivalents of the ’080 patent, the CAFC disagreed that Amgen met its burden of showing that the reason for the addition of the reference to the “amino acid sequence of FIG. 6” was merely tangential to the alleged equivalent stating:

We must reject Amgen’s argument that the sole reason for the amendment requiring EPO with 166 amino acids was to limit the ’080 patent to human EPO and that therefore the amendment was merely tangential to a 165-amino acid equivalent … claim 1 contains no limitation pertaining to human or non-human EPO. Claim 1 of the ’933 patent, which covers both human and non-human EPO, also lacks any limitation concerning the amino acid sequence of the claimed EPO product. Accordingly, claim 1 of the ’933 patent broadly encompasses EPO with any amino acid sequence, which would include amino acid sequences differing from that set forth in Figure 6.

Finally, we think that if the patentee had wished only to limit the claims to human EPO, the patentee could have done so by continuing to use the adjective “human” when referring to EPO in the third preliminary amendment; instead the patentee chose to further narrow the claims in the third preliminary amendment by making reference to the specific sequence in Figure 6 rather than human EPO.

Chief Judge Michel, dissenting-in-part, summed up things thusly:

This litigation has already dragged on for almost ten years, yet the end is nowhere in sight. … When will it end? Ironically, the patents in dispute may expire before this litigation concludes.

Moreover, since the majority holds that other asserted patents are not invalid and are literally infringed by HMR 4396, (and here I agree), the district court likely will enter an injunction precluding appellants from marketing HMR 4396 until the expiration of at least the '698 and '349 patents. Prolonging this litigation seems futile when, in the end, an injunction will likely issue regardless of how "therapeutically effective" is construed or whether claim 1 of the '422 patent is invalid.

Sanofi-Aventis SA and Bristol-Myers Squibb filed for a preliminary injunction against Apotex Inc . to stop sales of a generic version of Plavix® (clopidogrel bisulfate). The companies are seeking an immediate halt on the sale of Apotex' generic drug as well as a recall of drug already shipped. In the filing, the companies cited four reasons the injunction should be issued, including the likelihood that they will prevail in the patent case and that Apotex's launch last week is causing them irreparable harm.

The motion, filed in the U.S. District Court for the Southern District of New York, is set for a hearing on the motion on August 18, 2006. This is the court hearing the patent infringement suit, Sanofi-Synthelabo v. Apotex Inc., 2:02-cv-02255. The companies had to wait five days before they could file the motion under the terms of their earlier agreement in which Apotex agreed not to sell its generic. This follows the announcement by Apotex that it had launched a generic version of clopidogrel bisulfate at risk. The drug companies also have begun discounting Plavix.

Earlier, Apotex agreed to delay selling its drug in return for a minimum of $40-million from Bristol and Sanofi. In return, Apotex would be allowed to introduce its version of Plavix before the patent expired sometime in 2011. The deal between the drug companies was rejected by state attorneys general, who must approve arrangements between Bristol-Myers and generic drug makers as a result of earlier litigation.

Now, the U.S. Federal Trade Commission has initiated a criminal investigation by the Department of Justice. FBI agents have already confiscated documents at Bristol-Myers' New York headquarters, and both companies received grand jury subpoenas to determine if the agreement broke antitrust laws.

Aspects of the agreement still in place protect Apotex by stating that Bristol-Myers and Sanofi wouldn't seek a court order to prevent Apotex from selling the drug and would give Apotex five days' notice before they sought a court ruling to halt sales once they started. In addition, they also agreed to limit how much Apotex would have to pay if it began selling the generic drug and then lost the patent suit. Under the revised settlement agreement, Bristol and Sanofi could collect damages limited to 40-50% of Apotex's net sales of the generic drug. In addition, the companies waived their right to seek triple damages under applicable patent laws if they were to prevail in the pending patent litigation.

There's not a lot of love lost. At an Aug. 4 hearing, Bristol-Myers lawyers said Apotex had a clear strategy to "derail this settlement negotiation" claiming that Apotex told regulators the companies had reached a "secret side agreement" in which Bristol-Myers pledged not to introduce its own authorized generic of Plavix in competition with Apotex, even though it had removed such a promise from the agreement.

While Sanofi could win the suit against Plavix generic, the failure of the parties to agree doesn't bode well. It's also telling that Sanofi and Bristol made a lot of concessions to settle the patent litigation. Apotex must feel fairly secure to start selling the generic at risk. I doubt they'll be getting any good deals from the brand name drug makers any time soon, though.

See earlier posts from the Patent Baristas:

Apotex To Launch Generic Plavix At Its Own Risk
FTC Rejects Patent Deal by Bristol-Myers and Sanofi
Does Sanofi-Aventis Patent Settlement With Apotex Reveal a Trend?

In Pennington Seed et al. v. Produce Exchange No. 299 et al. (05-1440), the Federal Circuit affirmed that claims against the University of Arkansas for infringement of a patent were barred by the Eleventh Amendment to the United States Constitution.

Pennington filed suit against the University of Arkansas for infringement and conversion of U.S. Patent No. 6,111,170 (the '170 patent). The '170 patent claims a type of non-toxic fescue grass that does not adversely affect livestock that graze upon it. AgResearch developed the grass and received the '170 patent on August 29, 2000. It then licensed the patent to Pennington, which markets it as MAXQ.

The District Court dismissed the original complaint due to the University's Eleventh Amendment immunity. Concurrent with that dismissal, the court granted Pennington's motion to file its First Amended Complaint against several university officials for infringement of the '170 patent, deprivation of federal rights, and conversion. The district court subsequently dismissed the First Amended Complaint based on Eleventh Amendment immunity and lack of personal jurisdiction.

The Eleventh Amendment to the United States Constitution limits the judicial authority of the federal courts and prevents citizens from bringing suit against a state in a federal court without its consent. While Congress may abrogate, under certain circumstances, a state's Eleventh Amendment immunity under Section 5 of the Fourteenth Amendment, it may not do so under its Article I Commerce Clause power in patent cases.

In Florida Prepaid, the Supreme Court held that Congress did not have the authority under Article I, Section 8 of the Constitution to abrogate state sovereign immunity. The amendment to the Patent Act that abrogated state sovereign immunity, 35 U.S.C. §§ 271(h), 296(a), did not reflect any Congressional findings upon which Congress could base the abrogation of the Eleventh Amendment sovereign immunity of the states pursuant to the Fourteenth Amendment. The Act merely served as a uniform remedy for patent holders against states instead of a remedy for constitutional violations, such as where a state provides inadequate or no state court remedies.

The infringement of a patent by a state may be actionable in federal courts "only where the State provides no remedy, or only inadequate remedies, to injured patent owners for its infringement of their patent." The Act's legislative history in Florida Prepaid, however, provided no factual premise that Congress was attempting to remedy Fourteenth Amendment violations. The Court noted that the State of Florida provided various alternative remedies to recover for patent infringement, such as a legislative remedy through a claim for payment or a judicial remedy through a takings or conversion claim against the state.

In affirming the dismissal, the Federal Circuit held that:

In Xechem, we noted that Florida Prepaid requires a showing "that the state action ‘left [the patentee] without a remedy under state law,'" 382 F.3d at 1332; however, such a showing is predicated upon Congress's abrogation of Eleventh Amendment sovereign immunity. As specifically explained in Florida Prepaid, it is the Congress, not this court, that can abrogate Eleventh Amendment sovereign immunity for patent infringement, pursuant to Section 5 of the Fourteenth Amendment, if there is a showing that state remedies were insufficient and violated due process. 527 U.S. at 642-43, 646-47; see also Chew v. Cal., 893 F.2d 331, 336 (Fed. Cir. 1990).

Here, Pennington alleged in its complaint that the Arkansas Claims Commission is the only body allowed to hear claims against the state, but that it could not issue injunctions, conduct discovery, or issue a monetary award over $10,000. Pennington, however, fails to allege or explain how Congress made the specific finding that these state procedures are so inadequate that it abrogated state sovereign immunity to allow a patent infringement claim to be filed in federal court. Without such a finding, abrogation would be suspect under Florida Prepaid.

Although the district court found that there was no state forum in which to contest patent infringement claims, it did not find that other available remedies pursuant to state law were so insufficient that they violated the Fourteenth Amendment. In fact, Pennington's First Amended Complaint inherently recognizes the sufficient state remedies acknowledged in Florida Prepaid. Namely, the complaint notes that the State legislature may consider claims and appropriate monetary awards greater than $10,000 (a legislative remedy), and it alleges that the state remedy for conversion (a judicial remedy) may be available. See Fla. Prepaid, 527 U.S. at 644 n.9. Moreover, Arkansas law allows other forms of relief aside from the Claims Commission. See, e.g., Austin v. Ark. State Highway Comm'n, 895 S.W.2d 941, 943 (Ark. 1995) ("[L]andowner, claiming a taking of property, may either seek prospective injunctive relief in chancery court or damages from the State Claims Commission."); Cammack v. Chalmers, 680 S.W.2d 689 (Ark. 1984) (allowing injunctive relief for State acts that are illegal, unconstitutional or ultra vires). While these remedies may be "uncertain" or "less convenient," or may "undermine the uniformity of patent law," these attributes are not sufficient to show that the patentee's due process rights have been violated. Florida Prepaid, 527 U.S. at 644-45; see also Xechem, 382 F.3d at 1332; Jacobs Wind Elec. Co. v. Fla. Dep't of Transp., 919 F.2d 726, 728 (Fed. Cir. 1990).

Apotex Inc. must be confident the patent on Plavix will be held invalid. In a gutsy move for a generic drug maker, Apotex (the Welterweight from Winnipeg) started shipping a generic copy of the blood thinner Plavix in the U.S., ahead of a likely patent infringement trial. A New York judge has denied a request for a temporary restraining order. For an injunction, the drug makers need to prove that their patent infringement action is likely to win on the merits, that they will be irreparably harmed by sale of the generic, and that it is in the public's best interest to stop the generic's release.

This is the latest development in a legal morass that has developed between Apotex and the brand name drug co-marketers, Sanofi-Aventis SA and Bristol-Myers Squibb Co., after their deal that would have delayed bringing a generic to market for another five years was blocked.

Earlier, Apotex agreed to delay selling its drug until 2011, the year that the patent protecting Plavix expires, in return for a minimum of $40-million from Bristol and Sanofi. In return, Apotex would be allowed to introduce its version of Plavix before the patent expired sometime in 2011.

However, the U.S. Federal Trade Commission and state attorneys-general rejected the three-way deal, leading to a criminal investigation by the Department of Justice. The DOJ's Antitrust Division has already served subpoenas on Bristol, its CEO and another executive.

Under the revised settlement agreement that the attorneys general rejected, Bristol and Sanofi could collect damages equal to 40-50% of Apotex's net sales of the generic drug. In addition, the companies waived their right to seek triple damages under applicable patent laws if they were to prevail in the pending patent litigation.

As described in the 10-Q filing by Bristol-Myers Squibb, the settlement terms included that in the event of Regulatory Denial, the litigations will be resumed, and:

If the litigation results in a judgment that the ‘265 patent is not invalid or unenforceable, Sanofi agrees that its actual damages for any past infringement by Apotex, up to the date on which Apotex is enjoined, will be 50% of Apotex’s net sales of clopidogrel products if Sanofi has not launched an authorized generic and 40% of Apotex’s net sales if Sanofi has launched an authorized generic. Sanofi further agrees that it will not seek increased damages under 35 U.S.C.§284.

There's quite a bit at stake, though, given last year's sales of Plavix of $6.3 billion. That's a lot of $4-a-day pills.

The FTC has looked into "reverse payment" deals before, where brand-name pharmaceutical companies pay generic drug makers to keep generics off the market. According to the FTC, half of the top 20-selling brand-name drugs are covered under such deals, and lawsuits have been filed challenging deals that delay generic versions of Lipitor, Celebrex and Protonix.

At least a dozen U.S. lawsuits have also been filed against Bristol, Sanofi and Apotex on behalf of direct purchasers over trying to keep a cheaper generic version of Plavix off the market. A trial on the patent had been set for June and was cancelled because of the earlier settlement. No new date has been set.

The disputed patent, U.S. Patent No. 4,847,265 (the ’265 patent), covers Plavix’s main ingredient and does not expire until 2011. The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas the '265 patent, due to expire in 2011, claims only the (+)-enantiomer.

The earlier patent claimed, but did not describe, the (+)- and (–)-enantiomers, although it states that "the invention relates both to each enantiomer and their mixture." In the description of the activities of each enantiomer in the '265 patent, data show that the (+)-enantiomer is pharmacologically superior in activity and less toxic than both the (–)-form and the racemate. Apotex claims the '265 patent is either invalid or would not be infringed by its proposed generic product.

Contrary to earlier signs, this latest round of events may portend that the ability of patent holders to settle disputes may be moving away from favoring branded drug firms.

Get ready to rumble.

Like a bad penny, the Bayer AG And Bayer Corporation v. Housey Pharmaceuticals, Inc. case just keeps turning up. This time, the Court of Appeals for the Federal Circuit (06-1083) upheld a finding of inequitable conduct after vacating the earlier finding and remanding the case to give the district court an opportunity to provide additional support for its decision.

The District Court found U.S. Patent Nos. 4,980,281 (the ’281 patent), 5,266,464 (the ’464 patent), 5,688,655 (the ’655 patent), and 5,877,007 (the ’007 patent) unenforceable due to the inequitable conduct of Dr. Gerard M. Housey, the named inventor on all four patents.

This appeal is the second time Housey Pharmaceuticals has asked this court to reverse the district court’s inequitable conduct determination. After the district court’s earlier decision, Bayer AG v. Housey Pharm., Inc. (Bayer I), the Fed Circuit felt that the reasons given by the district court for finding Dr. Housey’s testimony not credible were insufficient to support the court’s conclusion. On remand, the district court provided further support regarding the lack of data for Dr. Housey’s “soft agar” experiment (the Table 3 experiment).

The district court said that while the lack of data itself is not evidence of inequitable conduct, Dr. Housey was not forthcoming about that data. The district court explained the contradictions between Dr. Housey’s testimony at trial and his pretrial deposition testimony. Regarding the number of incubators used in the laboratory, the district court emphasized that whatever that number may be, several experiments shared “incubator space,” yet none of Dr. Housey’s colleagues seemed to be able to remember any experiment conducted in that shared space.

The district court concluded: “I continue to believe that the clear and convincing evidence of record supports my conclusion that Dr. Housey is not credible and that he committed inequitable conduct before the PTO by presenting fabricated experimental results that were material to the issuance of the patents in suit.”

In review, the Federal Circuit stated that:

“[I]nequitable conduct includes affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive.” Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995). These elements must be shown with clear and convincing evidence. Id. This court reviews a determination of inequitable conduct for abuse of discretion and reviews the underlying factual issues of materiality and intent for clear error. Bristol- Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226, 1234 (Fed. Cir. 2003).

Housey suffered a death by a thousand cuts as one witness testified that he believed that Dr. Housey had invented numbers. Also, the declaration that Dr. Housey submitted purporting to confirm the validity of the data in Table 3 provided now raw data or detail – only Dr. Housey’s statement that he performed the experiment and obtained the claimed results.

The Federal Circuit was not moved this time and held:

While this court has identified deficiencies in Housey’s individual arguments, Housey faces a more serious challenge: in order to prevail, it must establish that the district court lacked a sufficient basis for finding that Dr. Housey lacked credibility. Thus, even if, for example, the district court erred regarding the existence of 24-well plates, that error alone would not require reversal. When this court vacated Bayer I, it did so because all the bases for the district court’s determination were erroneous. See Bayer II, 128 Fed. Appx. at 767. Before this court for the second time, Housey has fallen well short of establishing that the district court’s credibility determination amounted to clear error.

The district court gave a nod to the testimony of Dr. Housey’s former lab colleagues, who testified that they did not see Dr. Housey perform the “soft agar” experiment and that they did not believe he could have done so without their knowledge. The district court was thus entitled to credit this evidence which, taken with the court’s other reasons for disbelieving Dr. Housey’s contrary testimony, supports the court’s finding of inequitable conduct.

No word yet on what this means to still pending U.S. Pat. Appl. Ser. No. 11/170,465, a continuation-in-part of U.S. Ser. No. 07/154,206, which is now U.S. Pat. No. 4,980,281.

Pfizer learned the hard way not to take dependent claim form for granted. The Court of Appeals for the Federal Circuit, in Pfizer et al. v. Ranbaxy Laboratories (06-1179), held that a violation of § 112, ¶ 4 renders a patent invalid even if it would have been merely objected to (and not rejected) by the U.S. Patent Office.

Earlier, a Delaware District Court ruled that Pfizer can exclusively sell Lipitor until 2011 after finding that Ranbaxy Laboratories Ltd.'s generic version of Lipitor (atorvastatin) infringes on two Pfizer patents. Ranbaxy failed to prove Pfizer's patents were invalid or unenforceable so Pfizer's patents would remain in force until 2010 and 2011. Pfizer owns U.S. Patent Nos. 4,681,893 ('893 patent) and 5,273,995 ('995 patent) which cover Lipitor. Ranbaxy notified Pfizer that it had filed an abbreviated new drug application seeking to sell a generic version of the drug, and a paragraph IV certification, asserting that its proposed generic product would not infringe either the '893 patent or the '995 patent. Pfizer then filed a patent infringement suit against Ranbaxy in the Delaware federal court.

Ranbaxy appealed the rulings by the district court: (1) that claim 1 of the '893 patent was infringed; (2) that the '893 patent term extension was not proven invalid; (3) that claim 6 of the '995 patent was infringed; (4) that claim 6 was not proven invalid for failure to comply with § 112, ¶ 4; as anticipated or obvious; or for non-statutory double patenting; and (5) that the '995 patent was not proven unenforceable due to inequitable conduct.

The Federal Circuit agreed with the district court's claim construction of claim 1 of the '893 patent, we affirm the finding of infringement and also affirmed the ruling that the '893 patent term extension was not invalid. However, with respect to the '995 patent, the court reversed on the question of invalidity under § 112, ¶ 4.

As for the '995 patent, Pfizer only asserted dependent claim 6. The relevant claims are:

1. Recites the following compounds: (1) atorvastatin acid; or (2) atorvastatin lactone; or (3) pharmaceutically acceptable salts thereof.

2. A compound of claim 1 which is atorvastatin acid.

6. The hemicalcium salt of the compound of claim 2.

With respect to the '995 patent, the court focused on the question of validity under 35 U.S.C. § 112, ¶ 4, which provides:

Subject to the following paragraph [concerning multiple dependent claims], a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.

However, Pfizer only asserted dependent claim 6 of the '995 patent. Ranbaxy asserted that the district court erred in refusing to invalidate claim 6, even though it does not incorporate by reference all the limitations of the claim to which it refers and then specify a further limitation of the subject matter, as required by § 112, ¶ 4. In other words, claim 6 does not narrow the scope of claim 2; instead, the two claims deal with non-overlapping subject matter.

The district court explicitly recognized that "there may be a technical problem in the drafting of claim 6." Yet, it declined to find that this drafting problem is sufficient to render the claim invalid if the claim is read consistently with its meaning to those skilled in the art because it was unable to find any Federal Circuit precedent applying § 112, ¶ 4 to invalidate a patent.

The district court understood § 112, ¶ 4 "to be limited to matters of form, rather than matters of substance," noting that the PTO treats a claim that fails to comply with this provision "as a matter to be addressed through an objection" rather than rejected as unpatentable. While the district court found that claim 6 was unambiguous to the extent that the patentee intended to claim the hemicalcium salt of atorvastatin acid, the court recognized that "[a]s a matter of standard chemical nomenclature, chemists typically refer to a salt of an acid, even though they are aware that the complete acid is technically no longer present in the salt form."

Unfortunately, the Court of Appeals pointed to Curtiss-Wright Flow Control Corp., which suggests that a violation of § 112, ¶ 4 renders a patent invalid just as violations of other paragraphs of § 112 would in holding that "reading an additional limitation from a dependent claim into an independent claim would not only make that additional limitation superfluous, it might render the dependent claim invalid" for failing to add a limitation to those recited in the independent claim, as required by 35 U.S.C. § 112, ¶ 4. Since claim 6 could have been properly drafted either as dependent from claim 1 or as an independent claim - i.e., "the hemicalcium salt of atorvastatin acid" the Federal Circuit said it "should not rewrite claims to preserve validity."

The court then noted that claim 6 fails to "specify a further limitation of the subject matter" of the claim to which it refers because it is completely outside the scope of claim 2. The court held that it must reverse the district court and hold claim 6 invalid for failure to comply with § 112, ¶ 4. The Federal Circuit then affirmed-in-part, reversed-in-part and remanded so the district court can modify the permanent injunction in a manner consistent with this opinion.

This means that Pfizer has patent protection on the main Lipitor drug until March of 2010 but the loss of the second Pfizer patent, which would have protected the drug until June of 2011, eliminates 15 months of patent protection for a drug with sales of $12.2 billion in 2005. If Pfizer can't find a way to reverse the decision, it stands to lose billions of dollars in potential sales.

Johnson & Johnson's Alza drug unit sued Wyeth (Alza Corporation v. Wyeth, Wyeth Pharmaceuticals, Inc. Case No. 9:06-cv-00156-RHC), saying that Effexor XR infringes a patent for a method of administering antidepressants.

Effexor is Wyeth's biggest product and the world's best-selling antidepressant. Global sales of the drug were $918 million in the second quarter and $3.5 billion for all of 2005. Effexor XR® (venlafaxine HCl), is a once-a-day extended-release version of the antidepressant, approved for the treatment of major depressive disorder, generalized anxiety disorder, social anxiety disorder and panic disorder.

Alza owns a patent 6,440,457, issued August 27, 2002, for a controlled release version of antidepressants. The '457 patent contains a single claim to:

1. A method for administering a drug to the gastrointestinal tract of a human, wherein the method comprises: (a) admitting orally into the human a dosage form comprising a drug of the formula: [1-[2-(dimethylamino)-1-(4-methoxyphenyl)ethyl]cyclohexanol] which drug possess antidepressant therapy and the dosage form comprises a member selected from the group consisting of a sustained-release dosage form and a controlled-release dosage form; and, (b) administering the drug from the dosage form over an extended period of time in a therapeutically responsive dose to produce the antidepressant therapy.

In the lawsuit was filed July 26 in federal disctrict court in the Eastern District of Texas, Alza says the Wyeth drug is administered in that patented method. Wyeth says the '457 patent doesn't cover its drug.

The patent suit is not the reason Wyeth had "homicidal ideation" added to the drug's label as one of its rare adverse events.

Stratagene Corporation announced that it was informed that a jury determined that Invitrogen Corporation’s U.S. Patent No. 4,981,797 (issued Jan. 1, 1991) (the ’797 patent) is valid and that Stratagene infringed that patent by making and selling its competent E. coli cell products (Invitrogen Corporation vs. Stratagene; United States District Court for the Western District of Texas).

The jury awarded Invitrogen a 15% royalty rate on sales between the years 1997 and 2004 (for a total of $7.8 million in damages) and found Stratagene to have willfully infringed the patent only between the years 1997 and 2001. The jury found that Invitrogen was not entitled to lost profits because Stratagene has had a non-infringing manufacturing process for competent cells. Stratagene had previously modified its process for manufacturing competent E. coli cell products and Stratagene products sold in recent years and currently offered for sale will not be affected by the jury verdict.

Earlier, the district court granted Stratagene's motion for summary judgment finding that Invitrogen's aforementioned patent was not infringed by Stratagene. As we reported, on an earlier remand from the CAFC, the District Court, on summary judgment, determined that Biocrest Manufacturing, L.P., Stratagene Holding Corporation, and Stratagene, Inc. (collectively Stratagene) infringed the '797 patent, and that the ’797 patent was not invalid for indefiniteness, although it was invalid because of public use under 35 U.S.C. § 102(b).

The '797 patent involves the introduction of foreign, recombinant DNA molecules into receptive E. coli cells to improve the cells' "competence," i.e., their ability to take up and establish exogenous DNA and replicate this DNA as they multiply. A cell that accepts alien DNA is called a transformable cell. Claim 1 of the '797 patent claims:

A process for producing transformable E. coli cells of improved competence by a process comprising the following steps in order: (a) growing E. coli in a growth-conductive medium at a temperature of 18°C to 32°C; (b) rendering said E. coli cells competent; and (c) freezing the cells.

Stratagene made thirty-four competent E. coli cell lines by a process "including the steps of incubating cells at 37°C, growing the cells in a fermenter at 26°C, and freezing the cells." Invitrogen sued Stratagene for infringement and the district court construed the claims and then granted Stratagene’s summary judgment motion of non-infringement. Invitrogen appealed, disputing the lower court’s construction of both "improved competence" in the preamble and "growing" in step (a).

The CAFC decided that the trial court had correctly construed the term "improved competence." The CAFC noted that the term required only a general increase in competence, as compared with that generally obtained when cells are prepared by either (1) growing the cells at 37°C, rendering them competent, and freezing them, or (2) growing the cells at 37°C, rendering them competent, and not freezing them. The CAFC also noted that the trial court had incorrectly construed "growing." The CAFC then construed that term to permit preparatory steps in advance of step (a), including growth of E. coli at a temperature outside the range in step (a).

On remand, the district court found literal infringement of the ’797 patent; decided that Claim 1 was not indefinite under 35 U.S.C. § 112, 2; and found the claims invalid under the public use provision of 35 U.S.C. § 102(b). In January 2004, the district court granted partial summary judgment to Invitrogen based on the determination that Stratagene's then-existing manufacturing process infringed Invitrogen's patent, however the court also determined that Invitrogen's patent was invalid. Stratagene then changed its manufacturing process for competent cell products to a non-infringing method. Invitrogen appealed the decision again and in October 2005 the Federal Circuit Court reversed the district court's findings in part stating that " there is no evidence that Invitrogen received compensation for internally, and secretly, exploiting its cells. The fact that Invitrogen secretly used the cells internally to develop future products that were never sold, without more, is insufficient to create a public use bar to patentability." The case was remanded back to district court.

The final judgment has not been rendered by the court since it is looking at the appropriateness of the damages determined by the jury and the potential for enhanced damages. Stratagene could still appeal this verdict.

In an article written a few years back, I'd noted that combining different forms of representation -- litigating and prosecuting, litigating and opinining, and so on -- created risk. David Hricik, How Things Snowball: The Ethical Responsibilities and Liability Risks Arising from Representing a Single Client in Multiple Patent-Related Representations, 18 Geo. J. Legal Ethics 421 (2004).

One key risk I noted that arose when a law firm combined both an opinion on and the litigation of a patent was the risk of broad waiver of work product of trial counsel. Id. ("Teh greatest risk that an opining-litigator creates is taht work product -- including, in some courts' views, even work product which was never received by the client from anyone at the lawyer's firm -- will be discoverable.") A brand new case out of California has shown that risk to be real -- and raises even more significant questions about reliance on advice of counsel defenses.

In Informatica Corp. v. Bus. Objects Data Integration, Inc., 2006 WL 2038461 (N.D. Cal. July 14, 2006), the district court, after lengthy briefing by the parties, concluded that it was the infringer's state of mind that mattered, and so held that it was irrelevant whether trial counsel was the same person who gave the opinion, or even whether trial counsel was in the same firm as opinion counsel. Instead, the court reasoned:

This Court, after weighing all the persuasive authority, concludes that the Federal Circuit has the final word in a patent case on the subject of the scope of waiver of attorney-client privilege and the work product protection for discovery relevant to a substantive issue after assertion of the advice-of-counsel defense. The court in Echostar makes it crystal clear that attorney-client communications on the subject of the opinion BODI relies on for its defense are subject to waiver, as well as documents, including work product, which reference these communications. Similarly, both pre- and post-filing work product is potentially relevant to the alleged infringer's intent where there is an allegation of continuing infringement and are therefore also subject to waiver. However, only work product which has either been communicated to the alleged infringer or refers to communications is relevant to intent and therefore subject to waiver by assertion of the advice-of-counsel defense.

This Court finds that, according to the analysis in Echostar, what is significant is the state of mind of BODI and not the affiliation of BODI's attorneys, and that privilege has been waived with respect to pertinent communications and work product of all counsel in this case. Attorney legal opinions, impressions and trial strategy unrelated to the opinion on which BODI relies may be redacted from documents to be produced to Informatica. The Federal Circuit in Echostar cautioned that the parties should protect such information.
*8 Still, we must emphasize that such communications may contain work product of the second kind-legal analysis that was not communicated. In those situations, the parties should take special care to redact such information, and if necessary the district court may review such material in camera.
In re EchoStar, 448 F.3d at1304.

While opinion counsel and trial counsel can be walled off from each other, the immurement is immaterial--what matters, according to the decision by the Federal Circuit in Echostar, is the state of mind of BODI.

For all the above reasons, Informatica's motion to compel further responses from BODI is granted. This Court finds that, by asserting advice of counsel as a defense to a charge of willful infringement of Informatica's patents, BODI waived privilege for both pre-and post-filing pertinent attorney-client communications and work product. Under the analysis in Echostar, it is immaterial whether BODI's opinion counsel and trial counsel are from the same firm, different firms or are even the same person. What matters is that:

1. BODI relies on advice of counsel as a defense to Informatica's charge that it willfully infringed Informatica's patents;

2. Therefore, BODI waives privilege for communications with counsel on the subject of the opinion or advice on which it relies as well as work product on that subject communicated to BODI or which refers to communications on that subject;

3. Informatica alleges that BODI continues to infringe Informatica's patents;

4. Therefore Informatica is entitled to information subject to waiver which BODI received even after Informatica filed its complaint;

5. The categories of information which BODI must turn over to Informatica include (a) attorney-client communications with any counsel on the subject of the opinion or advice on which BODI relies; (b) work product communicated to BODI on that same subject; (c) work product which reflects any communication on that subject.

Attorney legal opinions, impressions and trial strategy unrelated to the opinion on which BODI relies may be redacted from documents to be produced to Informatica.

All responsive discovery which is being withheld as privileged for which privilege has been waived as discussed above shall be produced within twenty days of the e-filing of this order. BODI shall at the same time produce a privilege log for all other withheld documents, in compliance with the decision in In re Grand Jury Investigation, 974 F.2d 1068, 1070 (9th Cir.1992), citing Dole v. Milonas, 889 F.2d 885, 888 n. 3, 890 (9th Cir.1989).

Wow.

This post is by David Hricik, a guest here, who is a professor at Mercer University School of Law in Macon, GA. He isn't part of the firm that sponsors this site.

The Federal Circuit has held that a licensee in good standing cannot bring suit in federal court seeking a declaration that the licensed patent is invalid or unenforceable. I think that's right, and I've written an amicus brief that I am writing on behalf of law professors (mostly IP types) to file with the Supreme Court in favor of the respondents' position. I'd love to have your feedback on the brief.

To me, it's a simple lack of statutory basis for jurisdiction, but I also think that as a matter of policy -- were this an issue for the courts -- that allowing a licensee in good standing to sue for a declaration of invalidity without at the same time incurring liability as an infringer is a very bad idea. It will, I think, lead to less patenting and less licensing, at least at the margins.

Thoughts?

Today's post comes from Guest Barista David Hricik, an Associate Professor of Law with the Walter F. George School of Law, Mercer University, in Macon, Georgia.

In his official capacity as Director of the USPTO, Jon Dudas, along with Yeda Research and Development Co., was recently named as a defendant in an action filed by Enzo Therapeutics. The complaint, filed July 3 in the U.S. District Court for the Eastern District of Virginia, details Enzo's unsuccessful efforts to establish co-pendency of two US applications via filing a Petition to Revive.

The suit stems from an interference between junior party Sehgal and senior party Revel (real parties-in-interest Enzo Therapeutics and Yeda Research and Development, respectively). Because of an inadvertent failure to file a Three-month Petition for Extension of Time, Sehgal’s U.S. application 06/255,215 (the '215 application)-- to which Enzo intended to claim priority-- was deemed abandoned. The continuation application US 06/634,998 (the '998 application) was therefore found not co-pending with the earlier application. The Board denied Enzo's Petition to Revive the '215 application, and priority of invention was awarded to Revel.

According to the complaint, Enzo asserts that the Board of Patent Appeals and Interferences violated the PTO's regulations, abusing their discretion by deciding the Petition to Revive, and that the Director had unreasonably withheld or delayed action on both plaintiff's 183 Petition (the accompanying petition to waive the requirement for a terminal disclaimer) and the Petition to Revive.

In its Complaint, Enzo asserts that the PTO was required to give deference to representations made in the Petition to Revive concerning a delay or inquire further into the matter:

In accordance with M.P.E.P. § 711.03(c)II.C, the PTO "relies upon the applicant's duty of candor and good faith and accepts that statement that 'the entire delay in filing the required reply from the due date for the reply until the filing of a grantable petition pursuant to 37 C.F.R. § 1.137(b) was unintentional' without requiring further information in the vast majority of petitions under 37 C.F.R. § 1.137(b)."

The PTO "is almost always satisfied as to whether 'the entire delay... was unintentional' on the basis of statement(s) by the applicant or representative explaining the cause of the delay accompanied at most by copies of correspondence relevant to the period of delay." M.P.E.P. §711.03(c)II.C.

Even if an applicant's statement is not accepted, then the PTO "... reserves the authority to require further information concerning the cause of abandonment and the delay in filing a petition to revive ..." M.P.E.P. § 711.03(c)II.C.

The PTO did not request further information concerning the cause of abandonment of the '215 application or delay in filing the Petition to Revive.

In the absence of a request for further information, the statement in the signed Petition to Revive that "the entirely delay in filing the required reply from the due date for the reply until the filing of a grantable petition pursuant to this paragraph was unintentional" should be deemed as accepted by the PTO.

Paragraphs 33-37 of the Complaint.

Enzo asserts that the Board violated PTO regulations and exceeded its authority by denying the Petition to Revive without forwarding to the Office of the Deputy Commissioner for Patent Examination Policy. Enzo further charges the Board with abuse of discretion for failing to accord proper weight to statements made in the Petition to Revive, relying instead on an unrecorded conference call between the Attorney for Sehgal and a judge in a "he-said"-"she-said" fashion.

The facts as set forth by Enzo suggest that intentional abandonment would be absurd. Enzo, in its complaint, points to the file history of the '215 patent and its progeny to show subsequent filings requesting a continuation application accompanied by copies of the '215 application; amendments to claim priority to the '215 parent application; acceptance by the PTO of Sehgal's request for a continuation application as evidenced by a notation on the front cover of the continuation application and the PTO Filing Receipt; and an express request by Sehgal for the abandonment of the '215 parent application when the continuation was filed.

In Enzo's words:

A registered patent practitioner would never "intentionally" cause a parent application to become prematurely abandoned and then, at the same time, file a "continuation" application (including an express request to abandon the parent on that date); the two acts are entirely inconsistent and thus the non-filing of the petition for extension of time resulting in premature abandonment could only have resulted from a clearly unintentional error. (Paragraph 57 of the Complaint.)

Enzo has asked the court to reverse the decision of the Board, expunging from the record all of the Board's findings, and remand the case to the Board for further administrative proceedings. Enzo has further requested that the Court compel the Director to decide the 183 Petition and forward the Petition to Revive to the Office of the Deputy Commissioner for Patent Examination Policy to promptly decide the Petition.

Download the Complaint Part 1.

Download the Complaint Part 2

Thanks to Tom Scott of Hunton & Williams LLP for a copy of the complaint.

The University of Alabama in Huntsville (UAH) announced the settlement of their suit against Nektar Therapeutics and Dr. Milton Harris, the founder of Nektar Alabama and a former employee of UAH, in exchange for a total cash payment of $25 million.

Under the terms of the agreement, Nektar and Dr. Harris have jointly made an upfront payment totaling $15 million to UAH. In addition, Nektar will pay UAH the sum of $1 million per year for ten years. UAH currently plans to apply the funds towards its endowment and to fund scholarships for the entire campus, including chemistry and biology programs. In exchange, UAH has agreed to dismiss all claims related to the Nektar PEGylation patent portfolio and Nektar has agreed to dismiss all counterclaims.

UAH had sued Nektar Therapeutics AL and Nektar Therapeutics in United States District Court for patent infringement, breach of contract license, violation of the Alabama Trade Secrets Act and unjust enrichment. Harris and another researcher developed a PEGylation technology, which was patented by UAH. PEGylation technology is based on the use of non-toxic polyethylene glycol (PEG) polymers, which can be attached to most major drug classes, including proteins, peptides, antibody fragments, small molecules, and other drugs and is used in eight approved products in the U.S. and/or Europe today.

With PEGylation technology, polyethylene glycol (PEG) polymer chains are attached to a drug, which sustain bioavailability by protecting the drug molecules from immune responses and other clearance mechanisms. In an aqueous medium, the long, chain-like PEG molecule is heavily hydrated and in rapid motion. This motion causes the PEG to prevent the interference of other molecules.

The university entered a royalty agreement with Harris for products developed out of the discovery, and Harris created Shearwater Polymers, a company bought by Nektar in 2001 for $197 million in cash and stock, to pursue manufacturing of PEG-related products. UAH claimed that Harris, without UAH's knowledge, made a number of other discoveries related to the PEG technology in the following years and patented 28 of them and that Harris was required to notify UAH of any discovery related to the original PEG patent, and the lawsuit contends that the patents are "obvious derivatives" of and "equivalent" to the original PEG patent.

After the Supreme Court refused to hear the Federal Trade Commission v. Schering-Plough case, Senators Herb Kohl (D-WI), Patrick Leahy (D-VT), Chuck Grassley (R-IA) and Charles Schumer (D-NY) have introduced legislation to explicitly prohibit brand-name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market.

In 2005, two appellate court decisions overturned FTC’s long-standing position against this practice and upheld settlements that include such pay-offs. The current decision in Schering-Plough makes it very difficult (if not impossible) for parties challenging patent settlements to do so based on the terms of the settlement itself (i.e., the inclusion of a reverse payment). Plaintiffs will need to show that the generic company’s product did not infringe on a valid patent – a very difficult path to go.

The Supreme Court dismissal of the FTC’s latest appeal spurred the introduction of the "Preserve Access to Affordable Generics Act" (S. 3582) in which Section 5 of the Federal Trade Commission Act (15 U.S.C. 45) would be amended to include:

It shall be considered an unfair method of competition affecting commerce under subsection (a)(1) for a person, in connection with the sale of a drug product, to directly or indirectly be a party to any agreement resolving or settling a patent infringement claim in which (a) an ANDA filer receives anything of value; and (b) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time.

Nothing in this subsection shall prohibit a resolution or settlement of patent infringement claim in which the value paid by the NDA holder to the ANDA filer as a part of the resolution or settlement of the patent infringement claim includes no more than the right to market the ANDA product prior to the expiration of the patent that is the basis for the patent infringement claim.

A recent FTC report found that in the six months following the 2005 court decisions, there were three settlement agreements in which the generic company received compensation and agreed to a restriction on its ability to market the product. Additionally, the FTC found that at least seven settlement agreements made in 2006 included a pay-off from the brand manufacturer in exchange for a promise by the generic company to delay entry into the market. According to a study released by Pharmaceutical Care Management Association (PCMA), health plans and consumers could save $26.4 billion over the next five years by using the generic versions of 14 popular drugs that are scheduled to lose their patent protections before 2010.

But is a restraint on settlements really in anyone's best interest? Our legal system likes settlement. It even encourages it. Do we want companies to instead be forced to fight legal battles to the death?

The question comes down to whether an agreement between a pharmaceutical patent holder and a would-be generic competitor, in which the patent holder makes a substantial payment to the challenger for the purpose of delaying the challenger’s entry into the market, is an unreasonable restraint of trade. Unfortunately, things are never so simple. What really constitutes an unreasonable restraint of trade?

Generic-drug companies regularly make legal challenges to brand-name companies’ patents in the hopes of getting their generic versions on the market more quickly. They have little to lose. For the cost of a lawsuit, the generic company gets a shot at millions (perhaps billions) of dollars in revenue. The threat of a lawsuit claiming that the brand-name drug companies patent is invalid is close to being held at gunpoint since a jury may find the patent invalid and the drug company will be left twisting in the wind.

The Act as introduced does not take into account the fact that often the issues are muddy waters without a clear right or wrong answer. Patent invalidity suits often come down to a nuanced, battle of experts trying to decide what some hypothetical person skilled in the art would or would not have found obvious a decade or two ago. Having these matters put in front of a jury can feel a lot like a game of Russian roulette. Therefore, the drug company will often decide to resolve the dispute out of court, with the generic companies agreeing to give up their claims in exchange for cash settlements. The generic versions of the drugs then enter the market when the patents expire. But, the alternative would be for the companies to continue legal battles through endless appeals.

The Preserve Access to Affordable Generics Act would seem to remove incentives to settle disputes and cause more resources to be devoted to litigation.

See the text of S. 3582 here.

Teva Pharmaceuticals announced that it launched a generic version of the antibiotic Biaxin® (clarithromycin) XL Filmtabs® following the decision rendered on Thursday June 22, 2006 by the U.S. Court of Appeals for the Federal Circuit vacating a June 2005 ruling which had granted Abbott's motion for a preliminary injunction related to the product.

However, Abbott then filed an emergency motion in the U.S. District Court for the Northern District of Illinois to enjoin Teva from further sales of the product pending additional appeals despite the preliminary injunction being vacated. Teva then agreed to refrain from further sales of this product pending the outcome of the motion.

Teva contends that the preliminary injunction order is no longer in effect because the Federal Circuit, in a 2-1 decision, vacated the preliminary injunction. However, under the Federal Rules of Appellate Procedure and applicable case law, that opinion is not final and has no effect on the injunction unless and until a mandate has been issued by the Federal Circuit to the District Court and no such mandate has been issued, and no such mandate will issue at least until 7 days after Abbott’s (planned) petition for rehearing has been decided. Therefore, the preliminary injunction order remains in effect and Abbott is entitled to prevent Teva from violating the preliminary injunction order, in order to maintain the status quo. Abbott also wants the court to hold Teva in contempt and sanction it for violating the preliminary injunction order.

Andrx, also sued by Abbott, has filed a motion to vacate the District Court's preliminary injunction order arguing that since Abbott has not established a likelihood of success on the merits per the Federal Circuit and that with generic competition entering the market, including Abbott’s own authorized generic, Abbott is no longer entitled to a presumption of irreparable harm. Teva's removal of the generic from the marketplace will hurt Andrx's chances based on the "pre-existing generic" argument.

Andrx also cites Abbott plans to come to market with its own generic version of Biaxin® XL (i.e., an authorized generic) if another party has launched a generic version of Biaxin® XL already. So far, Abbott's Opposition to the Motion remains sealed. We'll keep you posted on further developments.

After being bombarded with 20 amicus briefs, the U.S. Supreme Court has opted out of ruling on the LabCorp v. Metabolite Laboratories case (U.S., No. 04-607) saying that it had "improvidently" agreed to hear the case in the first place and it dismissed the appeal. Basically, thousands of patents on medical tests and genes dodged a serious bullet since the Court could have deemed such tests "natural phenomena."

Review was granted only with respect to whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to "correlat[e]" results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

A District Court trial jury found that LabCorp indirectly infringed Metabolite's U.S. Patent No. 4,940,658. The ’658 patent claims methods for detecting cobalamin or folate deficiency. Cobalamin and folate are both B vitamins, commonly known as B12 and folic acid, respectively. A deficiency in these vitamins can cause serious illnesses in humans, including vascular disease, cognitive dysfunction, birth defects and cancer. Claim 13 claims a method for detecting a deficiency of cobalamin or folate in warmblooded animals comprising the steps of: assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.

On appeal to the CAFC, LabCorp argued that claim 13 is invalid on grounds of indefiniteness, lack of written description and enablement, anticipation, and obviousness. Likewise, LabCorp contends that claim 18, directed to the panel test, is also invalid on grounds of indefiniteness, and lack of written description and enablement. The CAFC upheld the district court's decision.

Three justices dissented, saying the court should have decided the case after expressing concerns that patents in areas like biotechnology and financial services were being granted too liberally and over concerns that physicians could become unwitting patent infringers if they make the same test conclusion linking the presence of cobalamin or folate in a patient's blood and vitamin B deficiency.

The dissent stated that:

Claim 13’s process instructs the user to (1) obtain test results and (2) think about them. Why should it matter if the test results themselves were obtained through an unpatented procedure that involved the transformation of blood? Claim 13 is indifferent to that fact, for it tells the user to use any test at all. Indeed, to use virtually any natural phenomenon for virtually any useful purpose could well involve the use of empirical information obtained through an unpatented means that might have involved transforming matter.

At most, respondents have simply described the natural law at issue in the abstract patent language of a “process.” But they cannot avoid the fact that the process is no more than an instruction to read some numbers in light of medical knowledge. … In my view, that correlation is an unpatentable “natural phenomenon,” and I can find nothing in claim 13 that adds anything more of significance.

Further consideration on natural phenomena will have to wait for another day.

See the dissent here. See also Patently-O, Phosita, and the WSJ Blog.

In Abbott Labs. v. Andrx Pharm., Inc., No. 05-1433, the U.S. Court of Appeals for the Federal Circuit held that a preliminary injunction granted pursuant to plaintiff's claims alleging infringement of its patents relating to extended release formulations of a broad spectrum antibiotic should be vacated where (a) the plaintiff failed to establish a likelihood of success on the merits; (b) the plaintiff failed to establish that irreparable harm supported the grant of the injunction; and (c) the public interest benefited from a denial of the injunction.

Earlier, Abbott Laboratories brought suit against Teva Pharmaceuticals, Inc. alleging infringement of its patents relating to extended release formulations of clarithromycin. Clarithromycin is a broad spectrum antibiotic from the macrolide family of antibiotics, all of which are derived from erythromycin A.

Abbott asked for a preliminary injunction against Teva on the grounds that Teva was infringing claims 2, 4, and 6 of U.S. Patent No. 6,010,718 (’718 patent) and claim 2 of U.S. Patent No. 6,551,616 (’616 patent). Teva argued that substantial questions existed as to the validity of Abbott’s asserted claims under 35 U.S.C. § 103. The district court granted a preliminary injunction after agreeing that Teva had raised a substantial question as to the validity of claim 2 of the ’616 patent but it rejected Teva’s invalidity arguments as to the asserted claims of the ’718 patent.

In 1997, Abbott filed for a patent claiming an extended release formulation of clarithromycin. The patent describes and claims extended release formulations comprising erythromycin derivatives combined with a pharmaceutically acceptable polymer. The resulting drug-polymer matrix leads to the extended release properties of the formulation. The ER formulation enabled patients to take one pill per day rather than twice, as had been required with the immediate release formulation. That patent issued on January 4, 2000 as the ’718 patent. Further, based on the ’718 patent application, Abbott filed a continuation-in-part application that claims a method of reducing adverse gastrointestinal side effects of erythromycin-derived drug formulations by using extended release formulations. This continuation-in-part issued as the ’616 patent. In 2000, Abbott introduced its ER clarithromycin formulation, Biaxin XL.

A plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief: (1) the movant has some likelihood of success on the merits of the underlying litigation; (2) immediate irreparable harm will result if the relief is not granted; (3) the balance of hardships to the parties weighs in the movant’s favor; and (4) the public interest is best served by granting the injunctive relief. These principles apply with equal force to disputes arising under the Patent Act.

In looking at the standard for a preliminary injunction, the court stated that when moving for the extraordinary relief of a preliminary injunction, a patentee need not establish the validity of a patent beyond question. The patentee must, however, present a clear case supporting the validity of the patent in suit.

As to the public interest factor, the court stated that:

Although the public interest inquiry is not necessarily or always bound to the likelihood of success of the merits, in this case absent any other relevant concerns, we agree with the district court that the public is best served by enforcing patents that are likely valid and infringed. As Abbott did not establish a likelihood of success on the merits, we conclude that the public interest is best served by denying the preliminary injunction.

In a split decision, the court said Teva had raised sufficient questions about the validity of Abbott's patents to make it unfair for a court to keep Teva out of the marketplace for generic versions of Biaxin XL until after a full trial. The court felt that if Abbott ultimately proves its patents for extended release Biaxin are valid, money damages shall be sufficient.

U.S. Circuit Judge Pauline Newman dissented stating that:

Reversal of a preliminary injunction that preserves the status quo requires a clear showing that the district court exceeded its discretionary authority. See We Care, Inc. v. Ultra-Mark Int'l Corp., 930 F.2d 1567, 1570 (Fed. Cir. 1991) (“The court's determination can be overturned only on a showing that it abused its discretion, committed an error of law, or seriously misjudged the evidence.”) My colleagues do not discuss the trial judge's careful explanations, but, upon finding that Teva has raised a “substantial question” about patent validity, they hold that Teva should be permitted to practice the Abbott invention before patent validity is decided. With all respect to my colleagues' concerns, they misapply not only the criteria of the preliminary injunction but also the standard of appellate review.

Merck is on the verge of losing patent protection for its multi-million dollar drug compound Simvastatin, paving the way for euphoric generic players to enter the U.S. Simvastatin market, which was worth around U.S. $4.4 Billion worldwide in 2005. Even though there is no current Para IV litigation for the Simvastatin tablet, the story so far is quite interesting, and central for the future of the U.S. generic industry, and more particularly for the First Para IV filer and subsequent Para IV filers. On June 23, 2006, generic players will start commercializing their generic versions of Simvastatin tablets, but the debate surrounding the generic launch and entry still continues to prevail. That is, if all generic players get the FDA final nod to market their generic versions, or if only Teva and Ranbaxy would reap the benefit of 180-day exclusivity for their generic Simvastatin tablets.

The Food and Drug Administration (the "FDA"), which earlier denied Ranbaxy and Ivax’s citizen petitions for not approving subsequently-filed ANDAs (before expiry of their 180-day exclusivity for respective strengths, and for reinstating the delisted patents to the Orange Book) has already made an appeal with the U.S. Court of Appeals against the decision of the U.S. District Court, which remanded and sent the case back to the FDA for a decision. Now interestingly, rather than being a conventional generic tussle between Innovator and Generics, this case is turning out to be decisive regulatory tussle between the FDA and the First Para IV filers, concerning a 180-day exclusivity issue.

Let us go back and revisit this unusual case history from its inception, to figure out the issues involved, and their impact on future generic industry, particularly when the Authorized Generics are turning out to be next big hurdle for the 180-day exclusivity holder.

Merck’s Goldmine

Merck hit a gold mine when the Merck scientists synthetically derived Simvastatin from a fermentation product of Aspergillus Terreus, while developing and researching lovastatin. In 1980, Hoffmann et al. filed a U.S. patent application for Simvastatin (its pharmaceutical composition and use thereof to treat hypercholesterolemia, against which U.S. Patent No. 4,444,784 was issued on April 24, 1984). Merck filed the new drug application (the "NDA") for simvastatin and for anti- hypercholesterolemia indication, being approved by the FDA on December 23, 1991, in 5 mg, 10 mg, 20 mg, and 40 mg strengths. Subsequently, the FDA listed the Simvastatin tablet along with the ‘784 Patent, with the Approved Drug Products, and with the Therapeutic Equivalence (Orange Book) under 21 U.S.C. § 355 (b) (1).

Listing Additional Patents & PTE

On May 20, 1993 the USPTO, under 35 USC § 156, extended the term of the ‘784 Patent for a period of 1,704 days, adjusting the patent expiry of the ‘784 Patent from April 24, 2001 to December 23, 2005. The FDA later approved the 80 mg strength of the Simvastatin tablet in 1998. In 2000, Merck further listed two additional patents, stating them to be metabolites of Simvastatin, namely:

1. U.S. reissued Patent No. RE36,481 (the ‘481 Patent)
2. U.S. reissued Patent No. RE36,520 (the ‘520 Patent)

Later, Merck also obtained Pediatric Exclusivity from Simvastatin tablets, extending the patent terms of the ‘784, ‘481, and ‘520 patents with additional 6 months.

Ivax Para IV Attack

Like other blockbuster drugs, Simvastatin also became a Para IV target in the same year when Merck listed additional patents for Simvastatin tablets. On December 14, 2000 Ivax submitted ANDA, with the FDA seeking marketing approval for its generic version of the Simvastatin tablet, in 5 mg, 10 mg, 20 mg, and 40 mg strengths. Ivax filed a Para III certification, with respect to the ‘784 Patent, but filed a Para IV certification with respect to additional patents, contending that the ‘481 and ‘520 patents were invalid or unenforceable, or that their drugs would not infringe the patents. Ivax notified Merck of the Para IV certification, detailing the factual and legal basis for its belief, and that its generic drug would not infringe the patents, or that the patents are invalid or unenforceable.

Ranbaxy Joins the Para IV Race

In November 2001, Ranbaxy became the second generic player to file Para IV certification with the FDA, seeking marketing approval for its generic version of the Simvastatin tablet in 5 mg, 10 mg, 20 mg, 40 mg, and 80 mg strengths. Ranbaxy was, however, first to file Para IV certification in the case of the 80 mg strength, as Ivax’s Para IV certification was intended for 5 mg, 10 mg, 20 mg, and 40 mg strengths. Like Ivax, Ranbaxy also filed a Para III certification with respect to the ‘784 Patent, and a Para IV certification with respect to additional patents, contending that the ‘481 and ‘520 Patents were invalid, unenforceable, or that their drugs would not infringe the patents. Ranbaxy also notified Merck of the Para IV certification, detailing the factual and legal basis for its belief that its generic drug would not infringe the patents, or that the patents are invalid or unenforceable.

Conquering 45 day Barrier

Merck did not sue Ivax and Ranbaxy within 45 days as required under 21 U.S.C. 355 (j) (5) (B) (iii), to trigger an automatic 30-month stay of the FDA approval of the ANDAs. As a result of this, both Ivax and Ranbaxy were entitled to a 180-day exclusivity for their respective strengths, and expected to launch their generic Simvastatin tablet after expiry of the ‘784 Patent. Until this, everything seems to be clear and evident that, with the expiry of the ‘784 Patent, Ivax and Ranbaxy would enjoy a 180-day marketing exclusivity and would be the sole generic players in U.S. Simvastatin market.

Big celebrations for Big Generic Predators!

FDA 2003 Rulemaking

On June 18, 2003, the FDA published its Revised Rules, clarifying the types of patents that must and must not be submitted to FDA for listing in the Orange Book, effective as of August 18, 2003. Under the Revised Rules, NDA holders are not allowed to submit patent information for listing in the Orange Book for: drug packaging, drug metabolites, and intermediates of a drug. In addition to this, the Revised Rules also added requirements for submission of: (1) polymorph patents (only if the NDA holder must have the test data, demonstrating that a drug product containing the polymorph will perform the same as the drug product described in the NDA) and (2) a product-by-process (only if the product is novel).

However, these developments had no role to play in the Ranbaxy and Ivax’s 180-day party.

Merck Unexpected Maneuver

Following the FDA revision, on October 10, 2003, Merck submitted a letter to the FDA requesting that the ‘481 and ‘520 Patents be delisted from Orange Book. The following month, the FDA received a letter from Kenyon & Kenyon (an intellectual property law firm) challenging the listing of additional patents under revised an FDA regulation published on June 18, 2003. The FDA forwarded this letter to Merck, which renewed its request that the patents be withdrawn. In June 2004, Merck sent a third request to the FDA to delist the patents. In September 2004, Ivax and Ranbaxy learned that the FDA had delisted the ‘481 and ‘520 Patents from the Orange Book.

FDA Nullify 180-day Exclusivity

Discovering that the FDA had delisted the ‘481 and ‘520 Patents, both Ivax (on January 05, 2005) and Ranbaxy (on February 1, 2005) submitted citizens' petitions with the FDA, requesting that the FDA confirm it would not approve subsequent ANDAs, until after the 180-day period, and the FDA relist the patents in the Orange Book. On October 24, 2005, the FDA denied both petitions, deciding that it would not relist the disputed patents, that no applicant would be eligible for a 180-day exclusivity for delisted patents, and that it would approve all subsequent ANDAs for simvastatin tablets. Following the FDA denial, Ivax and Ranbaxy separately sued the FDA, challenging the FDA’s refusal to relist the ‘481 and ‘520 Patents, and their refusal to grant any ANDA Applicant eligibility for the 180-day exclusivity for generic Simvastatin tablets. All three parties moved for summary judgment. Ranbaxy and Ivax moved for summary judgment, seeking to vacate the FDA decision. The FDA filed a cross-for-summary judgment seeking to maintain its decision.

Thumbs Up for Ranbaxy & Ivax!

On April 30, 2006 Judge Richard W. Roberts of U.S. District Court for the District of Columbia, in his memorandum opinion, ruled in the favor of Ranbaxy & Ivax by granting them summary judgment and contending that the FDA has acted contrary to the clear intent of Congress in its decision to deny Ranbaxy and Ivax’s citizen petitions. The issue was sent back to the FDA by the District Court for a decision giving Ranbaxy and Ivax much expected relief.

FDA Not Ready to Give Up

On May 24, 2006, the FDA appealed against the decision of District Court and filed a Motion with U.S. Court of Appeals, seeking expedited review concerning Ivax and Ranbaxy’s 180-day exclusivity issue, and also proposed a schedule whereby the appeal will be fully briefed over the summer, with arguments to be heard at the Court’s earliest convenience thereafter. Teva (which earlier acquired Ivax) has agreed to an expedited schedule as proposed by FDA.

The Generic 23/6: The Day Belongs To?

As of now, FDA has already relisted both the delisted patents to the Orange Book, which implies that Teva and Ranbaxy will receive the final marketing approval for their generic Simvastatin tablets on June 23, 2006, and will market their respective strengths with 180-day exclusivity period. Considering that appeal will be briefed over the summer, and Teva and Ranbaxy will commence their marketing in June 2006, there can be either of two situations:

1. If the U.S. Court of Appeals rules in favor of Generics, then Teva and Ranbaxy will enjoy marketing exclusivity, until the end of December; or

2. If U.S. Court of Appeals rules against Generics, then the FDA will grant their final marketing approvals to the rest of generic players, and end Teva and Ranbaxy’s marketing exclusivity before the 180 days.

Whatever the outcome of the appeal would be, four things are very much evident on June 23, 2006:

1. Simvastatin will lose its patent protection;
2. Generics would enter the U.S. Simvastatin market;
3. Dr. Reddy’s Laboratories will be there as Authorized Generics; or
4. Merck will continue to market its branded Zocor.

But what remains critical is, should the U.S. Court of Appeals rule in the favor of the FDA, delisting may become one more viable strategy for innovators to negate the 180-day exclusivity. However, if the U.S. Court of Appeals rules in favor of Generics ... Well!!! That will keep their hope intact with this High Risk, High Returns strategy.

Today's post comes from Varun Chhonkar, Senior Officer - Patents with J.B. Chemicals & Pharmaceuticals Ltd., Mumbai, India (varun.chhonkar[at]jbcpl.com). © Varun Chhonkar.

Acambis, a UK biotechnology company, is fighting a patent-infringement lawsuit that may bar it from a $1.9bn contract to provide smallpox vaccines to the US government. Acambis is bidding for a US Government contract to supply an emergency-use stockpile of MVA.

Currently, the company is fighting a three-front battle with Danish vaccine maker Bavarian Nordic, which alleges that Acambis' MVA vaccine infringes its treatment, which is based on the same smallpox strain.

First, Bavarian Nordic is seeking an exclusion order in an International Trade Commission (ITC) trial, which would in effect stop any vaccines at the border. The MVA vaccine is potentially a major product. Together with Baxter, Acambis submitted a bid for a US Government stockpiling contract for MVA in October 2005 in response to a Request for Proposals issued by the Department of Health and Human Services for making up to 20 million doses of MVA and advanced clinical testing up to and including obtaining a product license. It also includes options for the purchase of up to 60 million additional doses of MVA and warm-base manufacturing over the longer term.

Second, Acambis has filed an opposition to European Patent No. 1335987 issued to Bavarian Nordic A/S (Bavarian Nordic) on 28 December 2005 by the European Patent Office. The patent relates to Bavarian Nordic's MVA technology, MVA-BN®. MVA is an attenuated smallpox vaccine, Modified Vaccinia Ankara, which has been used in Europe since the late 1970s. Acambis opposes the patent on the grounds that the patent is invalid. Acambis' partner, Baxter Healthcare SA, which manufactures Acambis' MVA vaccine, MVA3000, in Austria, has also filed an opposition to the European patent on the grounds that the patent is invalid.

And third, Bavarian Nordic has filed suit against Acambis in the US alleging that Acambis has used its trade secrets in developing MVA3000 and that it is infringing its patents. Acambis says the allegations are without foundation. A further suit was filed in Austria in February 2006. BN alleges that we have used its trade secrets in the development of our MVA3000 vaccine and that we are infringing its patents.

Acambis' view is that BN's patents are invalid and unenforceable believing it can show evidence that MVA-BN is not novel, that the patent is unenforceable through lack of enablement, that BN failed to provide the US Patent and Trademark Office with prior art related to its patent claims; and that the patents rely on scant scientific evidence. Acambis stated that MVA-BN is not novel because all MVA viruses, including MVA-BN and prior art strains, have similar replication characteristics.

On the question of the use of misappropriation, Acambis contends that Dr. Mayr of BN provided an MVA strain to the NIH/NIAID and the NIAID then provided a version of that strain to Acambis for use as the basis of MVA3000. Dr. Mayr did not place in writing any restriction on the NIH's use of the transferred MVA virus and did not restrict the use of the MVA strain he provided to the NIH. When the NIH released its first RFP, it made the NIH MVA strain publicly available, stating that "collaborative opportunities from NIAID are available to all legitimate parties and include: the availability of a master seed stock of MVA from NIAID...". Acambis requested and received the NIH MVA under a Material Transfer Agreement that granted Acambis "worldwide, non-exclusive rights to make, have made, and use" the NIH MVA "to sell and have sold, and to offer to sell Commercial Products in the Field of Use of Smallpox Vaccines". During the procurement process for the first MVA contract, although it did not undertake a comprehensive review of intellectual property in the MVA field and encouraged us to undertake our own analysis, the NIAID stated that "prior to distribution of the material NIAID determined that it is within its rights to transfer the material to other parties".

More here.

Amgen has filed a complaint for declaratory judgment of patent invalidity and non-infringement in the United States District Court for the District of Delaware (Amgen et al. v. Ariad Pharmaceuticals). Amgen is seeking a declaratory judgment that each of the claims contained in U.S. Patent No. 6,410,516 ('516 Patent") covering methods of treating human disease by regulating NF-κβ cell-signaling activity are invalid and that Amgen and its affiliated entities have not infringed any claims of the '516 Patent based on activities related to the products, Enbrel(R) and Kineret(R).

Earlier, Eli Lilly and Company lost a jury trial in the U.S. District Court of Massachusetts in Boston in a decision in the case of Ariad Pharmaceuticals et al. v. Eli Lilly and Company. The Jury handed down a verdict that U.S. Patent No. 6,410,516, owned by Harvard, the Massachusetts Institute of Technology, and the Whitehead Institute and licensed to Ariad Pharmaceuticals, is valid and infringed by Lilly's sale of Evista® and Xigris®.

The '516 patent claims methods of treating disease by regulating a family of molecules known as NF-κβ. While Ariad contends that the patent covers all means for modulating the NF-κβ pathway, Lilly's contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees' scientists made their discovery.

The '516 patent issued from U.S. Patent Application Ser. No. 08/464,364 ('364 application), filed June 5, 1995. Ariad asserts that the claims of the '516 patent cover "methods of treating human disease by regulating NF-κβ activity," "methods of treating disease by inhibiting NF-κβ," and "methods useful for treating various disease conditions through modulation of NF-κβ activity."

Now, Amgen is seeking a determination on its Enbrel® product (etanercept), a human therapeutic product developed by Immunex through its research on lymphokines and the immune system, and its Kineret® product (anakinra), a human therapeutic product developed by Amgen through its research on lymphokines and the immune system. Obviously, Amgen is concerned that these might infringe one or more claims of the '516 patent.

A separate bench trial with the U.S. District Court of Massachusetts will be held on Lilly's contention that the patent is unenforceable and will also consider the patent's improper coverage of natural processes. In June 2005, the U.S. Patent and Trademark Office commenced a reexamination of the patent (Reexam. C.N. 90/007,503). The reexamination is currently in progress although the USPTO has not issued any substantive action.

The '516 patent claims are directed to methods of reducing or otherwise modifying the naturally occurring transcription factor NF-κβ activity in cells affecting gene expression:

Claim 1. A method of inhibiting expression, in a eukaryotic cell, of a gene whose transcription is regulated by NF-κβ, the method comprising reducing NF-κβ activity in the cell such that the expression of said gene is inhibited.

Claim 203. A method of inhibiting expression, in a mammalian cell, of a gene whose transcriptional activity is activated by binding of NF-κβ to said gene, comprising introducing a nucleic acid decoy molecule into the cell in an amount sufficient to inhibit expression of the gene, which decoy includes a NF-κβ binding site that binds NF-κβ.

In the reexam, the USPTO has asserted that there exists a substantial new question of patentability for claims 1-203 of the '516 patent. The patent at issue has a very long history. Application 08/464,364 (filed 6/5/95) issued US Pat. No. 6,410,516 is a divisional of 08/418,266 (filed 4/6/95) issued as US Pat. No. 5,804,374, which is a continuation of 07/791,898 (filed 11/13/91; abandoned 5/16/95); which is a CIP of 06/946,365 (filed 12/24/86) and a CIP of 07/341,436 filed 04/21/1989, a CIP of 07/280,173 filed 12/05/1988, a CIP of 07/318,901 filed 03/03/1989, a CIP of 07/162,680 filed 03/01/1988, a CIP of 07/155,207 filed 02/12/1988, and a CIP of 06/817,441 filed 01/09/1986.

However, for priority, the USPTO contends that the above-identified CIP applications (e.g. original specification and original claims) fail to adequately describe and/or enable the methods of the reexamination patent claims and are entitled to the filing date (e.g. 11/13/91) of continuation application 07/791,898 for purposes of prior art.

For example, the pre-November 1991 applications fail to disclose:

1. an amino acid or nucleic acid sequence corresponding to NF- κβ;



2. an NF- κβ inhibitor. The 07/341,436 although mentioning nucleic acid decoy molecules fails



3. to disclose sequences thereof or a means of delivering these molecules for in vivo use.



4. support for the '516 patent claim limitations including (but not limited to): "reducing NF-κβ activity" in a cell (e.g. mammalian/eukaryotic) and/or an enabling means thereof (e.g. administering a NF-κβ inhibitor) to effect various functions (e.g. inhibit expression generally, reduce cytokine expression etc.) as required in all the claims; reduce binding of NF-κβ to NF-κβ recognition sites on genes which are transcriptionally regulated by NF-Iκβ" (e.g., claims 25,36,47,69,80,93,144, and 154); inhibiting modification of an LcB protein, which modification otherwise reduces 1KB binding to NF-κβ (e.g., claims 22,33, and 44); inhibiting degradation of an Iκβ protein (e.g., claims 23,34, and 45); inhibiting dissociation of NF-κβ:Iκβ complexes (e.g., claims 24,35, and 46).

The Examiner also notes that the failure of the 06/946,365 (filed 12/24/86) (ABN: 3/24/92) application to satisfy 35 USC 112, first paragraph would render the 07/162,680; 07/155,207 and 06/817,441 applications unavailable for 35 USC 120 priority because they would not be co-pending with the 07/791,898 (filed 11/13/91) application. Even then, the Griffith document (with Holschermann et al as evidence of inherency in which its publication date is not critical), establishes a substantial new question of patentability which predates the earliest possible assertion of 35 USC 120 priority (e.g. CIP of 06/817,441 01/09/1986).

The Examiner cited the following pertinent references stating:

• Bielinska et al.(e.g. at pages 197-198 and Fig. 1) disclose the use of nucleic acid decoy molecules to inhibit NF-κβ-dependent expression of a reporter gene in clone 13 B-lymphoblastoid cells. It is agreed that consideration of the newly cited Bielinska et al. document raises a substantial new question of patentability over the claims of the Baltimore patent since there is a substantial likelihood that a reasonable examiner would consider the teaching of this reference important in deciding whether or not the Baltimore patent claims are patentable



• As pointed out on pages 10-11 of the request, Tanaka et al. (e.g. at pages 3070,3072 and Figures 3 and 4) disclose the use of decoy molecules (e.g. phosphorothionates containing an NF-κβ recognition/binding sequence) to inhibit NF-κβ -dependent expression of a reporter gene in HeLa cells. It is agreed that consideration of the newly cited Tanaka et al. document raises a substantial new question of patentability ^ to the Baltimore patent claims since there is a substantial likelihood that a reasonable examiner would consider the teaching of this reference important in deciding whether or not the Baltimore patent claims are patentable



• As pointed out on pages 12-14 of the request, Eck et al. (e.g. at pages 6530-32;Figures 2, 4 and 6) disclose the use of double-stranded phosphorothionate oligonucleotides (denoted KB-PTs) containing the NF-κβ binding sequence, GGGACTTTTCC, which specifically inhibits NF-KB-mediated transcription. It is agreed that consideration of the newly cited Eck et al. document raises a substantial new question of patentability as to the Baltimore patent claims since there is a substantial likelihood that a reasonable examiner would consider the teaching of this reference important in deciding whether or not the Baltimore patent claims are patentable



• As pointed out on pages 15-16 of the request, Staal et al. (e.g. see Abstract; page 9945; Figures 4-5) disclose a method of inhibiting TNF-a by blocking NF-κβ activation in mammalian cells (e.g. Jurkat cells) by administration of N-acetyl-L-cysteine (NAC). It is agreed that consideration of the newly cited Staal et al. document raises a substantial new question of patentability as to the Baltimore patent claims since there is a substantial likelihood that a reasonable examiner would consider the teaching of this reference important in deciding whether or not the Baltimore patent claims are patentable



• As pointed out on pages 16-17 of the request, Schreck et al. (e.g. see Abstract, pages 1181,1186-1187; Figures 3 and 6) disclose blocking NF-κβ activation by suppressing NF-κβ dissociation from its inhibitor 1KB in IL-1 and TNF-a stimulated Jurkat cells by administration of dithiocarbamates and metal chelators. It is agreed that consideration of the newly cited Schreck et al. document raises a substantial new question of patentability as to the Baltimore patent claims since there is a substantial likelihood that a reasonable examiner would consider the teaching of this reference important in deciding whether or not the Baltimore patent claims are patentable.



• As pointed out on pages 17-18 of the request, the Baldwin and Sharp reference disclose (e.g. pages 724-725; Fig. 2) the use of various DNA probes to compete for NF-κβ binding in nuclear extracts of various mammalian cell types. Additionally, as pointed out on page 19 of the request, the Schorpp et al., Li et al. and Hai et al. references teach that an oligonucleotides that specifically and competitively binds a transcription factor would reduce expression of a gene controlled by the transcription factor. Further, as pointed out on page 19 of the request, Chu et al. teaches methods for transfection of oligonucleotides (e.g. DNA) into eukaryotic cells, which once introduced into cells, readily enter the nucleus through pores. See Molecular Biology of THE CELL at p.423. It is agreed that consideration of the combined teaching of the newly cited Baldwin and Sharp,. Schorpp et al., Li et al., Hai et al., Chu et al. and Molecular Biology of THE CELL documents raise a substantial new question of patentability as to the Baltimore patent claims since there is a substantial likelihood that a reasonable examiner would consider the combined teaching of these references important in deciding whether or not the Baltimore patent claims are patentable.
  
  
• Griffith et al. teach (e.g. see abstract) the administration of cyclosporin to cardiac transplant plantations. Holschermann et al teach (e.g. see page 4236, left column; Fig. 4) that the administration of cyclosporin to cardiac patients (as taught by Griffith et al.) necessarily (e.g. inherently) results in reduced NF- κβ activity. Consideration of the newly cited Griffith et al. and Ho'lschermann et al. documents would raise a substantial new question of patentability as to the '516 patent claims since there is a substantial likelihood that a reasonable examiner would consider the teaching of the Griffith et al. reference in view of the Holschermann et al. document (as evidence of the Griffith reference method's reduction of NF-κβ activity) important in deciding whether or not the '516 patent claims are patentable.

The US Supreme Court ruled unanimously that judges do not have to automatically bar companies from using patents that they been shown to have violated. In eBay Inc. et al. v. MercExchange, LLC., a small patent-holding company that won a ruling against the auction site, the Court said judges must use a four-point test to decide if a permanent injunction should be granted against the losing party in patent disputes.

The Court held that according to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate:

(1) that it has suffered an irreparable injury;
(2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.

The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. Earlier, the Court of Appeals for the Federal Circuit ruled that injunctions should be granted as a "general rule."

The case put a number of large interests on the two sides of the case as Microsoft, Intel and other large technology companies supported eBay's position that an injunction preventing the continued use of disputed patents hurts innovation and gives patent-holding companies too much leverage in extracting licensing fees. MercExchange, along with the pharmaceutical industry, the federal government and many venture capitalists, argued that injunctions are necessary and useful tool to force infringers to negotiate in good faith.

In the end, the Supreme Court sided with eBay, stating that to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. These principles apply with equal force to Patent Act disputes. The court stated that:

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. See, e.g., Weinberger v. Romero-Barcelo, 456 U. S. 305, 311-313 (1982); Amoco Production Co. v. Gambell, 480 U. S. 531, 542 (1987). The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. See, e.g., Romero-Barcelo, 456 U. S., at 320.

These familiar principles apply with equal force to disputes arising under the Patent Act. As this Court has long recognized, "a major departure from the long tradition of equity practice should not be lightly implied." Ibid.; see also Amoco, supra, at 542. Nothing in the Patent Act indicates that Congress intended such a departure. To the contrary, the Patent Act expressly provides that injunctions "may" issue "in accordance with the principles of equity." 35 U. S. C. §283.2

The bottom line is that this could buy some time for companies hit with an infringement suit to try and get the patent invalidated at the Patent Office. In MercExchange's case, the U.S. Patent and Trademark Office has issued a preliminary ruling saying that MercExchange's invention was obvious and should not have been issued. The final outcome will take some time to resolve.

The European Court of Justice rendered a decision that states drug companies can't receive patent extensions covering the combination of two substances when only one is an active ingredient and the other controls the release of the first.

Drug companies often try to extend patent protection and, under EU rules, drug makers can apply for a "Supplementary Protection Certificate." The certificate, granted for a maximum of five years, acts as a patent term extension for time lost from when a company first applies for a drug patent to its authorization, which can be as long as 15 years. The SPC is not an automatic right and has to be applied for in each individual state. The SPC covers a combination of what was claimed in the patent in relation to the marketed drug and what is covered by the marketing authorization.

MIT holds a European patent covering the drug Gliadel 7.7 mg Implant, which is the combination of polifeprosan, a polymeric, biodegradable excipient, and carmustine, an active ingredient already used in intravenous chemotherapy with inert excipients and drug additives for the treatment of brain tumors. Gliadel comes in the form of a device which is implanted into the cranium for the treatment of recurrent brain tumors. The mechanism of its action consists in the carmustine, a highly cytotoxic active ingredient, being released slowly and gradually by the polifeprosan, which acts as a bioerodible matrix.

MIT requested a supplementary protection certificate for carmustine in combination with polifeprosan. The German Patent Office rejected the rejected that application for an SPC on the ground that polifeprosan could not be considered to be an active ingredient within the meaning of Article 1(b) and Article 3 of Regulation No 1768/92.

MIT claimed that polifeprosan is an essential component of Gliadel since it enables carmustine to be administered in a therapeutically relevant way for the treatment of malignant brain tumors, thereby contributing to the efficacy of the medicinal product. It is consequently not a mere excipient or an ancillary component.

The Court looked at the following questions:

1. Does the concept of "combination of active ingredients of a medicinal product" within the meaning of Article 1(b) of Regulation [No 1768/92] mean that the components of the combination must all be active ingredients with a therapeutic effect?

2. Is there a "combination of active ingredients of a medicinal product" also where a combination of substances comprises two components of which one component is a known substance with a therapeutic effect for a specific indication and the other component renders possible a pharmaceutical form of the medicinal product that brings about a changed efficacy of the medicinal product for this indication (in vivo implantation with controlled release of the active ingredient to avoid toxic effects)?

As set out in Article 1(b) of Regulation No 1768/92, 'product' means the active ingredient or combination of active ingredients of a medicinal product. However, it does not define the concept of 'active ingredient'. The court stated that the expression 'active ingredient' is generally accepted in pharmacology not to include substances forming part of a medicinal product which do not have an effect of their own on the human or animal body.

In a lengthy opinion, the court concluded that a substance which does not have any therapeutic effect of its own and which is used to obtain a certain pharmaceutical form of the medicinal product is not covered by the concept of active ingredient, which in turn is used to define the term product. Therefore, the combination of such a substance with another substance which does have therapeutic effects of its own cannot give rise to a combination of active ingredients within the meaning of Article 1(b) of Regulation No 1768/92.

The fact that the substance without any therapeutic effect of its own renders possible a pharmaceutical form of the medicinal product necessary for the therapeutic efficacy of the substance which does have therapeutic effects doesn't change the results.

In Breckenridge Pharmaceutical, Inc. v. Metabolite Laboratories, Inc., the Federal Circuit summarized the standard for personal jurisdiction in patent cases.

Metabolite holds patents for a method of controlling hyperhomocysteinemia, a condition involving elevated serum metabolite levels, which is an emerging risk factor for heart and vascular disease, and its principal business involves licensing its patents to pharmaceutical manufacturing companies. PamLab has an exclusive license of the Metabolite patents and manufactures and distributes a prescription-only vitamin product containing a specific formulation of B12, folic acid and B6 marketed as FOLTX. Breckenridge, a generic drug company headquartered in Florida, manufactures a similar product, marketed as “Folbee”, which it sells as a substitute for FOLTX.

Metabolite and PamLab filed suit in District Court alleging that Breckenridge had infringed the Metabolite patents by offering to sell Folbee to drug wholesalers and retailers as a generic equivalent to FOLTX. Following the district court’s denial of the plaintiffs’ motion for a temporary restraining order, the plaintiffs voluntarily dismissed the suit.
Several weeks later, Metabolite sent letters to vitamin distributors and retailers informing them of the Metabolite patents and PamLab’s exclusive license. Three letters were sent to customers of Breckenridge in Florida: Publix Super Markets, Eckerd, and Winn-Dixie. The letters did not name Breckenridge or threaten a lawsuit for infringement.

The letters stated in relevant part:

[O]ne or more small generic drug companies are offering generic equivalents to FOLTX. As the patent owner, Metabolite wanted to alert you to the patent coverage on FOLTX. We would urge you to consult with your patent attorney before entering into any arrangements for the distribution, dispensing or substitution of these generic equivalents in place of a legitimate prescription or order for FOLTX.

Breckenridge filed suit against Metabolite and PamLab seeking declaratory judgment of non-infringement and alleging state law claims of tortious interference and unfair competition. Metabolite moved to dismiss the complaint for lack of personal jurisdiction and the district court granted the motion. The Federal Circuit has now reversed.

Where a defendant is not subject to general jurisdiction in the forum state, a district court may nonetheless exercise specific jurisdiction over the defendant if the cause of action “arises out of” or “relates to” the defendant’s in-state activity. The issue of personal jurisdiction in a declaratory action for non-infringement is “intimately related to patent law” and thus governed by Federal Circuit law regarding due process.

Where a suit involves both patent and non-patent claims, Federal Circuit law regarding due process also applies to the question of personal jurisdiction on non-patent claims if “the resolution of the patent infringement issue will be a significant factor” in determining liability under the non-patent claims. A court must inquire whether the defendant has “purposefully directed his activities” at the forum state and, if so, whether “the litigation results from alleged injuries that arise out of or relate to those activities.” Then, to defeat jurisdiction, the burden of proof shifts to the defendant, which must “present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”

The court held that:

Thus, the crux of the due process inquiry should focus first on whether the defendant has had contact with parties in the forum state beyond the sending of cease and desist letters or mere attempts to license the patent at issue there. Where a defendant-licensor has a relationship with an exclusive licensee headquartered or doing business in the forum state, the inquiry requires close examination of the license agreement. In particular, our case law requires that the license agreement contemplate a relationship beyond royalty or cross-licensing payment, such as granting both parties the right to litigate infringement cases or granting the licensor the right to exercise control over the licensee’s sales or marketing activities.

Here, the court felt that jurisdiction arose by sending letters into the forum state, which it presumed qualify as cease and desist” letters, stating that Metabolite had entered into an exclusive license with PamLab, a company that conducts business in Florida.

Interestingly, the court noted that as a practical matter, patentees and patent counsel today often write accusatory letters artfully, and the type of implicit accusation of infringement contained in the Metabolite attorney letters has become the norm for what is traditionally refer to as “cease and desist” letters without using those magic words.

In sum, the court felt that Metabolite had not met its burden of showing a “compelling case” that the exercise of personal jurisdiction would be unfair under Burger King (Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73, 1985).

Eli Lilly and Company today got hammered by a jury in the U.S. District Court of Massachusetts in Boston in a decision in the case of Ariad Pharmaceuticals et al. v. Eli Lilly and Company. The Jury handed down a verdict that U.S. Patent No. 6,410,516, owned by Harvard, the Massachusetts Institute of Technology, and the Whitehead Institute and licensed to Ariad Pharmaceuticals, is valid and infringed by Lilly's sale of Evista® and Xigris®.

The '516 patent, awarded after 16 years of prosecution in the USPTO, presents 203 separate claims covering methods of treating disease by regulating a family of molecules known as NF-kB, a biological trigger believed to play a role in a wide range of illnesses from cancer to osteoporosis to bacterial infections.

The '516 patent claims methods based on the discovery of a naturally-occurring biological pathway, the NF-kappaB pathway. While Ariad contends that the patent covers all means for modulating the NF-kappaB pathway, Lilly's contention is that it discovered the drugs in question, Evista and Xigris and disclosed their medicinal properties years before the patentees' scientists made their discovery.

In June 2002, Lilly was sued by Ariad, MIT, Whitehead and Harvard in the U.S. District Court of Massachusetts alleging that sales of two of Lilly's products, Evista and Xigris, were inducing the infringement of their patent and seeking royalties on past and future sales of these products. The jury awarded the plaintiffs approximately $65 million in back royalties and a 2.3 percent royalty on future U.S. sales of Evista and Xigris until the patent's expiration in 2019.

Regarding Evista, the jury found that the drug infringed claims 80 and 95:

80. [A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-kappaB-mediated intracellular signaling, the method comprising altering NF-kappaB activity in the cells such that NF-kappaB-mediated effects of external influences are modified ... wherein NF-kappaB activity in the cell is reduced] wherein reducing NF-kappaB activity comprises reducing binding of NF-kappaB to NF-kappaB recognition sites on genes which are transcriptionally regulated by NF-kappaB.

95. [A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-kappaB-mediated intracellular signaling, the method comprising reducing NF-kappaB activity in the cells such that expression of said genes is reduced] carried out on human cells.

1(a) Does a patient who takes Evista in accordance with the product label for prevention and/or treatment of osteoporosis infringe claim 80 and/or claim 95 of the ‘516 patent? Yes.

1(b) Did defendant Eli Lilly induce infringement of claim 80 and/or claim 95 by selling or causing a third party to sell Evista to such patients? Yes.

1(c) Did defendant Eli Lilly contributorily infringe claim 80 and/or claim 95 by selling or causing a third party to sell Evista? Yes.

Regarding Evista, the jury found that the drug infringed claims 144 and 145:

144. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-kappaB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], wherein reducing NF-kappaB activity comprises reducing binding of NF-kappaB to NF-kappaB recognition sites on genes which are transcriptionally regulated by NF-kappaB.

145. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-kappaB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], carried out on human cells.

2(a) Does a patient who takes Xigris in accordance with the product label for treatment of severe sepsis infringe claim 144 and/or claim 145? Yes.

2(b) Did defendant Eli Lilly induce infringement of claim 144 and/or claim 145 of the ‘516 patent by selling or causing a third party to sell Xigris? Yes.

2(c) Did defendant Eli Lilly contributorily infringe claim 144 and/or claim 145 by selling or causing a third party to sell Xigris? Yes.

This decision appears to go against long-standing patent practice in that one cannot get a patent that would remove known materials from the public. In addition, it has always been the case that one may patent a drug without knowing how it works. If this decision were allowed to stand, many drugs could eventually be found to infringe patents that were issued long after the drugs themselves were discovered.

This also begs the question of if a researcher discovers a drug without ever knowing the drug acts on a patented pathway or before the pathway is understood, does that constitute infringement? If the drug was acting on the pathway before the pathway was discovered, does the existence of the drug invalidate the patent on the pathway by rendering it not "new"? This could also give rise to an ever-increasing number of conflicting patents. Because NF-kB can activate so many genes, more than 150, it is implicated in many diseases.

A separate bench trial with the U.S. District Court of Massachusetts will be held on Lilly's contention that the patent is unenforceable and will also consider the patent's improper coverage of natural processes. In June 2005, the U.S. Patent and Trademark Office commenced a reexamination of the patent (Reexam. C.N. 90/007,828). The reexamination is currently in progress although the USPTO has not issued any substantive action.

On April 30, 2006 Judge Richard W. Roberts of U.S. District Court for the District of Columbia, in his memorandum opinion, has ruled in the favor of Ranbaxy & Ivax (acquired by Teva) by granting them summary judgment and contending that the FDA has acted contrary to the clear intent of Congress in its decision to deny Ranbaxy and Ivax’s citizen petitions. This ruling means that Ranbaxy and Ivax are likely to be the sole generic competitors to sell generic version of Merck’s Zocor after the basic patent (U.S. Patent No. 4,444,784) covering simvastatin get expired on June 23, 2006.

Delisting Orange Book Patents

Earlier, at the time when Ranbaxy and Ivax submitted their abbreviated new drug applications (ANDAs) with US FDA, Merck had three listed patents for simvastatin in the Orange Book -- U.S. Patent No. 4,444,784 (‘784 patent’), U.S. Patent No. RE36481 (‘481 patent’), and U.S. Patent No. RE36520 (‘520 patent’). However, Ranbaxy and Ivax filed Para III certifications with respect to ‘784 patent but both filed Para IV certifications in respect of other two listed patents contending that the ‘481 and ‘520 patents were invalid or unenforceable, or that their drugs would not infringe those patents. Following the submission of Para IV certifications by Ranbaxy & Ivax, Merck, instead of suing them within 45 days, submitted a letter to the FDA requesting that the ‘481 and ‘520 patents to be delisted from the Orange Book. Learning that FDA has delisted the ‘481 and ‘520 patents from the Orange Book, both Ranbaxy and Ivax submitted citizen petitions, requesting FDA to confirm that it would not approve subsequent ANDAs until after the 180-day period and to relist the patents in the Orange Book.

On October 24, 2005 FDA denied both the petitions deciding that it would not relist the disputed patents, that no applicant will be entitled for 180-day exclusivity for delisted patents, and that it will approve all subsequent ANDAs for simvastatin. As a result, Ranbaxy and Ivax separately sued the FDA under 5 USC § 706 claiming that the FDA improperly nullified Ranbaxy and Ivax’s rights to a 180-day period of exclusive marketing of generic Zocor. These civil actions were consolidated and all three parties moved for summary judgment, contending that there are no genuine issues of material fact and that each is entitled to judgment as a matter of law.

The Last Laugh

The District Court Judge in his opinion ruled that the FDA should have granted the petition by Ranbaxy & Ivax and also that the FDA’s decision “contravened the plain and undisputed intent of Congress.” The issue is now sent back to the FDA by the District Court for a decision, giving Ranbaxy & Teva the last laugh. However, FDA may file an appeal against the ruling in the U.S. Court of Appeals for the District Court of Columbia Circuit, which may delay the sale of a generic Zocor beyond June 23, 2006.

Today's post comes from Varun Chhonkar, Senior Officer - Patents with J.B. Chemicals & Pharmaceuticals Ltd., Mumbai, India (varun.chhonkar[at]jbcpl.com). © Varun Chhonkar.

In Eli Lilly & Co. v. Emisphere Technologies, Inc., a district court judge has decided that Eli Lilly doesn't have any rights to a patent it applied for based on its partner's technology after ruling that Lilly breached its contract with Emisphere by setting up a secret research team to study its partner's technology.

Under a Research Collaboration and Option Agreement, Lilly and Emisphere agreed to collaborate on a research and development program to study the use of Emisphere Technology for oral delivery of PTH and related compounds, as well as some non-oral methods of delivery. The parties agreed that Emisphere would grant Lilly an option for an exclusive worldwide license to make and use the Emisphere carrier technology to develop oral PTH products. Lilly could exercise that option by giving notice to Emisphere and by paying Emisphere a sum of money. They also agreed on the terms of the separate license agreement that would take effect if and when Lilly exercised the option.

The parties defined Emisphere Technology broadly as: proprietary synthetic chemical compounds that enable the delivery of therapeutic macromolecules and other compounds that are not currently deliverable by oral means or by certain non-oral means (including all related patents, patent applications and Know-How presently owned by Emisphere and all patents, patent applications, and Know-How relating to inventions developed by Emisphere pursuant to the Program . . . ).

The PTH License Agreement also included detailed provisions for confidentiality, including limits on Lilly’s internal distribution and use of information relating to the PTH and carrier research. Emisphere contends that Lilly violated confidentiality clauses by having the employees who worked on the PTH program provide confidential Emisphere information to the Lilly team working on the secret projects researching Emisphere’s carriers with proteins other than PTH.

A second research collaboration on oral delivery of PTH and hGH provided that Emisphere would own all patents, patent applications and Know-How relating to the Emisphere Technology to the extent that Lilly and/or Emisphere invents and/or develops same during the course of and as part of the Programs, including, but not limited to, any Lilly Improvements.

It didn't help any that Lilly apparently set up a secret Oral Protein Delivery Team to study the mechanism of action of the Emisphere carriers, but with protein molecules other than PTH. The Secret Team had access to detailed information about results of unpublished research, experience with methods for synthesizing the carrier molecules, and methods for testing the carriers.

After getting promising results from its secret research on Emisphere carriers, Lilly began negotiating with Emisphere for a license to commercialize products containing Emisphere’s carriers and GLP. While those negotiations were going on, Lilly filed a PCT application for combinations of GLP with 56 different delivery agents, including Emisphere’s proprietary carriers that had been used in the collaborative research on PTH.

The court held that Lilly’s refusal to assign the GLP patent application to Emisphere violated Section 1.5(c) of the research agreement, which stated:

It will not be Lilly’s responsibility or intent to develop new synthetic chemical compounds that enable the delivery of therapeutic macromolecules and other compounds that are not currently deliverable by oral means or by certain non-oral means (the Carriers) as part of the Programs. Any new Carriers or inventions which are closely related to the Emisphere Technology (as it exists as of the Effective Date) that arise, in whole or in part, out of suggestions, recommendations or discussions held between Emisphere and Lilly scientists shall be Emisphere Technology.

Despite Lilly's contention that the OPD/GLP team relied only on published data and that none of the information from the Emisphere collaboration was useful in selecting carriers for GLP, two of the carriers in the Lilly GLP patent application were carriers in Emisphere’s database of unpublished carriers. The court felt that any work Kahn did on carriers must have arisen at least in part from discussions, recommendations, and suggestions between Lilly and Emisphere scientists in the PTH project.

The court held that:

... Emisphere has shown that the Oral GLP team did not rely solely on published information, but had already received a running start on carrier research because of the help they received from [Lilly researchers], who got their start with the Emisphere-Lilly collaboration on PTH. In other words, Lilly’s Oral GLP team already knew a lot about what had worked with the PTH research. The effort to develop a sanitized paper trail relying on only published information did not accurately reflect the reality of what had occurred, yet it reflects an awareness of the benefits of making the project appear to be based on only public information.

...

The research efforts for any one therapy could easily require Emisphere to disclose to its research partner a vast amount of valuable information about the Emisphere carriers, as in the PTH project with Lilly. Much of that information was not public, such as the best procedures for synthesizing and manufacturing particular carriers, how to deal with impurities in the carriers, which excipients were likely to work well or not so well with carriers, toxicology data, dose response data from animal experiments, and whether solid or liquid doses produced better absorption, among many others. If a partner with vast scientific, intellectual, and commercial resources like Lilly could take the information gleaned in one project and use it in an independent project with other therapeutic proteins, Emisphere would have effectively sold its entire business for the relatively cheap price of a license for only one application of its technology. In addition, Emisphere’s existing licenses to its other research partners working on other proteins would weaken and lose value, and Emisphere’s ability to enter into new exclusive licensing agreements would also be diminished.

While Lilly contends that under Emisphere’s case, Lilly would be prohibited from carrying out research that any other company in the world may carry out, the court put weight to the fact that no other company in the world had the kind of access to Emisphere’s technology that Lilly had. In the court’s view, Lilly deliberately chose a course that was too aggressive, which resulted in the termination of the contracts and the loss of much of Lilly’s investment in the oral PTH program.

The court held that Lilly should hand over the international patent application to Emisphere Technologies by May 5.

A federal District Court ruled that a terminal disclaimer does not negate Patent Term Extension. King Pharma v. Teva Pharma, 78 USPQ2d 1237 (D.N.J. 2006). In a patent dispute, Teva argued that Wyeth’s patent on zaleplon drug products had expired because of a terminal disclaimer. Wyeth, and its exclusive licensee King Pharma, argued that patent’s term was ongoing because of a Patent Term Extension due to FDA regulatory review delay.

King Pharma sued Teva Pharma for patent infringement alleging that Teva has infringed one or more claims of U.S. Patent No. 4,626,538, owned by Wyeth, under which King has exclusive license to sell drug products containing zaleplon under the trademark Sonata®, which is used to treat insomnia. Teva has moved to dismiss arguing that the '538 Patent expired on June 23, 2003 as a matter of law and therefore no valid and enforceable patent is being asserted. The District Court disagreed.

An FDA publication entitled "Approved Drug Products with Therapeutic Equivalence Evaluation" (the Orange Book) lists the '538 Patent as being applicable to King's Sonata® drug products. The application for what ultimately became the '538 Patent was initially rejected on the ground that it claimed the same invention that was claimed in an earlier patent, U.S. Patent No. 4,521,422, and the '538 Patent was granted only after the applicant filed a terminal disclaimer under 35 U.S.C. § 253.

This terminal disclaimer disclaimed any term of the '538 Patent that would otherwise have extended beyond the '422 Patent, which expired on June 23, 2003. The original termination date of the '422 Patent was June 3, 2002 (seventeen years from its issue date); however, pursuant to 35 U.S.C. § 154, this date was reset to June 23, 2003 (twenty years from its filing date). The USPTO agreed that the '538 Patent's expiration date should be reset at June 23, 2003 as well since the term of the '538 Patent was linked to the term of the '422 Patent. Thus, based on the terminal disclaimer, the '538 Patent had been scheduled to expire on June 23, 2003.

On June 4, 2003, pursuant to 35 U.S.C. § 156, the PTO extended the term of the '538 Patent for a period of 1810 days, running from June 23, 2003, based on the regulatory review of the product Sonata® (zalephon) by the FDA. Based on the Patent Term Extension, the expiration date of the '538 Patent became June 6, 2008. The crux of Teva's argument is that the term of a terminally disclaimed patent may not be extended under 35 U.S.C. § 156 and, therefore, the '538 Patent expired on June 23, 2003.

Section 156 provides that:

a) The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section from the original expiration date of the patent, which shall include any patent term adjustment granted under section 154(b), if-- (1) the term of the patent has not expired before an application is submitted under subsection (d)(1) for its extension; (2) the term of the patent has never been extended under subsection (e)(1) of this section; (3) an application for extension is submitted by the owner of record of the patent . . . ; (4) the product has been subject to a regulatory review period before its commercial marketing or use; (5)(A) except as provided in subparagraph (B) or (C), the permission for the commercial marketing or use of the product after such regulatory review period is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred; . . . .

The District Court held that

Teva has not alleged that the enumerated conditions were not satisfied. Instead, Teva argues that a § 156 patent term extension is not available to a patent subject to a § 253 terminal disclaimer. However, § 156 is plain and unambiguous: a terminally disclaimed patent is not barred from receiving a § 156 extension.

...

Further, § 156 makes no reference whatsoever to terminal disclaimers. Section 156's direction that a patent term extension “shall” be granted if the conditions are met contains no exception for patents subject to a § 253 terminal disclaimer. This Court may not read language in or graft meaning on to § 156, and hence may not create an exception for terminally disclaimed patents where Congress did not see fit to do so.

Whereas § 156 provides for a patent term extension for FDA delays in approving a drug for sale, § 154(b) provides for a patent term extension, or adjustment, where a delay has occurred during prosecution of a patent before the PTO. 35 U.S.C. §§ 156, 154(b) (2005). Unlike § 156, § 154(b) expressly refers to terminally disclaimed patents: No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer.

The Court held that it must follow the presumption that Congress acted intentionally and purposely when it included an exception for terminally disclaimed patents in § 154 and omitted any exception for terminally disclaimed patents in § 156. The Court concluded that a terminally disclaimed patent is eligible for extension under 35 U.S.C. § 156.

Note that before June 8, 1995, the terminal disclaimer date was printed on the face of the patent; the date was determined from the expected expiration date of the earlier issued patent based on a seventeen year term measured from grant. When 35 U.S.C. 154 was amended such that all patents (other than design patents) that were in force on June 8, 1995, or that issued on an application that was filed before June 8, 1995, have a term that is the greater of the "twenty year term" or seventeen years from the patent grant, the terminal disclaimer date as printed on many patents became incorrect. If the terminal disclaimer of record in the patent file disclaims the terminal portion of the patent subsequent to the full statutory term of a referenced patent (without identifying a specific date), then the date printed on the face of the patent is incorrect when the full statutory term of the referenced patent is changed as a result of 35 U.S.C. 154(c).

The U.S. Court of Appeals for the Federal Circuit, in Aventis Pharma S.A. v. Amphastar Pharmaceuticals, Inc., and Teva Pharmaceuticals Usa, Inc., (No. 05-1513; April 10, 2006), held that if there is another reasonable inference for not disclosing information during prosecution, the failure to disclose may have been due purely to inadvertence.

In the case, Aventis appealed a District Court summary judgment in favor of Amphastar Pharmaceuticals and Teva Pharmaceuticals that held U.S. Pat. No. 5,389,618 and Reissue Patent No. 38,743 unenforceable. The ’618 patent and the ’743 reissue patent disclose and claim mixtures of low molecular weight herapin (“LMWH”) used to prevent blood clots and sold as Lovenox® (enoxaparin sodium injection). During prosecution of the application leading to the ’618 patent and the ’743 reissue patent, Aventis compared the half-life of a product allegedly covered by the ’618 patent at a 40 mg dose to the half-life of a prior art product at a 60 mg dose to show an unexpected and significantly better half-life. Aventis did not, however, expressly disclose the dosages at which the half-life comparisons were made, and specifically, that the EP 40,144 LMWH data was for a 60 mg dose.

The district court faulted Aventis for comparing data based on different doses to show an improved half-life, when a comparison of available data using the same doses actually showed that there was little if any difference between the half-lives of the prior art and the purported invention. Aventis argued that the use of the 40 mg Debrie LMWH data, as opposed to the 60 mg Debrie LMWH data, was reasonable. The court stated that the question is not whether use of the 40 mg data was reasonable, but whether there was an omission of material fact, particularly in light of the fact that the same study showed that the 60 mg Debrie LMWH data and the 60 mg EP 40,144 LMWH data was much closer than the 40 mg Debrie LMWH data and the 60 mg EP 40,144 LMWH data. It therefore granted summary judgment of unenforceability due to inequitable conduct.

The standards for finding inequitable conduct as follows:

Applicants for patents have a duty to prosecute patents in the PTO with candor and good faith, including a duty to disclose information known to the applicants to be material to patentability. A breach of this duty may constitute inequitable conduct, which can arise from an affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive or mislead the PTO.

Purdue Pharma L.P. v. Endo Pharm., Inc., 438 F.3d 1123, 1128-29 (Fed. Cir. 2006) (citations omitted).

The threshold showing of materiality required to proceed to the “balancing” portion of the inequitable conduct inquiry can be met by showing a reasonable examiner would have considered such information important in deciding whether to allow the application.

The district court determined that an omission that would have revealed that the difference in half-lives was actually much smaller was material to patentability. A comparison made at the same dosage, 60 mg, would have yielded a much smaller difference in half-life. Given the centrality of the differences in half-lives to patentability, by failing to disclose the dosage of the 60 mg compound or to disclose that the difference in half-lives at the same dosage was actually lower, Aventis failed to disclose material information to the PTO.

The CAFC held that it was insufficient to merely submit the underlying data to the examiner and later argue that the examiner could have requested the EP 40,144 dosage information to make additional comparisons. The withholding of the EP 40,144 dosage information prevented the examiner from considering information important in deciding whether to allow the application, and was therefore a failure to disclose material information to the PTO.

Even if an omission is found to be material, the omission must also be found to have been made with the intent to deceive. On summary judgment, to create a genuine issue of material fact, Aventis was required to state specific facts supporting a plausible justification or excuse for its failure to disclose material information.

The CAFC stated that:

Here, the district court did not find direct evidence of intent to deceive, but found that the “facts and circumstances surrounding the failure to disclose the dose differential . . . supports a strong inference of intent by Aventis to deceive the PTO.” … Because Aventis has met its burden of setting forth a plausible justification for its failure to disclose material information, deciding all inferences in favor of Aventis, we hold that the district court erred in finding intent to deceive on summary judgment.

...

The district court’s inference was reasonable—by failing to disclose that the EP 40,144 data was at a 60 mg dose, Aventis may have been painting the rosiest picture possible as to the half-life improvement of its claimed compounds in an attempt to deceive the examiner. Appellees contend that this is only reasonable inference to draw from the facts presented. However, there is another reasonable inference—namely, as Aventis argues, if the comparison between different doses was reasonable, the failure to disclose may have been due purely to inadvertence. Based on the facts presented by Aventis, these are not “insupportable, [or] specious . . . explanations or excuses.” … Therefore, a finding of intent was inappropriate on summary judgment.

The CAFC then remanded for further proceedings stating there remain genuine issues of material fact regarding Aventis’s intent to deceive the PTO.

In an exciting exchange at the Supreme Court, lawyers for MercExchange and eBay squared off in the battle for and against injunctions. The Court heard oral arguments yesterday in a crucial intellectual property case where the outcome could hinge on whether the justices think eBay is an evil patent infringer or the innocent victim of a so-called "patent troll"

In 2003, eBay lost an infringement action to MercExchange when a jury awarded MercExchange $35 million - although the judge reduced the award by $5.5 million and denied MercExchange an injunction, saying the smaller company would not face "irreparable harm" without it.

The district judge reasoned that, among other things, MercExchange was not practicing the patents and was willing to license its technologies to other companies. The judge also cited "growing concern over the issuance of business-method patents" as a reason that an injunction would not be in the public interest.

However, the U.S. Court of Appeals for the Federal Circuit reversed the ruling last year, saying MercExchange was entitled to an injunction because a "general concern" about business-method patents did not justify "the unusual step of denying injunctive relief." eBay's lawyers argued that the appeals court's ruling is too inflexible to encompass the fast-changing world of software technologies.

eBay also argued that MercExchange wouldn't be harmed if eBay continued to offer the service while it tried to design around the patents since MercExchange didn't use its patents and could eventually be compensated with additional monetary damages if the infringing continued.

On Wednesday, the Supreme Court justices seemed to back the necessity for injunctions with Justice Antonin Scalia firing out that "We're talking about a property-right here; all he's asking for is 'give me my property back.' "

Injunctions, of course, are critical to the pharmaceutical industry, which has a huge stake in patenting drugs that take years to develop and needs easy access to injunctions.

A decision is expected by July. In the meantime, the USPTO has handed down another Non-Final rejection in the patent at issue in the course of re-examination. In the 105 page Office Action, the Examiner contends that claimed invention was obvious over the cited art.

More will be forthcoming.

Medtronic filed a patent infringement lawsuit in Ireland against Guidant Corp.'s Vision and Xience stents (tiny tubes that prop open arteries) alleging that the stents infringe patents licensed to Medtronic from Evysio Medical Devices, a Canadian company. Medtronic is seeking an injunction and monetary damages.

This is high-stakes for both Medtronic and Guidant as they try to muscle into the $6 billion U.S. market for drug-coated stents - now the domain of Johnson & Johnson and Boston Scientific. Lawsuits have also been filed in U.S. District Court in northern California and in France. A French court ruled that Guidant's Vision stent may infringe the Evysio patents. Guidant's Vision stent is the foundation of their Xience drug-eluting stent.

Patent woes are also posing trouble for Boston Scientific, which in January agreed to buy Guidant for $27 billion. A successful fight in Ireland where Vision is manufactured, for example, could put the Xience European launch at risk. There is argument, though, about whether the latest patent claims are note-worthy or are simply a footnote in the competitive $5 billion to $6 billion stent business.

Some analysts suggest Medtronic's patent suits are really an effort to create bargaining chips to benefit its own stent project. Medtronic is marketing a drug-coated stent internationally called Endeavor, and hopes to bring it to the U.S. in 2007. However, the company doesn't currently have access to "rapid exchange," a key delivery system that's now the favored way to install stents. If Medtronic can create a strong case against Guidant's product, it can later agree to drop that case in return for access to rapid exchange.

The two most common types of delivery system in the United States are over-the-wire and Rapid Exchange ("RX"). Over-the-wire delivery systems employ a long guidewire and require two operators to implant the stents. In contrast, the RX delivery system employs a shorter guidewire that can be handled by a single operator. RX delivery systems currently are preferred by physicians.

Johnson & Johnson, which had planned to buy Guidant before Boston Scientific won a bidding war, holds patents for the family of drugs used on the Guidant and Abbott stents.

In a Sign o' the Times, Sanofi-Aventis and Bristol-Myers Squibb have reached a settlement agreement with Apotex in the patent infringement lawsuit pending between the parties in the US District Court. The suit relates to the validity of a composition of matter patent for clopidogrel bisulfate, the active ingredient in Plavix.

Plavix is one of the three top-selling drugs in the world with sales of $5.4 billion. In Sanofi's suit against Apotex and Dr. Reddy in the U.S. Apotex and Dr. Reddy argued that the patent for the active ingredient, which expires in 2011, is not sufficiently different from another Sanofi patent that expired two years ago.

The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas a later patent (US 4,847,265), due to expire in 2011, claims only the (+)-enantiomer.

The earlier patent claimed, but did not describe, the (+)- and (–)-enantiomers, although it states that "the invention relates both to each enantiomer and their mixture." In the description of the activities of each enantiomer in the '265 patent, data show that the (+)-enantiomer is pharmacologically superior in activity and less toxic than both the (–)-form and the racemate.

Under the terms of the proposed settlement, Sanofi-Aventis will grant Apotex a royalty-bearing license under the '265 patent to manufacture and sell its FDA-approved clopidogrel bisulfate product in the United States, and Apotex would agree not to sell another clopidogrel product in the United States until the effective date of the license.

Keep in mind that the proposed settlement is subject to certain conditions, including antitrust review and clearance by the Federal Trade Commission and state attorneys general. There is a risk that antitrust clearance won't be obtained. Sanofi and Bristol-Myers have approached Dr. Reddy's to discuss a possible settlement of this matter, too.

The growing ability of patent holders to settle disputes could be a sign that things are moving more in favor of branded drug firms on patents after years of aggressive attack from generic firms. This follows the victories last year by Pfizer with its patent on Lipitor and Eli Lilly with its patent on Zyprexa.

The Court of Appeals for the Federal Circuit, in what seems to be a confusion over neutralization of an acid versus a salt, held that a claim for an acid is not literally infringed by a salt in Kao Corp. and Andrew Jergens Corp. v. Unilever and Conopco.

Earlier, the U.S. District Court ruled that Kao's U.S. Patent No. 6,306,382 was valid and enforceable but not infringed by Unilever's accused product, Pond's Clear Pore Strips - a cosmetic skin-care product used to remove "keratotic plugs" (a/k/a blackheads) from facial skin. The district court exercised jurisdiction pursuant to 28 U.S.C. § 1338.

Claim 1 recites as follows:

A method for removing keratotic plugs from skin with a cosmetic article, which comprises: wetting the skin or said cosmetic article; applying onto the skin said cosmetic article; and peeling off said cosmetic article after drying; wherein said cosmetic article comprises: (i) a substrate selected from the group consisting of woven cloth, non-woven cloth and a plastic film; and (ii) on said substrate, a layer comprising a copolymer, in an amount effective to remove keratotic plugs, wherein said copolymer is a poly(alkyl vinyl ether/maleic acid) copolymer or a polyalkylvinyl ether/maleic anhydride) copolymer.

The district court also construed what it termed the "copolymer limitation" of claim 1 - the language stating "wherein said copolymer is a poly(alkyl vinyl ether/maleic acid) copolymer or a polyalkylvinyl ether/maleic anhydride) copolymer" to mean "either poly(alkyl vinyl ether/maleic acid) copolymer or poly(alkylvinyl ether/maleic acid anhydride) copolymer, but not the salt form thereof." Concluding that "a salt copolymer is a distinct chemical entity from both an acid copolymer and an anhydride copolymer," The court noted that after filing the application for the '382 Patent, Kao filed another application "with claims specifically directed to the salts of the copolymers claimed in the '382 patent." The district court took this as evidence that the '382 Patent does not cover salt forms.

Kao argued that Unilever does not use the salt form of PVM/MA, but the acid form based on the fact that the addition of 2% AMP to the PVM/MA only slightly neutralizes the acid, such that "85.5% of the acid groups do not include a salt and only 14.5% of the acid groups include a salt.

The coating for the Pond's strips is prepared by mixing 98% by weight of a solution of PVM/MA with 2% by weight of AMP. The AMP reacts with the PVM/MA to form what Unilever and the district court describe as a salt. The district court concluded that Unilever's product did not literally infringe the '382 Patent because it did not meet the "copolymer" limitation of claim 1.

The Federal Circuit affirmed the lower court based on the belief that:

..it was "uncontested" that there were "differences in chemical composition between the claimed PVM/MA and the PVM/MA acid-salt" used by Unilever's product. Id. The primary difference was that Unilever's product contains 98% by weight of PVM/MA copolymer and 2% by weight of AMP, which "reacts with the PVM/MA to form a salt." Id. at 541. The trial court noted that "[t]he experts also agree that the claimed PVM/MA copolymer and the PVM/MA acid-salt have different chemical compositions which can be characterized by differences in their solubility, viscosity, and infrared spectra data."

The court stated that "the relevant question is not whether Unilever's compound is a salt, but whether it is "a salt form of" PVM/MA." Huh? The Federal Circuit seemed to hang the decision on the fact that Kao offered no response to Unilever's account of the record testimony beyond a conclusory assertion, unsupported by citation to the record, that Unilever's account is "not correct." [Note to practitioners: Get this evidence in the record!]

Judge Newman, concurring in part, dissenting in part contested the result saying “the panel majority has misunderstood the chemistry, in holding that neutralization of 14.5% of the maleic acid groups means that the totality is a salt and not an acid. This flawed science led to an incorrect conclusion of law.”

This decision seems to point out two critical items for patent holders. One, in drafting chemical patents, the drafter should spell out what is or is not a salt as well as what is an equivalent. And two, in an infringement action involving chemistry, you need to get the court educated on the reactions involved. Preferably, have the nuances spelled out in the specification. Kao also lost any chance for infringement under the doctrine of equivalents because it did not raise the issue, which seems odd given that the chemical changes effected by combining PVM/MA with AMP have no effect at all on the function of the invention.

Update:

A reader pointed out that Kao probably was sunk by its own patent application filed on the salt form. Because the district court determined that Unilever's product used a salt, not the claimed acid, Kao could not meet literal infringement. Kao then tried to rely on Merck & Co. v. Teva Pharmaceuticals USA, Inc., 347 F.3d 1367 (Fed. Cir. 2003), for the proposition that "a claim that recite[s] an acid" may be "literally infringed by the salt of the acid" where "both the acid and its salt functioned similarly." Kao argued that even Unilever does not dispute that the chemical changes effected by combining PVM/MA with AMP have no effect at all on the function of the invention.

However, the cited cases involve patent claims that were held to include salt forms. In the present case, the district court's claim construction expressly excluded the salt form of PVM/MA. In addition, the court made note that Kao filed a separate application "with claims specifically directed to salts of the copolymers claimed in the '382 patent." The Federal Circuit believed that if Kao had intended to claim salt forms of the copolymer in the '382 Patent, the subsequent patent application would have been superfluous. Therefore, by not filing on the salt forms in the original application, they may have given up any chance for a DOE claim.

In an Op-Ed piece in the New York Times entitled "Patently Ridiculous," the editors state that "something has gone very wrong with the United States patent system.

That's not really "new" as far as patent reform claims of this sort go but the editors do finally concede that the problem lies "not just with the short-staffed patent office, but also with the courts." The article attempts to draw blame away from patent holders themselves and to shine light on the ease with which patent holders can get an injunction to shut down a competing business. Since injunctions are such a heavy hammer, many companies settle rather than fight it out à la RIM v. NTP.

The article provokes one to contemplate the questions raised by new technological advances. It also gives a nod to the fact that not everyone is effected equally -- high-tech and pharmaceutical industries are at odds on reform since patents affect their businesses so differently. The bottom line is that an understaffed Patent and Trademark Office needs to work cooperatively with inventors to carve out their inventions' proper niche.

Congress is currently looking at draft patent reform legislation to deal with the issue of patent infringement injunctions. Companies like eBay, which have to contend with the possibility that one device might be infringing hundreds of patents, want Congress to clarify existing rules that give district court judges discretion in deciding whether to issue injunctions while patent cases make their way through the appeals process.

The pharmaceuticals industry, by contrast, wants the legislation to reflect recent federal circuit court decisions - particularly the one eBay is appealing - which say injunctions against patent infringers should be standard during appeal except in extraordinary circumstances. Pharmaceutical and biotech companies tend to face fewer numbers of patents in developing a particular product and so immediate injunctions are more critical.

Meanwhile, in the eBay v. MercExchange case, the Court of Appeals for the Federal Circuit felt that eBay should be subject to an injunction in holding that a permanent injunction must follow all judgments of infringement unless such a decision would "frustrate an important public need," such as protecting public health. Note that RIM made this argument against an injunction on testimonials that its Blackberry e-mail device, used by doctors and emergency workers, fit that description.

When deciding whether to grant injunctions, the other federal appellate courts use a four-part test where the courts consider whether the plaintiff will be irreparably harmed if an injunction is not issued, whether the plaintiff has some other adequate legal remedy, whether an injunction is in the public interest, and whether an injunction (or lack of one) would pose an undue hardship to the plaintiff or defendant. A much less hardline approach.

Counterbalancing all this is the importance of an injunction for the "little guy" in all this. The power of an injunction can be the only weapon that a small start-up has to combat it's larger foes seeking to cruch it out of the marketplace using its vast cash resources. It's all a matter of balance and, hopefully, the Supreme Court will provide some guidance. The U.S. Supreme Court has agreed to review the ruling in the eBay v. MercExchange case will begin taking up the general merits of that case on March 29, when it is scheduled to hear oral arguments.

The U.S. government filed its own brief in the case arguing that the court handling eBay's appeal did not stick to a "general rule" but instead used ample "discretion" in issuing an injunction. The government said no special exemptions should be made in cases involving companies like MercExchange that do not make products using their patents but instead simply licence them. A 1908 Supreme Court decision established that injunctions can occur even if the patent holder itself has "'unreasonably' failed to practice its own invention."

For a round-up of amici briefs in the eBay v. MercExchange case, see Dennis Crouch's Review: EBay v. MercExchange Amici Briefs, Patently-O, March 13, 2006.

In Rockey, Inc. v. Cordis Corp. (05-1236), the U.S. Court of Appeals for the Federal Circuit held that determining patent infringement is a two-step process consisting of the court construing the claims and then comparing the allegedly infringing device to the properly construed claims.

Arlaine & Gina Rockey, Inc. ("AGR") filed an action against Cordis alleging breach of the licensing agreement, breach of an implied duty to commercialize, and breach of the duty of good faith and fair dealing. After a Markman hearing, the District Court issued a claim construction order and granted summary judgment in favor of Cordis. The district court found that AGR is not entitled to royalties because the use of Cordis' accused device (the "Palmaz-Schatz" stent) is not covered by AGR's stent patent.

United States Patent No. 4,641,653, assigned to AGR, covers various medical devices and procedures involving stents. AGR claims that Cordis breached the license agreement by selling the accused device, the Palmaz-Schatz stent, without paying royalties.

Claim 2 of the '653 patent is directed to a method for inserting a stent into a blood vessel, manipulating the stent into position, and expanding it to the full diameter of the vessel. The stent remains in place due to the frictional forces created by the expanded device against the blood vessel wall, and helps to maintain an open passageway in a diseased vessel.

While the Palmaz-Schatz stent is used in a similar manner, the Palmaz-Schatz stent is a lattice-like cylinder that is delivered to a desired location within the blood vessel and then radially expanded by an internal balloon. The expanding balloon causes permanent deformation of the latticed-steel cylinder. The metal of the stent retains its new shape.

In contrast, the '653 patent illustrates the use of a stent that has a different means of maintaining itself in a permanently expanded configuration. Rather than relying on mechanical deformation of a steel-lattice, the Rockey patent relies on the introduction of a slowly-hardening substance.

To construe claims, the court first looks at the ordinary and customary meaning of the claim language. The claim's "ordinary and customary meaning" is the reading a person of ordinary skill in the art would give the claim at the time of the invention. The person of ordinary skill in the art should read the claim term "not only in the context of the particular claim in which the disputed terms appears, but in the context of the entire patent, including the specification."

Claim 2 of the '653 patent recited a “A method of treating an area of a body vessel, comprising the steps of … providing in the sleeve a material which increases in rigidity after expansion of said balloon …”

The district court defined "providing in the sleeve a material which increases in rigidity after expansion of said balloon" to mean "supply[ing] in the sleeve a material that is separate and distinct from the sleeve itself." The district court held that the limitation requires the addition of a material to the stent at some point in the process.

AGR argued that the district court erred by improperly importing limitations of the preferred embodiment into the claims in its claim construction. On review, the Federal Circuit held that:

When interpreting the claims, we must read them "'in view of the specification, of which they are a part.'" Phillips, 415 F.3d at 1315 (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 978 (Fed. Cir. 1995) (en banc)). In interpreting the '653 claim, the district court considered the intrinsic evidence contained in the patent specification to determine the meaning of the term "provided in."

In light of this claim construction, the Federal Circuit held that the district court did not err in finding that there is no genuine issue of material fact whether the use of the Palmaz-Schatz stent is covered by the '653 patent. Thus, Cordis is not subject to royalty payments pursuant to the terms of the license agreement for the Palmaz-Schatz stent.

The U.S. Court of Appeals for the Federal Circuit, in SmithKline Beecham Corp. and GlaxoSmithKline v. Apotex Corp (04-1522), held that once a product is fully disclosed in the art, future claims to that same product are precluded, even if that product is claimed as made by a new process.

Earlier, SmithKline sued Apotex for infringing SmithKline’s patent, U.S. Patent No. 6,113,944 (a product-by-process patent claiming paroxetine made by an allegedly novel process). Apotex moved for summary judgment, arguing that the ‘944 patent was invalid. The district court granted summary judgment to Apotex that the patent was invalid for being anticipated by SmithKline’s earlier patent for paroxetine, U.S. Patent No. 4,721,723 (a patent on the product paroxetine).

The ‘723 patent claimed a pharmaceutical product aimed at treating depression and disclosed a pharmaceutical composition in tablet form containing paroxetine. The ‘723 patent also disclosed that the product is “usually presented as a unit dose composition containing from 1 to 200 mg, more usually from 5 to 100 mg, for example 10 to 50 mg such as 12.5, 15, 20, 25 or 30 mg.”

SmithKline obtained approval from the Food and Drug Administration (“FDA”) to market crystalline paroxetine hydrochloride, which it began to sell under the trade name Paxil®. SmithKline then filed various other related patent applications, including what became the ‘944 patent containing the following two product-by-process claims:

Claim 1. A pharmaceutical composition in tablet form containing paroxetine, produced on a commercial scale by a process which comprises the steps of: a) dry admixing paroxetine and excipients in a mixer to form a mixture; or b) dry admixing paroxetine and excipients, compressing the resulting combination into a slug material or roller compacting the resulting combination into a strand material, and milling the prepared material into a free flowing mixture; and c) compressing the mixture into tablets.

Claim 2. A pharmaceutical composition in tablet form according to claim 1 containing an amount of paroxetine selected from 10 mg, 20 mg, 30 mg, 40 mg and 50 mg, wherein the amount of paroxetine is expressed as the free base, produced on a commercial scale by a process which comprises the steps of: a) dry admixing paroxetine and excipients in a mixer to form a mixture; or b) dry admixing paroxetine and excipients, compressing the resulting combination into a slug material or roller compacting the resulting combination into a strand material, and milling the prepared material into a free flowing mixture; and c) compressing the mixture into tablets using a single punch or rotary tablet machine.

The district court held the ‘944 patent anticipated and thus invalid. The district court appeared to view the question of anticipation as turning on the scope of the ‘944 patent, namely whether the patent should be viewed as claiming paroxetine without regard to the process by which it was made or whether the process steps were to be treated as claim limitations.

Following the earlier decision in Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565 (Fed. Cir. 1991) holding that the process steps were not claim limitations, the district court concluded that it was bound to follow the earlier Scripps decision, finding that Scripps required it to “evaluate the validity of the [‘944 patent’s] claims by reference to the products claimed therein, without the process limitations of those claims.” Because the ‘723 patent disclosed tablets containing paroxetine, including in the dosages specified in claim 2 of the ‘944 patent, the court determined that the ‘723 patent anticipated the ‘944 patent.

SmithKline’s argued that the paroxetine tablets claimed by the ‘944 patent were different because they lacked a pink hue, did not contain spherical granules, and had a different content uniformity. The court stated that these characteristics were “not required by the patent claims or specification” and that the “product characteristics now cited by SmithKline are insufficient to distinguish the product of the ‘944 Patent from the products claimed in the ‘723 Patent.”

On appeal, the Federal Circuit made it clear that once a product is fully disclosed in the art, future claims to that same product are precluded, even if that product is claimed as made by a new process. The ultimate issue is simply whether the prior art disclosure of a product precludes a future claim to that same product when it is made by an allegedly novel process.

The purpose of product-by-process claims is to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.” Thus, an inventor will not be foreclosed from the benefits of the patent system simply because a product is difficult to describe in words, or its structure is insufficiently understood.

In its decision, the Federal Circuit held that:

Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process.

…anticipation by an earlier product patent cannot be avoided by claiming the same product more narrowly in a product-process claim. It makes no difference here whether the ‘944 patent’s product-by-process claims are construed broadly to cover the product made by any process or narrowly to cover only the product made by a dry admixing process. Either way, anticipation by an earlier product disclosure (which disclosed the product itself) cannot be avoided. While the process set forth in the product-by-process claim may be new, that novelty can only be captured by obtaining a process claim. We agree with the district court’s conclusion that the ‘723 patent disclosure anticipated the identical product claimed by the ‘944 patent even though that product was produced by an allegedly novel process.

In looking at whether the product produced by the process claimed in the ’944 patent was, in fact, a different product than that disclosed in the ‘723 patent, the court stated that those product-by-process claims produced a different product than that disclosed by the ‘723 patent, there would be an argument that the ‘723 patent disclosure did not anticipate. However, the court conclude that this issue has been waived for failure to brief it on appeal.

Judge Newman, in a dissent, stated that the law of "anticipation" does not change in the special situation where claims contain both product and process limitations. In his view:

It is not the law that process limitations in product claims are not claim limitations. It is not the law that process limitations are ignored in construing claims, whatever the nature of the invention. Claims state the invention for which a patent is sought. … This rule is not suspended when product and process limitations appear in the same claim. No precedent so requires, and no policy is served by this creative new rule.

The fundamentals of claim analysis require that all of the claim limitations limit the claim. We have so held in myriad decisions. The panel majority's holding that a claim to a product is never limited by the process limitations in the claim is an extraordinarily mischievous holding, for there are thousands of patents with such claims. It is for the inventor, not the judge, to state what has been invented and to choose how to claim it.

The University of California won a $100 million plus settlement from Monsanto for patent claims that had been pending for over 24 years - a patent covering the growth hormone used to make cows produce more milk. Monsanto reached a deal with the university just as the case was set to begin a jury trial.

As part of its settlement, Monsanto was granted an exclusive license to the university's patents for making recombinant bovine growth hormone (rBGH), a genetically-engineered bovine somatotropin (BST) that Monsanto sells under the brand name Posilac. About one-third of the dairy cows in the United States receive Posilac.

The University of California will get an upfront royalty payment of $100 million from Monsanto, and an ongoing royalty of 15 cents per dose of Posilac sold, with a minimum annual royalty of $5 million. Monsanto will pay the royalties through 2023, when the University of California's patents expire.

Three researchers at the University of California in San Francisco were the first to isolate and identify the genetic code for bovine growth hormone. The university sued Monsanto in February 2004, after it received one of its patents.

U.S. Patent No. 6,692,941, was filed February 15, 1990, which was a continuation of applications dating back to August 26, 1980! The patent claims a DNA comprising a deoxynucleotide sequence coding for bovine growth hormone. A transfer vector and an expression vector containing this DNA and microorganisms transformed by these vectors are also described.

The present invention discloses the cloning of a DNA coding for bovine growth hormone and the expression of the cloned DNA in microorganisms. In the process, mRNA coding for bovine growth hormone is isolated from bovine pituitaries, a reverse transcript (a cDNA copy) of the mRNA is prepared and inserted into a transfer vector. The transfer vector is used to transform bacteria which express the cloned cDNA.

The FDA approved Monsanto's rBGH product, Posilac, for commercial use on November 5, 1993. A 90-day moratorium on the sale of rBGH ended on February 3, 1994. Posilac went on sale the following day - 10 years before the UC patent issued but still 14 years after the UC patent was filed.

BST has been controversial since it was introduced, because its opponents claim it forces cows to produce more milk than they normally would produce and makes them susceptible to udder infections. Some groups consider the use of BST unhealthy for humans.

On January 17, 2006 Judge Rodney Sippel of the U.S. District Court for the eastern district of Missouri has ruled under summary judgment in favor of the generic challengers, clearing their way to launch generic versions of Toprol-XL in U.S. market. This is, however, a pyrrhic victory for generic manufactures after successive para IV defeats in Lipitor (Atorvastatin Calcium, Ranbaxy losing to Pfizer), Accupril (Quinapril Hydrochloride, Ranbaxy losing to Pfizer), Norvasc (Amlodipine Besylate, Dr. Reddy’s loses to Pfizer) and Zyprexa (Olanzapine, Dr. Reddy’s loses Eli Lilly). The court has favored suits filed by KV Pharmaceutical Co, Andrx Corp. and Eon Labs Inc. (a unit of Novartis AG), challenging the validity and enforceability of Orange Book listed patents. Astra, which earlier contended before the District Court that its patents on Toprol-XL will survive their patent term, has now announced their intention to appeal against the judgment in the U.S. Court of Appeals for the Federal Circuit maintaining that both US patents (5001161 and 5081154) are valid and enforceable.

Another Para IV Patent Litigation

To recap, in February 2004, AstraZeneca filed a patent infringement lawsuit against Andrx Corp. in the United States District Court for the District of Delaware as a result of a Paragraph IV certification letter submitted by Andrx concerning its intent to manufacture and sell generic form of Toprol-XL in the 50 mg dose form in US. Again, in July 2004 AstraZeneca filed a second patent infringement against Andrx Corp. in the same District Court following the Andrx’s notification that it had filed ANDA under paragraph IV with USFDA for seeking approval to market generic form of Toprol-XL 50 mg dose form. Astra advocated that Andrx infringes its patents covering Toprol-XL.

In the same year, AstraZeneca also filed a lawsuit in the District Court for the District of Delaware against generic manufacture, Eon Labs, for patent infringement following the Eon’s move for market approval of generic form of Toprol-XL for all dose forms under paragraph IV.

Moreover, later in the same year, AstraZeneca filed legal proceedings against KV Pharmaceutical Co. in the District Court for the Eastern District of Missouri this time following the KV’s notification regarding ANDA submission under paragraph IV for market approval of generic form of Toprol-XL 50 mg dose form. Earlier to this AstraZeneca filed a suit in May 2003 against KV Pharmaceutical Co. for patent infringement by the 200mg dose form of Toprol-XL and again in August 2003 for patent infringement by the 100 mg dose form.

Pre-trial Discovery

All of these pending patent litigations later consolidated for pre-trial discovery purposes and motion practice in the U.S. District Court for the Eastern District of Missouri, which do not include a jury. A pre-trial discovery means that a party to a lawsuit should not be surprised by its adversary on the day of trial, and therefore has the right to full discovery, prior to trial, of all relevant evidence, including documents (broadly defined to include virtually every tangible and intangible form of record keeping) and witness testimony related to the matter at issue in the litigation. In other words, each party to the suit attempts to “discover” relevant or pertinent facts. However, in this trial consideration was of the validity and enforceability of two AstraZeneca patents (US Patent No. 5,081,154 and 5,001,161) relating to active ingredient (metoprolol succinate per se) and composition of Toprol-XL (extended release tablet of metoprolol succinate) and to determine whether the defendants in the case infringe those patents. Both ‘154 and ‘161 patent were due to expire in September of 2007.

Astra’s Setback, Generics Roller Coaster!

The judgment day belongs to generics, a much needed victory for all Para IV seekers. Judge Rodney Sippel in his summary judgment found that AstraZeneca’s patents (US Patent No. 5,081,154 and 5,001,161) on Toprol-XL were “both invalid due to double patenting and are unenforceable due to inequitable conduct.” Astra’s both ‘161 patent and ‘154 patent are invalidated on the basis of double patenting over the US 4,780,318 patent and are considered unenforceable based on Astra’s inequitable conduct in the prosecution of these patents in the United States Patent & Trademark Office concerning inventorship dispute over metoprolol succinate with their competitor named Lejus Medical. However, it was also argued during proceedings that Astra intentionally did not name the correct inventors in Astra’s prosecution of patents in suit. Court found that Astra’s failure was done with an intent to deceive the patent examiner about the inventorship dispute and to avoid questions concerning Astra’s ability to claim priority to the ‘318 patent application and to avoid potential prior art concerning metoprolol succinate.

This means that now generic challengers can launch their generic copies of Toprol-XL in US. Andrx being the first to file ANDA under Para IV will be, however, entitled to 180-days exclusivity on the 50mg strength of generic Toprol-XL under Hatch-Waxman Act. But Andrx’s approval and launch of generic Toprol-XL will depend on FDA clearance and approval requirements and potential future legal proceedings by AstraZeneca, which is likely to happen. Even though, Astra is proposing to appeal the against the judgment in the U.S. Court of Appeals for the Federal Circuit, what cannot be denied is the major setback faced by Astra, particularly when its two other top selling drugs – antiulcerant Nexium (challenged by Ranbaxy) and schizophrenia drug Seroquel (challenged by Teva) are also subject of pending Para IV Patent Litigation.

Today's post comes from Varun Chhonkar, Senior Officer - Patents with J.B. Chemicals & Pharmaceuticals Ltd., Mumbai, India (varun.chhonkar[at]jbcpl.com). © Varun Chhonkar.

The Supreme Court agreed to consider allowing a lawsuit by MedImmune Inc. that seeks to end royalties the company pays on its drug Synagis to go forward. The Court agreed to review a Federal Circuit decision that a licensee may not use a declaratory judgment action to challenge the validity of the licensed patent where the licensee is paying royalties and observing the terms of the patent license agreement.

The Federal Circuit ruling rejected the view that licensee rights established under Lear v. Atkins, 395 U.S. 653 (1969), permit the validity challenge, stating that this case is governed not by the bar against licensee estoppel, but by the Constitution’s requirement of a case or controversy.

MedImmune, Inc., a licensee of a patent owned by Genentech, Inc., sought a declaratory action to challenge the validity and enforceability of the licensed patent on various grounds flowing from the settlement of a patent interference between Genentech and Celltech R&D, Ltd. The U.S. District Court held that because MedImmune continues to comply fully with the license terms, leaving no possibility of infringement suit or license cancellation by Genentech, there is no "case of actual controversy" as required by the Declaratory Judgment Act, 28 U.S.C. §2201. The district court also dismissed MedImmune's antitrust and unfair competition counts claiming that Genentech illegally obtained a patent on an antibody synthesis technology used in the production of Synagis, a MedImmune drug that prevents certain respiratory infections in babies.

The U.S. Court of Appeals for the Federal Circuit affirmed (See MedImmune Inc. v. Genentech, 04-1300, -1384) holding that:

The settlement of disputes such as priority in patent interferences is not a presumptive violation of antitrust law; such violation requires a showing of market power and other antitrust predicates. A patent does not of itself confer market power or a presumption thereof for purposes of the antitrust laws. See C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1368 (Fed. Cir. 1998) ("It is not presumed that the patent-based right to exclude necessarily establishes market power in antitrust terms."); Abbott Labs., 952 F.2d at 1354 (Fed. Cir. 1991) ("A patent does not of itself establish a presumption of market power in the antitrust sense."); American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1367 (Fed. Cir. 1984) ("patent rights are not legal monopolies in the antitrust sense of the word"); Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 18 (1984) ("any inquiry into the validity of a tying arrangement must focus on the market or markets in which the two products are sold, for that is where the anticompetitive forcing has its impact"); In re Independent Service Organizations Antitrust Litigation, 203 F.3d 1322, 1329 (Fed. Cir. 2000) ("patent alone does not demonstrate market power"); Independent Ink, Inc. v. Illinois Tool Works, Inc. 396 F.3d 1342, 1348 (Fed. Cir. 2003) ("the Supreme Court has held that there is a presumption of market power in patent tying cases"), cert. granted, 125 S. Ct. 2937 (June 20, 2005); Herbert Hovenkamp, Federal Antitrust Policy: The Law of Competition and its Practice §10.3 (3d ed. 2005) ("most patents confer absolutely no market power on their owners").

MedImmune claims that Genentech violated antitrust law by colluding with Celltech in obtaining an extension on the antibody production patent, and MedImmune is seeking to have Genentech's patent declared invalid.

The U.S. Patent and Trademark Office is also reviewing Genentech's Cabilly patent under concurrent proceedings for an Inter Partes Reexamination (RE Appl. No. 90/007,542) and an Ex Parte Reexamination (RE Appl. No. 90/007,859). In an earlier ruling, the U.S. Patent and Trademark Office (USPTO) issued an obviousness-type double-patenting rejection and a "Schneller-type" double patenting rejection on the Genentech patent indicating that the patent, awarded in 2001, covered basically the same invention as an earlier Genentech patent that was set to expire next March.

For background, on March 25, 1983, Celltech filed in the United Kingdom a patent application directed to methods of making recombinant antibodies and antibody fragments, together with vectors and host cells useful in these processes. Celltech filed a related patent application in the United States, which issued as U.S. Patent No. 4,816,397 ("the Boss Patent"). On April 8, 1983, about two weeks after Celltech’s original U.K. filing, Genentech filed a United States patent application directed to similar technology, which issued as U.S. Patent No. 4,816,567 ("the Cabilly Patent"). The Boss Patent and the Cabilly Patent issued on the same day, and both were scheduled to expire on March 28, 2006.

The USPTO ultimately revoked the Boss Patent and issued a new United States patent, U.S. Patent No. 6,331,415 to Genentech ("the New Cabilly Patent"). All the claims originally issued in the revoked Boss Patent subsequently issued in the New Cabilly Patent. As a result, while the disputed invention was originally scheduled to pass into the public domain in 2006 upon expiration of the Boss Patent, it is now owned exclusively by Genentech until 2018, which is when the New Cabilly Patent is scheduled to expire.

MedImmune is now claiming that Genentech and Celltech conspired improperly to secure for themselves, through 2018, a dominant and exclusive position in the recombinant antibody field. As we've said before, it's too early to try to predict the outcome so it is not clear yet if companies developing recombinant antibody-based products will become free and clear of the Boss Patent and the Cabilly Patent in 2006.

In Ferring B.V., and Aventis v. Barr Labs, (05-1284), the Court of Appeals for the Federal Circuit, deemed a patent unenforceable due to inequitable conduct where the inventors submitted declarations to the examiner in order to define the term “peroral” but did not disclose to the examiner that some of the declarants had been employed by the applicant’s company or performing paid research for the company.

Ferring B.V. and Aventis Pharmaceuticals sued Barr Laboratories for infringement of Ferring’s patent, U.S. Patent No. 5,047,398 (‘398 patent). The ‘398 patent claimed an “antidiuretic composition for humans comprising a gastrointestinally absorbable, antidiuretically effective, amount of [the peptide] 1-deamino-8-D-arginine vasopressin and a pharmaceutically acceptable carrier in solid oral dosage form for absorption in the gastrointestinal tract of said humans.”

Desmopressin acetate (DDAVP) is approved as anti-diuretic replacement therapy in the management of central diabetes insipidus and to manage the temporary polyuria and polydipsia following head trauma or surgery in the pituitary region. It is also approved for the management of primary nocturnal enuresis.

1-deamino-8-D-arginine vasopressin and other compounds were known in the art to prevent the diuretic symptoms associated with diabetes when they were absorbed through the walls of the patient’s mouth via a dissolving tablet, or through the patient’s nasal passage via a liquid spray or plastic tube. However, such modes of administering the medicine proved cumbersome and time-consuming. Therefore, the claimed solid oral dosage form of the compound and method of administering it were thought to be an improvement over the prior art, because the medicine was designed to be simply swallowed and absorbed through the gastrointestinal tract.

During prosecution, the examiners discussed certain prior art references, including U.S. Patent No. 3,497,491, which taught, for antidiuretic purposes, that “1-deamino-8-D-arginine vasopressin” “may be used . . . for the parenteral, peroral, intranasal, subcutaneous, intramuscular, or intravenous application.”

The examiners were concerned that the ‘491 patent’s disclosure of the “peroral” application of the peptide may have suggested the oral administration of the peptide for gastrointestinal absorption. Vilhardt argued that the term “peroral” as used in the ‘491 patent did not teach the oral administration of the peptide for gastrointestinal absorption, but rather for absorption through the walls of the mouth. As the examiners were not entirely convinced, they “suggested that applicants obtain evidence from a non-inventor” to support their interpretation of the term “peroral.”

The inventors submitted declarations explaining the scientific belief that the term “peroral” in the ‘491 patent meant that the compound could be administered “through the mouth,” but only for absorption through the cheek of the mouth or under the tongue. However, the declarations failed to disclose that a declarant had been receiving research funding from Ferring from to conduct a clinical investigation relating to a particular drug (DDAVP) preparation (although he testified that he was not receiving funding from Ferring in June 1986, when he submitted his first declaration). They also failed to inform the examiners that one of the new declarants had been Ferring’s pre-clinical research director and a paid consultant for Ferring.

In the end, four of the five declarations submitted to the PTO in 1990 were written by scientists who had been employed or had received research funds from Ferring, and Vilhardt participated in the drafting of two of the four declarations submitted by non-inventors. The examiners were not otherwise made aware of the Ferring connections and allowed the previously rejected claims.

The district court granted summary judgment to Barr on grounds of inequitable conduct, stating:

The undisputed evidence in this case supports the finding of inequitable conduct by the patentee and its agents and the grant of summary judgment. The reluctance of the PTO to issue the ‘398 patent was evident. Each affidavit submitted in support of its issuance was thus highly material to the prosecution history. That three of the challenged declarations were submitted after several iterations of rejected attempts to obtain the patent’s issuance speaks loudly as to motive and intent. While credibility determinations from a courtroom observation may at times be necessary on the issue of intent, here, the entire record presents clear and convincing evidence of an intent to mislead the examiners, even viewing the evidence, as it must be viewed, in the light most favorable to Plaintiff.

Inequitable conduct occurs when a patentee breaches his or her duty to the PTO of ‘candor, good faith, and honesty. While inequitable conduct includes affirmative misrepresentations of material facts, it also arises when the patentee fails to disclose material information to the PTO. The inequitable conduct analysis is performed in two steps comprising first, a determination of whether the withheld reference meets a threshold level of materiality and intent to mislead, and second, a weighing of the materiality and intent in light of all the circumstances to determine whether the applicant’s conduct is so culpable that the patent should be held unenforceable. The predicate facts must be proven by clear and convincing evidence.

On appeal, they argue that the Ferring affiliations were immaterial as a matter of law because (1) those affiliations supposedly did not bear directly on the critical assertion that each made in his declaration, meaning that the relationships were not the source of the information in the declarations, and (2) the declarants did not have a direct financial stake in the success of the patent.

The CAFC saw it differently:

Our jurisprudence does not suggest such a narrow view of materiality. A witness’s interest is always pertinent to his credibility and to the weight to be given to his testimony, and relevant interests are not limited to direct financial interests. Under Refac and Paragon, a declarant’s past relationships with the applicant are material if (1) the declarant’s views on the underlying issue are material and (2) the past relationship to the applicant was a significant one. Here we think that each of these requirements was satisfied on the summary judgment record.

The CAFC felt that the affirmative act of submitting an affidavit must be construed as being intended to be relied upon and that it is not comparable to omitting an unnecessary act. The court stated that these relationships were not isolated, nor were they confined to the distant past. The declarants clearly had ongoing and mutually beneficial relationships with Ferring during the prosecution of the ‘398 patent:

Even if an omission is found to be material, the omission must also be found to have been made with the intent to deceive. In the absence of a credible explanation, intent to deceive is generally inferred from the facts and circumstances surrounding a knowing failure to disclose material information. Thee question of intent is directed to the applicant’s intent, not to the intent of the declarants. Thus, that the declarants may have had no intent to deceive is entirely irrelevant. The question is whether the applicant (here Vilhardt) had such an intent.

We need not in this case attempt to lay down a general rule as to when intent may be or must be inferred from the withholding of material information by an applicant. Suffice it to say that we have recognized, in cases such as Paragon, that summary judgment is appropriate on the issue of intent if there has been a failure to supply highly material information and if the summary judgment record establishes that (1) the applicant knew of the information; (2) the applicant knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding. See Bruno Indep. Living Aids, 394 F.3d at 1354; Critikon, Inc., 120 F.3d at 1257. Here, all three conditions are satisfied.

The CAFC did add comforting words for patent practitioners who will now be worried about submitting declarations with some undisclosed conflict of interest. The court stated flatly that:

In coming to this conclusion, we fully recognize that inventors often consult their colleagues or other persons skilled in the art whom they have met during the course of their professional life. Accordingly, when an inventor is asked to provide supportive declarations to the PTO, it may be completely natural for the inventor to recommend, and even contact, his own colleagues or people who are, or who have been, affiliated with his employer and to submit declarations from such people. Nothing in this opinion should be read as discouraging such practice. Rather, at least where the objectivity of the declarant is an issue in the prosecution, the inventor must disclose the known relationships and affiliations of the declarants so that those interests can be considered in weighing the declarations. This is not an onerous burden to place on any applicant.

Judge Newman dissented stating that:

"Inequitable conduct" in patent practice means misconduct by the patent applicant in dealings with the patent examiner, whereby the applicant or its attorney is found to have engaged in practices intended to deceive or mislead the examiner into granting the patent. It is a serious charge, and the effect is that an otherwise valid and invariably valuable patent is rendered unenforceable, for the charge arises only as a defense to patent infringement.

As this litigation-driven issue evolved, the law came to demand a perfection that few could attain in the complexities of patent practice. The result was not simply the elimination of fraudulently obtained patents, when such situations existed. The consequences were disproportionally pernicious, for they went far beyond punishing improper practice. The defense was grossly misused, and with inequitable conduct charged in almost every case in litigation, judges came to believe that every inventor and every patent attorney wallowed in sharp practice. This history was recently summarized as follows:

As is known, about 20 years ago inequitable conduct was frequently pleaded as a defense to patent infringement; a patent that is "unenforceable" due to a finding of inequitable conduct is dead. The defense was so misused by alleged infringers that the Federal Circuit once called this defense a "scourge" on US patent litigation . . . . The famous Kingsdown seemed to put a stop to the defense of inequitable conduct. . . .

See the entire opinion here.

A former University of Alabama professor is being sued by the University of Alabama System claiming that it owns his patents worth $197 million. The complaint was filed by The Board of Trustees of the University of Alabama against Nektar Therapeutics AL, Corporation, and Nektar Therapeutics in the United States District Court for the Northern District of Alabama alleges patent infringement, breach of contract license, violation of the Alabama Trade Secrets Act and unjust enrichment.

Dr. Milton Harris formed Nektar Therapeutics and developed a new inhalable insulin system. The U.S. Food and Drug Administration (FDA) has approved the inhalable formulation of recombinant human insulin [rDNA origin] powder for the treatment of adult patients with type 1 and type 2 diabetes mellitus, and conivaptan injection for the treatment of euvolemic hyponatremia in hospitalized patients. The insulin inhaler is not part of the suit.

The suit contends that because Harris was on the UA faculty from 1973 to 2000, and was covered by the university's patent policy, his patents are owned by UA. The policy says it will be a university-owned patent if the discovery was made by UA employees and graduate students, through research paid for by the university, within an employee's field or involving UA facilities.

Harris and another researcher developed a PEGylation technology, which was patented by UA. With PEGylation technology, polyethylene glycol (PEG) polymer chains are attached to a drug, which sustain bioavailability by protecting the drug molecules from immune responses and other clearance mechanisms. In an aqueous medium, the long, chain-like PEG molecule is heavily hydrated and in rapid motion. This motion causes the PEG to prevent the interference of other molecules. The university entered a royalty agreement with Harris for products developed out of the discovery, and Harris created Shearwater Polymers, a company bought by Nektar in 2001 for $197 million in cash and stock, to pursue manufacturing of PEG-related products.

The UA System claims that Harris, without UA's knowledge, made a number of other discoveries related to the PEG technology in the following years and patented 28 of them. Harris was required to notify UA of any discovery related to the original PEG patent, and the lawsuit contends that the patents are "obvious derivatives" of and "equivalent" to the original PEG patent.

The lawsuit came about after Nektar informed UA last spring that it would no longer pay royalties from sales of the drug Neulasta, when Nektar informed the university that the PEG compound for Neulasta does not involve anything owned by UA

It may be necessary for the UA System to prove both ownership of the patents in question and that the products sold are covered by the patents in question.

Here at Patent Baristas, we love the mystery and intrigue that comes with litigation to establish priority of invention. These matters often bring out juicy details worthy of a good Dynasty episode.

In a particularly protracted example, the U.S. Court of Appeals for the Federal Circuit, in Medichem, S.A., v. Rolabo, S.L. (05-1179, 05-1248), reversed the priority rights between U.S. Patent No. 6,084,100 (the 100 patent), assigned to Medichem, S.A. (Medichem), and U.S. Patent No. 6,093,827 (the 827 patent), assigned to Rolabo, S.L. (Rolabo).

The District Court found the existence of an interference-in-fact and awarded priority of invention to Medichem but the CAFC reversed the courts award of priority to Medichem, based on the insufficiency of the evidence that Medichem introduced at trial to corroborate the testimony of its inventors regarding reduction to practice of the invention.

Rolabos 827 patent and Medichems 100 patent both claim a process for making loratadine, the active ingredient in the allergy medication Claritin. The only significant difference between the processes claimed by Medichem and Rolabo is that Medichems process, which requires a tertiary amine, is a species within the genus of the Rolabo invention.

The first step in an interference analysis is for the court to determine whether an interference exists under 35 U.S.C. §291 by asking whether the patents . . . have the same or substantially the same subject matter in similar form as that required by the PTO pursuant to 35 U.S.C. § 135. In order to make this determination, the court uses the two-way test which states that two patents interfere only if (1) invention A either anticipates or renders obvious invention B, where Party A's claimed invention is presumed to be prior art vis-à-vis Party B and (2) vice versa.

The Federal Circuit looked at whether the district court erred in awarding priority of invention to Medichem based on the oral testimony of Medichem co-inventors, testimony that Rolabo claims was not corroborated by independent evidence, and thus should not have been credited in the final determination of whether reduction to practice was established before the critical date.

Priority of invention goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive of the invention and that it exercised reasonable diligence in later reducing that invention to practice. The key issue on appeal was whether Medichem provided adequate corroboration of the inventor’s testimony regarding the alleged actual reduction to practice.

In a case involving reduction to practice, an unwitnessed notebook is insufficient on its own to support a claim of reduction to practice. In addition, the court stated that when an inventor claims a process for making a chemical compound rather than the compound itself, it is the successful reduction to practice of the process that must be corroborated, and not merely the successful production of the compound per se.

Medichem produced a documented request for the analysis of a loratadine sample, purported to have been produced via the claimed synthetic route, which was sent by one co-inventor to another. It also included the original laboratory notebook of co-inventor Dr. Rodriguez as well as the original laboratory notebook of former Medichem employee, and non-inventor, Lola Casas.

In its review, the CAFC stated that:

This court now turns to consider the corroborative value of the three principal pieces of potentially corroborative evidence: the NMR spectra, the notebooks of Medichems inventors, and the notebook of non-inventor Casas. We note at the outset that the problem with the dated NMR data is that at most they corroborate that the inventors were in possession of the chemical loratadine as of that date; they do not, in themselves, adequately corroborate the claimed process, as they do not establish whether the sample that was analyzed was actually produced by that process.

Not helping their cause was Medichem admitting to fraudulently backdating certain documents relating to a purported 1995 reduction to practice.

In the end, the CAFC held that:

Where a laboratory notebook authored by a non-inventor is offered into evidence pursuant to authentication by an inventor, where the author of the notebook has not testified at trial or otherwise attested to its authenticity, and where the notebook has not been signed or witnessed and has not been maintained in reasonable accordance with good laboratory practices sufficient to reasonably ensure its genuineness under the circumstances, then the corroborative value of the notebook is minimal. Given the facts of this case, Casas notebook should therefore not be accorded much corroborative value. In view of the minimal corroborative value of the inventor’s notebooks and the limited value of the NMR spectrum, we conclude that the evidence, evaluated as a whole under the rule of reason, is insufficient as a matter of law to corroborate Medichems reduction to practice.

See the entire opinion here.

In an appeal from the USPTO Board of Patent Appeals and Interferences (Board), the U.S. Court of Appeals for the Federal Circuit (05-1119; Interference No. 103,586), in Brown et al. v. Barbacid et al., looked at an invention priority determination (interference" proceeding).

In an interference between Brown and Barbacid over an assay for identifying compounds that inhibit farnesyl transferase ("FT"), an enzyme involved in the control of cell growth, the CAFC reversed Board's holding that Brown's reasonable diligence had not been demonstrated. The CAFC held that a laboratory notebook recording daily experimentation does not need to include on every page a statement of the larger research purpose.

The contested subject matter is stated in the interference count was:

A method for identifying a candidate substance having the ability to inhibit a farnesyl transferase enzyme, comprising the steps of: (a) obtaining an enzyme composition comprising a farnesyl transferase enzyme that is capable of transferring a farnesyl moiety to a farnesyl acceptor substance; (b) admixing a candidate substance with the enzyme composition and farnesyl pyrophosphate; and (c) determining the ability of the farnesyl transferase enzyme to transfer a farnesyl moiety to a farnesyl acceptor substrate in the presence of the candidate substance and in the absence of the candidate substance

Earlier, the Board held that Brown had established conception no later than November 15, 1989, but had failed to provide corroborated evidence of diligence and awarded priority to Barbacid.

The party that is first to conceive the invention in interference, if last to reduce the invention to practice, is entitled to the patent based on prior conception if, as first to conceive, he exercised reasonable diligence from a time before the other party's conception date to his own reduction to practice date.

The purpose of requiring reasonable diligence by the first to conceive the invention but second to reduce to practice is to assure that the invention was not abandoned or unreasonably delayed by the first inventor during the period after the second inventor entered the field. The question of reasonable diligence is one of fact. The admissibility of physical and testimonial evidence is determined in accordance with the Federal Rules of Evidence.

Barbacid argued that Brown must show diligence measured from the Barbacid date of conception, not Barbacid's date of reduction to practice. Brown provided evidence from inventor Dr. Reiss and laboratory technician Ms. Morgan concerning the exercise of reasonable diligence during the period from Barbacid's accorded date to Brown's filing date. Dr. Reiss stated that after September 1989 he worked on the farnesyl transferase project "on a daily basis." For the period following Barbacid's actual reduction to practice on March 6, 1990, Dr. Reiss stated that his experiments were directed at further characterizing the FT enzyme, improving the methodology for purifying the enzyme, and improving the overall performance of the assay. He provided laboratory notebook pages recording this work.

The Board rejected Dr. Reiss' testimony for lack of corroboration, and also observed that even if his notebook records showing this work were deemed to corroborate his testimony, they recorded work on only ten of the thirty-one days from March 6 to April 18, and thus were insufficient to establish reasonable diligence.

Precedent requires that an inventor's testimony concerning his diligence be corroborated. But, unlike the legal rigor of conception and reduction to practice, diligence and its corroboration may be shown by a variety of activities, as precedent illustrates. The CAFC stated that:

The basic inquiry is whether, on all of the evidence, there was reasonably continuing activity to reduce the invention to practice. There is no rule requiring a specific kind of activity in determining whether the applicant was reasonably diligent in proceeding toward an actual or constructive reduction to practice.

The Board found that Ms. Morgan "worked for the inventors" and that "her work could inure to the benefit of the inventors to establish reasonable diligence over the entire period. "However, the Board refused to credit any of Ms. Morgan's evidence, criticizing what it described as the absence of explanation of the content and purpose of these experiments.

The CAFC then held that:

We conclude that the Board erred in law, in failing to view the proffered evidence as it would be viewed by persons experienced in the field of the invention. See Mahurkar, 79 F.3d at 1577-78 (the trier of fact is aided by an understanding of how the evidence would be viewed by one skilled in the art). The Board is charged with expertise appropriate to the invention under examination, and with understanding that a laboratory notebook recording daily experimentation, reasonably considered from the viewpoint of persons experienced in the field, need not reproduce on each page a statement of the larger research purpose; this purpose may reasonably be shown in the various declarations.

It is undisputed that the subject matter recorded on the Morgan notebook pages and described in her declaration concerns the subject matter of the count. This is the same form and content of evidence that the court in Brown I deemed admissible for purposes of showing conception. The Board agreed that Ms. Morgan's activity during the critical period, if accepted into evidence, established diligence. We conclude that the Board erred in refusing to accept this evidence, and that reasonable diligence is deemed established.

The Board's holding that Brown's reasonable diligence had not been shown was reversed and the case remanded for a determination on patentability.

See the entire opinion here.

Last June, we detailed that the U.S. Court of Appeals for the Federal Circuit upheld a trial court decision that three patents held by Purdue Pharma LP couldn't be enforced because of misrepresentations to the U.S. Patent and Trademark Office about the painkiller's effectiveness thus giving Endo Pharmaceutical Holdings Inc. the right to sell a generic version. OxyContin, a time-release painkiller generally prescribed to cancer patients and chronic-pain sufferers, had about $2 billion in sales last year.

A combined petition for panel rehearing and rehearing en banc by Purdue Pharma was filed along with amicus briefs by the Biotechnology Industry Organization; Richard L. Edelson, M.D.; the International Intellectual Property Institute; Congressman Darrell Issa; Law Professors John F. Duffy, et al.; the Pharmaceutical Research and Manufacturers of America; and the Washington Legal Foundation. The CAFC then granted the panel rehearing and withdrew the previous opinion and issued a new one.

This was a patent infringement case in which the patents were held unenforceable by the trial court due to inequitable conduct during prosecution before the USPTO. The district court found that Endo would infringe Purdue's patents, but determined the patents were unenforceable due to the inequitable conduct that occurred during prosecution. Purdue then appealed the inequitable conduct judgment.

For a claim of inequitable conduct, applicants for patents have a duty to prosecute patents in the PTO with candor and good faith, including a duty to disclose information known to the applicants to be material to patentability. A breach of this duty may constitute inequitable conduct, which can arise from an affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive or mislead the PTO. A party asserting that a patent is unenforceable due to inequitable conduct must prove materiality and intent by clear and convincing evidence.

Regarding materiality, the court stated that:

A failure to inform the PTO whether a "surprising discovery" was based on insight or experimental data does not in itself amount to a material omission. In this case, however, Purdue did much more than characterize the four-fold dosage range of the claimed oxycodone formulation as a surprising discovery. Purdue repeatedly relied on that discovery to distinguish its invention from other prior art opioids while using language that suggested the existence of clinical results supporting the reduced dosage range. Presented with these unique facts, we cannot say the trial court erred in finding that Purdue failed to disclose material information to the PTO. ... Some language in its opinion, however, indicates the trial court considered Purdue’s failure to tell the PTO the basis for its discovery to be highly material. As discussed below, the trial court may have erred to the extent it relied on a high level of materiality in determining whether Purdue intended to deceive the PTO and whether Purdue ultimately committed inequitable conduct.

Regarding intent, the court stated that:

Intent to deceive, however, cannot be "inferred solely from the fact that information was not disclosed; there must be a factual basis for a finding of deceptive intent." Hebert v. Stryker SalesLisle Corp., 267, 99 F.3d 1370, 13811109, 1116 (Fed. Cir. 1996). When determining whether intent has been shown, a court must weigh all evidence, including evidence of good faith. Baxter, 149 F.3d at 1330.

...

While Purdue alleged during prosecution that ease of titration would result from a reduced dosage range, the two concepts are different. Furthermore, the quantum of proof necessary for FDA approval is significantly higher than that required by the PTO. Therefore, evidence that Purdue personnel believed it would be difficult to satisfy FDA requirements is at best marginally related to whether they intended to deceive the PTO. For these reasons, the trial court erred in giving the weight it did to this evidence when determining that Purdue acted with deceptive intent during prosecution of its patents.

Purdue then claimed that the trial court erred by importing the four-fold dosage range limitation into the claims and that, if the claims do not include that limitation, the CAFC should affirm the trial courts infringement determination because Endo does not dispute that its product satisfies the remaining claim limitations.

Regarding infringement, the court stated that:

In this case, the trial court concluded that during prosecution Purdue "deliberately and clearly relinquished, disclaimed and surrendered controlled release oxycodone formulations that do not control pain relief in approximately 90% of patients with an approximately four-fold dosage range." Purdue Pharma, 2004 WL 26523, at *14. We agree with Purdue that it made no such disclaimer or disavowal, and the trial court's holding to the contrary was in error. While it is true that Purdue relied on its discovery of the four-fold dosage range to distinguish its claimed oxycodone formulations from other prior art opioids, Purdue’s statements do not amount to a clear disavowal of claim scope.

The CAFC then vacated the trial court’s judgment that the patents-in-suit are unenforceable due to inequitable conduct and remanded the case for further proceedings consistent with this opinion. The trial court’s judgment of infringement was affirmed.

We'll keep you posted on further developments.

See the revised Opinion here.

See the Order here.

The Federal Circuit recently addressed the issue of collateral estoppel in a jury's determination of a reasonable royalty where two infringing products were sold at different times, thus making the hypothetical royalty negotiations different.

In Applied Medical Resources Corporation v. United States Surgical Corporation, the U.S. Court of Appeals for the Federal Circuit (05-1149, Jan. 24, 2006) upheld a $64.5 million award stating that collateral estoppel doesn’t apply in setting the reasonable royalty rate in a judgment of willful infringement.

United States Surgical Corporation (“U.S. Surgical”) tried to appeal an earlier District Court decision finding U.S. Surgical willfully infringed U.S. Patent 5,385,553 of Applied Medical Resources Corporation (“Applied”), awarding damages, enhanced damages, attorney fees, and prejudgment interest of $64.5 million.

The ’553 patent relates to surgical devices called trocars, which are used as access ports into the abdomen during laparoscopic surgery. Laparoscopic surgery is performed by inflating the abdomen and inserting instruments through trocars. It is important for the trocar to maintain a seal with the instrument; otherwise, the insufflation gas used to inflate the abdomen would leak and potentially cause serious complications.

Early trocars did not accommodate instruments of different diameters. For example, inserting a relatively small instrument through a large seal would produce a gap between the instrument and the seal, allowing the insufflation gas to leak out from the abdomen. The invention of the ’553 patent eliminates the need for adapters, describing a trocar which maintains a seal around instruments of various sizes, using a “floating seal.”

Specifically, claim 3 recites a trocar whose seal includes excess material at its outer portions, which permits the seal orifice to move without allowing gas to leak. Claim 4, which depends from claim 3, further requires that the excess material be configured in a bellows shape.

Earlier, a District Court found that U.S. Surgical’s sale of its original Versaport trocars infringed the ’553 patent, as well as two other Applied patents. In 1997, a jury found that U.S. Surgical willfully infringed claims 4 and 18 of the ’553 patent as well as two other Applied patents, and awarded damages in the form of a 7% reasonable royalty.

Before trial in the present case, U.S. Surgical moved to establish as a matter of law that the reasonable royalty for infringing sales of new, improved version of the trocar now found to infringe was 7%, arguing that the reasonable royalty established in earlier case for infringing sales of first design was binding under principles of collateral estoppel. The District Court denied the motion saying that the jury would make “its own ‘independent’ determination of the reasonable royalty rate in 1997."

The Federal Circuit then held that:

We agree with Applied that the district court properly denied collateral estoppel effect to the 7% reasonable royalty rate found by the jury in Applied I. “Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case.”

Collateral estoppel is appropriate only if: (1) the issue to be decided is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) the parties had a full and fair opportunity to litigate the issue in the first action. Here, collateral estoppel is not appropriate because the necessary reasonable royalty determination in Applied II is not identical to that decided in Applied I.

…

When an established royalty does not exist, a court may determine a reasonable royalty based on “hypothetical negotiations between willing licensor and willing licensee.” Fromson, 853 F.2d at 1574. We have held that a reasonable royalty determination for purposes of making a damages evaluation must relate to the time infringement occurred.

…

Consistent with our precedent, reasonable royalty damages are not calculated in a vacuum without consideration of the infringement being redressed. Id. We are required to identify the infringement requiring compensation, and evaluate damages based on a hypothetical negotiation at the time that infringement began, not an earlier one. Id. Here, the issue of reasonable royalty damages in Applied II is not identical to the issue of reasonable royalty damages in Applied I because the infringements requiring compensation began at separate and distinct times.

…

Because the determination of reasonable royalty damages is tied to the infringement being redressed, a separate infringement beginning at a different time requires a separate evaluation of reasonable royalty damages. To argue otherwise, U.S. Surgical would have to concede that it has willfully violated the permanent injunction in Applied I.

In Fredric A. Stern v. Columbia University and Laszlo Z. Bito, the U.S. Court of Appeals for the Federal Circuit (05-1291) affirmed a District Court motion for summary judgment that Stern failed to present sufficient evidence to be added as co-inventor of U.S. Patent No. 4,599,353 (“the ’353 patent”), a patent owned by Columbia University.

The’353 patent is directed towards the use of prostaglandins in treating glaucoma and names Lazlo Bito, a faculty member at Columbia University, the inventor of the patent. In 1980, while Stern was a medical student at Columbia University, he approached Bito about doing a one semester ophthalmology research elective in his laboratory. Bito agreed and directed Stern to begin his project by reviewing Bito’s papers on prostaglandins and intraocular pressure (“IOP”).

Bito had published numerous papers on the effects of prostaglandins on the IOP in various animals and had concluded that rhesus monkeys would be good subjects for further studies on the effects of prostaglandins on IOP. Experiments Stern conducted while working in Bito’s laboratory showed that topical application of a single dose of prostaglandin reduced IOP in rhesus monkeys and cats. Stern’s experiments did not prove whether tachyphylaxis would develop in primates, the absence of which is required for successful glaucoma treatment. After Stern’s departure from Columbia, Bito conceived the ’353 patent while studying the effects of repeated prostaglandin application on the IOP in rhesus monkeys. Bito applied for the patent in 1982 and, in 1986, it was issued.

Claim 1 states:

[a] method for treating hypertension or glaucoma in a primate subject’s eye comprising periodically contacting the surface of the eye with an amount of an eicosanoid or an eicosanoid derivative effective to reduce intraocular pressure in the eye without any substantial initial increase in said pressure and to maintain reduced intraocular pressure.

In determining inventorship, the trial court first construed the claims of the ’353 patent. The only disputed phrase was the meaning of “to maintain reduced intraocular pressure” in claim 1. The trial court found that Columbia’s proposed construction of the phrase to mean “maintenance of reduced intraocular pressure throughout the course of treatment without development of tachyphylaxis, i.e., throughout the period of time that the claimed method is being used to treat glaucoma” was correct. Using that construction, the trial court determined that Stern failed to present clear and convincing evidence of inventorship, as required to be added as a co-inventor to a published patent. Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1358 (Fed. Cir. 2004). Accordingly, the trial court granted Columbia’s motion for summary judgment. Because the state law claims for fraudulent concealment, breach of fiduciary duty, and unjust enrichment depended on the addition of Stern as a co-inventor of the ’353 patent, the trial court also granted summary judgment to Columbia on those claims.

The Court found that:

Because “[c]onception is the touchstone of inventorship,” each joint inventor must generally contribute to the conception of the invention. Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1227-28 (Fed. Cir. 1994). Additionally, courts require corroborating evidence of conception. Id. at 1228. However, contribution to one claim is sufficient to be a co-inventor. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir. 1998). Conception is defined as “the ‘formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.’” Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed. Cir. 1986) (citation omitted). Conception is complete when “the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation.” Burroughs Wellcome, 40 F.3d at 1228.

Stern did not have an understanding of the claimed invention, did not discover that prostaglandins have an effect on IOP, did not discover that repetitive application of prostaglandins to the eyes of primates can maintain reduced IOP, and did not conceive of the idea of the use of prostaglandins to reduce IOP in primates. Furthermore, there was no collaboration between Stern and Bito in developing a glaucoma treatment. Stern simply carried out an experiment previously done by Bito on different animals—animals that Bito had already determined would be good models for prostaglandins research. Stern’s contribution is insufficient to support a claim of co-inventorship.

While Stern argued that material in his laboratory notebooks would have proved his claim of co-inventorship, but that they were destroyed by Bito, the Court noted this wouldn’t have saved him noting that:

“…regardless of the contents of the notebooks, unwitnessed laboratory notebooks on their own are insufficient to support his claim of co-inventorship. See Hybritech, 802 F.3d at 1378. Thus, the evidence Stern presented was insufficient to corroborate his claim of co-inventorship.”

At least he didn't try to steal the invention. See the tale of Fenn and Taborsky.

In following the status of the reexamination request on Pfizer's Viagra (sildenafil citrate) patent (U.S. Pat. No. 6,469,012), we find that Pfizer has filed a response to the outstanding Nonfinal Office Action.

See the Nonfinal Office Action here.

To recap, Pfizer filed a patent infringement lawsuit against ICOS, Lilly ICOS, and Lilly in the United States District Court contending that the use, offering for sale, selling, manufacture, or importing into the United States of Cialis for the treatment of erectile dysfunction by any of the defendants infringes claim 24 of Pfizer’s U.S. Patent No. 6,469,012.

The USPTO subsequently ordered the reexamination of the Pfizer Patent (Reexam. C.N. 90/007,478) and in the first office action issued by the PTO, the Examiner rejected claim 24 of the Pfizer Patent.

Claim 24 reads:

A method of treating erectile dysfunction in a male human, comprising orally administering to a male human in need of such treatment an effective amount of a selective cGMP PDEv inhibitor, or a pharmaceutically acceptable salt thereof, of a pharmaceutical composition containing either entity.

This broad claim would cover treatment by any cGMP PDEv inhibitor (read: Cialis) and was rejected over the references Korenmann, 41 J. Am Geriatrics Soc. 363 (1993) and Yin et al., 10(6) Yunnan J. Traditional Chinese Medicine 13 (1989).

The Examiner rejected claim 24 on the basis that certain prior art rendered the claimed invention not new, and therefore unpatentable under 35 U.S.C. §102(b), and obvious and unpatentable under the judicially created doctrine of obviousness-type double patenting.

On September 15, 2005, the USPTO issued a second office action that rejected Pfizer’s arguments made in response to the first office action, reaffirmed the initial rejection of claim 24, and entered new grounds for rejecting claim 24. The second office action also maintained the obviousness-type double patenting rejection of the other claims.

Pfizer has now filed a Response arguing that the Examiner employed applied a one-way test of obviousness for claim 24 in finding obviousness-type double patenting over claim 1 of each of U.S. Pat. Nos. 6,534,511, 6,100,270 and 6,656,945, and that there is no double patenting under this test. They have argued that simply because an invention falls within a range disclosed by the prior art does not necessarily make it per se obvious. Both the genus and species may be patentable.

Pfizer also contends that the Patent Office had not met the burden of proof for establishing unpatentability stating that the reports relied upon by the Patent Office, as well as patentee's own submissions, demonstrate there is no basis to conclude that pentoxifylline is a PDEV selective inhibitor or that it is effective in treating ED as required by claim 24.

Pfizer claims that the evidence the Patent Office relied upon is based on "junk science" that should not be accorded any weight (i.e., reports based on scientifically invalid methodology and lacking statistical significance, sometimes referred to as "junk science," should not be relied upon. (Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311,1322 (9th Cir. 1995)).

Regarding Claim 24 the Second Reexam Office Action states that "Bensky, Hsu, Chang & But and Yin individually teach the use of Yin Yang Huo in oral compositions to treat impotence." The Patent Office also found that, although these references do not disclose that Yin Yang Huo is a selective cGMP PDEV inhibitor, "the scientific literature … establishes that the main ingredient of Yin Yang Huo-containing compositions, icariin, is a selective cGMP PDEV inhibitor.”

Pfizer now argues that there is no evidence that a PDEV selective inhibitor contained in Yin Yang Huo treats ED and that there is no evidence that icariin is the compound that treats ED - even assuming that anything in Yin Yang Huo treats ED.

We'll keep you posted on further actions on this matter.

The U.S. Federal Trade Commission (FTC) is concerned about the recent use of anti-competitive drug patent deals in light of recent court rulings, which may spur drug companies to step up a practice of paying generic rivals to keep alternatives off the market.

The FTC has filed a series of lawsuits challenging patent settlement agreements between major drugmakers and their generic rivals. The agency contends that in some cases those settlements stifle competition because drugmakers are paying generics to stay out of the market.

Under federal law, drugmakers are allowed to seek U.S. Food and Drug Administration approval for generic versions of brand-name drugs before a drug's patent expires. They must certify that the patent is invalid or will not be infringed by the new generic version.

In March, a federal appeals court overturned the FTC's challenge to a patent settlement between Schering-Plough Corp. and Upsher-Smith Laboratories and American Home Products, now Wyeth. The FTC had issued a finding that the settlement illegally kept cheaper versions of Schering-Plough's blood pressure drug K-Dur off the market but the appeals court said the companies were within their rights to use their patents to lock competitors out of the market.

The decision in Schering-Plough makes it very difficult (if not impossible) for parties challenging patent settlements to do so based on the terms of the settlement itself (i.e., the inclusion of a reverse payment). Plaintiffs will need to show that the generic company’s product did not infringe on a valid patent – a high hurdle to get over indeed.

Interestingly, under the applicable rules for appealing FTC administrative actions, respondents are entitled to choose which circuit court will hear their appeal. Bet you can imagine that anyone caught in similar administrative litigation would choose to bring its appeal in the Eleventh Circuit.

Currently, the FTC is seeking certiorari from the Supreme Court in Schering-Plough, and stated in its petition that the Eleventh Circuit’s decision "could seriously impede the Commission’s law enforcement efforts."

In the FTC's Petition for Certiorari from the Supreme Court in Schering-Plough, the questions presented are:

1. Whether an agreement between a pharmaceutical patent holder and a would-be generic competitor, in which the patent holder makes a substantial payment to the challenger for the purpose of delaying the challenger’s entry into the market, is an unreasonable restraint of trade.

2. Whether the court of appeals grossly misapplied the pertinent “substantial evidence” standard of review, by summarily rejecting the extensive factual findings of an expert federal agency regarding matters within its purview.

Download the FTC's Petition for Certiorari here.

In November another federal appeals court upheld a lower court decision to throw out a similar case that private parties had filed against Barr Pharmaceuticals Inc. and AstraZeneca.

The patent settlement challenged in that case involved AstraZeneca's Novaldex. Novaldex (tamoxifen citrate) is a drug sold by AstraZeneca that is used to treat breast cancer. The tamoxifen litigation involves an agreement between Imperial Chemical Industries, PLC (an affiliate of AstraZeneca) and Barr Laboratories to settle patent infringement litigation relating to Imperial’s patent for tamoxifen (the ‘516 patent).

Imperial sued Barr for infringement of the ‘516 patent, and the patent was found unenforceable after trial. Imperial appealed but Barr and Imperial reached a settlement agreement during the appeal and moved jointly to vacate the judgment of the district court. Under the agreement, Imperial licensed Barr to sell Novaldex, and Barr (which was the first ANDA filer) agreed not to pursue final approval of its ANDA prior to the expiration of the ‘516 patent.

It is worth noting that in subsequent litigation AstraZeneca obtained three decisions upholding its Tamoxifen patent in cases against other generic companies.

The Second Circuit court upheld the district court’s decision granting the defendants’ motion to dismiss the antitrust case. The Second Circuit panel emphasized that settlements are pro-competitive, and dismissed the views of the plaintiffs (and the FTC in Schering-Plough) that there is something inherently anticompetitive about reverse payments.

The court stated that because the Hatch-Waxman Act permitted generic companies to challenge patents without putting themselves at risk for significant damages, generic companies are in a strong position to demand a large premium in order to settle high-stakes cases. This is true even where the branded manufacturer may be reasonably confident of victory but wishes to avoid the litigation burden and uncertainty.

The plaintiffs in Tamoxifen have filed a petition for re-hearing en banc, and the FTC has submitted an amicus brief supporting the petition. In evaluating the petition for re-hearing, we expect the Second Circuit to focus, among other things, on (1) whether the "sham" standard used by the court was proper, and (2) whether dismissal at the pleading stage was appropriate.

In the U.S. Court of Appeals for the Federal Circuit case Perricone v. Medicis Pharm. Corp. (case 05-1022, 05-1023), decided December 20, 2005, summary judgment of invalidity and non-infringement on claims in a patent infringement case involving methods of treating sunburns and skin damage was reversed because the district court erred in its anticipation analysis with respect to certain claims noting that sunburn is not a species of the genus of skin disorders. The Federal Circuit held that skin sunburn is not analogous to skin surfaces generally and that there is a distinction between topical application to skin for the purpose of avoiding sunburn, and topical application to skin sunburn.

Earlier, Dr. Nicholas Perricone sued Medicis Pharmaceutical Corp, alleging that Medicis infringed its patents with its prescription skin depigmenters. On summary judgment, the United States District Court for the District of Connecticut determined that all of the asserted claims of Dr. Perricone’s U.S. Patent Nos. 5,409,693 (the ’693 patent) and 5,574,063 (the ’063 patent) were invalid and, as to the ’693 patent, not infringed. Perricone v. Medicis Pharm. Corp., 267 F. Supp. 2d 229 (D. Conn. 2003). The court affirmed the trial court’s decisions of anticipation based on inherency for the remaining claims of the ’693 and ’063 patents and its double-patenting analysis with respect to claims 9, 11-13, 16, 18, and 19 of the ’063 patent.

The district court noted that “sunburn is a species of the genus of skin disorders” covered by the ’063 patent and concluded that the claimed effective amount in the ’063 patent falls within the ranges of effective amounts in the ’693 patent.

Dr. Perricone’s patents claim methods of treating or preventing sunburns (the ’693 patent) and methods of treating skin damage or disorders (the ’063 patent). Both patents disclose essentially the same subject matter, that is, treatment or prevention of various forms of skin damage through the topical application of ascorbic acid (Vitamin C) in a fat soluble form. Specifically, the patents disclose the topical application of ascorbyl fatty acid ester (e.g., ascorbyl palmitate, ascorbyl laurate, ascorbyl myristate, ascorbyl stearate) with a dermatologically acceptable carrier. Because the carrier, as well as the ascorbyl fatty acid ester, is fat soluble, it can “effectively penetrate skin layers and deliver the active ascorbyl fatty acid ester to the lipid-rich layers of the skin.” Upon reaching the lipid-rich layers of skin, the ascorbyl fatty acid ester produces a number of beneficial effects ranging from the acceleration of collagen synthesis to the scavenging of oxygen-containing radicals caused by exposure to damaging ultraviolet radiation.

The district court determined that U.S. Patent No. 4,981,845 (Pereira) anticipates claims of the ’063 patent because Pereira teaches a cosmetic composition for topical application and discloses various ingredients in that composition, including skin benefit ingredients, emollients, emulsifiers, and thickeners. In addition to listing examples, Pereira discloses eight distinct example compositions with specific concentrations of ingredients. Pereira identifies the disclosed compositions only briefly, identifying them as “suitable for topical application to the skin or hair.” The district court concluded that Pereira’s disclosed use anticipates Dr. Perricone’s claims because Pereira’s disclosed compositions include all the various ingredients in the concentrations claimed by Dr. Perricone. Thus, according to the district court, the topical application of Pereira’s compositions would necessarily yield Dr. Perricone’s claimed skin benefits.

On appeal, Dr. Perricone argued that: (1) Pereira’s disclosed skin benefit ingredients include ascorbyl palmitate among many others, and so Pereira’s disclosure does not anticipate the specific claimed use of ascorbyl palmitate; (2) Pereira’s disclosed range of concentration of its skin benefit ingredient only partially overlaps with Dr. Perricone’s claimed range; and (3) Pereira does not disclose any benefit directed to skin sunburn, or any of the other specific skin disorders, as claimed by Dr. Perricone.

The court held that:

With respect to the particular claimed skin benefits, the district court reasoned that “Pereira will inherently function in [the claimed beneficial manner] when topically applied to the skin.” Perricone, 267 F. Supp. 2d at 248. Thus, the district court ultimately based its anticipation analysis on inherency. “In general, a limitation or the entire invention is inherent and in the public domain if it is the ‘natural result flowing from’ the explicit disclosure of the prior art.” Schering, 339 F.3d at 1379 (citing Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 970 (Fed. Cir. 2001); In re Kratz, 562 F.2d 1169, 1174 (CCPA 1979)). In some cases, the inherent property corresponds to a claimed new benefit or characteristic of an invention otherwise in the prior art. In those cases, the new realization alone does not render the old invention patentable. See Atlas Powder, 190 F.3d at 1347 (“[T]he discovery of a previously unappreciated property of a prior art composition, or of a scientific explanation for the prior art’s function, does not render the old composition patentably new to the discoverer.”); Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1376 (Fed. Cir. 2001) (explaining that newly discovered results of known processes are not patentable because those results are inherent in the known processes). Thus, when considering a prior art method, the anticipation doctrine examines the natural and inherent results in that method without regard to the full recognition of those benefits or characteristics within the art field at the time of the prior art disclosure.

Like the district court, the dissent seems to ignore, or at least dismiss as “not substantial[],” the distinction between Dr. Perricone’s claimed method and Pereira’s disclosed method. Thus, the dissent characterizes both methods the same way: “Pereira describes not only the same product that is claimed in the sunburn patent, but also the same method of using it, i.e., topically applying it to the skin in an amount necessary to have beneficial effects on the skin.” Unfortunately, the dissent can make that statement only by dismissing the explicit language of Dr. Perricone’s claimed method: “applying to the skin sunburn.” ’693 patent, claim 1. Skin sunburn is not analogous to skin surfaces generally. Thus, there is an important distinction between topical application to skin for the purpose of avoiding sunburn, and the much narrower topical application to skin sunburn. That distinction highlights the flaw in the dissent’s knee brace hypothetical, which suggests that a particular prevention method necessarily anticipates a treatment method. To use a more apt analogy, the disclosure that a sunburn can be prevented by wearing a hat clearly does not anticipate a claim to the discovery that one can treat an existing sunburn by putting on a hat. The dissent attempts to bolster its analogy by comparing the mechanism underlying its knee brace analogy to Dr. Perricone’s invention. With that comparison, the dissent drifts even farther from the facts of this case. The alleged anticipating reference here is Pereira, not Dr. Perricone’s own teachings. Pereira is silent about any sunburn prevention or treatment benefits, not to mention the mechanisms underlying such uses. If Pereira did teach sunburn prevention, as well as the mechanism behind that prevention, those teachings might suggest that Dr. Perricone’s sunburn treatment claims would have been obvious. However, those unrealized possibilities do not alter the analysis in this case where Pereira does not disclose topical application to skin sunburn.

Thus, the court reversed the summary judgment of invalidity and non-infringement for the defendant.

See the opinion here.

Ranbaxy Laboratories Ltd. agreed to settle patent litigation of the $500 million drug Provigil (modafinil) with Cephalon Inc. Under the agreement Ranbaxy can market its generic version of Provigil from October 2011, three years before the patent protection ends, on payment of royalty.

Cephalon and Ranbaxy also agreed to a series of business arrangements related to Modafinil including:

Cephalon will grant a non-exclusive royalty-bearing right to Ranbaxy to market and sell a generic version of Provigil in the United States, which will become effective in October 2011 in the absence of a pediatric extension for Provigil, which would delay the entry date by six months to April 2012. An earlier entry by Ranbaxy may take place based upon the entry of another generic version of Provigil.

Ranbaxy has agreed to grant to Cephalon a non-exclusive license to certain of its world-wide intellectual property rights related to modafinil in exchange for milestone payments.

Cephalon also has agreed to enter into certain arrangements with Ranbaxy related to Ranbaxy's supply of the active pharmaceutical ingredient modafinil.

The two companies will now file for 'a dismissal with prejudice' with the District Court of New Jersey that will conclude all pending litigation between them regarding Provigil. These lawsuits claim infringement of Cephalon's U.S. Pat. No. RE37,516, which covers pharmaceutical compositions and methods of treatment with the form of modafinil contained in Provigil. The patent expires in October 6, 2014, and may be extended by six months to April 6, 2015, upon submission of pediatric study data that is acceptable to the FDA.

This patent relates to the acetamide derivative modafinil, which is 2-(benzhydrylsulfinyl)acetamide and is also known as 2-[(diphenylmethyl)sulfinyl]acetamide. Modafinil is used to treat excessive sleepiness caused by narcolepsy (a condition that causes excessive daytime sleepiness) or shift work sleep disorder (sleepiness during scheduled waking hours and difficulty falling asleep or staying asleep during scheduled sleeping hours in people who work at night or on rotating shifts). Modafinil is also used along with breathing devices or other treatments to prevent excessive sleepiness caused by obstructive sleep apnea/hypopnea syndrome (OSAHS; a sleep disorder in which the patient briefly stops breathing or breathes shallowly many times during sleep and therefore doesn't get enough restful sleep).

Modafinil has been described as presenting a "neuropsychopharmacological spectrum characterized by the presence of excitation with hyperactivity and of hypermotility; and by the absence of stereotypy (except in high doses) and of potentialization of the effects of apomorphine and amphetamine" (U.S. Pat. No. 4,177,290). Modafinil is thought to modulate the central postsynaptic alpha1-adrenergic receptor, without participation of the dopaminergic system. Modafinil has been successfully tested in humans for treatment of idiopathic hypersomnia and narcolepsy.

Andrx Pharmaceuticals has filed a patent infringement suit against the UK's GlaxoSmithKline PLC over a version of the antidepressant Wellbutrin XL. Andrx filed the suit in the U.S. District Court for the Southern District of Florida, alleging that GlaxoSmithKline's 150 milligram dose of extended-release Wellbutrin violates its patent covering a once-a-day form of bupropion hydrochloride, the active ingredient in Wellbutrin.

Andrx Pharmaceuticals' US Patent No. 6,905,708, claims:

1. A once daily dosage form comprising 150 mg of an bupropion or salt of bupropion, said dosage form providing an in vivo plasma profile selected from:

(a) Mean Tmax of about 5 or more hours

(b) Mean Cmax of less than about 90 ng/ml, and

(c) Mean AUC0-120h of more than about 350 (ng-h)ml.

The original compound, bupropion hydrochloride, is described in U.S. Pat. Nos. 3,819,706 and 3,885,046 and is used as an anti-depressant and as an aid to smoking cessation. Bupropion hydrochlorideis an aminoketone-derivative. In some studies, a risk of seizures appears to be strongly associated, in part, with the use of instant release tablets.

The '708 patent describes a pelletization process, typified by the application of a bupropion/cellulose ether suspension to inert spheres and two formulations of sustained release coatings that are applied to separate active pellets. The formulation functions by membrane-controlled extended-release in a pH dependent manner.

This formulation can provide 24-hour efficacy with once daily dosing, with less than 50% of the drug released at 10 hours. Therapeutic plasma levels are maintained from 12 to 24 hours. The usual dosage range is 75-450 mg.

A Delaware District Court ruled that Pfizer can exclusively sell Lipitor until 2011 after finding that Ranbaxy Laboratories Ltd.'s generic version of Lipitor infringes on two Pfizer patents. Ranbaxy failed to prove Pfizer's patents were invalid or unenforceable so Pfizer's patents will remain in force until 2010 and 2011.

Pfizer owns U.S. Patent Nos. 4,681,893 ('893 patent) and 5,273,995 ('995 patent) which cover Lipitor. Ranbaxy notified Pfizer that it had filed an abbreviated new drug application seeking to sell a generic version of the drug, and a paragraph IV certification, asserting that its proposed generic product would not infringe either the '893 patent or the '995 patent. Shortly thereafter, Pfizer filed a patent infringement suit against Ranbaxy in the Delaware federal court.

Pfizer's on a roll given that in October, a British court upheld the main patent covering atorvastatin in the United Kingdom through November 2011, though it did rule for Ranbaxy on a secondary patent challenge. Ranbaxy contends that Warner-Lambert (the original patentee) withheld material information from the Patent Office and misrepresented certain information when it failed to reveal an earlier filed application. In the Delaware court case, the judge wrote that "Pfizer has advanced reasonable and credible grounds for the non-production of certain data that weigh against a conclusion that ... scientists and employees were intentionally deceiving the PTO."

Ranbaxy was unable to show unenforceability due to inequitable conduct or invalidity of the patents based on claims of double patenting, obviousness and anticipation. However, Ranbaxy said it would appeal the ruling to the U.S. Court of Appeals for the Federal Circuit.

The full opinion is here.

I received a letter from a reader asking about the current status of the reexamination request on Pfizer's Viagra (sildenafil citrate) patent (U.S. Pat. No. 6,469,012). I always appreciate hearing from readers and don't mind trying to answer questions (when I can) so I reviewed the file history. The proceedings are now merged (consolidated into one) and the actions to date are summarized below.

In October 2002, Pfizer Inc., Pfizer Limited, and Pfizer Ireland Pharmaceuticals filed a patent infringement lawsuit against ICOS, Lilly ICOS, and Lilly in the United States District Court for the District of Delaware. Pfizer contends that the use, offering for sale, selling, manufacture, or importing into the United States of Cialis for the treatment of erectile dysfunction by any of the defendants infringes claim 24 of Pfizer’s U.S. Patent No. 6,469,012, and seeks a declaratory judgment to that effect. Pfizer also seeks a permanent injunction, attorneys’ fees, costs, and expenses.

The USPTO subsequently ordered the reexamination of the Pfizer Patent (Reexam. C.N. 90/007,478). Under the reexamination process, the PTO is required to reconsider the validity of a patent if substantial new questions of patentability are raised by any party including by the PTO itself. The District Court stayed, or suspended, the patent infringement lawsuit, pending the outcome of the reexamination. Subsequently, Lilly ICOS and other parties filed several reexamination requests regarding the Pfizer Patent, which were merged with the USPTO-ordered reexamination. The first office action issued by the PTO rejected claim 24 of the Pfizer Patent. Claim 24 reads:

A method of treating erectile dysfunction in a male human, comprising orally administering to a male human in need of such treatment an effective amount of a selective cGMP PDEv inhibitor, or a pharmaceutically acceptable salt thereof, of a pharmaceutical composition containing either entity.

The Examiner rejected claim 24 on the basis that certain prior art rendered the claimed invention not new, and therefore unpatentable under 35 U.S.C. §102(b), and obvious and unpatentable under the judicially created doctrine of obviousness-type double patenting. This broad claim would cover treatment by any cGMP PDEv inhibitor (read: Cialis) and was rejected over the references Korenmann, 41 J. Am Geriatrics Soc. 363 (1993) and Yin et al., 10(6) Yunnan J. Traditional Chinese Medicine 13 (1989).

On September 15, 2005, the USPTO issued a second office action that rejected Pfizer’s arguments made in response to the first office action, reaffirmed the initial rejection of claim 24, and entered new grounds for rejecting claim 24. The second office action also maintained the obviousness-type double patenting rejection of the other claims. Pfizer’s response to the second office action was due by November 15, 2005. The time for taking any action by a patent owner in an ex parte reexamination proceeding can be extended only for sufficient cause and for a reasonable time specified. Any request for such extension must be filed on or before the day on which action by the patent owner is due, but in no case will the mere filing of a request effect any extension.

Therefore, the time for response has passed but it is possible that Pfizer will file with an extension of time or that the response has just not made it to the file wrapper as yet. If a response has been filed, the USPTO could issue a further action, which may finalize the rejections of claim 24, withdraw the rejections of that claim, or allow an amended claim to be entered. In any event, Pfizer may challenge the result of a final office action within the PTO and subsequently in court.

ICOS and Lilly also have initiated or are defending lawsuits and/or administrative proceedings against Pfizer in other jurisdictions around the world regarding patents corresponding to Pfizer’s U.S. "method of use" patent. The corresponding patent in the UK was found invalid as obvious by the Court of Appeal in Lilly ICOS Ltd v. Pfizer Ltd. (2002) EWCA Civ 1 and Civ 2 and in Australia in Eli Lilly v. Pfizer (2005) FCA 67.

UPDATE: Dr. Vivien Santer, a patent attorney with Griffith Hack in Australia, sent a note pointing out that the case was litigated in Australia, and at first instance claim 10 was held by the Federal Court of Australia to be invalid for lack of inventive step and for lack of fair basis (analogous to lack of support in the specification under US Section 112). Claim 10 is the equivalent of US claim 24, and would have encompassed Cialis. However, the Full Federal Court held on appeal that the invention as claimed was novel and not obvious, but then it upheld the finding of invalidity of claim 10 on the ground of lack of fair basis. A case of winning the battle but losing the war. The appeal decision can be found here.

We'll keep you posted on any further actions on this matter.

See the Nonfinal Office Action here.

A US Court of Appeals for the Federal Circuit (CAFC) upheld a ruling which blocked sales of Ranbaxy's generic alternative to Pfizer Inc's Accupril blood pressure drug (Quinapril HCl), a generic equivalent of Pfizer's (Parke Davis) anti-hypertensive agent Accupril Tablets. [Pfizer, Inc. and Warner-Lambert Company, LLC, v. Teva Pharmaceuticals USA, Inc., Ranbaxy Pharmaceuticals, Inc., and Ranbaxy Laboratories Limited, Fed. Cir. (05-1331, November 22, 2005)]

Teva and Ranbaxy appealed from the District Court order granting a motion for a preliminary injunction filed by Pfizer and Warner-Lambert to prevent Teva and Ranbaxy from infringing United States Patent No. 4,743,450 (“the ’450 patent”). The ’450 patent relates to pharmaceutical compositions containing angiotensin converting enzyme (“ACE”) inhibitors such as quinapril and their methods of manufacture. The ’450 patent discloses minimizing cyclization, hydrolysis, and discoloration by using formulations containing a metal-containing stabilizer and a saccharide.

The appeal involves the ’450 patent’s independent claims 1 and 16. Claim 1 is a composition claim:

A pharmaceutical composition which contains: (a) a drug component which comprises a suitable amount of an ACE inhibitor which is susceptible to cyclization, hydrolysis, and discoloration, (b) a suitable amount of an alkali or alkaline earth metal carbonate to inhibit cyclization and discoloration, and (c) a suitable amount of a saccharide to inhibit hydrolysis.

Claim 16 is a process claim:

A process for stabilizing an ACE inhibitor drug against cyclization which comprises the step of contacting the drug with: (a) a suitable amount of an alkali or alkaline earth-metal carbonate and, (b) one or more saccharides.

Ranbaxy sought FDA approval to market its own generic version of Accupril® by filing its own ANDA and certifying that its product would not infringe the ’450 patent. Ranbaxy sent Warner-Lambert a paragraph IV certification letter on April 7, 2003, explaining why Ranbaxy believed its product would not infringe the ’450 patent. Ranbaxy’s letter indicated that it had adopted and relied upon the construction of “saccharide” Warner-Lambert had previously stipulated to in its case against Teva.

The district court eventually granted summary judgment against Teva, finding the ’450 patent not invalid for lack of enablement and infringed. In granting the motion for a preliminary injunction, the district court construed “saccharide,” as the term is used in claim 1, and “saccharides,” as the term is used in claim 16, to include “mono-, di-, tri-, and polysaccharides.” In doing so, the court simultaneously rejected both the stipulated construction previously entered in the separate case and Ranbaxy’s proposed construction of “sugars, including the lower molecular carbohydrates, specifically mono- and disaccharides.”

In upholding the preliminary injunction, the Fed. Circuit held that:

The claim language itself does not support Ranbaxy’s proposed construction.“[T]he claims themselves provide substantial guidance as to the meaning of particular claim terms.” Id. at 1314. Claim 1 includes “a suitable amount of a saccharide to inhibit hydrolysis,” and claim 16 includes “one or more saccharides.” It is important to note that the claims do not include the terms “sugar” or “sugars.” Neither do the claims distinguish between polysaccharides having ten or less monosaccharide units and polysaccharides having more than ten monosaccharide units.

…

This court has previously construed a disputed claim term by referencing use of “i.e.” in a patent specification. See Abbott Labs. v. Novopharm Ltd., 323 F.3d 1324, specification.” (emphasis added)). “[I]t is necessary to consider the specification as a whole, and to read all portions of the written description, if possible, in a manner that renders the 1327, 1330 (Fed. Cir. 2003). In that case, however, the court did not identify any support in the intrinsic evidence for a construction of the disputed claim term other than the construction linked to “i.e.” Id. at 1330. Indeed, the problem with Ranbaxy’s argument is that it ignores the fact that the person of ordinary skill in the art is deemed to have read the claim term in the context of the entire patent. Phillips, 415 F.3d at 1313. See also SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1285 (Fed. Cir. 2005) (“The court must always read the claims in view of the full patent internally consistent.” Budde v. Harley-Davidson, Inc., 250 F.3d 1369, 1379–80 (Fed. Cir. 2001).

Ranbaxy admits that mannitol is not a sugar. It nevertheless argues that the patentee labeled mannitol as a sugar, and that we should respect the patentees’ decision to do so. Thus, according to Ranbaxy, “Mannitol, lactose, and other sugars are preferred” is, for the purpose of the patent, a list of like ingredients, “sugars.” We are not convinced that one of ordinary skill in the art would understand the patentee to have classified mannitol as a sugar in this sentence. As the district court found and Ranbaxy does not dispute on appeal, mannitol is not actually a sugar. On the other hand, lactose is a sugar. The reference to “other sugars” therefore appears to relate to the disclosure of lactose only. In short, the reference to “other sugars” does not mean that mannitol is a sugar or should be considered to be a sugar for purposes of the ’450 patent.

...

Extrinsic evidence in the form of technical dictionaries, treatises, and expert testimony supports the conclusion drawn from the ’450 patent that one of skill in the art would understand “saccharides” to encompass more than sugars. The district court reviewed the extrinsic evidence presented by the parties and found that one of skill in the art would understand “saccharides” to include polysaccharides. Ranbaxy, however, points to specific examples of references and testimony that allegedly support its view that “saccharides” means sugars.

The CAFC then went on to affirm the grant of the preliminary injunction stating that the district court’s claim construction was not erroneous; the district court did not abuse its discretion when it determined that Ranbaxy likely infringes the ’450 patent either literally or under the doctrine of equivalents; and the district court did not abuse its discretion when it found that the harm and public interest favors enjoining Ranbaxy.

Get the opinion here.

The accused infringers, AWH Corp., et al., have petitioned for review of one part of the en banc ruling on claim construction in the Phillips case. (I hardly can write a sentence without using Latin). Now that all the fanfare over the Federal Circuit’s consideration of that case, and over the 33 amici that weighed in on it, has died down – we see a petition for certiorari devoted to the single issue that the en banc Court did not decide. So, we have case with no final judgment (just reversal of a non-infringement ruling based on a stipulation), that is taken up by an accused infringer (instead of a patentee whose rights were lessened by “interpretation”), on an issue that was not decided by the Circuit Court. I’m deeming this petition to have the chances of a one-hander from outside the three-point line.

Our Supreme Court tends to hear constitutional issues, or cases arising therefrom. Here, the petitioners argue, as have many before them, that their case “illustrates perfectly what has gone wrong in the Federal Circuit.” AWH makes no argument that the Federal Circuit mis-construed Phillips’ patent claims, only that the Circuit should be “deferential to” the claim construction rulings made in the District Courts. Deferential review is proper, AWH argues, because claim construction is a mixed question of fact and law, or is a legal conclusion based on disputed facts.

The petition, in my view, asks that the Markman case be reconsidered (which, in my view, is not likely to happen). The holding in Markman that claim interpretation is a legal issue forms the basis for the Federal Circuit to review those interpretations as a matter of law, using the de novo standard of review. It seems that AWH has asked the Supreme Court to revisit this necessary premise. If I recall correctly (which can be challenging as I age), the Markman cases considered the argument that claim interpretation can present a mix of fact and law – and they held, no matter, patent claims are interpreted as a matter of law. From that, I presume that the AWH petition prays for a change in settled law.

Also, the precedent that AWH relies upon are mostly non-patent cases, with differing interests at stake. Every cert. petitioner, who loses in the Federal Circuit, cites to Anderson v. Bessemer City. That was a civil rights, Title VII case, which tend to get a different level of scrutiny from the Court than nuances of patent law. AWH relies too on the Ornelas case, involving search and seizure, again, a constitutional claim. It cites Pierce v. Underwood, which asked if the same, or a lesser, standard of review applies to a district court’s interpretation of state law questions. The analysis in those cases starts from more compelling interests than the standard of “deference” that was passed on without any ruling in Phillips. Even Markman was a contest over the 7th Amendment right to a jury.

When I first read the order specifying the issues for en banc consideration in the Phillips case, it seemed to augur that auspicious changes in patent claim interpretation would be forthcoming. Then, after the 33 amici and the litigants and many commentators spoke at length about those seven questions, the Federal Circuit’s decision was more a repackaging of precedent than anything remarkable. The present petition for certiorari by AWH also recasts arguments about the settled law of claim interpretation, which for the present is likely to remain unchanged.

Today's post comes from Guest Barista C. Lee Thomason, a registered patent attorney and IP litigator at Frost Brown Todd's Louisville office.

In Invitrogen Corporation v. Clontech Laboratories, Inc., Fed. Cir. 04-1039, -1040 (November 18, 2005), the CAFC vacated an invalidity judgment and the district court’s conception ruling based on anticipation by § 102(g)(2) prior art where the inventors could not appreciate the discovery they made.

Invitrogen appealed from a decision by the United States District Court for the District of Maryland, invalidating two hundred and twenty-one claims, in three related Invitrogen patents, as anticipated by § 102(g)(2) prior art. The invalidity was based on the district court’s underlying ruling that researchers at Columbia University conceived of a similar invention before, and were diligent in reducing it to practice after, Invitrogen’s first reduction to practice in 1987. On appeal, Invitrogen challenged the district court’s partial summary judgment dating conception by the Columbia researchers. On cross-appeal Clontech challenged three underlying partial summary judgments in favor of Invitrogen: (1) that the claims-in-suit are enabled; (2) that the claims-in-suit satisfy the § 112 written description requirement; and (3) that Clontech’s products literally infringe claims 3, 4, 12, and 13 of U.S. Patent No. 6,063,608.

The patents involved in the suit were owned by Invitrogen: U.S. Patent No. 5,244,797 (“the '797 patent”), U.S. Patent No. 5,688,005 (“the '005 patent”), and U.S. Patent No. 6,063,608 (“the '608 patent”). The appeal involved the '797 patent, claims 1-4; the '005 patent, claims 8-29; and the '608 patent, claims 1-196. All three patents issued from continuations of a common parent application, No. 07/143,396 (“the ‘396 application”), filed on January 13, 1988, and share a common written description.

The patents disclose a genetically modified enzyme, reverse transcriptase, involved in DNA replication. Reverse transcriptase (“RT”) is a naturally occurring enzyme produced by retroviruses, such as the Moloney-Murine Leukemia Virus (“MMLV”). Invitrogen’s genetic modifications affect how the modified RT participates in DNA replication. DNA replication involves a series of discrete steps. The original DNA, a molecule comprised of two strands of nucleotides forming a double helix, is opened to expose single strands. Messenger RNA (“mRNA”), comprising a single strand of nucleotides, forms opposite the exposed DNA strands. The mRNA detaches from the exposed DNA and serves as a template against which a first strand of complementary DNA (“cDNA”) forms. This is first strand synthesis. The mRNA detaches from the first cDNA strand, allowing a second, complementary DNA strand to form opposite the first strand, completing the process. This is second strand synthesis. The completed cDNA molecule is a copy of the original DNA transcribed by the mRNA. “Reverse transcription” describes building the cDNA from the mRNA template.

Reverse transcriptase affects at least two steps in this process. First, it facilitates the formation of cDNA opposite the mRNA template, a step called DNA polymerase activity. Second, it degrades the mRNA strand of the mRNA / cDNA hybrid molecule so that the first strand cDNA nucleotides are free to form a second strand and complete the DNA replication. Degrading or destroying the mRNA template is called RNase H activity. Until the mRNA template is removed from the first strand cDNA, the second strand cDNA synthesis cannot occur.

If RNase H activity destroys the mRNA template, as happens with naturally occurring RT, then it cannot serve as a template for additional cDNA. But if the RNase H activity of RT is inhibited, and the mRNA is detached from the hybrid mRNA / cDNA first strand without being destroyed, then scientists can reuse the mRNA to form additional cDNA. An RT with inhibited RNase H behavior is useful for efficiently cloning DNA. As described and claimed in the patents, Invitrogen developed mutant RT with DNA polymerase, but no RNase H, activity (“RNase H minus”). More particularly, Invitrogen altered a gene that originally encoded wild or natural RT, resulting in a mutant enzyme with the desired properties. Invitrogen reduced this invention to practice on January 27, 1987.

Beginning in the early 1980s two scientists at Columbia University, Dr. Stephen P. Goff and his post-doctoral researcher, Dr. Naoko Tanese, studied the effects of random mutations in the MMLV gene for RT – an approach called “random mutagenesis.” In 1984, Tanese prepared a panel of roughly 100 mutants. Without sequencing the mutants, Goff did not know where the MMLV gene had been altered in each mutation. Two mutant genes created in 1984 were H7 and H8, each encoding enzymes that later proved to lack RNase H activity. After creating the mutant MMLV genes, Tanese tested the mutant RT they encoded for DNA polymerase activity. Roth tested the mutant RT for a different function called integrase. In late 1984, Tanese also tested the mutant RT for RNase H activity. But the tests using 1984 assay technology yielded inconclusive results. The mutant RT under investigation was produced in E. coli bacteria, which naturally produces an enzyme with RNase H activity. The RNase H activity of the bacterial enzyme introduced too much background noise to measure, with existing methods, the RNase H behavior of the mutant RT.

The 1984 assay technology could have been used to measure the mutant RT RNase H activity if Goff and Tanese first purified the mutant RT for each mutant MMLV gene – that is, if they had they isolated the mutant RT from the background E. coli enzymes. Goff concluded that approach was too time consuming for the large number of mutant MMLV at issue, so he and Tanese developed a new in situ assay. That new assay was designed to measure the RNase H activity of the mutant RT without first isolating it from the bacterial enzymes. Not until March 1987, however, did Goff and Tanese complete the new assay and apply it to their panel of mutants. Nonetheless, in 1986, before finishing the new assay, Goff sequenced various mutant RT genes. Among those he sequenced were H7 and H8. When Goff and Tanese completed the new in situ assay in March 1987, they rapidly determined which parts of the MMLV RT gene affected which enzyme properties. By March 7, 1987, they established that H7 and H8 encoded mutant RT with DNA polymerase activity but no RNase H activity.

Goff and Tanese started publishing their work after March 1987. On January 29, 1988, Goff filed a patent application pertaining to this research. In 1993 the U.S. Patent and Trademark Office (“PTO”) declared an interference between Goff’s application and the '260 application that eventually issued as Invitrogen’s '005 patent. (October 18, 1993 notice of interference from PTO). The sole count described a method for producing a genetically modified RT with DNA polymerase but “having substantially no RNase H activity.” Goff’s assignee, Columbia University, defaulted and the PTO ruled in Invitrogen’s favor. As a result, the PTO never reviewed Goff’s research records to determine priority of invention between Goff and Invitrogen.

The district court determined that Goff et al. invented a mutant [RT] enzyme that did not have RNase H activity. The enzyme was prepared in December 1984, and its reduction to practice was confirmed in March 1987. The Court has also found that Goff was diligent and that he did not abandon, suppress or conceal his invention. Goff’s work is available as prior art as of December 1984. On October 17, 2003, the district court entered final judgment in both actions, invalidating several claims under § 102(g)(2) in view of Goff: (a) '797 patent, claims 1-4; (b) '005 patent, claims 8-29; and (c) '608 patent, claims 1-196.

Conception requires the “definite and permanent idea of the complete and operative invention” for conception, require more than unrecognized accidental creation. “[A]n accidental and unappreciated duplication of an invention does not defeat the patent right of one who, though later in time, was the first to recognize that which constitutes the inventive subject matter.” Silvestri v. Grant, 496 F.2d 593, 597 (CCPA 1974). Thus, “[t]he date of conception of a prior inventor’s invention is the date the inventor first appreciated the fact of what he made.” In other words, conception requires that the inventor appreciate that which he has invented.

The invalidity judgment depends on when Goff appreciated that H7 and H8 were RNase H minus, but retained DNA polymerase activity.7 Invitrogen contends that the district court misread the facts and misapplied the law to award Goff priority of invention. Under a correct application of law, Invitrogen argues, Goff did not conceive of the invention until March 1987, when he perfected his in situ assay and established that the H7 and H8 mutants were RNase H minus. Invitrogen contended that until that moment, Goff never recognized that his accidental creations, the H7 and H8 mutants, had the inventive features at issue. Clontech disagrees, and asked the court to affirm the district court’s ruling.

With unrecognized accidental duplication, the invention exists but remains unrecognized. The priority determination requires evidence that the inventor actually first made the invention, and that he understood his creation to have the features that, comprise the inventive subject matter at bar. Thus, the court must identify when, during an emerging recognition that a particular invention includes something new, the inventor’s understanding reaches the level needed for appreciation.

The court held that:

As a matter of law, the court’s conclusion is unsustainable. Langer and Silvestri require some connection between the physical result (the invention) and the belief (by the inventor). Here, the district court never identified corroborating evidence of Goff’s purported belief, nor identified how it could determine that Goff had reviewed such evidence and understood its import. There is no evidence that merely sequencing the mutant RT gene could, in 1986, establish the corresponding enzyme’s properties.

More fundamentally, the record is inconsistent with the district court’s notion that Goff set out to create RNase H minus RT, or that he recognized his invention in 1984. It shows, instead, that this action fits squarely within the unrecognized, accidental duplication cases. First, Goff’s research was general in nature. The random mutagenesis involved a panel of 100 randomly mutated MMLV RT genes. At his deposition, Goff testified that Tanese’s 1984 experiments “[were] focused on understanding what the consequences of those mutations were for the virus.” He explained that his “main grant and the main focus of [his] whole lab was to look at the [MMLV] mutants . . . and to look at the [effects] of those mutations on the virus.” Second, it was unknown at the time whether it was even possible to make an RNase H minus RT with DNA polymerase activity. Not until his March 1987 assay, Goff explained, had anyone shown that RNase H activity involved a separate area of the RT gene from the sequence responsible for DNA polymerase. The publications at the time were conflicting, and it was unclear “whether it would be possible to express [the two functions] separately because there are many multi function enzymes, but frequently [their] multiple activities are interconnected so intimately, that [it is] very hard to separate them.” Finally, asked to identify the time when he “decided” to create an RNase H minus mutant RT, Goff testified that “the belief was that we had them, but I didn’t know how to characterize them. I mean, it wasn’t that we wanted one. There was no reason to have one in our minds.” (emphasis added) Even assuming the district court had assessed an objective basis for appreciation – which it did not – on these facts the partial summary judgment of conception for Clontech is unsustainable.

* * *

In sum, the district court erred in granting judgment of invalidity under § 102(g)(2). Clontech's challenges to the court's partial summary judgments on written description and enablement are misplaced and fail to support the invalidity judgment. Accordingly, the court vacates the judgment of invalidity and the conception ruling on partial summary judgment, and remands for further proceedings.

On remand, we remind the district court that the material factual dispute we perceive regarding appreciation affects not only the proper date of conception, but also the date of reduction to practice. “It is now well settled that in [an accidental creation] there is no conception or reduction to practice where there has been no recognition or appreciation of the existence of the new form.” Silvestri, 496 F.2d at 597. Because we reserve the question of appreciation for the jury, its determination on this issue will decide the date of conception (as well as reduction to practice). IV. Finally, Clontech cross-appeals the district court’s partial summary judgment that the PowerScript RT infringes claims 3, 4, 12, and 13 of the '608 patent.

No, this post is not about the NFL or NBA, but if I'd titled it the Probabilistics Of Reverse Payment Hatch-Waxman Settlements, then you would have stopped before reading this far.

Suits for antitrust relief based on settlements, in which pharmaceutical patent owners settled and paid makers of generics to delay entering the market, recently have been causes lost by the FTC and private plaintiffs. One recent case, FTC v. Schering, may be reviewed by the Supreme Court, since they asked the Solicitor General for a brief on the matter. The likelihood of review by the high court is greater still, due to an arguable conflict between the 11th Circuit ruling in that Schering case and the 6th Circuit in the Cardizem case, as to whether a per se rule or other analysis should apply to the alleged anticompetitive effect of "reverse payment" settlements. The 6th Circuit found it "per se illegal for a pioneer drug company to pay money to a generic manufacturer in return for a commitment to delay entry" in the Cardizem CD Antitrust Litigation, 332 F.3d 896, 908 (6th Cir. 2003). The 11th Circuit found "that neither the rule of reason not the per se analysis is appropriate in this context" in Schering-Plough Corp. v. FTC, 402 F.3d 1056, 1065 (11th Cir. 2005).

By way of background, the FTC charged that settlement payments for delaying entry of a generic were per se anticompetitive. The "essence of the complaint is that the pioneer paid the generics not to compete for a period of time, which could be per se illegal." FTC Commission, op, pg. 12. The ALJ agreed with the FTC’s charge, based on extensive evidence from economists. The FTC Commissioners disagreed with the per se analysis, yet concluded that the settlement was anticompetitive, and then, the 11th Circuit reversed the Commissioners. I think it was Truman who said that his administration needed a one-armed economist, one who would never qualify his conclusions with the remark, "but, on the other hand." In sum, the votes were: the FTC, the ALJ, the 6th Circuit, and many private plaintiffs claim these settlements are illegal restraints, while the FTC Commissioners, the 11th Circuit and some district courts say not, but they say no for conflicting reasons.

I put aside some of the per se tediousness of their rulings, which ask whether settlement of a pharmaceutical patent suit between a patentee and a potential generics competitor can be monopolistic, so that I can focus instead on a few simple chestnuts. Settlements are good, and our adjudicative systems favor them - right? Agreements are the product of compromise, and being sued for agreeing to a compromise would be bad - right? When patent owners settle with accused infringers, patentees pay the infringers - what?

Schering paid “$60 million to Upsher [and] $30 million to ESI.” 402 F.3d at 1062. In Cardizem, the patentee guaranteed “$ 10 million per quarter, [to] refrain from marketing its generic version of Cardizem.” 332 F.3d at 907. Payments in the Cipro case were not less than “approximately $398 million.” 363 F. Supp. 3d at 519. In each case, economists gave expert opinion as to what consumers lost by the delay in generics entering the market, the incentives to settle or litigate a patent case and the risks and costs of those choices, and the presence or absence of market power within a market of disputed scope.

Several modes of analysis are used in these court decisions. As with all antitrust cases, the defendant needs to avoid a per se legal standard. When the alternative, the rule of reason, is applied then both sides engage grandly in a battle of economists, who estimate the impacts of the challenged agreement. A scenario added in a patent antitrust case is where the Chancellor guides the mighty sword that divides the realms of evil monopolism from that of a bona fide patent monopoly.

The potentially decisive turns taken in these cases begin once it is known if the settlement is per se inimical to competition, and if not, then a rule of reason analysis will encompass the subjective intent behind the settlement terms and the objective indicia of adverse effects. (Bayer expected “to lose …between $510 million and $826 million in Cipro sales in the first two years of generic competition …[and] estimated Bayer’s losses due to a potential adverse judgment in the `444 Patent litigation at $1.679 billion net present value.”

A significant and overarching principle is that agreed restrictions in the settlement, which impair competition no more than the exclusionary scope of the patent grant, are presumptively legal. “Patent owners should not be a worse position, by virtue of the patent right, to negotiate and settle” suits, Schering, at 1072; and do “the challenged agreements restrict competition beyond the exclusionary effects” of the patent. Id., at 1068.

Generally, if the patent law allows the restrictions in the settlement agreement, such as exclusion from market entry or increased prices due to a royalty, then it should avoid antitrust liability. On the other hand (to quote Truman’s economists), when the settlement terms exceed a patentee’s rights to restrict competitive activity, then it will fact greater antitrust scrutiny.

In the Cardizem decision, the settlement kept the generic competitor Andrx from relinquishing its “first-filer” status under Hatch-Waxman, which “delayed the entry of other generic competitors, who could not enter until the expiration of Andrx's 180-day period of marketing exclusivity …[and this] was, at its core, a horizontal agreement to eliminate competition.” Cardizem, at 907-08. This agreed restriction, which postponed the market entry of all generics, exploited the Hatch-Waxman protocols and, was outside the scope of the right granted to the patentee to exclude. The settlement in Schering had no equivalent effect.

The matter of “market power” is perhaps the factor least clarified, especially when a patent covers only claimed embodiments of a pharmaceutical, and not everything in the entire market. An example in one case was a patent only for the time-release coating, and not the active ingredient under it. In another, the molecule in the patented composition was present in non-infringing substitutes. The clarity in case law on the market power of a patentee is apparent in the Federal Circuit cases string-cited on page 12 of its recent Medimmune v. Genentech decision, “it is not presumed that” the patent confers “market power” but, “there is a presumption of market power in patent tying cases,” and consider too, that where a ”plaintiff can demonstrate an actual adverse effect on competition ..there is no need to show market power in addition.” FTC v. Ind. Fed’n of Dentists, 476 U.S. 447, 460-61 (1986). These statements suggest that “market power” is one factor that makes the patent a “probabilistic” property right in these reverse-payment antitrust cases. See, fn. 9 to FTC’s petition for certiorari in the Schering case.

Last, these reverse payment settlement cases put in doubt the “presumption” of anticompetitive effect that the FTC wished to apply when it could not obtain a per se standard of liability. That presumption would attach where the settlement sum did not represent “legitimate consideration” for the rights exchanged, and where a generic maker receives “anything of value and agrees to defer its own [R&D], production or sales activities” and where the sum paid as “litigation costs” exceeded $2 million. The Schering case applied the substantial evidence test and concluded that each offered reason was not a basis for the claimed presumption, and after that de novo review the 11th Circuit vacated the FTC’s cease and desist order.

In closing, imagine a patent challenged because, “at the time of invention,” a “hypothetical person” of skill would know to combine or not know how to enable the patent’s elements; then, based on a “hypothetical negotiation,” you believe that the “future profits” stream would be affected by a factor of X, and that your “litigation risk” assessment is that the challenger has a 39% chance of invalidating the patent, so you agree to a reverse payment settlement, pay the challenger a sum in the range of 23 to 26% of anticipated, future loss revenue; but, a later antitrust suit claims that objective, economic opinion shows that the potential impact of the settlement is harmful to the market and to consumers, who demand disgorgement of “treble” damages. To some patent professionals, that’s just another day at the office. We may see if the Supreme Court treats it that way.

Today's post comes from Guest Barista C. Lee Thomason, a registered patent attorney and IP litigator at Frost Brown Todd's Louisville office.

The U.S. Supreme Court has agreed to review a case relating to subject matter issues under 35 U.S.C. §101 for a patent that allegedly claims "laws of nature, natural phenomena, and abstract ideas" in Laboratory Corp. of America v. Metabolite Laboratories, U.S., No. 04-607, 10/31/05. Review was granted only with respect to question 3 in the petition:

Whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to "correlat[e]" results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

The United States District Court trial jury found that Laboratory Corporation (LabCorp) indirectly infringed Metabolite Laboratories, Inc.’s (Metabolite’s) U.S. Patent No. 4,940,658 (the ’658 patent). The jury also found that LabCorp partially breached its contract with Metabolite.

The ’658 patent claims methods for detecting cobalamin or folate deficiency. Cobalamin and folate are both B vitamins, commonly known as B12 and folic acid, respectively. A deficiency in these vitamins can cause serious illnesses in humans, including vascular disease, cognitive dysfunction, birth defects and cancer. If detected early enough, however, vitamin supplements readily treat the deficiency.

Because these B vitamins assist in metabolizing the amino acid homocysteine, scientists directly assayed homocysteine to screen for cobalamin and folate deficiency. These direct homocysteine assays were unreliable. Then researchers at University Patents Inc. (UPI) discovered a relationship between elevated levels of total homocysteine and a deficiency in either cobalamin or folate. The total homocysteine test, however, could not alone identify which vitamin was deficient. Total homocysteine includes free and protein-complexed homocysteine and also includes homocysteine derivatives homocystine and homocysteine-cysteine.

Originally, doctors could not conveniently treat both deficiencies because while folate was available in tablet form, cobalamin could only be administered by injection. After cobalamin became available in tablet form, however, doctors could simply order a total homocysteine test and, without identifying the deficient vitamin, treat elevated levels of total homocysteine with a tablet containing both cobalamin and folate. The UPI inventors also developed a test to identify the deficient vitamin using methylmalonic acid (the panel test method). The ’658 patent claims both the total homocysteine test and the total homocysteine-methylmalonic acid test. Claim 13 claims the total homocysteine test:

13. A method for detecting a deficiency of cobalamin or folate in warmblooded animals comprising the steps of: assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.

On appeal, LabCorp argued that claim 13’s correlating step should be construed as establishing that an elevated level of homocysteine is caused by a “shortage of cobalamin which causes a hematologic or neuropsychiatric abnormality,” or a “deficiency of folate which causes a hematologic abnormality.” LabCorp interprets the specification to clearly define a “deficiency of cobalamin” as the presence of a clinical or hematologic syndrome or both that responds to cyano-cobalamin treatment, and to acknowledge that some clinical or hematologic syndrome or neuropsychiatric abnormality must be present. Thus, LabCorp contends that the correlation step of claim 13 should be construed to require a showing of a separate hematologic or neuropsychiatric symptom to confirm the “correlation.”

The claim states that the method must correlate “an elevated level of total homocysteine . . . with a deficiency of cobalamin or folate.” This language does not require a further association between the level of total homocysteine and either a hematologic or neuropyschiatric abnormality or both. The claim only requires association of homocysteine levels with vitamin deficiencies. It requires no further correlation to confirm the relationship to vitamin deficiencies. The claim simply says nothing about a confirmatory step or a further correlation beyond the stated relationship.

On appeal to the CAFC, LabCorp argued that claim 13 is invalid on grounds of indefiniteness, lack of written description and enablement, anticipation, and obviousness. Likewise, LabCorp contends that claim 18, directed to the panel test, is also invalid on grounds of indefiniteness, and lack of written description and enablement.

First, LabCorp contends that the “correlating” step in claim 13 is indefinite. 35 U.S.C. § 112, second paragraph, provides: “The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” The CAFC affirmed the trial court’s denial of JMOL.

In its petition, Laboratory Corp. argued that the standard of intent to induce applied by the Federal Circuit is so low that a defendant becomes an inducer by merely delivering to doctors factual information about the correlation of elevated homocysteine levels and vitamin deficiency. According to the brief, a truthful statement of medical fact alone cannot under any circumstances constitute a specific intent to infringe a patent. It added that scientific facts and laws of nature are outside the scope of patentable inventions, citing Diamond v. Diehr, 450 U.S. 175 (1981).

The Supreme Court invited the government to brief on the following question:

Respondent’s patent claims a method for detecting a form of vitamin B deficiency, which focuses upon a correlation in the human body between elevated levels of certain amino acids and deficient levels of vitamin B. The method consists of the following: First, measure the level of the relevant amino acids using any device, whether the device is, or is not, patented; second, notice whether the amino acid level is elevated and, if so, conclude that a vitamin B deficiency exists. Is the patent invalid because one cannot patent “laws of nature, natural phenomena, and abstract ideas”? Diamond v. Diehr, 450 U.S. 175, 185 (1981).

The PTO contends that the record in this case is not sufficiently developed to answer particular fact questions to make the Section 101 determination under Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981). Those questions are whether the claimed invention transforms matter and whether it prevents all practical applications of the natural phenomenon. According to the PTO, the courts below did not construe the claim term “assay,” which can suggest a variety of ways in which a product is transformed and made no finding as to the practical applications of the natural phenomenon preempted by the claim.

The government’s brief conceded that the claim in question involves a natural relationship but states that this is only the beginning of the Section 101 analysis. A claim involving a natural phenomenon must transform an article to a different state. Parker v. Flook, 437 U.S. 584 (1978). Moreover, the claim as a whole must contain some inventive aspect other than the natural phenomenon itself, and must not prevent all practical applications of the natural phenomenon. On the other hand, Diehr stated that patentable subject matter includes everything under the sun made by man, and that the novelty of an invention is of no relevance in determining whether the subject matter of the claim is within Section 101.

See the Federal Circuit decision here.

The recent decision, about a backbone stabilizing device, in Cross Medical Prods. v. Medtronic Sofamor Danek, 424 F.3d 1293 (Fed. Cir. 2005), may be a reminder why so many commentators have weighed in on the need to reform the Patent Act, or to reign in judicially-created rules.

The panel decision in Cross Medical works out on the rebuttable presumptions for and against imposing a "means" construction on claims, the yielding "doctrine" of claim differentiation, that extrinsic "marking estoppel" cannot contradict intrinsic interpretative evidence, then "refer[ing] to the dictionary" first to determine ordinary meaning, and also, ruling as a MOL what one of ordinary skill would have understood "from the context of" the specification, but that whether "a set screw is equivalent to an external nut" cannot be decided "as a matter of law," and noting that an infringer's later admission of interchangeability is "irrelevant to known interchangeability" at the time of invention. The Federal Circuit has fathered all of these presumptions and doctrines and tools for ruling, and applies them decisively. However, these rules of decision have little of no basis in the patent statute.

The two aspects of the Cross Medical case, infringement and obviousness, should be read by clients and patent attorneys who have medical device patents and applications.

The ruling of no direct infringement results from including the "bone" in the claim for the bone "fixation device." Without the presence of the "bone" in the accused infringing device, no direct infringement occurs until it is implanted. "Because Medtronic does not itself make an apparatus with the 'interface' portion in contact with bone, Medtronic does not directly infringe." The issue then turns to inducement to infringe and to contributory infringement, but again, one essential element of those is direct infringement. In addition, proof of 'knowingly" inducing and of "no substantial non-infringing use" must be presented to sustain those charges.

Putting aside the correctness of the non-infringement ruling, you can find a fair number of recently-issued patents for medical devices (which I'll leave unidentified) that claim the "bone" or the "tissue" that the medical devices acts upon, even though many patents follow the better practice of mentioning, but not claiming, the "bone" itself, e.g., US Pat. 6,342,055. As we were taught early on - don't include the "work piece" in what is claimed. To do so may prevent a finding of direct infringement and relegate to the case to the common-law doctrine of inducing or contributing to infringements.

Obviousness may be the next battleground in the patent law, in part due to the certiorari petition in KSR Int'l v. Teleflex, which makes well-supported arguments that the Federal Circuit requirement for clear and convincing proof of a "motivation or suggestion" to combine prior art references has no basis in the law.

The decision in Cross Medical applies a lower standard, and bases its ruling on the principle that the "motivation to combine" may be "implicit" in the skill of one skilled in the art, and that it can come from one's knowledge of the problem to be solved, or of a different problem. "One of ordinary skill in the art need not see the identical problem addressed in a prior art reference to be motivated to apply its teachings." Perhaps I fail to grasp the logic of these statements about what can prove obvious combinations. Instead, the ruling may cut against patents in crowded fields of art, such as medical devices, where each advance is engendered from highly-skilled persons "knowledge of the problem to be solved." The absence of a proven "motivation or suggestion" in the prior art often is essential to medical devices that claim am advantageous combination of known elements

In the coming year, patent practitioners will hear about reforms to the patent act, which are intended to make for "better" patents and for more predictable patent rulings, and may hear too from the Supreme Court about the long-standing, but non-statutory, test for obviousness. Perhaps some development in those areas may help in the future to cut down the issues in a case like Cross Medical.

Today's post comes from Guest Barista C. Lee Thomason, a registered patent attorney and IP litigator at Frost Brown Todd's Louisville office.

The United States Court of Appeals for the Federal Circuit took up the question of internal use of an invention as it relates to a public use in determining patentability in Invitrogen Corp. v. Biocrest Mfg., L.P., Stratagene Holding Corp., & Stratagene, Inc., 04-1273, -1274.

On an earlier remand from the CAFC, the District Court, on summary judgment, determined that Biocrest Manufacturing, L.P., Stratagene Holding Corporation, and Stratagene, Inc. (collectively Stratagene) infringed Invitrogen Corporation’s (Invitrogen’s) U.S. Patent No. 4,981,797 (issued Jan. 1, 1991) (the ’797 patent), and that the ’797 patent was not invalid for indefiniteness, although it was invalid because of public use under 35 U.S.C. § 102(b).

The ’797 patent involves the introduction of recombinant DNA molecules into receptive E. coli cells to improve the cells’ “competence,” i.e., their ability to take up and establish exogenous DNA and replicate this DNA as they multiply. A cell that accepts alien DNA is called a transformable cell. Claim 1 of the ’797 patent claims:

A process for producing transformable E. coli cells of improved competence by a process comprising the following steps in order: (a) growing E. coli in a growth-conductive medium at a temperature of 18°C to 32°C; (b) rendering said E. coli cells competent; and (c) freezing the cells.

Stratagene made thirty-four competent E. coli cell lines by a process “including the steps of incubating cells at 37°C, growing the cells in a fermenter at 26°C, and freezing the cells.” Invitrogen sued Stratagene for infringement and the district court construed the claims and then granted Stratagene’s summary judgment motion of non-infringement. Invitrogen appealed, disputing the lower court’s construction of both “improved competence” in the preamble and “growing” in step (a).

The CAFC decided that the trial court had correctly construed the term “improved competence.” The CAFC noted that the term required only a general increase in competence, as compared with that generally obtained when cells are prepared by either (1) growing the cells at 37°C, rendering them competent, and freezing them, or (2) growing the cells at 37°C, rendering them competent, and not freezing them. The CAFC also noted that the trial court had incorrectly construed “growing.” The CAFC then construed that term to permit preparatory steps in advance of step (a), including growth of E. coli at a temperature outside the range in step (a).

On remand, the district court found literal infringement of the ’797 patent; decided that Claim 1 was not indefinite under 35 U.S.C. § 112, 2; and found the claims invalid under the public use provision of 35 U.S.C. § 102(b). The court dismissed all other motions as moot.

Undisputed was that Invitrogen used the claimed process before the critical date, in its own laboratories, to produce competent cells. Invitrogen did not sell the claimed process or any products made with it. Invitrogen kept its use of the claimed process confidential. The process was known only within the company. Stratagene did not dispute that the claimed process was maintained as a secret within Invitrogen until some time after the critical date.

35 U.S.C. § 102(b) states that a person shall be entitled to a patent unless “the invention was . . . in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States.” The Supreme Court considered the meaning of the phrase “the invention” in § 102(b) in Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 60 (1998). The Court explained that analysis under § 102(b) involves two separate inquiries, one evaluating whether “the invention” was complete and ready for patenting, and the other evaluating whether that invention was “on sale.”

The Court noted that both the on sale and public use bars of § 102 stem from the same “reluctance to allow an inventor to remove existing knowledge from public use.” A bar under § 102(b) arises where, before the critical date, the invention is in public use and ready for patenting. The proper test for the public use prong of the § 102(b) statutory bar is whether the purported use: (1) was accessible to the public; or (2) was commercially exploited. Commercial exploitation is a clear indication of public use, but it likely requires more than, for example, a secret offer for sale. Thus, the test for the public use prong includes the consideration of evidence relevant to experimentation, as well as, , the nature of the activity that occurred in public; public access to the use; confidentiality obligations imposed on members of the public who observed the use; and commercial exploitation,

The district court reasoned that Stratagene had used the claimed process in its own laboratories, more than one year before the ’797 application was filed, to “further other projects” beyond development of the claimed process and to acquire a commercial advantage. Stratagene admitted that it used the claimed process in its own laboratories before the critical date to grow cells to be used in other projects within the company. The district court determined that use of the invention in Stratagene’s general business of widespread research generated commercial benefits. The district court found that this use was “public.” Stratagene argued that this secret internal use was not “public use” under the applicable test, because it neither sold nor offered for sale the claimed process or any product derived from the process, nor did it otherwise place into the public domain either the process or any product derived from it.

The CAFC then held that:

The basic tenet of U.S. patent law is that an original inventor gains an exclusive right to the invention. U.S. Const. art. I, § 8, cl. 8. Thus, an inventor’s own work cannot be used to invalidate patents protecting his own later inventive activities unless, inter alia, he places it on sale or uses it publicly more than a year before filing. 35 U.S.C. § 102(b); see also In re Katz, 687 F.2d 450, 454 (CCPA. 1982); In re Facius, 408 F.2d 1396, 1406 (CCPA 1969) (“[C]ertainly one’s own invention, whatever the form of disclosure to the public, may not be prior art against oneself, absent a statutory bar.”). Section 102(a) denies any applicant for a patent an exclusive right to any invention already “known or used by others in this country” (emphasis added). On the other hand, § 102(b) can apply to the inventor’s own actions. Section 102(b) expressly requires a “public use” in this country for a statutory bar to arise based on use by the inventor himself. See Pennock v. Dialogue, 27 U.S. 1, 23 (1829) (an applicant must be the “first and true” inventor to obtain a patent, but “if he shall put [the invention] into public use, or sell it for public use before he applies for a patent . . . this should furnish , 104 U.S. 333, 336 (1881); another bar to his claim”); Katz, 687 F.2d at 454 (“Disclosure to the public of one’s own work constitutes a bar to the grant of a patent claiming the subject matter so disclosed (or subject matter obvious therefrom).”). Further, to qualify as “public,” a use must occur without any “limitation or restriction, or injunction of secrecy.” Egbert v. Lippmann; In re Smith, 714 F.2d 1127, 1134 (Fed. Cir. 1983).

* * *

While there are instances in which a secret or confidential use of an invention will nonetheless give rise to the public use bar, this is not such a case. In Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946), the patentee used a secret process to recondition worn metal parts for its customers before the critical date. The Second Circuit correctly held “that it is a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or [a patent].” Id. at 520. In contrast, there is no evidence that Invitrogen received compensation for internally, and secretly, exploiting its cells. The fact that Invitrogen secretly used the cells internally to develop future products that were never sold, without more, is insufficient to create a public use bar to patentability.

Get the opinion here.

A British court handed down a mixed verdict for Pfizer in a patent dispute, upholding one of the company's British patents on Lipitor, the cholesterol-lowering medicine, but invalidating a second patent. The ruling will have no practical effect on Pfizer's control over Lipitor, because the patent upheld by the court expires in November 2011, while the patent that was invalided expires in July 2010.

Lipitor is the world's top-selling drug, with sales expected to top $12 billion this year, producing almost half of Pfizer's profits. Next up is a decision in the similar patent suit in the U.S., closely watched since more than 60 percent of Pfizer's worldwide Lipitor sales come in the United States.

Ranbaxy is arguing in the Delaware case that Pfizer's basic patents on the active ingredient atorvastatin are invalid claiming that one of the two Lipitor patents does not cover the exact molecular form of atorvastatin that Pfizer sells as Lipitor. Ranbaxy then claims that the second patent, which does cover the exact molecular form, should be invalidated because it does not represent a real advance over the first patent.

Atorvastatin has two key patents that protect its market exclusivity. The composition patent, U.S. Pat. No. 4,681,893, discloses NCE atorvastatin, while U.S. Pat. No. 5,273,995, discloses the enantiomer having the R form of the ring-opened acid of trans-atorvastatin. The basic composition patent covers the racemic mixtures (including Lipitor, which is one of the stereoisomer). The second patent covers the pure isomer (Lipitor, or R-Trans-isomer). The original basic NCE patent expires on May 30, 2006. Pfizer received a Hatch-Waxman patent term extension, to the original patent, which along with a 6-month pediatric extension protects the exclusivity to March 2010. The racemic patent, including a six-month pediatric extension, expires on June 2011.

The patent examiner in the USPTO initially considered the enantiomer patent invalid because the pure enantiomer was found within the basic NCE patent. Pfizer argued that although the pure enantiomer was mentioned in the ’893 patent, the ’893 patent did not teach how to make the pure enantiomer.

Under patent law, one can obtain a patent on a racemic mixture and then later obtain a patent on a pure enantiomer of the compound disclosed in the racemic mixture. The Patent Board of Appeals of USPTO then agreed with Pfizer that the pure enantiomer claimed in the ’995 patent was not anticipated by the ’893 patent but it suggested to the examiner that he might want to consider an obviousness rejection. The same examiner issued the ‘995 patent.

Since the patent on atorvastatin in the U.S. expires in March 2010, patent protection could end a year earlier than expected if the U.S. District Court follows the British court's ruling.

Gen-Probe Inc. announced today that the United States Court of Appeals for the Federal Circuit has affirmed the summary judgment in favor of Gen-Probe in the patent infringement lawsuit initiated by Enzo Biochem, Inc. The summary judgment was granted in July of 2004 by the U.S. District Court for the Southern District of New York. The District Court ruled that the patent on which Enzo's lawsuit is based is invalid and dismissed Enzo's infringement claims against Gen-Probe and its co-defendant, Becton Dickinson. Enzo filed the infringement lawsuit in June 1999. Enzo alleged that Gen-Probe and Becton Dickinson willfully infringed U.S. Pat. No. 4,900,659 through the manufacture and sale of products for the diagnosis of gonorrhea.

Enzo is the assignee of the ’659 patent, which relates to nucleic acid probes that selectively hybridize to the bacteria that cause gonorrhea, namely, Neisseria gonorrhoeae, as well as methods for using those probes to detect the bacteria. The district court's decision invalidated the ’659 patent for violating the on-sale bar. The trial judge specifically held that "there are no triable issues of fact," and he granted defendants’ motion for summary judgment. The District Court judge made it clear that his rulings affected all six claims of the patent and held them invalid. Importantly, the trial judge concluded the hearing by asking the parties "if there is anything that I have missed in my rulings that I should rule upon." Both counsel responded that the court had covered all the issues raised, and Enzo’s counsel indicated that it would appeal the decision. The judge then stated that he would “enter a summary order . . . that will enable you to proceed with dispatch in the Federal Court of Appeals on your rights if I have erred." Enzo filed a Notice of Appeal and Gen-Probe then moved to dismiss the appeal, arguing that its remaining unadjudicated counterclaim of unenforceability for inequitable conduct rendered the district court’s judgment nonfinal.

Gen-Probe argued that there was no final judgment in this case because there was no adjudication of Gen-Probe’s unenforceability counterclaim, nor had Gen-Probe agreed to a dismissal without prejudice or without a finding of mootness. The district court also did not expressly find that the counterclaim was moot in light of its summary judgment of invalidity.

Gen-Probe did not bring the pending counterclaim to the district judge’s attention when asked whether any issues were outstanding and Enzo contends that the district court believed that the judgment was final, as evidenced by its statements during the summary judgment hearing and the unequivocal direction to the clerk of the court to enter an order closing the case. Second, Enzo asserts that Gen-Probe’s counterclaim for unenforceability is moot because all claims of the patent were held invalid. It argues that the allegations of inequitable conduct would be relevant only to a claim for attorney fees, which Enzo maintains does not render a judgment on the merits nonfinal for appellate review under Federal Rule of Civil Procedure 58(c). Enzo contends that Gen-Probe did not timely move for attorney fees, so it waived any such claim, and its unenforceability counterclaim is therefore moot. Gen-Probe responds that the district court’s belief that the judgment was final is irrelevant to whether jurisdiction is satisfied. It argues that the district court’s pronouncement that an order is final for purposes of appellate jurisdiction is not itself conclusive of finality, and it alleges that the district court had no occasion to address the counterclaim during the summary judgment hearing, which focused on invalidity.

Gen-Probe asserte that the responses by Gen-Probe’s counsel to the district court’s inquiry concerning whether all issues had been resolved did not unambiguously refer to the case as a whole, including the outstanding counterclaims. Gen-Probe asserted that its answer to the district court was in the more specific context of the summary judgment hearings; the affirmative statement by its counsel came at the end of a hearing on invalidity lasting several days and was not intended to waive its unenforceability counterclaim.

The Fed Circuit held:

We agree with Gen-Probe that its pending unenforceability counterclaim renders the district court’s judgment nonfinal for purposes of appeal. ... Although it is true that the district court here did make a clear statement that the case was at an end, it was mistaken, because an unadjudicated counterclaim remained. Gen-Probe’s brief to this court, supported by the record, and unrefuted by Enzo, makes that clear. While it is, to say the least, regrettable that a party with a remaining counterclaim that it wishes to pursue, as well as its opponent, leaves a trial judge with the impression that no claims remain in the case, we have no choice but to take cognizance of the nonfinality created by the unquestioned existence of that counterclaim.

... although the district court may have indicated its intent that its order "will enable you to proceed with dispatch in the Federal Court of Appeals," Summary Judgment Hearing at 35, it did not address at any time Gen-Probe’s unresolved counterclaim of unenforceability. At no time was the counterclaim waived, and, whether through inadvertence or not, the parties should not have let the trial court conclude its deliberations under that false impression. Because Gen-Probe’s counterclaim remains unadjudicated, the judgment is nonfinal.

We also disagree with Enzo that the only issue remaining is Gen-Probe’s claim for attorney fees. Enzo’s argument under Federal Rule of Civil Procedure 58(c) that a pending motion for attorney fees will not render an otherwise final judgment unappealable, is relevant only when all other claims have been adjudicated. More litigation lay ahead than awarding fees. To be eligible for attorney fees on the basis of inequitable conduct, Gen-Probe still has to establish that Enzo actually engaged in such conduct, an issue that remains unresolved in the district court. Despite the jurisdictional defect in the instant appeal, we have held that "a premature notice of appeal ripens upon subsequent action of the district court," Pause, 401 F.3d at 1295 (citing E-Pass Techs., Inc. v. 3Com Corp., 343 F.3d 1364, 1367 (Fed. Cir. 2003) and Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 830 (Fed. Cir. 2003)). Accordingly, inasmuch as the appeal has been briefed and argued on the merits, in the interest of judicial economy we grant Enzo leave to seek remedial action in the district court and thereafter reinstate the appeal if and when the judgment becomes final.

See the entire holding here.

Akzo Nobel's human healthcare business, Organon, has entered into a non-binding letter of intent with Cincinnati's Duramed Pharmaceuticals, Inc., a subsidiary of Barr Pharmaceuticals, Inc., to settle the pending patent litigation concerning a generic version of Organon’s Mircette® oral contraceptive.

Under the proposed transaction, Barr would pay Organon $142 million to settle the patent litigation and to acquire all rights relating to Mircette, including the U.S. marketing approval. Barr would also pay $13.75 million to Saviant Pharmaceuticals, Inc., owner of the patent covering Mircette. Organon is the exclusive licensee under the patent for Mircette (U.S. Patent No. 4,921,843, the "original patent", and U.S. Patent No. RE 35724, the "reissue patent").

Mircette® (desogestrel/ethinyl estradiol and ethinyl estradiol) provides an oral contraceptive regimen of tablets each containing 0.15 mg desogestrel (13-ethyl-11- methylene-18,19-dinor-17 alpha-pregn- 4-en- 20-yn-17-ol), 0.02 mg ethinyl estradiol (19-nor-17 alpha-pregna-1,3,5 (10)-trien-20-yne-3,17-diol).

The patent litigation is currently before the U.S. District Court for the District of New Jersey. The court has agreed to stay any further proceedings to allow all parties involved to negotiate definitive settlement agreements.

Barr and Organon filed the non-binding letter of intent on the settlement with the Federal Trade Commission (FTC) this year, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act. The closing of the deal is subject to FTC approval, which is currently at a second request stage.

The Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. 94-435 (known commonly as the HSR Act), is a set of amendments to the antitrust laws, principally the Clayton Antitrust Act. The context in which the HSR Act is usually cited is 15 U.S.C. § 18a, title II of the original law, which provides that a company seeking to acquire or merge with another company (or engage in certain other transactions) must file advance notice of its intentions with the Federal Trade Commission and the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice at least thirty days prior to consummation of such a transaction.

Title III of the Act allows states to sue companies in Federal court for monetary damages under antitrust laws on behalf of their citizens; previously, only the persons harmed by anticompetitive activity had a right to sue for damages.

The Court of Appeals for the Federal Circuit handed down a decision in In Re Dane K. Fisher And Raghunath V. Lalgudi (U.S. Court of Appeals for the Federal Circuit, 04-1465 (Serial No. 09/619,643), September 7, 2005). Monsanto had appealed the rejection of its patent application for five expressed sequence tags (ESTs) that encode parts of genes whose functions are unknown. The U.S. Patent and Trademark Office refused to grant the patent to Monsanto’s assignees (Fisher and Raghunath) on the grounds that the ESTs have no specific utility; they can only be used to locate genes of unknown function, as can all other ESTs.

Monsanto insisted that the PTO is applying a higher utility standard than stipulated by law, and that the use of ESTs as research tools is enough to warrant them patentable. Monsanto says the PTO argument that awarding patents on ESTs would inhibit innovation is no basis for rejecting them if the law says otherwise – even if it would be "bad public policy." In affirming the Board’s findings, the CAFC agreed that each of the five claimed ESTs lack a specific and substantial utility and that they are not enabled.

Basically, the claimed invention relates to five purified nucleic acid sequences that encode proteins and protein fragments in maize plants. The claimed sequences are commonly referred to as "expressed sequence tags" or "ESTs." An EST is a short nucleotide sequence that represents a fragment of a cDNA clone. It is typically generated by isolating a cDNA clone and sequencing a small number of nucleotides located at the end of one of the two cDNA strands. When an EST is introduced into a sample containing a mixture of DNA, the EST may hybridize with a portion of DNA. Such binding shows that the gene corresponding to the EST was being expressed at the time of mRNA extraction.

Claim 1 of the ’643 application recites:

A substantially purified nucleic acid molecule that encodes a maize protein or fragment thereof comprising a nucleic acid sequence selected from the group consisting of SEQ ID NO: 1 through SEQ ID NO: 5.

The ESTs set forth in SEQ ID NO: 1 through SEQ ID NO: 5 are obtained from cDNA library LIB3115, which was generated from pooled leaf tissue harvested from maize plants (RX601, Asgrow Seed Company, Des Moines, Iowa, U.S.A.) grown in the fields at Asgrow research stations. SEQ ID NO:1 through SEQ ID NO:5 consist of 429, 423, 365, 411, and 331 nucleotides, respectively. When Fisher filed the ’643 application, he claimed ESTs corresponding to genes expressed from the maize pooled leaf tissue at the time of anthesis. Nevertheless, Fisher did not know the precise structure or function of either the genes or the proteins encoded for by those genes.

The ’643 application generally discloses that the five claimed ESTs may be used in a variety of ways, including: (1) serving as a molecular marker for mapping the entire maize genome, which consists of ten chromosomes that collectively encompass roughly 50,000 genes; (2) measuring the level of mRNA in a tissue sample via microarray technology to provide information about gene expression; (3) providing a source for primers for use in the polymerase chain reaction ("PCR") process to enable rapid and inexpensive duplication of specific genes; (4) identifying the presence or absence of a polymorphism; (5) isolating promoters via chromosome walking; (6) controlling protein expression; and (7) locating genetic molecules of other plants and organisms.

In a final rejection, dated September 6, 2001, the examiner rejected claim 1 for lack of utility under §101. The examiner found that the claimed ESTs were not supported by a specific and substantial utility. She concluded that the disclosed uses were not specific to the claimed ESTs, but instead were generally applicable to any EST. For example, the examiner noted that any EST may serve as a molecular tag to isolate genetic regions. She also concluded that the claimed ESTs lacked a substantial utility because there was no known use for the proteins produced as final products resulting from processes involving the claimed ESTs.

The examiner stated: "Utilities that require or constitute carrying out further research to identify or reasonably confirm a ‘real world’ context of use are not substantial utilities." The examiner also rejected the claimed application for lack of enablement under § 112, first paragraph. She reasoned that one skilled in the art would not know how to use the claimed ESTs because the ’643 application did not disclose a specific and substantial utility for them.

The Board considered each of Fisher’s seven potential uses but noted that Fisher focused its appeal on only two: (1) use for the identification of polymorphisms; and (2) use as probes or as a source for primers. As to the first, the Board found that the application failed to explain why the claimed ESTs would be useful in detecting polymorphisms in maize plants. Board Decision. The Board reasoned that "[w]ithout knowing any further information in regard to the gene represented by an EST, as here, detection of the presence or absence of a polymorphism provides the barest information in regard to genetic heritage."

Thus, the Board concluded that Fisher’s asserted uses for the claimed ESTs tended to the "insubstantial use" end of the spectrum between a substantial and an insubstantial utility. The Board also concluded that using the claimed ESTs to isolate nucleic acid molecules of other plants and organisms, which themselves had no known utility, is not a substantial utility. Specifically, the Board noted that Fisher argued that the "claimed ESTs may be useful in searching for promoters that are only active in leaves at the time of anthesis." The Board found, however, that the application failed to show that the claimed ESTs would be expressed only during anthesis or that they would be capable of isolating a promoter active in maize leaves at the time of anthesis. Additionally, the Board addressed the remaining asserted utilities, highlighting in particular the use of the claimed ESTs to monitor gene expression by measuring the level of mRNA through microarray technology and to serve as molecular markers. The Board found that using the claimed ESTs in screens does not provide a specific benefit because the application fails to provide any teaching regarding how to use the data relating to gene expression. Fisher appealed.

In rendering its opinion, the CAFC declared that:

Regarding the seven uses asserted by Fisher, we observe that each claimed EST uniquely corresponds to the single gene from which it was transcribed ("underlying gene"). As of the filing date of the ’643 application, Fisher admits that the underlying genes have no known functions. Fisher, nevertheless, claims that this fact is irrelevant because the seven asserted uses are not related to the functions of the underlying genes. We are not convinced by this contention. Essentially, the claimed ESTs act as no more than research intermediates that may help scientists to isolate the particular underlying protein-encoding genes and conduct further experimentation on those genes. The overall goal of such experimentation is presumably to understand the maize genome – the functions of the underlying genes, the identity of the encoded proteins, the role those proteins play during anthesis, whether polymorphisms exist, the identity of promoters that trigger protein expression, whether protein expression may be controlled, etc. Accordingly, the claimed ESTs are, in words of the Supreme Court, mere "object[s] of use-testing," to wit, objects upon which scientific research could be performed with no assurance that anything useful will be discovered in the end. Brenner, 383 U.S. at 535.

…

Moreover, all of Fisher’s asserted uses represent merely hypothetical possibilities, objectives which the claimed ESTs, or any EST for that matter, could possibly achieve, but none for which they have been used in the real world. Focusing on the two uses emphasized by Fisher at oral argument, Fisher maintains that the claimed ESTs could be used to identify polymorphisms or to isolate promoters. Nevertheless, in the face of a utility rejection, Fisher has not presented any evidence, as the Board well noted, showing that the claimed ESTs have been used in either way. That is, Fisher does not present either a single polymorphism or a single promoter, assuming at least one of each exists, actually identified by using the claimed ESTs. Further, Fisher has not shown that a polymorphism or promoter so identified would have a "specific and substantial" use. The Board, in fact, correctly recognized this very deficiency and cited it as one of the reasons for upholding the examiner’s final rejection.

With respect to the remaining asserted uses, there is no disclosure in the specification showing that any of the claimed ESTs were used as a molecular marker on a map of the maize genome. There also is no disclosure establishing that any of the claimed ESTs were used or, for that matter, could be used to control or provide information about gene expression. Significantly, despite the fact that maize leaves produce over two thousand different proteins during anthesis, Fisher failed to show that one of the claimed ESTs translates into a portion of one of those proteins. Fisher likewise did not provide any evidence showing that the claimed ESTs were used to locate genetic molecules in other plants and organisms. What is more, Fisher has not proffered any evidence showing that any such generic molecules would themselves have a specific and substantial utility. Consequently, because Fisher failed to prove that its claimed ESTs can be successfully used in the seven ways disclosed in the ’643 application, we have no choice but to conclude that the claimed ESTs do not have a "substantial" utility under § 101.

The court felt that nothing about Fisher’s alleged uses set the five claimed ESTs apart from the more than 32,000 ESTs disclosed in the ’643 application or indeed from any EST derived from any organism and that Fisher has only disclosed general uses for its claimed ESTs, not specific ones that satisfy § 101.

The court did not agree with the concerns raised by the government and certain amici that allowing EST patents without proof of utility would discourage research, delay scientific discovery, and thwart progress in the "useful Arts" and "Science" stating that Congress did not intend for these practical implications to affect the determination of whether an invention satisfies the requirements set forth in 35 U.S.C. §§ 101, 102, 103, and 112.

Judge Rader dissented stating believing that the claimed ESTs indeed have such a utility, at least as research tools in isolating and studying other molecules.

Download Full Opinion Here">here.

The U.S. District Court for the District of New Jersey has issued a summary judgment ruling that GlaxoSmithKline's U.S. Patent Nos. 5,578,628 (the '628 patent) and 4,753,789 (the '789 patent) for Zofran ODT(R) (ondansetron) Orally Disintegrating Tablets are valid, enforceable and infringed by Kali Laboratories, Inc., a wholly-owned subsidiary of Par Pharmaceutical Companies, Inc. There are "method of use" patents covering the way that the active ingredient in Zofran works. These are often difficult to protect.

Zofran ODT(R) is used for the prevention of nausea and vomiting associated with emetogenic cancer chemotherapy, certain radiotherapies, and the prevention of postoperative nausea and/or vomiting. Annual U.S. sales of Zofran ODT(R) are approximately $225 million.

Kali filed an Abbreviated New Drug Application (ANDA) containing a paragraph IV certification with the U.S. Food and Drug Administration (FDA) in September 2002 seeking marketing clearance for its generic version of Zofran ODT(R). In October 2002, Kali's ANDA was accepted for filing by the FDA. GlaxoSmithKline did not file suit against Kali on U.S. Patent Nos. 5,955,488 and 6,063,802, which expire in May 2016. The '628 method of use patent expires August 16, 2005 and the '789 method of use patent expires December 24, 2006, following expiration of pediatric exclusivity.

More here.

Today's post comes from Guest Barista C. Lee Thomason, an expert with over twenty years experience in complex patent infringement suits, on the much-anticipated Court of Appeals for the Federal Circuit decision in Phillips v. AWH Corp.:

The en banc decision in the Phillips case urges that claim construction will be done essentially in accord with three CAFC decisions, Markman, Vitronics and Innova. On that basis, the Phillips decision argues that the existing law was restated, not reformulated. The only expressed change was to remove the precedential value of the Texas Digital line of ‘dictionary’ decisions. Still, some reformulation occurred, at least in regard to ‘rating’ the sources of information offered to interpret patent claims.

One noted change is the primacy accorded to the enablement and best mode requirements from §112. The prior CAFC opinions do not start interpreting claims with §112 as the guiding premise. The §112 requirements for the written description start the analysis in Phillips (slip op. pg. 7), then come again in the middle (slip op., pg. 15, the “statutory directive”), and then toward the end of the decision §112 (pg. 27, the “inventor’s goal” and pg. 29. “important to keep in mind that the purposes of the specification are to teach and enable ..and to provide a best mode”).

The stated goal in Phillips, and the most important component of the analysis is to ascertain the meaning to the “person of ordinary skill in the art in question at the time of the invention” (slip op., pg. 9). That phrase comes, however, from the test set out in §103, not §112. Only a patent lawyer can find reason to quare: does “any person skilled in the art” per §112, ascribe the same meaning to a claim as does “a person having ordinary skill in the art” per §103?

From these threshold points, the Phillips opinion identifies, and suggests the relative worth of, several sources of textual reference. These include, the “context” in the claim, and in the “entire patent” and the “prosecution history” (slip op., pg. 10). That “context” may arise from the use of adjectives to add to ordinary meaning, or from use of a term consistently in several claims (slip op., pg. 12). Next considered is whether the disputed word is a specialized or an ordinary term (slip op., pgs. 11 & 16), which is an aspect based on intrinsic as well as “extrinsic evidence concerning relevant scientific principles, …and the state of the art” (slip op., pg. 11), including perhaps, “technical dictionaries” (slip op., pgs. 18 & 19). Not to be overlooked though, are what the inventor “intended to envelop with the claim” (slip op., pg. 15), and what is the “broadest reasonable construction” consistent with §112 (slip op., pg. 16), which does not engender the “risk of systematic overbreadth” (slip op., pg. 26). All of these are important, but the less important sources are in the prosecution history (slip op., pg. 17), the extrinsic evidence, and expert’s opinions (slip op., pg. 19 & 20).

The edicts in Phillips eliminate any “catechism for claim construction” but its hierarchy of “sources,” in practice, may perform more like a convocation among competing voices. As applied, do these “sources” result in a determination based on the weighty-est of them (once “the appropriate weight [is] assigned to these sources,” slip op., pg. 31), or does the claim interpretation result from a compromise evaluation, (not “any particular sources” analyzed not “in any specific sequence,” slip op., pg. 30).

The opinion may have wanted to amplify the rule in Vitronics, 90 F.3d at 1582, against an ambiguity being created from extrinsic evidence, but no consensus may have existed about how to integrate rules arising from ambiguity, with the stated rulings on inventor intent, prosecution history, multiple dictionary definitions and the presumption of validity (slip op., pgs. 14, 17, 26, & 36). After all, when one “person” interprets a claim term to have ambiguous multiple meanings, another person of skill may deem those as “encompass[ed]” by consistent “multiple dictionary meanings” (slip op., pg. 22 & 24), or by the “broadest reasonable construction” (slip op., pg. 16), or that the meaning of the term is “unambiguous in light of the intrinsic evidence” (slip op., pg. 31).

Perhaps the weakest part of the opinion dances the “fine line” between instances where examples in the written description are “merely …exemplary” and those which express an intention for the claims “to be limited” to the examples. (slip op., pgs. 28-30). For an en banc opinion to say that “Most of the time [this] will become clear” simply overlooks how many panel decisions have struggled in their pursuit of interpreting the claims to avoid importing limitations from the specification.

Part IV of the majority opinion was not joined by those concurring in part. That section reaffirms the doctrine of claim differentiation (slip op., pg. 32). Also, Part IV remarks that the “doctrine of construing claims to preserve their validity” is not a “regular component of claim construction” but is confined to instances of “ambiguity” (slip op., pgs. 36-37). Part IV is weakened too because like other CAFC cases, it never makes clear whether claim differentiation is a doctrine or canon of construction, or just a check against a claim being “redundant” (slip op., pg. 32), or does it act as a “presumption” favoring a broader interpretation (slip op., pg. 13).

Part IV is now the law, however, that applies a broad interpretation to a claim element that the specification suggests can serve “multiple objectives” (slip op., pg. 35). That principle is solidified in Part III of the opinion, which rejects “the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as limited to that embodiment” (slip op., pg. 29). Also, these and other aspects of the ruling may cut back on cases after Texas Digital that find, or infer, that the specification disavowed some breadth impliedly, and Phillips may restore the requirement of a “clear disavowal of claim scope” (slip op., pg. 23).

Many commentators will quote this-ship’s-going-down remarks in Judge Mayer’s opinion in dissent. Suffice it to say that the dissent cites 17 Supreme Court decisions, and only 2 of the CAFC. That suggests that His Honor is imploring the High Court to review the issue (Mayer dissent fn. 1) of whether claim construction is decided by the district judge, or the fact finder. Beyond that, it provides good material for discussing the wisdom of the majority’s rules.

A U.S. District Court jury in Delaware yesterday dealt a blow to Boston Scientific Corp. finding that it infringed two cardiac stent patents of its main competitor in the field, Johnson & Johnson. BSX could be forced to pay damages to J&J although the exact amount will not be set until August at a separate trial.

Morgan Stanley expects that it will cost between $1 billion and $1.5 billion but the amount could triple if a court later finds the infringement was willful and awards treble damages. BSX said it will probably appeal the verdict.

Stents are tiny wire-mesh tubes used to prop open arteries after they have been cleared of blockages through a procedure known as angioplasty. The latest versions from both companies are drug-coated stents, which slowly release medication that prevents vessels from reclogging after procedures to open them up.

The benefits apparently last for years, and even very big blockages in very small vessels can be fixed this way. The devices work so well that when an older stent clogs, it's better to put a new drug-coated one inside it than to treat the problem with radiation as has been done in the past.

Johnson & Johnson argued that Boston Scientific products, including Taxus drug-coated cardiac stents, are based on stent designs it licensed partly from Julio Palmaz, an academic physician in Texas. Apparently, Boston Scientific turned down Palmaz's $40 million request in the early 1990s so he went to Johnson & Johnson.

The jury found in favor of Johnson & Johnson's claims that its patent rights to the Palmaz patent were violated. It also sided with Johnson & Johnson's claim that Boston Scientific's newest bare-metal stent design, called Liberté, violates another patent related to flexible stents.

The dispute dates back to 1997 when Johnson & Johnson claimed that a stent Boston Scientific previously sold violated the Palmaz patent. In 2000, a jury awarded Johnson & Johnson $324 million in damages but the award was set aside.

Meanwhile, BSX is now pursuing its own patent infringement case against J&J, leading some observers to predict an eventual settlement. However, BSX could face a court injunction to pull its best performing stent off the market, the Liberté. While difficult, it would not be impossible for J&J to prevail.

Boston Scientific last year reported $5.6 billion in revenue, with nearly half of it driven by sales of Taxus drug-coated cardiac stents, the focus of Johnson & Johnson's patent-litigation claims.

The U.S. Supreme Court agreed to consider limiting antitrust suits against pharmaceutical companies, computer makers and other patent holders. The justices said they will hear an appeal by Illinois Tool Works Inc., which is trying to block a lawsuit over devices it sells for use in industrial printers.

On Jan. 25, 2005, the U.S. Court of Appeals for the Federal Circuit issued a decision in Independent Ink Inc. v. Illinois Tool Works Inc. that held that in certain circumstances, patent and copyright owners will be presumed to possess market power. The concept of market power plays a crucial role in most antitrust cases. Generally, it means the ability to raise prices above competitive levels without sacrificing profits, e.g., by losing significant sales to competitors. Monopoly power represents a heightened form of market power and, as a practical matter, exists only where a single company controls the vast majority, if not all, of the sales in a market.

In most instances, to establish a cause of action under Section 1 of the Sherman Act (which condemns any concerted action between or among economically independent actors with an overall anti-competitive effect), the plaintiff must prove that the parties to the concerted action possess market power. This follows from the notion that parties lacking market power simply cannot force an anti-competitive result on the market. If a company without market power tries to increase its prices substantially above the market price, customers will defect to competitors’ products.

In an action brought under Section 2 of the Sherman Act (which prohibits deliberate attempts to obtain or maintain monopoly power), the plaintiff must prove that the defendant has an even higher degree of market power than what would suffice under Section 1, that is, either monopoly power or something dangerously close to it.

IP protection in patents and copyrights are often described as monopolies but these are not necessarily economic monopolies in the marketplace. After all, just because you have the exclusive right to sell a bad product doesn’t mean the marketplace must buy it instead of better alternatives. The patent grant may or may not contribute to a market monopoly but it’s not a certainty and each instance must be looked at on a case-by-case basis.

In 1962, the Supreme Court in United States v. Loew’s Inc. the “block-booking” of motion pictures, where studios would only license rights to copyrighted films in a package, as illegal tying. The Court held that “[t]he requisite economic power is presumed when the tying product is patented or copyrighted.” The Court relied on its 1947 opinion in International Salt Co. v. United States, a case in which the defendant tied the lease of a patented machine to the lessee’s purchase of an unpatented product. But International Salt doesn't mention market power as a necessary element of a tying claim nor does it describe a market power presumption due to ownership of a patent.

In 1988, Congress amended the Patent Act to provide that parties asserting the defense of patent misuse must affirmatively prove that the patentee has market power if the misuse claim rests on a tying theory. This seems to have removed any market power presumption that may have existed under the misuse doctrine.

The present case involves claims of "tying," which is when a company illegally conditions the sale of a sought-after product on the purchase of a second item. Tying is illegal when the seller has market power in selling the desired product and, therefore, can raise prices on that product without losing sales. Here, the patent owner Illinois Tool holds a patent for a device used to print bar codes on cartons. Trident's standard licensing agreement requires printer manufacturers also to buy their ink from Trident. The contract also prohibits refilling the printheads. Independent Ink Inc., which sells ink that can be used in Trident's printheads, sued, saying the licensing agreement is an illegal tying arrangement.

The U.S. Court of Appeals for the Federal Circuit said courts should presume that a company with a patent has market power in that field. In its appeal, ITW said the appeals court's approach "is the very embodiment of formalism over economic substance." ITW said that in many cases the patented product has competition that keeps down prices.

The District Court in California dismissed both the Section 1 and Section 2 Sherman Act claims on the basis that Independent Ink failed to show that Illinois Tool had the Section 1 statutorily required market power over the tying product or the required monopoly power under Section 2.

Acknowledging its mandate to follow Supreme Court precedent, the Federal Circuit made clear that unless and until changed by the Supreme Court or the legislature, the precedent was binding, stating:

The fundamental error in all of defendants’ arguments is that they ignore the fact that it is the duty of a court of appeals to follow the precedents of the Supreme Court until the Court itself chooses to expressly overrule them. This message has been conveyed repeatedly by the Court. The Court’s “decisions remain binding precedent until [it] see[s] fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality.” Hohn v. United States, 524 U.S. 236, 252-53 (1998). “If a precedent of th[e] Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to th[e] Court the prerogative of overruling its own decisions.” Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 484 (1989). Even where a Supreme Court precedent contains many “infirmities” and rests upon “wobbly, moth-eaten foundations,” it remains the “Court's prerogative alone to overrule one of its precedents.” State Oil Co. v. Khan, 522 U.S. 3, 20 (1997). None of the authorities that defendants present, whether it be the language of Walker Process, the concurrence in Jefferson Parish, or the dissent from denial of certiorari in Data General, constituted an express overruling of International Salt or Loew’s. We conclude that the Supreme Court has held that there is a presumption of market power in patent tying cases, and we are obliged to follow the Supreme Court’s direction in this respect. The time may have come to abandon the doctrine, but it is up to the Congress or the Supreme Court to make this judgment.

However, addressing what it characterized as an unresolved issue, the Federal Circuit held that the presumption of market power was rebuttable, permitting the patent owner the opportunity to overcome it. As well, the CAFC held that the presumption of market power does not create a presumption of monopoly power, which is a requirement of Section 2, stating that:

The presumption of illegality in patent tying arises in section 1 cases. Neither International Salt nor Loew’s dealt with section 2 of the Sherman Act. See Int’l Salt, 332 U.S. at 393 & n.1; Loew’s, 371 U.S. at 39 & n.1. To establish a monopolization claim under section 2 of the Sherman Act, there must be monopoly power in the relevant market and the willful acquisition or maintenance of that power. Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 124 S. Ct. 872, 878-79 (2004). To establish an attempted monopolization claim, plaintiff must demonstrate that the defendant had specific intent to monopolize a relevant market and a “dangerous probability of success.” Spectrum Sports Inc. v. McQuillan, 506 U.S. 447, 455 (1993). It follows that in section 2 cases a definition of the relevant market and consideration of the defendant’s power within that market are required. Id. at 455-56; Walker Process, 382 U.S. at 177-78.

In this case, the alleged monopolization is over the tied product, the ink, not the tying product, the printhead technology. The patent tying cases do not create any presumption that market power over the tying product confers the degree of market power over the tied product necessary to establish a monopolization or attempted monopolization claim. See Fortner II, 429 U.S. at 619. In section 2 cases, the plaintiff bears the burden of defining the market and proving defendant’s power in that market. See Spectrum Sports, 506 U.S. at 455-56. As the district court found, plaintiff makes only the conclusory allegation of a geographic market without supporting economic evidence. Indep. Ink, 210 F. Supp. 2d at 1175. Such conclusory statements are not sufficient to define a relevant market. Morgan, Strand, Wheeler & Biggs v. Radiology, Ltd., 924 F.2d 1484, 1490 (9th Cir. 1991). Therefore, there is no genuine issue of material fact as to the section 2 claim and summary judgment was properly granted.

But this is not the case under Section 1 of the Sherman Act. Thus the Section 1 Sherman Act cause of action was sustained and remanded for further fact finding and the dismissal of the Section 2 Sherman Act claim was affirmed.

The Federal Circuit’s decision in Independent Ink v. Illinois Tool Works, Inc. is available here.

AIPLA amicus brief is here.

ABA amicus brief is here.

IPO amicus brief is here.

Janssen Pharmaceutica Products, L.P. (a subsidiary of Johnson & Johnson) and Synaptech filed suit against Barr Laboratories Inc., for patent infringement relating to Razadyne (galantamine hydrobromide), 4 mg, 8 mg, and 12 mg Tablets, formerly Reminyl. The action was initiated under the Hatch-Waxman Act as an infringement of a patent on the compound that expires in December 2008. They also filed against Teva Pharmaceutical Industries Ltd. Mylan Laboratories Inc., Dr. Reddy's Laboratories Ltd. and Alpharma Inc.

Barr filed an Abbreviated New Drug Application (ANDA) with the US Food and Drug Administration (FDA) for Razadyne tablets on February 28, 2005, the first day that an ANDA containing a Paragraph IV certification could be submitted based on the expiration of the New Chemical Entity (NCE) exclusivity on the product.

Barr received notification from the FDA of the application's acceptance for filing in April 2005. Following receipt of notice from FDA, Barr notified Janssen, the New Drug Application (NDA) holder, and Synaptech, the patent owner, of Barr's challenge to the patents protecting Razadyne.

Razadyne, formerly Reminyl, is a tertiary alkaloid that has been extracted from plant sources and is now synthesized for use in the treatment of mild to moderate Alzheimer's disease (AD). Galantamine acts both as a reversible competitive inhibitor of acetylcholinesterase (AChE) and as an allosteric modulator of nicotinic acetylcholine receptors.

More here.

While the U.S. Supreme Court's opinion did not extend the statutory research use exemption to patented research tools under 35 U.S.C. ss.271 (e)(1) in Merck KGaA v. Integra LifeSciences I, Ltd . (2005 WL 1386324 (U.S.)), the Court unanimously ruled for a broader interpretation of the exemption from patent infringement for use of a patented invention "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs." The Court specifically noted that patented "research tools" were not part of that interpretation.

Some lawyers for these companies also said it was hypocritical of drug companies, which constantly assert the importance of strong patent protection in spurring innovation, to argue that they should be permitted to infringe upon patents held by others.

The Supreme Court said in a footnote that this case was about research using patented drugs themselves, not about tools used to study those drugs. Therefore, it did not address whether drug companies could use research tools without worrying about patents.

This case involved the question of whether uses of patented inventions in preclinical research, the results of which are not ultimately included in a submission to the Food and Drug Administration (FDA), are exempted from infringement by 35 U. S. C. §271(e)(1). While it is generally an act of patent infringement to “mak[e], us[e], offe[r] to sell, or sel[l] any patented invention . . . during the term of the patent therefore,” the Drug Price Competition and Patent Term Restoration Act of 1984 provides:

“It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) . . .) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs . . . .”

The clause permits drug companies to infringe on patents "solely for uses reasonably related to the development and submission of information" to the Food and Drug Administration. But it is not specifically restricted to generic drugs, so there have been questions about how far it extends.

The appeals court that handles patent cases ruled in 2003 that the exemption should be narrow, covering, in effect, clinical trials but not earlier work like test-tube experiments to determine which of several compounds might be the best drug candidate.

Now, the Supreme Court ruled that the exemption applied to more than clinical trials. The Court stated that:

Basic scientific research on a particular compound, performed without the intent to develop a particular drug or a reasonable belief that the compound will cause the sort of physiological effect the researcher intends to induce, is surely not “reasonably related to the development and submission of information” to the FDA. It does not follow from this, however, that §271(e)(1)’s exemption from infringement categorically excludes either (1) experimentation on drugs that are not ultimately the subject of an FDA submission or (2) use of patented compounds in experiments that are not ultimately submitted to the FDA. Under certain conditions, we think the exemption is sufficiently broad to protect the use of patented compounds in both situations.

...

We decline to read the “reasonable relation” requirement so narrowly as to render §271(e)(1)’s stated protection of activities leading to FDA approval for all drugs illusory. Properly construed, §271(e)(1) leaves adequate space for experimentation and failure on the road to regulatory approval: At least where a drugmaker has a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA, that use is “reasonably related” to the “development and submission of information under . . . Federal law.” §271(e)(1).

The use of a patented compound in experiments that are not themselves included in a “submission of information” to the FDA does not, standing alone, render the use infringing. The relationship of the use of a patented compound in a particular experiment to the “development and submission of information” to the FDA does not become more attenuated (or less reasonable) simply because the data from that experiment are left out of the submission that is ultimately passed along to the FDA. Moreover, many of the uncertainties that exist with respect to the selection of a specific drug exist as well with respect to the decision of what research to include in an IND or NDA.

The decision means that drug companies can do much of the laboratory, animal and human testing needed to win approval of a drug even if the new drug would infringe on the patent on another product. However, the new drug could not be sold until the patent on the other drug expired.

The Supreme Court sent the case back to the appeals court for reconsideration in light of the new ruling.

The U.S. Court of Appeals for the Federal Circuit in Washington today upheld an earlier decision that three patents held by Purdue Pharma LP can't be enforced because of misrepresentations to the U.S. Patent and Trademark Office about the painkiller's effectiveness thus giving Endo Pharmaceutical Holdings Inc. the right to sell a generic version.

OxyContin, a time-release painkiller generally prescribed to cancer patients and chronic-pain sufferers, had about $2 billion in sales last year. The drug is considered a controlled substance because its potential for abuse is similar to morphine's.

This was a patent infringement case in which the patents were held unenforceable by the trial court due to inequitable conduct during prosecution before the USPTO. Purdue Pharma filed an infringement suit against Endo alleging that Endo’s proposed generic versions of OxyContin®, would infringe three Purdue patents. The district court found that Endo would infringe Purdue’s patents, but determined the patents were unenforceable due to the inequitable conduct that occurred during prosecution. Purdue appealed the inequitable conduct judgment.

The three patents asserted by Purdue against Endo are directed to controlled release oxycodone medications for the treatment of moderate to severe pain. The patents are related: U.S. Patents No. 5,656,295 (the “’295 patent”) and No. 5,508,042 (the “’042 patent”) are, respectively, a continuation-in-part and a divisional of U.S. Patent No. 5,549,912 (the “’912 patent”). The ’912 patent itself is a continuation-in-part of U.S. Patent No. 5,266,331 (the “’331 patent”), which Purdue has not asserted against Endo.

The “Detailed Description” section of the written description in each asserted patent opens with the following statement, which played a prominent role in the trial court’s inequitable conduct determination:

It has now been surprisingly discovered that the presently claimed controlled release oxycodone formulations acceptably control pain over a substantially narrower, approximately four-fold [range] (10 to 40 mg every 12 hours—around-the-clock dosing) in approximately 90% of patients. This is in sharp contrast to the approximately eight-fold range required for approximately 90% of patients for opioid analgesics in general.

The thrust of this language is that the invented oxycodone formulation using a four-fold range of dosages (e.g., between 10 mg and 40 mg) achieves the same clinical results as the prior art opioid formulations using an eight-fold range of dosages (e.g., between 10 mg and 80 mg). The written description later explains that the “clinical significance” of the four-fold dosage range of the oxycodone formulations of the present invention, as compared to other opioid analgesics, such as morphine, requiring twice the dosage range, is a more efficient titration process, which is the process of adjusting a patient’s dosage to provide acceptable pain relief without unacceptable side effects.

However, the trial court concluded that Endo had shown by clear and convincing evidence that Purdue’s patents were “invalid” due to Purdue’s inequitable conduct during prosecution of the patents before the PTO based its inequitable conduct determination on underlying findings of materiality and intent.

First, the court found that in view of Purdue’s repeated statements to the PTO that it had discovered an oxycodone formulation for controlling pain over a four-fold range of dosages for 90% of patients, compared to an eight-fold range for other opioids, Purdue failed to disclose material information because it did not inform the PTO that the “discovery” was based on “insight” without “scientific proof.” Second, the trial court found the record as a whole reflected a “clear pattern of intentional misrepresentation.”

Purdue contended it is irrelevant that it lacked scientific proof of the four-fold dosage range for oxycodone because the inventors never stated during prosecution of the patents that the discovery had been clinically tested, and thus did not expressly misrepresent a material fact. But that was not the basis for the trial court’s materiality finding. The court found Purdue had relied on its discovery of a four-fold dosage range throughout prosecution and failed to disclose material information that was inconsistent with its arguments for patentability.

Purdue first told the PTO it had “surprisingly discovered” the four-fold dosage range for controlled release oxycodone, compared to the eight-fold range for other opioids. In response to an obviousness rejection, under headings containing the phrases “Surprisingly Improved Results” and “Results Obtained,” Purdue distinguished its oxycodone formulations from other opioids based on the “surprising result” of the four-fold dosage range and its “clinical significance”—a more efficient titration process. Purdue presented this argument even though neither the written description nor the pending claims of the ’331 patent application made reference to the four-fold dosage range.

The court held that:

In light of Purdue’s consistent representations of the four-fold dosage range for controlled release oxycodone as a “surprising discovery” and the context in which that statement was repeatedly made, we cannot say the trial court’s finding that Purdue failed to disclose material information was clearly erroneous. While Purdue never expressly stated that the discovery of the four-fold dosage range was based on the results of clinical studies, that conclusion was clearly to be inferred from the language used by Purdue in both the patents and prosecution history.

Therefore, the court concluded that weighing materiality and intent is a matter of judgment and thus, the trial court’s findings on materiality and intent were well-founded, and thus not clearly erroneous.

The case is Purdue Pharma LP v. Endo Pharmaceuticals Inc., 04-1189, 04-1347 and 04-1357, all U.S. Court of Appeals for the Federal Circuit. See opinion here: Download file

The U.S. Court of Appeals for the District of Columbia Circuit ruled that Pfizer and other drug companies have the right to sell unbranded versions of their own drugs even if they undercut sales of generic competitors in a suit by Teva Pharmaceutical, which sought to stop Pfizer from selling its own generic version of the epilepsy drug Neurontin. (see

In Teva Pharmaceutical Industries Ltd. v.Lester M. Crawford, Jr., Acting Commissioner of Food And Drugs, et al. (No. 05-5004 , Decided June 3, 2005), Teva Pharmaceutical Industries sued to overturn the Food and Drug Administration’s denial of its “citizen petition” requesting that the agency prohibit Pfizer, Inc., the holder of the approved New Drug Application (NDA) for gabapentin, from marketing that drug in “generic” form during the 180-day exclusivity period provided by the Drug Price Competition and Patent Term Restoration Act, also known as the “Hatch-Waxman Amendments” to the Food, Drug, & Cosmetic Act. Because the exclusivity provision does not apply to the holder of an approved NDA, the district court entered a summary judgment for the FDA.

Section 355(j) of 21 U.S.C. provides that a drug manufacturer may submit an “Abbreviated New Drug Application” (ANDA) for approval to market a so-called “generic” drug, which is the bioequivalent to a “branded” drug previously approved pursuant to a NDA filed under 21 U.S.C. § 355(b). Unlike a NDA, an ANDA need not contain clinical evidence of the safety or efficacy of the drug.

The ANDA must certify either that the approved product is not protected by a patent or “that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.” 21 U.S.C. § 355(j)(2)(A)(vii)(para. IV). The statute rewards the first generic applicant successfully to challenge the patent on an approved drug with a 180-day exclusivity period during which no other ANDA for the same drug may be approved.

The Federal Trade Commission, at the urging of three U.S. senators, is looking into whether authorized generics are anti-competitive. Under federal law, the first generic-drug maker to challenge patents on a drug wins six months of exclusive marketing rights. Teva argued that Pfizer, the world’s largest drug company, sought to thwart competition by undermining that incentive.

In the appellate case, Teva’s argument stemmed from the following premises: (1) the purpose of the 180-day exclusivity period was “to encourage generic companies to file Paragraph IV challenges to brand-drug patents”; (2) the marketing of a brand-generic competitor during that period will reduce the revenues going to the first to file an ANDA; and (3) such “brand-generic intrusion [into the exclusivity period] developed only recently as a routine brand-company business strategy.”

The Appeals Court held that:

..when Teva goes on to argue that because the Congress could not have anticipated brand-generic competition during the exclusivity period, adhering to the “literal” terms of the statute would lead to an absurd result, namely, that § 355(j)(5)(B)(iv) grants only a “meaningless” exclusivity against subsequent ANDA filers rather than a “commercially effective” exclusivity that runs against the NDA holder as well.

It does not follow, however, from the Congress having intended to create an incentive to challenge brand-drug patents --as it clearly did --that the incentive it created is without limitation. Rather, as even the formal name of the Hatch-Waxman Amendments (the Drug Price Competition and Patent Term Restoration Act) reflects, the Congress sought to strike a balance between incentives, on the one hand, for innovation, and on the other, for quickly getting lower-cost generic drugs to market. Because the balance struck between these competing goals is quintessentially a matter for legislative judgment, the court must attend closely to the terms in which the Congress expressed that judgment.

The DC Circuit affirmed stating that § 355(j)(5)(B)(iv) of the Act clearly does not prohibit the holder of an approved NDA from marketing, during the 180-day exclusivity period, its own “brand-generic” version of its drug.

Get the entire opinion here.

The IPKat posted a nice summary of the Tercica Inc v Avecia Ltd et al. case involving summary judgment motions on the validity of a patent having Swiss-type claims. The action concerned two applications for summary judgment in linked proceedings. In the first, Tercica, a licensee under a Genentech patent for a growth hormone, sued Avecia and Insmed for infringement; in the second, Avecia and Insmed sought revocation of that patent. The patent had a Swiss claim, its essential inventive content being a new use for a known drug.

Tercica's suit in the UK alleged that by making, using, and selling the SomatoKine(R) product in the United Kingdom for the treatment of Growth Hormone Insensitivity Syndrome (GHIS), Avecia and Insmed infringe a European (UK) patent under which Tercica holds an exclusive license from Genentech. SomatoKine(R) is a complex of insulin-like growth factor-1 (IGF-1) and insulin-like growth factor binding protein-3 (IGFBP-3). Tercica licensed world-wide rights to develop, manufacture and commercialize rhIGF-1 and IGF-1/IGFBP-3 from Genentech.

The High Court of Justice (Chancery Division Patent Court) in London dismissed both sides' applications for summary judgments. The Court also ordered Insmed and Avecia to pay Tercica's and Genentech's legal fees saying:

"What I was asked to consider (among other things) was a concept which Jacob J has called the "artificial construct of a Swiss form claim" (see Merck & Co Inc's Patents [2003] FSR 498 at para 80), and in particular what is meant by "new use" where part of that new use involves a particular method of administration, and the interface with the method of treatment point. One of the questions which might arise is: just how far can the artificiality be pushed before reality forces its way in? These are not subjects which are particularly happily determined on applications for summary judgment, even when those applications are argued as well and as fully as the one before me was."

Basically, if a chemical composition or a method of manufacture or use, is already known, then it is not patentable. The therapeutic use of that substance cannot be patented either. This is because that use is a method of treatment of a human or animal body by surgery, therapy or diagnosis which is practiced on that human or animal body and methods of treatment are regarded in Europe as not being capable of industrial application and are consequently not patentable.

However, if an invention relates to a substance or composition which is to be used in a method of treatment of a human or animal body by surgery, therapy or diagnosis practiced on that human or animal body then, even if that substance is known, that knowledge does not prevent the compound from being regarded as new, if the use of that substance or composition in any such method does not form part of the state of the art. In other words, it is possible to patent a known chemical compound as a pharmaceutical provided that it has not been previously known to have any pharmaceutical activity.

This is what is known as the Swiss Claim, adopted by the EPO and the Swiss Patent Office, which has a basic format along the lines of:

"Use of compound X in the manufacture of a medicament for the treatment of disorder Y".

In the UK, the view is that merely indicating that something is "for" or "suitable for" a new purpose will not give novelty to subject matter which is already known but allowed the Swiss form of claim to be granted in order to achieve conformity with EPO practice.

The Swiss claim is a claim to a manufacturing process and not merely to the taking of the active ingredient and converting it into a special medicament. However, the distinguishing feature of the claim is the use to which that medicament is then put. That new medical use must be entirely new and cannot just be a modification of an existing treatment or a better method for treating the disease, for which the drug is already known to have an effect.

It will be interesting to see how the case law on Swiss claims evolves in both the UK and the EPO.

Last week, the U.S. Court of Appeals for the Federal Circuit ruled that a District Court judge committed a "clear error" when he concluded that Allergan's patent on Acular was valid because it wasn't an obvious variation of earlier known compounds. The Fed Circuit, saying there were necessary factors that weren't considered, ordered him to review the issue.

The ruling gives Canadian generic-drug maker Apotex Inc. a second chance to seek the invalidation of the patent. Acular (ketorolac tromethamine) is Allergan Inc.'s treatment for eye inflammations, first approved by the FDA in 1992 to treat allergies, photophobia, post-surgical pain and post-surgical inflammation. Allergan contends that the patent is valid until 2009.

Apotex, Inc., Apotex Corp. and Novex Pharma (collectively "Apotex") appealed from the final judgment of the United States District Court for the Northern District of California, which, after a bench trial, held U.S. Patent No. 5,110,493 (the "'493 patent") owned by Syntex LLC not invalid, enforceable, and infringed by Apotex's Abbreviated New Drug Application ("ANDA").

Allergan, Inc., Syntex's distributor, has exclusive rights to manufacture the commercial embodiment of the '493 patent. The Federal Circuit found that the district court committed legal error in establishing certain factual predicates to its non-obviousness determination and reversed the judgment of validity and remanded for further consideration.

The '493 patent, entitled "Ophthalmic NSAID Formulations Containing a Quaternary Ammonium Preservative and a Nonionic Surfactant," claims a formulation for sterile, preserved eye drops to treat eye inflammation such as that caused by conjunctivitis or eye surgery. The '493 patent teaches combining a nonsteroidal anti-inflammatory drug ("NSAID") such as ketoralac tromethamine ("KT") and a quaternary ammonium preservative such as benzalkonium chloride ("BAC") with a surfactant such as octoxynol 40.

The NSAID is the active ingredient for reducing eye inflammation. The quaternary ammonium preservative, in turn, kills any bacteria introduced into the eye during administration of the NSAID. However, quaternary ammonium preservatives, such as BAC, do not always mix well with NSAIDs. Neither ingredient is water soluble plus the two active ingredients may react with each other to form complexes when mixed. These complexes will eventually cause the mixture to look cloudy or lose its antibacterial properties.

On appeal, the critical issue was whether the use of the surfactant octoxynol 40 in the claimed formulations is an obvious alteration of similar formulations taught in the prior art. At trial, Apotex argued that based on the prior art, a person of ordinary skill in the art would expect to succeed in stabilizing a formulation containing an NSAID and BAC with a nonionic surfactant. Contending that the formulation claimed in the '493 patent is just such a formulation, Apotex argued that it is legally obvious.

The Federal Circuit found clear error based upon the following observations:

First, the court clearly erred in finding that "[n]o pharmaceutical formulation other than ACULAR has ever included Octoxynol 40." Second, the court clearly erred in discussing the McCutcheon reference and in finding that each of the Waterbury, Gilbert, and Han references teach away from the use of octoxynol 40 in the claimed formulations. Further, the court was under the impression that, in the absence of evidence that those references teach away from combination, there was a failure of proof that there would have been any motivation by one of ordinary skill in the art to use octoxynol 40 in the claimed formulations. In so concluding, the district court failed to examine the expert testimony of Dr. Mitra on the question of whether one of ordinary skill in the art would have deemed the invention obvious, and as a subset of the overall obviousness question, whether octoxynol 40 produced the unexpected results asserted by Syntex. In addition, we think the district court failed to appreciate that the prosecution history of the relevant patents, while not establishing inequitable conduct, casts some doubt on the final examiner's conclusion that the claimed surfactant produces unexpected results sufficient to overcome a prima facie case of obviousness. Finally, we feel the district court should reconsider the significance of the commercial success of the patented formulation in light of our recent decision in Merck & Co. v. Teva Pharmaceuticals. USA, Inc., 395 F.3d 1364 (Fed. Cir. 2005).

Allergan's eye-care business, which includes Acular and Restasis drops for chronic dry eyes, accounted for $999.5 million, or 57%, of Allergan's sales last year. The Federal Trade Commission had been investigating whether Allergan and Syntex improperly thwarted generic competition by misusing the patent rights. The agency dropped the probe based on the finding of validity by the trial judge. Since Apotex was the first to challenge the Acular patent, it will have six months of exclusive rights to sell the only generic brand on the market.

See more here.

Blue Cross/Blue Shield and other insurers have sued GlaxoSmithKline in a dispute over the generics market of Paxil. The insurers are alleging that Glaxo has been gaming the patent system to keep cheaper generic alternatives to the antidepressant off the market. Glaxo lost its patent on Paxil in 2003. They accuse Glaxo of violating federal and state antitrust laws and fraud laws and engaging in deceptive trade practices.

The lawsuit alleges that the drug company claimed to hold patents on scientific procedures that already were in the public domain and listed invalid patents with the U.S. Food and Drug Administration that kept other pharmaceutical manufacturers from making generic equivalents.

Since sales on a blockbuster drug can plunge 80 percent or more the first year after a generic competitor hits the market, drugmakers have an incentive to fend off generics for as long as possible. In addition, brand-name drugs can cost three times their generic equivalents, according to the Generic Pharmaceutical Association, even though the FDA insists there is no therapeutic difference between generics and name brands.

Drug companies have tried to release new "improved" versions, also newly patented, as patents on their original drugs expire. For example, when Glaxo lost its patent on Paxil, they came out with a new version that patients take just once a day, rather than twice. Paxil CR, a once-a-day "controlled release" drug that had $824 million in U.S. sales last year.

Another tactic is to release an over-the-counter drug when patents expire to hold on to market share as in the case of Schering-Plough, which release an OTC of Claritin, its blockbuster antihistamine, thus killing a lot of its generics market.

This doesn't always work, of course, as in the case of Merck & Co., who tried to get approval for an over-the-counter version of Mevacor, a cholesterol-lowering drug, but the FDA turned it down.

See more here.

As a Monday morning patent litigation round-up of interesting proceedings, I put together a list of recent actions. You just can't tell the players without a program:

Eli Lilly has filed a lawsuit to block Teva Pharmaceuticals from selling generic Symbyax after Teva filed for an Abbreviated New Drug Application (ANDA) for generic Symbyax on January 10, 2005. This is currently the only option open to the innovator company under the process outlined in the Hatch-Waxman Act, despite the fact that Lilly has just emerged successfully from a similar patent court battle over Zyprexa. On April 14, 2005, the federal court upheld Zyprexa's patent which was under fire by Ivax, Dr Reddy's and Teva. This precedent would suggest that Teva's second attempt to bring a product containing olanzapine to the market will also be unsuccessful. Unfortunately for both, the FDA has recently issued a warning of fatal adverse events in patients treated with certain atypical antipsychotic drugs including Abilify (aripiparozole), Zyprexa (olanzapine), Seroquel (quetiapine), Risperdal (risperidone), Clozaril (clozapine) and Geodon (ziprasidone). Manufacturers were asked to place a "black box" warning (the FDA's most severe labeling option) on drug labels. Opinion leader research carried out by Datamonitor had indicated a concern about the long-term use of Symbyax at the time of its approval, with only an eight week trial having been carried out. More here.

Sandoz, Inc. notified Cephalon Inc. that it will no longer challenge Cephalon's U.S. particle-size modafinil patent. Instead, Sandoz said it intends to convert its abbreviated new drug application (ANDA) for approval of a generic equivalent of modafinil, the active ingredient contained in PROVIGIL® Tablets [C-IV], from a paragraph IV certification to a paragraph III certification. Sandoz will certify to the U.S. Food and Drug Administration (FDA) that it does not intend to market a generic form of modafinil until the applicable patent for modafinil listed in the Orange Book has expired in 2014. Therefore, it will no longer be necessary for Cephalon to continue to pursue its patent infringement litigation against Sandoz. More here.

Schering AG announced on Friday that it filed a patent infringement action in the U.S. District Court for the District of New Jersey against Barr Pharmaceuticals Inc. over its Yasmin oral contraceptive. Barr Laboratories Inc. is currently seeking approval from the Food and Drug Administration to produce and market a generic version of Yasmin. More here.

Medtronic Inc. has agreed to settle a lawsuit by paying biotechnology company Cytomedix royalties to use the company's therapy for wound healing. Cytomedix filed a lawsuit against Medtronic in November, alleging that Medtronic was infringing on Cytomedix's patent for a treatment that uses a patient's own blood platelets to treat tissue damage and diabetic foot ulcers. More here.

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.

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.

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.

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.

There's a nice update on the new Japanese Intellectual Property High Court on Bill Heinze's I/P Updates blog. The new court was organized because the Supreme Court, which is supposed to unify legal precedents, takes too long to complete hearings and it now only rules on constitutional issues.

The new court will reportedly have 18 judges and will serve as the court of first instance over whether the Patent Office's decisions are appropriate. It also will serve as a court of appeal, after Tokyo and Osaka district courts, on compensation suits concerning the infringement of patent rights and injunctions.

It appears that the Intellectual Property High Court will introduce a collegiate court system using five judges, as opposed to the normal collegiate court system of three judges. The new system will only deal with cases in which similar lawsuits have received different rulings or rulings that may influence business activities.

In addition to patent violation lawsuits, the expanded court system could target cases over how much a company should pay an employee who was responsible for a breakthrough invention. As we reported earlier, the inventor of an LED technology settled a lawsuit for 840 million yen ($8.1 million) with his former employer, the Nichia Corporation, for inventing blue-light-emitting diodes.

If the calculation of the cost to be paid to an in-house inventor were harmonized, it could be a model for companies to develop an incentive system.

More here.

Boston Scientific Corp. announced that a jury in Delaware found that one of the company's cardiovascular stents infringed on a patent held by Johnson & Johnson. Monetary damages will be determined in a later hearing and there are likely to be post-verdict motions and hearings, as well as an appeal.

During an earlier trial of the case in late 2000, J&J asserted that Boston Scientific's NIR stent infringed six claims from four different patents. The jury found that one of those claims infringed and awarded damages of $324.4 million. The other five claims were found to be either invalid or not infringed. In March 2002, the judge set aside the damage award, and held that two of the four J&J patents had been obtained through inequitable conduct in the U.S. Patent and Trademark Office. It's likely that J&J will ask the court to reinstate the $324 million damages award.

More here.

For an interesting PowerPoint of the effects of litigation on the stent market by Hannah Yun, see here.

It illustrates how litigation costs of $400K to $48 million are quite small in comparison to the $300 million to over a $1 billion in revenues a company can receive from stent sales (2003).

A Canadian court ruled in favor of Sanofi-Aventis, maker of the top-selling blood thinner Plavix, preventing Apotex from selling a generic version of Plavix in Canada. Plavix is one of the three top-selling drugs in the world with sales of $5.4 billion. Sanofi has a similar suit against Aptoex and Dr. Reddy in the U.S. Apotex and Dr. Reddy argue that the United States patent for active ingredient in Plavix, which expires in 2011, is not sufficiently different from another Sanofi patent that expired two years ago. This could effect Bristol-Myers Squibb's sales since they divide the profits from Plavix with Sanofi.

Plavix was approved by the FDA in 1997 as the (+)-enantiomer, and its five-year exclusivity period, granted for all New Chemical Entities, expired last year. The first patent covering Sanofi’s oral antiplatelet chiral drug clopidogrel bisulfate (US 4,529,596), was filed in 1983 and expired in July 2003, and claims both enantiomers and their mixture, whereas a later patent (US 4,847,265), due to expire in 2011, claims only the (+)-enantiomer.

The earlier patent claimed, but did not describe, the (+)- and (–)-enantiomers, although it states that “the invention relates both to each enantiomer and their mixture”. In the description of the activities of each enantiomer in the ‘265 patent, data show that the (+)-enantiomer is pharmacologically superior in activity and less toxic than both the (–)-form and the racemate.

Was the development of Plavix as a single enantiomer in the 1980s nonobvious? A problem for Sanofi is that in the 1980s, single enantiomers were already a significant and important component of approved drugs.

See the story here.

In a March 8 opinion, a three-judge panel of the U.S. Court of Appeals for the 11th Circuit in Atlanta rejected a 2003 Federal Trade Commission (FTC) ruling that Schering-Plough Corporation's patent settlements with two other companies amounted to pay-offs not to compete. The FTC claimed that the company illegally kept cheaper versions of blood pressure drug, a controlled-release potassium chloride supplement K-DUR(R) 20 (potassium chloride), USP off the market.

The judges noted that: "Simply because a brand-name pharmaceutical company holding a patent paid its generic competitor money cannot be the sole basis for a violation of antitrust law."

The company has consistently maintained that the patent litigation settlements complied with the law and benefited consumers by allowing generic product to enter the market two to five years before the expiration of the relevant patent.

Schering-Plough holds a formulation patent for K-DUR, which gives the company the right to exclude infringing products into 2006. In 1995, Upsher- Smith and ESI Lederle filed separate Abbreviated New Drug Applications (ANDA) with the U.S. Food and Drug Administration (FDA) seeking to market generic versions of K-DUR. Schering-Plough brought separate actions against both companies alleging that their products infringed Schering-Plough's patent. In each case, Schering-Plough and the parties settled before trial. Under the settlements, licenses were agreed to allowing Upsher-Smith to bring its product to market in September 2001 and ESI Lederle to bring its product to market in January 2004.

The FTC Bureau of Competition in March 2001 filed a complaint in Washington, D.C. before an FTC administrative law judge charging that the patent litigation settlements involving K-DUR were anti-competitive and violated the Federal Trade Commission Act.

Get the full decision here: Download file

Walker Morris in London sent a note regarding the October, 2004, opinion in the patents case Kirin-Amgen v. Hoechst Marion Roussel. The case was the first opportunity for the House to consider the critical question of the extent of protection conferred by a patent under the provisions of the European Patent Convention (EPC), which were incorporated into UK law by the Patents Act 1977.

The dispute between Amgen and Transkaryotic Therapies, Inc. (TKT) relates to the production of erythropoietin ("EPO"). EPO is produced in the kidneys in minute quantities. It was discovered that EPO had the useful property that it stimulated production of red blood cells and as a result it was very valuable for the therapeutic treatment of anemia.

Amgen invented a process of producing EPO by recombinant DNA technology. For this invention Amgen was granted a European Patent (EP0148605B2). Essentially, Amgen had discovered a way of inserting the genetic code for the expression of EPO (or a part of the EPO protein) into a host cell. Amgen’s patent was directed to this invention. TKT developed a different method of producing EPO. TKT discovered a way to "switch on" a cell’s natural ability to express EPO. This method was unknown at the priority date of the patent. Amgen sued for infringement of Amgen’s patent.

The Electronic Frontier Foundation (EFF), along with consumer advocacy groups Public Knowledge, and the Consumer Project, filed an amicus brief in the Merck v. Integra case asking the Supreme Court to protect scientific researchers from patent infringement.

Merck v. Integra, as we posted earlier here, deals specifically with information researchers submitted to the Food and Drug Administration regarding a potential cure for cancer. The EFF believes it raises broader questions about whether patent owners can stop academic researchers and inventors from studying patented inventions in order to research or improve upon them.

Even while their battle over Lipitor continues, Pfizer has sued Ranbaxy Laboratories in District Court for patent infringement of its patent on Accupril (the generic name is quinapril), an anti-hypertensive with annual sales of $550 million. Pfizer is suing on U.S. Patent No. 4,743,450, which covers the use of lactose and microcrystalline cellulose for the stabilization of quinapril.

Medtronic, Inc. announced that a Delaware jury rendered verdicts in patent litigation between Medtronic and the ACS subsidiary of Guidant Corporation. The jury found the Guidant Lau patents valid and infringed by some of Medtronic stents, including the S7 and Driver stents. However, there will be another hearing regarding Medtronic’s claim that Guidant’s patent is unenforceable due to "inequitable conduct," which of course, is every patent litigators way of saying hello to the other side. Medtronic claims Guidant showed "willful disregard of patent filing procedures."

A U.S. District Court ordered Nobel Prize winner and former Yale University professor John Fenn, 87, to pay Yale $545,000 in royalties and penalties, and pay their legal bills of almost $500,000. While at Yale in the late 1980s, Fenn developed a method for mass spectrometric analysis of chemical compounds in solution concerned with determining the mass or molecular weight of large fragile solute species with greater speed, convenience and accuracy as well as new compositions of matter comprising populations of ions having a multiplicity of charges.

The court called Fenn's actions "fraud" and "civil theft" when he licensed the rights to U.S. Patent No. 5,130,538 to a company he partly owned, which has generated more than $5 million in royalties and could make several times that by the time the patent expires. While Fenn claimed he believed that he had a right to the patent, the court felt that he had no good-faith basis to believe so and acted to conceal the facts from Yale.

More on the Fenn case here.

As noted on Law.com, people came out in droves to the U.S. Court of Appeals for the Federal Circuit on Tuesday to listen to arguments for a case on claim interpretation.  In Phillips v. AWH Corp., 363 F.3d 1207 (Fed. Cir. 2004), the claimed term "baffle" was limited to baffles that were at an angle greater than 90 degrees.  Although the dictionary definition for "baffle" was broad, the Federal Circuit concluded that the specification only disclosed an embodiment having baffles with an angle other than 90 degrees. Judge Dyk dissented, based on the concepts that the narrow interpretation was contrary to the plain meaning in the dictionary.

The en banc rehearing order asked for briefing on the following questions:

1.  Is the public notice function of patent claims better served by referencing primarily to technical and general purpose dictionaries and similar sources to interpret a claim term or by looking primarily to the patentee?s use of the term in the specification?   If both sources are to be consulted, in what order?

2.  If dictionaries should serve as the primary source for claim interpretation, should the specification limit the full scope of claim language (as defined by the dictionaries) only when the patentee has acted as his own lexicographer or when the specification reflects a clear disclaimer of claim scope?  If so, what language in the specification will satisfy those conditions?  What use should be made of general as opposed to technical dictionaries?  How does the concept of ordinary meaning apply if there are multiple dictionary definitions of the same term?  If the dictionary provides multiple potentially applicable definitions for a term, is it appropriate to look to the specification to determine what definition or definitions should apply?

3.  If the primary source for claim construction should be the specification, what use should be made of dictionaries? Should the range of the ordinary meaning of claim language be limited to the scope of the invention disclosed in the specification, for example, when only a single embodiment is disclosed and no other indications of breadth are disclosed?

4.  Instead of viewing the claim construction methodologies in the majority and dissent of the now-vacated panel decision as alternative, conflicting approaches, should the two approaches be treated as complementary methodologies such that there is a dual restriction on claim scope, and a patentee must satisfy both limiting methodologies in order to establish the claim coverage it seeks?

5.  When, if ever, should claim language be narrowly construed for the sole    purpose of avoiding invalidity under, e.g., 35 U.S.C. 102, 103 and 112.

6.  What role should prosecution history and expert testimony by one of ordinary skill in the art play in determining the meaning of the disputed claim terms?

7.  Consistent with the Supreme Court's decision in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), and our en banc decision in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998), is it appropriate for this court to accord any deference to any aspect of trial court claim construction rulings?  If so, on what aspects, in what circumstances, and to what extent?

8.  [In a separate concurring opinion by Judge Rader]: Is claim construction amenable to resolution by resort to strictly algorithmic rules, e.g., specification first, dictionaries first, etc? Or is claim construction better achieved by using the order or tools relevant in each case to discern the meaning of terms according to the understanding of one of ordinary skill in the art at the time of the invention, thus entrusting trial courts to interpret claims as a contract or statute?

9.  Chief Judge Mayer dissented, arguing that "any attempt to refine the process is future" as long as the court refuses to reconsider the fiction that claim construction is a matter of law.

See the rehearing order here.

Dennis Crouch's Patently Obvious blog lists over 25 amicus briefs and other documents related to Phillips. 

Barr Pharmaceuticals Inc. sued the U.S. Food and Drug Administration in the U.S. District Court for the District of Columbia, seeking exclusive rights to sell a generic version of Sanofi-Aventis' Allegra-D allergy drug. In the suit, Barr is challenging the FDA's policy of awarding generic exclusivity on a patent-by-patent basis rather than solely to the first company to file an application to sell a generic version of a branded drug. Allegra-D had U.S. sales of about $444 million last year.

Barr in July won tentative approval to sell generic Allegra-D, known by the chemical names fexofenadine hydrochloride and pseudoephedrine hydrochloride, pending resolution of its challenge to Aventis's patent but fears the FDA will try to force it to share the 180-day marketing exclusivity period.

Sanofi-Aventis holds patents that do not expire until between 2012 and 2019 and in 2002, Aventis obtained and listed an additional Allegra-D patent, extending its patent protection, which Barr believes that another generic company filed the first application based on the subsequently listed patent.

Law.com reported that the California Supreme Court agreed to review an appellate decision in which a $500 million judgment for City of Hope National Medical Center against Genentech, including $200 million in punitive damages.

Genentech negotiated a license agreement to develop and market human insulin and human growth hormone based on research at City of Hope. Genentech paid a royalty on the sale of products but didn't pay for licensing revenue. The research center sued Genentech for breach of contract. The first trial ended in a deadlock favoring Genentech, but the second ended with the $500 million award. Genentech has argued that a 2003 ruling by another division of the 2nd District that said the failure to account for and pay royalties is not a tortious breach of fiduciary duty but only a breach of contract. City of Hope has emphasized Genentech's alleged fraud.

This is being closely watch as Disney, Intel Corp. and Microsoft Corp., among others, have submitted amicus briefs in an attempt to quash any tort liability stemming from licensing.

The case is City of Hope National Medical Center v. Genentech Inc., S129463.

The U.S. of Appeals for the Federal Circuit invalidated U.S. Patent No. 5,994,329 (the '329 patent), covering the  osteoporosis drug Fosamax made by Merck & Co.  The court reversed and vacated an earlier ruling by the U.S. District Court in Delaware that had upheld the validity of the patent.

The patent is listed in the U.S. Food and Drug Administration's Orange Book for Merck & Co.'s 35 mg and 70 mg Fosamax for which Teva Pharmaceutical Industries Ltd. has filed an Abbreviated New Drug Application to market a generic version. The district court found that Teva’s Abbreviated New Drug Application (ANDA)  constructively infringed the '329 patent claims 23 and 37 under 35 U.S.C. 271(e)(2)(A) of the Hatch-Waxman Act.

The '329 patent, entitled Method for Inhibiting Bone Resorption teaches a method of treating and preventing osteoporosis through less-than-daily administration of bisphosphonate compounds.  Bisphosphonates are a family of chemical compounds that are known to selectively inhibit the bone destruction process that contributes to osteoporosis and other bone diseases. At issue in this case are once-weekly dosages of alendronate monosodium trihydrate.

Since bisphosphonates are not readily absorbed by the gastrointestinal (‘GI’) tract, a patient must take the medicine on an empty stomach and remain upright and fasting for thirty minutes after ingestion.   The '329 patent provided a reduced-frequency dosing schedule to alleviate  the irritating effect of the compounds.
 
This case involves dependent claims 23 and 37 of the '329 patent, as below:

23.       A method for treating osteoporosis in human comprising orally administering about 70 mg of alendronate monosodium trihydrate, on an alendronic acid basis, as a unit dosage according to a continuous schedule having a dosing interval of once-weekly.

37. A method for preventing osteoporosis in human comprising orally administering about 35 mg of alendronate monosodium trihydrate, on an alendronic acid basis, as a unit dosage according to a continuous schedule having a dosing interval of once-weekly.

Relying on a construction of "about", the district court dismissed Teva's allegations that the claims were anticipated or obvious.

In reviewing the lower court's holding, the Fed. Cir. stated that:

According to the district court's opinion, the patentee uses the phrase about 35 [or 70] mg to account for variations in the molecular weight of the different derivatives of alendronic acid and to deliver exactly 35 (or 70) mg of alendronic acid.  Merck, 288 F. Supp. 2d at 613.  For example, the court noted that alendronate monosodium trihydrate, which is used in Fosamax, requires an atom of sodium for each molecule.  Id. at 613-14.  If a heavier metal were chosen, such as potassium, the weight of the derivative compound would have to increase to deliver exactly the same number of molecules of the active alendronate compound found in 35 [or 70] mg of alendronic acid.  Id. at 614.  The district court thus construed the term "about 35 [or 70] mg" to mean the amount of the derivative compound that gives exactly 35 [or 70] mg of the active compound.

We reverse the district court's construction of about and hold that such term should be given its ordinary meaning of approximately.

...

When a patentee acts as his own lexicographer in redefining the meaning of particular claim terms away from their ordinary meaning, he must clearly express that intent in the written description.  See, e.g., Bell Atl. Network Servs. v. Covad Communications Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir. 2001).  We have repeatedly emphasized that the statement in the specification must have sufficient clarity to put one reasonably skilled in the art on notice that the inventor intended to redefine the claim term.  Id."

The trial court held a July 1996 article does not ‘expressly or inherently disclose the dosage amounts for alendronate in claims 23 and 37’ because there was no evidence that 40 mg and 80 mg of alendronate contains ‘the same number of alendronate core molecules’ as found in 35 mg and 70 mg, respectively, of alendronic acid and that the suggestion of weekly treatment was not ‘clinically useful or obvious in July 1997 because of the known dose-related gastrointestinal side effects’ associated with the daily formulation of Fosamax. Teva argued that the 40 mg and 80 mg amounts were recommended because 40 mg tablets of alendronate monosodium trihydrate were commercially available and exact multiples of the standard daily dose corresponding to the amount of Fosamax administered in a week, i.e., 35 mg or 70 mg, were not commercially available at the time of the 1996 articles.

In holding that the passage cited by the district court from the specification for Merck’s definition of ‘about’ is ambiguous, the court stated that it fails to redefine ‘about’ to mean ‘exactly’ in clear enough terms to justify such a counterintuitive definition of ‘about.’  The court also stated that:

Finally, our construction of ‘about’ eliminates the problem pointed out by Teva that the district court’s construction of the term ‘about’ renders other parts of the claim superfluous.  As Teva notes, the specification uses both the term ‘about’ and ‘on an alendronic acid basis’ at least 15 times to describe a dosage strength.  If, as Merck urges, "about 35 [or 70] mg" means exactly 35 (or 70) mg of alendronic acid, then the oft-repeated phrase "on an alendronic acid active basis’ would be unnecessary since such an understanding would be clear simply by using the term "about."  A claim construction that gives meaning to all the terms of the claim is preferred over one that does not do so.  Elekta, 214 F.3d at 1307 (construing claim to avoid rendering the 30 degree claim limitation superfluous); Gen. Am. Transp. Corp. v. Cryo-Trans, Inc., 93 F.3d 766, 770 (Fed. Cir. 1996) (rejecting the district court's claim construction because it rendered superfluous the claim requirement for openings adjacent to the end walls).  By construing 'about' to mean its accepted and ordinary meaning of "approximately," the phrase "alendronic acid basis" is no longer excess verbiage, but is instead necessary because it is the noun that "about 35 [or 70] mg" modifies. 

In light of the corrected claim construction the court reversed the district court's obviousness analysis holding that:

The central issue concerns the differences between the aspects of the invention claimed at claims 23 and 37, and the teachings of the Lunar News articles.  As the district court necessarily recognized, there are more similarities than differences.  These claims, and the July 1996 article, both teach administering alendronate once a week instead of once a day.  These claims read in light of the specification, and the July 1996 article, both indicate and it has been conceded as known in the art at the time that for treating or preventing osteoporosis a once-weekly dosage at seven times the daily dose would be as effective as seven daily doses.  The '329 patent, and both the April and July 1996 articles, explain the motivation for a once-weekly dose as increasing patient compliance, by making it easier to take the drug (and incur the inconvenience of the rigorous dosing regimen less frequently).  Although the claims teach 70 or 35 mg doses rather than the 80 or 40 mg doses disclosed in the July 1996 article, Dr. Arthur C. Santora, one of the co-inventors on the '329 patent admitted against Merck's interest that a once-weekly 40 mg dose would be as effective as seven daily 5 mg doses, and a once-weekly 80 mg dose would be as effective as seven daily 10 mg doses, in preventing or treating osteoporosis.  There was no great leap required of those skilled in the art to go from 40 or 80 mg once a week, the pills available at the time to treat patients with Paget's disease, to a 35 or 70 mg pill once a week.  The district court's conclusion that the claims are not obvious cannot rest on any of these similarities between the claimed invention and the two Lunar News articles.
...
In short, the district court clearly erred in distinguishing the claimed invention from the two Lunar News articles offered as section 103 prior art.  Contrary to the district court's findings, these articles support the conclusion that Merck’s claims 23 and 37 are invalid as obvious. 

The dissent, however, looked at the terms of the entire phrase "about 70 [35] mg of alendronate monosodium trihydrate, on an alendronic acid basis."  Judge Rader warned:

1.  "Elect the Lexicographer Option at Your Own Risk"   With this court's claim constructions wavering between the plain meaning rule ... and the "specification" rule ... , a patent applicant might suppose that the best option to define the scope of the claim language might be the lexicographer rule.  In this case, the patentee used the lexicographer rule to define a lengthy phrase.  ...   In its definition, the patentee defined the phrase with precise values.  The patentee's definition, however, fell five letters short of success because the phrase included the word "about."  This court seized on that word, gave it an ordinary meaning, and cast aside the lexicographer rule without a convincing explanation.  Moreover, this court overturned the result of a lengthy district court trial for the sole reason that the trial court applied this court's lexicographer rule.  I find it hard to explain to the district court how it erred by following this court's rules. 

2.  "Deference to Trial Courts: Time for ‘Truth in Advertising’" Despite the district court's superior tools and time to evaluate the complete record, to hear and inquire from expert and fact witnesses, to delve into countless related details, to probe the scientific and semantic context, and to entertain argument as long as necessary for clarity, this court with its reading three briefs before its half-hour hearing becomes enamored with its own analysis of a very close issue and reverses the district court.  Either the Federal Circuit accords deference in accordance with its public protestations or it does not in accordance with its legal standard barring any deference.  If the former, this court has a "truth in advertising" problem.  Its actual practice clashes with its professed legal duty.  If the latter, this court has a different kind of "truth in advertising" problem.

This should allow Teva's ANDA to be eligible for Final Approval in February 2008 when U.S. Patent No. 4,621,077 expires, instead of 2018. The main patent for the daily 5 milligram and 10 milligram versions of the drug already was set to expire in February 2008.

Merck reported total sales of $3.16 billion US for Fosamax last year, more than 90 per cent of which were for the once-a-week version. This comes on top of the withdrawal of Vioxx from the market and the loss of the Zocor patents in the middle of 2006. Zocor, for high cholesterol, is Merck's biggest drug, with $5.2 billion in sales last year.

See more here.

Forbes ran an article that Credit Suisse First Boston expects Pfizer to hold onto its Lipitor patent until March 2010, which is "earlier than the pre-litigation expectation of December 2011, but later than some estimates for 2006." It doesn't expect a decision for the Lipitor patent trial before the summer of 2005. This would reduce the patent protected period by 21 months." 

Earlier, Indian generic drugmaker Ranbaxy filed suit against Pfizer claiming that the main Lipitor patent does not cover the form of a key ingredient, atorvastatin, used in the drug. Ranbaxy alleges that Pfizer misrepresented that fact to the Patent and Trademark Office when it won an extension on the patent until 2010; the patent was originally scheduled to expire in 2006. (Ranbaxy also argues noninfringement and invalidity of the two patents at issue.) Lipitor is on track to produce $10 billion in sales this year and would be the first drug to ever break that mark.

See more here.

The Boston Globe reported that Genzyme Corp. sued Transkaryotic Therapies Inc. in the District Court of Tel Aviv, claiming that their method of purifying a treatment for Gaucher's disease infringed on Genzyme's Israeli patent No. 100,715, which covers certain cell culture processes involved in the manufacture of glucocerebrosidase.  TKT is conducting a clinical trial in Israel of its investigational gene-activated glucocerebrosidase (GA-GCB) for the treatment of Gaucher disease.  Genzyme believes that TKT infringes Genzyme's patent by importing into Israel and using in Israel the GA-GCB product manufactured by the processes protected by Genzyme's patent.

Genzyme's patent covers novel culture processes that have been critical in the production of  Cerezyme(R) (imiglucerase for injection) on a large scale for the treatment of thousands of patients around the world. In 2004, Genzyme sold $839 million of Cerezyme, accounting for 37 percent of Genzyme's total revenue. TKT is challenging Cerezyme with an investigational drug, and has recruited 12 patients to its trial in Israel.

In an agreement in October 2003, the two companies ended disputes over two key drugs, and agreed to become partners in developing another of TKT's drug candidates. They remain partners in the development of TKT's I2S, an experimental treatment for Hunter's disease, another rare genetic disease in which patients are unable to process certain carbohydrates, leading to disfiguring and fatal complications.

Reuters reported that Teva Pharmaceuticals Industries Ltd. lost its bid to keep 180 days of exclusivity for its generic version of Pfizer Inc.'s popular Zoloft antidepressant. The U.S. Court of Appeals for the Federal Circuit, in Teva Pharmaceuticals, Inc v. Pfizer Inc., 04-1186, rejected Teva's bid to overturn a lower court ruling over whether the company can seek a court ruling that it does not infringe on Pfizer's brand-name patent before it releases its generic version. Teva had sued Pfizer after the drug giant made a deal with Ivax Pharmaceuticals, a subsidiary of Ivax Corp., to sell a different generic version of the drug, whose chemical name is sertraline.

Pfizer, has already made a deal with Ivax Pharmaceuticals to sell a generic version of Zoloft. Under the law, the first generic company to seek approval for a drug gets 180 days to sell it exclusively after the brand-name patents expire. However, major drug companies could use a legal loophole to make deals with the exclusive generic maker and delay sales. The move, known as "parking," delays the 180-day period and prevents competition. The only way around the potential delay is to seek a pre-emptive, or declaratory, court order.

The Court of Appeals stated upheld the lower court's ruling Teva appealed the lower court holding claiming that the court erred as a matter of law in holding that there was no actual controversy between it and Pfizer. The court determined that Teva failed to show that Pfizer had taken actions giving rise to a reasonable apprehension on its part that Pfizer would sue it for infringement of the ?699 patent.

Teva submitted an ANDA to the FDA for its generic version of Zoloft?. Like Ivax, Teva filed a paragraph III certification as to the ?518 patent and a paragraph IV certification as to the ?699 patent. Pfizer elected not to file suit against Teva for infringement of the ?699 patent within the forty-five days following receipt of notice of Teva?s paragraph IV certification, and to date no such suit has been filed.

Teva argued that Pfizer had created a reasonable apprehension of suit based upon the following considerations: (1) Pfizer had listed the ?699 patent in the Orange Book; (2 ) Pfizer had refused to grant Teva a covenant not to sue; (3) Pfizer had aggressively asserted its patent rights against alleged infringers of other patents; (4) Pfizer sued Ivax, the first generic manufacturer of sertraline hydrochloride; and (5) it was in Pfizer?s self-interest to leave a "cloud of litigation" hanging over Teva. With respect to the final consideration, Teva argued that Pfizer?s settlement with Ivax gave Pfizer a vested interest in seeing Ivax preserve its 180-day exclusivity period. The district court rejected Teva?s contentions.

Teva argued that Pfizer had created a reasonable apprehension of suit based upon the following considerations: (1) Pfizer had listed the ?699 patent in the Orange Book; (2 ) Pfizer had refused to grant Teva a covenant not to sue; (3) Pfizer had aggressively asserted its patent rights against alleged infringers of other patents; (4) Pfizer sued Ivax, the first generic manufacturer of sertraline hydrochloride; and (5) it was in Pfizer?s self-interest to leave a "cloud of litigation" hanging over Teva. With respect to the final consideration, Teva argued that Pfizer?s settlement with Ivax gave Pfizer a vested interest in seeing Ivax preserve its 180-day exclusivity period. The district court rejected Teva?s contentions.

Teva asserts that the only way a patentee in Pfizer?s situation can defeat jurisdiction over an ANDA filer?s declaratory judgment action is by affirmatively representing that it will not sue the filer. Teva?s reliance on Pfizer?s listing of the ?699 patent in the Orange Book is misplaced. The listing of a patent in the Orange Book by an NDA filer is the result of a statutory requirement . Without more, Pfizer?s compliance wit h the Hatch-Wax man listing requirement should not be construed as a blanket threat to potential infringers as far as Pfizer?s patent enforcement intentions are concerned. The Orange Book is a listing of patents with respect to which claims of infringement " could be reasonably asserted . . . ." 21 U.S.C. ? 355(b)(1), (c)(2 ) (emphasis added). More is required for an actual controversy than the existence of an adversely held patent, however. See Capo, Inc. v. Dioptics Med. Prods., 387 F.3d 1352, 1355 (Fed. Cir. 2004) ("More is needed than knowledge or notice of an adversely held patent. . . . The standard is objective, and focuses on whether the patentee manifested the intention to enforce the patent, and would be reasonably expected to enforce the patent against the declaratory plaintiff."

The Court of Appeals refused to hold that listing a patent in the Orange Book evinces an intent to sue any ANDA filer who submits a paragraph IV certification with respect to the patent.

See appellate ruling here.

Mergen Limited announced it has resolved its patent infringement litigation case with Oxford Gene Technology.  Under the terms of the settlement, Mergen has obtained a license from OGT for its expression chips in the U.S., Europe and Japan.  This license allows Mergen to manufacture and sell microarrays, e.g., Mergen's ExpressChip(TM) DNA microarray system for high-throughput, high-sensitivity gene expression profiling.   See the Press Release.

Harold Wegner, a partner at Foley & Lardner has an interesting article pondering the upcoming possible changes to Japanese Patent Law.  The Japanese "Article 35" has become in the news for the astonomical awards of money to employed inventors possible independent of any employment contract. Legislation has been approved by the Cabinet that is now under consideration and may be enacted in the April-May 2004 session that would change in the law so that employers and workers are encouraged to reach an agreement on the framework for compensation.

What happens if the patent life unexpectedly becomes devalued due to noninfringing product or shortened due to invalidity.

Can an inventor get remuneration for an invention that has never been the basis for any licensing but is used to exclude others?

What if there is no license but a covenant not to compete?

Does it matter whether the license generating income is for an "invention" or for a "patent"?

Is an invention made by a Japanese national covered by Art. 35 or only if the person makes the invention in Japan? What happens if the inventor works for a foreign company? Does the location of the research facility matter?

Is there a right to remuneration for this invention that is not commercialized?

What about co-inventors who did not invent the technology where there are different inventors of different claims in a patent and that the critical technology that is licensed is in claims with less than all of the named inventors?

What to do with post-grant inventorship changes and disputes?

May an employer avoid compensation altogether by refraining from filing a patent application or by abandoning or forfeiting the application or patent?

As you can see, there are lots of questions that will need to be answered through some expensive litigation to work out the details of just how inventor compensation will work.  While it is expected to pass, there could be changes to the law given the publicity of the Shuji Nakamura case against Nichia.  In addition, it will be difficult for Japan to harmonize with U.S. and European laws if they continue down a path with their own provincial reward system.

See the entire article here.

St. Jude Medical settled a 2000 patent infringement suit with heart-valve technology company Edwards Lifesciences Corp.  Edwards will receive a $5.5 million payment, and St. Jude Medical will get paid-up licenses for certain of its heart valve therapy products.

In the suit, Edwards claimed St. Jude Medical infringed on three of Edwards' patents, two relating to annuloplasty rings and one relating to manufacturing methods used to make tissue heart valves.

See more here.

Advanced Cell Technology, Inc. (ACT) announced today the intent to appeal the decision of the Board of Patent Appeals and Interference, interference number 104,746, between itself and Geron Corporation (Nasdaq:GERN) to the U.S. District Court. Advanced Cell Technology disputes Geron Corporation's claim that ACT's patent at issue in the interference has been invalidated. An issued US patent is entitled to a presumption of validity until a final ruling. A final ruling in this case has not been made.

More here.

The U.S. Supreme Court agreed to review a lower ruling in which a patent held by Integra LifeSciences Holdings prevented Germany's Merck KGaA from conducting conduct "head-start" exploratory research for future applications into a potential new anticancer drug, even if the drug could not feasibly be marketed until after the patent expired in 2006.

Under 35 U.S.C. 271(e)(1), it is generally not an act of infringement to use a patented invention "solely for uses reasonably related to the development and submission of information under a Federal law" regulating the manufacture, use, or sale of drugs. The question presented is whether the court of appeals erred in limiting that exemption to clinical studies designed to provide information for Food and Drug Administration approval of a new drug.

The government has argued that the Federal Circuit decision (see 331 F.3d 860, 66 USPQ2d 1865 (Fed. Cir. 2003)) incorrectly suggests that Section 271(e)(1) is limited to "clinical" research, which the FDA regards as trials on humans. However, in determining whether to permit clinical trials, the FDA considers pre-clinical research, including pharmacological and toxicological studies of the drug involving laboratory animals or in vitro.

To read the Federal Circuit opinion in this case, click here.

To read the government amicus brief, click here.

Reuters reported that Medtronic Inc. lost a patent case over heart stents against rivals Guidant Corp. and Boston Scientific Corp. on Wednesday, but the company said it would appeal the decision.  A Delaware District Court ruled that two of Medtronic's stent devices used to treat clogged heart arteries infringed a patent held by rival Guidant, and that stents offered by Guidant and Boston Scientific did not infringe Medtronic's Boneau patents.  Heart stents are tiny wire-mesh tubes that prop open clogged heart arteries that have been cleared surgically. The federal court judge found that Medtronics S7 and Driver coronary stents infringed one claim of Guidant's Lau patent.  Medtronic's Driver stent is central to the company's efforts to develop a more advanced drug-coated stent that helps keep arteries from re-closing.  A drug-coated version of the Driver is currently in clinical trials.  Guidant agreed last month to be bought by Johnson & Johnson, another maker of the heart devices, for $25.4 billion.  Currently, J&J and Boston Scientific are the only two companies to sell a drug-coated stent in the United States.

In In re Crish, No. 04-1075 (Fed Cir. December 21, 2004), Crish filed a patent application for purified DNA molecules having promoter activity for the human involucrin gene (hINV). The Federal Circuit held that the claims were anticipated by two other publications that disclosed the complete structure of hINV.

The claimed invention relates to purified DNA molecules having promoter activity for the human involucrin gene (hINV). The outermost layers of the skin and other stratifying squamous epithelia are composed of dead cells densely packed with a fibrous protein called keratin. Involucrin is a protein that interacts with keratin and other intracellular proteins to form a cross-linked envelope within the dead cells to strengthen the plasma membrane of the cells.

As the name indicates, the involucrin gene contains the DNA sequence that codes for involucrin. Crish?s application discloses that Crish has isolated and sequenced the promoter sequence of hINV from plasmid pSP64 ? I-3 H6B using standard molecular biology techniques. Crish determined that the hINV promoter sequence was approximately 2.5 kb (kilobases) in size. Crish?s application also identified and numbered each nucleotide in the hINV promoter sequence and designated it as SEQ ID NO:1.

During prosecution, the examiner rejected the claims as being anticipated by a Crish publication  and a Welter publication. The Crish publication lists James Crish, coinventor on the ?509 application, as a coauthor. The Crish publication analyzed the phenotype (physical appearance) of mice pups that had hINV (including the promoter region) microinjected into them at the embryonic stage. The microinjected hINV was isolated from the same plasmid pSP64 ? I-3 H6B referenced in Crish?s patent application. The Crish publication also disclosed the complete structure of hINV (the promoter region of hINV used in the Crish publication, however, was not sequenced), including the approximate size (2.5 kb) of the promoter region, and referenced an earlier publication 4 disclosing how the plasmid pSP64 ? I-3 H6B was obtained.

The Welter publication, which also lists James Crish as a coauthor, identified five protein-binding sites on the promoter region of hINV. The publication also confirmed that protein binding on two of those sites was necessary for the cell to begin transcribing the DNA coding region. The hINV that was used for this study was from plasmid pSP64 ? I-3 H/Hc. Although plasmids pSP64 ? I-3 H6B and pSP64 ? I-3 H/Hc are not identical, the PTO contends that the promoter regions of hINV contained in both plasmids are identical.

Crish argued that the Crish and Welter publications cannot anticipate his claims because the prior art does not provide any information regarding nucleotide sequences. According to Crish, the fact that Crish?s application references a prior art plasmid is irrelevant; the pending claims cover a specified novel DNA sequence, not the starting materials. Secondly, Crish asserts that even if the Crish and Welter publications are relevant, a person of ordinary skill in the art starting with the plasmid disclosed in the Crish and Welter publications would not necessarily obtain SEQ ID NO:1. Crish explains that different DNA sequencing techniques, for example, using different restriction enzymes, may result in workers obtaining different DNA sequences.

However, since the promoter region of hINV was not new, the court found the only arguable contribution to the art that Crish?s application makes is the identification of the nucleotide sequence of the promoter region of hINV. However, just as the discovery of properties of a known material does not make it novel, the identification and characterization of a prior art material also does not make it novel.

The court rejected Crish?s argument that the claims are not anticipated because the Crish publication did not sequence the promoter region of hINV:

While the PTO?s position that the discovery of new properties of a known material does not make claims reciting those properties novel is correct, and we agree with the PTO as to its conclusion, we differ with its characterization of the nucleotide sequence of the gene as a property of that gene. The sequence is the identity of the structure of the gene, not merely one of its properties. The gene may have functional, biological properties, and it may have physical properties, but its structure is its identity, not merely one of its properties. A long line of cases confirms that one cannot establish novelty by claiming a known material by its properties. E.g., In re Spada, 911 F.2d 705, 708 (Fed. Cir. 1990) material plasmid, is unsound. The starting material plasmid necessarily contains the gene of interest, including the promoter region, and once we have affirmed the PTO?s construction of the claims as ?comprising? more than the recited numbered nucleotides, the claims necessarily encompass the gene incorporated in the starting material plasmid. Accordingly, Crish?s pending claims encompassing the gene plus other nucleotides are anticipated by the starting material plasmid, which consists of the gene plus other nucleotides. .

The court found that it was irrelevant whether other workers used the same plasmid as Crish and obtained a different sequence for the promoter region of hINV:

Crish is claiming what Crish earlier disclosed, and we presume that Crish correctly sequenced the promoter region of the hINV gene from plasmid pSP64 ? I-3 H6B, as he has described in his application on appeal. Crish cannot rely upon the inability of another worker to correctly sequence the promoter region of the hINV gene from plasmid pSP64 ? I-3 H6B when he has sequenced it accurately himself. His own work, as recited in his application, is better evidence than Lopez-Bayghen?s work. Finally, we address Crish?s argument that the Board improperly assumed that the plasmid referenced in Crish?s application is the same plasmid used in the Crish publication. We have previously explained that when the prior art evidence reasonably allows the PTO to conclude that a claimed feature is present in the prior art, the evidence ?compels such a conclusion if the applicant produces no evidence or argument to rebut it.? Spada, 911 F.2d at 708 n.3. Here, the Board reasonably concluded that the plasmids used in Crish?s application and the Crish publication were the same. Several facts support the reasonableness of the Board?s assumption. First, Crish is both an inventor on the subject application and an author of the prior art publication. Secondly, both the application and the publication refer to the promoter region as approximately 2.5 kb in size. Third, both the application and the publication refer to the same source for plasmid pSP64 ? I-3 H6B, a publication by Eckert et al.

The court also noted that Crish did not argue that the portions of the plasmid not consisting of the involucrin gene are not nucleotides, nor did he argue that the preamble term purified has any operative meaning in this appeal. It will be interesting to see if these are argued in subsequent appeals.

U.S. District Court Judge Gregory M. Sleet ended the stem cell patent suit by PharmaStem Therapeutics, Inc. against CorCell, Inc. and numerous private umbilical cord blood banks for infringement of its patents 5,004,681 and 5,192,553. Judge Sleet stated that, "There was no legally sufficient evidentiary basis for a reasonable jury to find that all, or any specific number, of the defendants cord blood units infringe the '681 patent." This judgment follows a Sept. 14, 2004 ruling by Judge Sleet stating that the defendants did not infringe on the '553 patent, the first of two PharmaStem patents in question. The earlier judgment overturned a $7 million award to PharmaStem.

Earlier, the Court held that CorCell is not, and cannot be, liable for patent infringement because they do not sell, or offer for sale umbilical cord blood. The Federal Court's decision decisively rejects PharmaStem's effort to prevent CorCell from processing and storing umbilical cord blood for families. The implication of this ruling is that ostetricians and other healthcare providers who simply collect umbilical cord blood for cryopreservation, cannot be liable for contributory infringement of any PharmaStem patent. The Court also declared that a child's family owns the child's umbilical cord blood and the private blood banks provide a service, processing and preserving the cord blood for the families.

Earlier, the Court overturned a ruling against ViaCell ruling that the cord blood is owned by the family and because ViaCell only provides services to assist the family, it does not infringe meaning that any individual, corporation or institution providing services to assist a family in preserving the Cord Blood does not infirnge PharmaStem's patents.

Without comment, the Supreme Court has declined to review a Federal Circuit decision on a University of Rochester patent involving the discovery of a separate cox-2 gene and related biological processes.  The University had petitioned the Court to hear the case after a three-judge panel of the federal appeals court, in February, upheld a lower court ruling that declared the University's patent invalid on the grounds that it did not provide sufficient information to meet what the court described as a "written description" requirement.  In July, the federal appeals court had denied, on a 7 to 5 vote, a request by the University for an en banc hearing.

While the fact was uncontested that the University's discovery of a gene and biological process enabled companies to create new drugs, the federal appeals court in effect imposed a second hurdle for such patents by saying that the Rochester patent was invalid because it did not include the precise chemical formula for such a compound.

The school committed more than $10 million in legal costs to defend the patent for a new cyclo-oxygenase enzyme that causes inflammation.  Pharmaceutical companies later codeveloped lucrative cox-2 inhibitor drugs, such as Celebrex, and the school hoped to recoup royalties and fees ranging from $3 billion to $30 billion.  The University is not anticipating any further legal steps at this time.

See Rochesters Reply Brief.

The Rochester decision, and other recent precedent, is sending a message that the Federal Circuit does not intend to limit the written description requirement solely to cases involving issues of priority or DNA structure.  Rather, Rochester holds that the written description requirement applies when a patentee seeks to claim an aspect of an invention in terms of functionality rather than structure.

US District Court Judge Mark Wolf dismissed patent claims filed by several biotechnology companies (including Genzyme Corp. and Biogen Idec Inc.) against Columbia University that alleged the New York school was improperly trying to extend its rights to a process widely used to engineer new drugs. Columbia had collected several hundred million dollars over the years from its patents on the drug-making process but the school recently pledged not to seek further royalties, so the judge in the case dismissed firms' claims.

The patents are based on research from the 1970s by Columbia professor Richard Axel, who this year was co-winner of the Nobel Prize for Medicine. Axel and two colleagues created a way to splice bits of DNA into living cells to create human proteins, a basic technique used to produce many of today's best-selling biotechnology products such as Genzyme's Cerezyme for Gaucher disease and Biogen Idec's multiple-sclerosis drug Avonex.

The patents expired in 2000, but in 2002 Columbia received a new patent derived from its previous patents with 17 more years of protection and Columbia expected continuing royalties based on the new patent. The companies stopped paying and filed various suits against Columbia the next year.

In dismissing the claims, Wolf let stand Columbia's patent itself, which the school is having reexamined by the US Patent and Trademark Office. David I. Gindler, an attorney at the firm of Irell & Manella LLP in Los Angeles who represents Columbia, said Wolf's ruling leaves open the possibility of a future decision by the government agency that would extend the school's rights after all.