Patent Baristas » IP Laws

Supreme Court To Address Standard For Induced Patent Infringement

Stephen Jenei — Wed, 23 Feb 2011 16:35:10 +0000

In a paper published by the Washington Legal Foundation, entitled Supreme Court To Address Standard For Induced Patent Infringement, Brian Pandya of Wiley Rein LLP present an examination of Global-Tech Appliances Inc. v. SEB, S.A. The U.S. Supreme Court will hold oral argument in the case today.

The Supreme Court has ruled in nine patent challenges since 2005. The nine decisions are more than double the number of patent rulings by the justices in the five years prior to 2005.

The Global-Tech case involves the standard for holding a company liable if it has induced its customers to infringe another’s patent. The Federal Circuit, ruling for SEB, said the intent needed to establish liability for inducement to infringe is “deliberate indifference to potential patent rights.” Global-Tech is arguing for a higher standard. It urges the Court to require evidence of a purposeful, culpable expression and conduct by the defendant encouraging infringement.

Issue:

Whether the legal standard for the “state of mind” element of a claim for actively inducing infringement under 35 U.S.C. § 271(b) is “deliberate indifference of a known risk” that an infringement may occur or instead “purposeful, culpable expression and conduct” to encourage an infringement.

The plaintiff is SEB, a large French appliance manufacturer that holds a patent on a design for a deep-fat fryer that has a cool external surface. The defendants (petitioner Global-Tech and a variety of affiliates) are a group of companies that design and manufacture appliances, largely in China. After Sunbeam requested that Global-Tech manufacture a deep-fat fryer, Global-Tech purchased several deep-fat fryers in Hong Kong, studied them, and developed a proposal that incorporated some of the most desirable features of those fryers, as well as a few new features of its own. SEB’s fryer was one of those that Global-Tech examined.

After settling on a design for a fryer, Global-Tech obtained a patent opinion from its US attorney indicating that the proposed fryer would not infringe any United States patents. Of special note is that Global-Tech did not disclose to the attorney the specific manufacturers whose fryers it had examined, and the attorney did not locate SEB’s patent.

Pandya believes that the Supreme Court is likely to affirm the lower judgment:

This case presents a challenging set of facts. On one hand, Global-Tech can credibly argue that it was not aware of SEB’s patent before being placed on actual notice of alleged infringement, therefore it could not have specifically intended SEB’s patent to be infringed. On the other hand, Global-Tech appears to have acted in a willfully blind manner, if not in bad faith, by copying SEB’s design and then commissioning a freedom to operate search without notifying its patent attorney of the product copying.

Although it is plausible that the Supreme Court could impose a requirement of actual knowledge of a patent and reverse the decision below in its entirety, it seems more likely that that the Supreme Court will affirm the judgment that Global-Tech induced infringement of the ‘312 patent, but reject the Federal Circuit’s deliberate indifference standard as inconsistent with Grokster. Such a decision would raise the bar for proving induced infringement, but would leave unanswered questions, such as under which circumstances intent to infringe a patent can be inferred when the accused infringer had no notice of patent infringement.

See the entire article here: Supreme Court To Address Standard For Induced Patent Infringement

Merits briefs

Bill Introduced to Prohibit the Marketing of Authorized Generic Drugs

Stephen Jenei — Fri, 06 Feb 2009 20:58:29 +0000

The 1984 Hatch-Waxman Act created a 180-day period of exclusivity to generic companies as an incentive to challenge patents on brand name drugs. However, there is a concern that some brand pharmaceutical companies have been circumventing the intent of the Act by using delay tactics such as authorized generics (where the brand product is repackaged as a generic and marketed either through a subsidiary or third party).

Authorized generics can lead to delaying generic competition by discouraging generic companies from challenging weak and potentially unenforceable patents. Now, Representative Jo Ann Emerson (R-MO), along with Rep. Marion Berry (D-AR), Dennis Moore (D-KS) and Zach Wamp (R-TN), have re-introducing H.R. 573, which would prohibit the marketing of an authorized generic during the 180-day generic exclusivity period following a patent challenge.

The Act would amend the Federal Food, Drug, and Cosmetic Act to prohibit the marketing of authorized generic drugs. (Introduced in House). The Act would amend Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) by adding at the end the following:

Prohibition of Authorized Generic Drugs-

(1) IN GENERAL- Notwithstanding any other provision of this Act, no holder of a new drug application approved under subsection (c) shall manufacture, market, sell, or distribute an authorized generic drug, direct or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

(2) AUTHORIZED GENERIC DRUG- For purposes of this subsection, the term `authorized generic drug’–

(A) means any version of a listed drug (as such term is used in subsection (j)) that the holder of the new drug application approved under subsection (c) for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to subsection (j)(2)(B) with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed–

(i) by an entity eligible for exclusivity with respect to such drug under subsection (j)(5)(B)(iv); or

(ii) after expiration or forfeiture of any exclusivity with respect to such drug under such subsection (j)(5)(B)(iv).’.

Bill Introduced to Preserve Access to Affordable Generics

Stephen Jenei — Fri, 06 Feb 2009 20:41:25 +0000

As mentioned earlier, not only has the Federal Trade Commission has filed a complaint in federal district court challenging agreements by Solvay Pharmaceuticals, which paid generic drug makers to delay launching generic versions of Solvay’s brand name drug AndroGel (known as “reverse payments“), but Senate Judiciary Committee members Herb Kohl (D-WI) and Chuck Grassley (R-IA) have proposed the “Preserve Access to Affordable Generics Act (S.396).”

The Act would prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market. According to the Senate findings:

prescription drugs make up 10 percent of the national health care spending but for the past decade have been one of the fastest growing segments of health care expenditures;
67 percent of all prescriptions dispensed in the United States are generic drugs, yet they account for only 20 percent of all expenditures;
generic drugs, on average, cost 30 to 80 percent less than their brand-name counterparts; and
the FTC found that 1/2 of the settlements made in 2006 and 2007 between brand name and generic companies, and over 2/3 of the settlements with generic companies with exclusivity rights that blocked other generic drug applicants, included a pay-off from the brand name manufacturer in exchange for a promise from the generic company to delay entry into the market.

The Act would amend the Clayton Act (15 U.S.C. 12 et seq.) by inserting after section 28 the following:

SEC. 29. UNLAWFUL INTERFERENCE WITH GENERIC MARKETING.

(a) It shall be unlawful under this Act for any 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–

(1) an ANDA filer receives anything of value; and

(2) the ANDA filer agrees not to research, develop, manufacture, market, or sell the ANDA product for any period of time.

(b) Nothing in this section 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.

—————–

Violators would forfeit their 180-day exclusivity period:

Section 505 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting `section 29 of the Clayton Act or’ after `that the agreement has violated’.

Japan Patent Office (JPO) Releases Examination Guidelines

Stephen Jenei — Tue, 03 Feb 2009 22:29:15 +0000

An English version of the current Examination Guidelines for Patent and Utility Model is available on the website of the Japan Patent Office (JPO).

The document specifies the requirements for patent applications, giving detailed examples on issues such as “clarity” or “unity of application” according to the Japanese law. These guidelines carry a lot of weight in patent examining before the JPO.

The Examination Guidelines also cover the patent applications relating to specific technical fields, e.g. computer-software, biological and medicinal inventions. Below, we set out some of the guidelines from the Biotechnology section:

Scope of Claim

Genes

A gene may be described by specifying its nucleotide sequence.
A structural gene may be described by specifying an amino acid sequence of the protein encoded by the said gene.

Example: A gene encoding a protein consisting of an amino acid sequence represented by Met- Asp-･･････-Lys-Glu.

A gene may be described by a combination of the terms “substitution, deletion or addition” or “hybridize” with functions of the gene, and if necessary, origin or source of the gene in a generic form as follows (provided that the claimed invention is clear and the enablement requirement is met (See 1.1.2.1 below)).

Example1: A gene encoding a protein of (a) or (b) as follows:

(a) a protein whose amino acid sequence is represented by Met-Tyr-･･････-Cys-Leu
(b) a protein derived from the protein of (a) by substitution, deletion or addition of one or several amino acids in the amino acid sequence defined in (a) and having the activity of enzyme A.

Example 2: A gene selected from the group consisting of:

(a) a DNA whose nucleotide sequence is represented by ATGTATCGG･･･TGCCT
(b) a DNA which hybridizes under stringent conditions to the DNA, whose nucleotide sequence is complementary to that of the DNA defined in (a) and encodes the human protein having the activity of enzyme B.

Note: “Stringent conditions” are described in the detailed description of the invention.

A gene may be described by specifying functions, physiochemical properties, origin or source of the said gene, a process for producing the said gene, etc. (provided that the claimed invention is clear and the enablement requirement is met.

Transformants

A transformant may be described by specifying at least one of (1) its host and (2) the gene which is introduced (or the recombinant vector) (provided the that the claimed invention is clear and enablement requirement is met.

Example 1: A transformant comprising a recombinant vector containing a gene encoding a protein whose amino acid sequence is represented by Met-Asp-･･････Lys-Glu.

Example 3: A transgenic non-human mammal, having a recombinant DNA obtained by linking a structural gene encoding any protein to the regulatory region of a gene involved in the production of milk protein, and secreting the said protein into milk.

Enablement Requirement

Genes, vectors or recombinant vectors

A process for producing a gene, a vector or a recombinant vector should be described by respective origin or source, means for obtaining a vector to be used, an enzyme to be used, treatment conditions, steps for collecting and purifying it, or means for identification, etc.

If genes are claimed in a generic form and a large amount of trials and errors or complicated experimentation are needed to produce those genes beyond the reasonable extent that can be expected from a person skilled in the art, the detailed description of the invention is not described in such a manner that enables a person skilled in the art to make the product.

For example, in cases where a claimed invention includes the gene actually obtained and many of genes whose identity is extremely low to the said gene obtained and is specified by their function and that as a result, many of genes which do not have the same function as the said gene obtained are included in the genes whose identity is extremely low, a large amount of trials and errors or complicated experimentation are generally needed to select the genes with the same function as the said gene obtained among the genes whose identity is extremely low beyond the reasonable extent that can be expected from a person skilled in the art, and therefore, the detailed description of the invention is not described in such a manner that enables a person skilled in the art to make the product.

Example: A gene selected from the group consisting of:
(a) a DNA whose nucleotide sequence is represented by ATGTATCGG…TGCCT
(b) a DNA whose nucleotide sequence has more than X% identity to that of (a) and which encodes the protein having the activity of enzyme B.

Note: A protein encoded by the DNA (a) has the activity of enzyme B. X% represents extremely low identity.

Explanation: Genes whose identity is extremely low to the gene actually obtained are included in the (b), although (b) is specified by its function. In case that ” A DNA whose nucleotide sequence has more than X % identity to that of (a)” includes many of genes which do not have the activity of enzyme B, a large amount of trials and errors or complicated experimentation are generally needed to select the genes with the activity of enzyme B beyond the reasonable extent that can be expected from a person skilled in the art. Therefore, the detailed description of the invention is not described in such a manner that enables a person skilled in the art to make the product.

Unity of Application

A single application may be filed for a set of claims describing inventions shown in the following examples.

Example 1:

(1) An invention of a chemical substance produced with the use of a transformant (referred to as the “specified invention”)
(2) An invention of a structural gene
(3) An invention of a recombinant vector containing the structural gene
(4) An invention of a transformant containing the structural gene

Explanation: A structural gene has an inherent function of determining the amino acid sequence of a specific chemical substance. Therefore, in providing the specific chemical substance, inventions of a structural gene, a recombinant vector containing the structural gene and a transformant containing the structural gene have a very close relationship with the chemical substance. Thus, since it may be considered that the inventions of the structural gene, the recombinant vector and the transformant provide means to obtain the specific chemical substance, these inventions and the invention of the chemical substance produced with the use of the transformant are considered to solve the same problem. Accordingly, the specified invention and inventions above meet the relationship under Section 37(i) of the Patent Law.

In such a case, a claim directed to a process for producing the structural gene, the recombinant vector, or the transformant having the relationship provided in Section 37(iii) of the Patent Law with the inventions (2) to (4), for instance, may be included in a single application in accordance with the provision of Section 37(v) of the Patent Law.

Example 2:

(1) An invention of a parent cell (specified invention); and
(2) An invention of a fused cell prepared from the parent cell

Explanation: Since a fused cell contains, in general, the characters of its parent cell as a part of its characters, the substantial part of the matters being to be stated in the claim of both inventions is considered to be the same. Accordingly, the specified invention and the invention (2) above meet the relationship under Section 37(ii) of the Patent Law.

Example 3:

(1) An invention of a transformant (specified invention)
(2) An invention of a process for manufacturing a chemical substance using the transformant

Explanation: An invention of a process for producing a chemical substance using a transformant falls within the “invention directed to a process using the product” provided in Section 37(iii) of the Patent Law, because it utilizes functions and characteristics of the transformant.

Example 4:

(1) An invention of a gene (specified invention),
(2) An invention of a process for producing a recombinant vector using the said gene; and
(3) An invention of a process for producing a transformant using the said gene

Explanation: The invention (2) and invention (3) above fall within the “invention of a process using the product” under Section 37(iii) of the Patent Law, because it utilizes functions and characteristics of the gene.

See more details at the Japan Patent Office.

Chinese Patent Law Amendment Approved

Stephen Jenei — Mon, 02 Feb 2009 18:27:38 +0000

On December 27, 2008, the Standing Committee of People’s National Congress approved amendments of the Chinese Patent Law. This third amendment aims at enhancing the innovation ability and enforcing protection of patent rights. Here’s a summary of the amendments most relevant to foreign clients:

Direct Foreign Filing Available (A20)
Now inventions/creations completed in China can be filed for patent protection in a foreign country without a Chinese filing first. Also, all inventions/creations for foreign filing are now subject to a security clearance before SIPO. The clearance procedure will be written into the Implementing Rules.

Patentability: Absolute Novelty Requirement (A22, A23)
The “prior art” is now explicitly defined as the state of the art known worldwide to the public prior to the application/priority date. This raises the bar of the novelty requirements.

In addition, the so-called “conflicting patent application” now includes a patent application for the same technology, filed before SIPO prior to the application/priority date and published thereafter by any person/entity, as opposed to any person/entity other than the applicant of a patent application in question, thereby rounding up all scenarios for the same creation/invention legally.

Inventions/Creations Relying on Genetic Resources (A5, A26.5)
Any inventions/creations mainly relying on genetic resources, for which said genetic resources are illegally obtained, are not to be patented. For this purpose, source of the involved genetic resource must be provided and stated in the specification.

Compulsory License for Patented Drugs (A48 ~ A58)
Provisions that were in the Implementing Rules are now included in the Patent Law. In addition, SIPO may grant a compulsory license, “where the public health interest so requires”, for manufacturing and exporting drugs patented in China to designated countries or regions, which include least-developed countries, or WTO member countries or regions with no or insufficient capacity to manufacture the patented drug.

Protection of Patent Rights (A62 ~ A69)
- Prior art defense is allowed in infringement lawsuits (new A62)
- Administrative measures for patent counterfeiting acts are outlined (new A64)
Specifically, patent authorities’ rights in collecting evidence and imposing administrative fines
- Calculation of compensation for infringing acts is included in law (new A65)
In particular, the right owner’s expenses in stopping infringing acts are included in the compensation.
- Injunctive measures and seizure of evidence are written into law (new A66 and A67)
- Parallel imports are now legal (new A69)
- Bolar Exemption is legalized (new A69)

Provisions Related to Design Patents
- Added right of “offer for sale” to design patent owners (A11)
- Absolute novelty requirement (A23)
- Designs mainly for identifying planar printing materials are no longer patentable (A24)
- Similar designs of a product may be filed in one application (A31). This article can greatly benefit designers in fees and application procedures.

Double Patenting (A9)
The amendment has written the provision for preventing double patenting into the Law. But in the meantime, the practice of filing patent applications of invention and of utility model on the same date is reinforced, which encourages the use of the utility model patent as an effective tool for quick granting of rights.

The amended Patent Law is set to come into effect on October 1, 2009.

Today’s Guest Barista post is by Ming & Sure Intellectual Property Office, a leading intellectual property law firm in China with over seventy dedicated members providing a full range of intellectual property legal services, from procuring and securing rights with the broadest scope possible to enforcing rights through litigation and administrative measures, and other matters such as appeals, licensing, due diligence and portfolio management.

For more updates on intellectual property matters in China, please visit their web site. Contact: 7 Shangdi Fifth Street, Haohai Building, 5th Floor, Haidian District, Beijing 100085, P.R. China. TEL: +86-10-8289-6186; FAX: +86-10-8289-6187; Email: mail@mingsure.com