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Patent Baristas

In a lawsuit challenging patents covering diagnostic tests for mutations in genes, the University of Utah and Myriad Genetics lost a U.S. court ruling over some of its patents for detecting inherited breast cancer related to the human genes known as Breast Cancer Susceptibility Genes 1 and 2, or “BRCA1” and “BRCA2.”  The 152-page decision (Myriad Decision) addresses questions about whether human genes should be subject to patent protection.

In an amicus brief filed by the Biotechnology Industry Organization (BIO) and The Association of University Technology Managers (AUTM) set out this familiar position in an amicus brief of their own, stating:

Isolated DNA molecules are unquestionably “composition[s] of matter,” 35 U.S.C. §101; the district court’s ruling that they are nonetheless categorically unpatentable rested on three fundamental errors.

First, the court incorrectly treated isolated DNA molecules as merely “purified” forms of naturally-occurring substances; in fact, they are new, man-made chemical compositions that do not occur in nature.

Second, even if isolated DNA molecules could be treated as purified versions of naturally-occurring DNA, the process of isolation requires such a level of human intervention and so alters their character and use as to make them patentable under settled law.

Third, the district court was led astray by the comparison of DNA sequences to “information”—a common metaphor that is useful in conveying complex science to laypersons, but that does not change the fact that DNA remains a chemical compound, not an alphabet or a language.

The utility of isolated DNA molecules derives from their chemical structure, which is, and can only be, developed by human ingenuity using complex scientific expertise and equipment. As a result, isolated DNA molecules are patentable subject matter.

Although isolated DNA molecules clearly are “composition[s] of matter,” the district court ruled them unpatentable because it believed them to be the “purification of a product of nature” and patentable only if they possessed “markedly different characteristics” from naturally-occurring DNA.

The district court’s analysis was doubly flawed. First, isolated DNA molecules are not the “purification” of naturally-occurring DNA. Rather, they are entirely different man-made molecules that do not appear in nature. Second, even if isolated DNA molecules could be considered “purified” forms of native DNA, the isolation process transforms the DNA into a new and different article with distinctive form, properties, and uses, rendering the isolated molecules patentable under longstanding precedent.

Native DNA simply cannot be used in these therapeutic applications. Rather, it is only when a new, isolated DNA molecule is produced independently from a chromosome that these uses become possible. Accordingly, this is not a situation in which natural substances “serve the ends nature originally provided and act quite independently of any effort of the patentee.” Funk Bros. Seed Co. v.Kalo Inoculant Co., 333 U.S. 127, 131 (1948).

Invalidating Patents On Isolated DNA Molecules Kills Innovation

According to BIO and AUTM, unless reversed, the decision will cause serious harm to U.S. biotechnological innovation. The biotechnology industry depends heavily on patent protection to encourage the investment of time and capital necessary to develop inventions—including those discovered industrially or in-licensed from world-class universities in support of further academic research—into real-life products. The average cost of bringing a single biotechnology-related therapeutic to market, including basic research, clinical trials, and post-approval testing, exceeds $1.2 billion. Grabowski, Follow-On Biologics, 7 Nature Reviews Drug Discovery 479, 482 (2008). For every successful product, many more are abandoned, often only after large investments have been made (only 30% of biological therapeutics that make it as far as human trials succeed).

A ruling that isolated DNA molecules are categorically ineligible for patent protection would kill investor confidence and interfere with the ability of biotechnology companies, particularly small companies, to attract the capital needed to fund further research and development.

The decision potentially casts doubt on patent protection for a wide variety of natural substances that have been isolated and purified to the detriment of the biotechnology industry and the public.

Patents On Isolated DNA Molecules Benefit Rather Than Harm The Public

As we’ve said before, the issue is not that Myriad has a patent and is withholding treatment from patients.  The issue is that Myriad is charging high prices, which could possibly keep some women from seeking preventative genetic testing.  There is a natural cycle where medical breakthroughs receive patent protection, which allows the patent-holder to charge higher prices. High prices yield high profits, which creates an incentive to develop the next generation of therapeutics and diagnostics.

The question might be better framed as “Who should pay for health care costs as expensive diagnostics become available?”  It would seem to be more productive to focus on what we can do to address health care costs that are spiraling out of control. There is nothing particularly extraordinary about gene patents that should require that they be held to a higher standard than, say, pharmaceutical patents or non-gene based diagnostics, both of which can be subject to high cost and limited availability based on the patent holder’s rights.

This case arose from insurance companies with restrictive reimbursement policies for payment of important therapeutics and diagnostics.  An effort to abolish patents on isolated DNA molecules, however, is misdirected and short-sighted. It mistakes problems in the insurance system for problems in the patent system and will harm rather than help patients in the long run.

It is easy to argue after an invention has already been discovered and disclosed that the public would be better off if it were not patented. It is just as easy to single out a particular invention and argue with the benefit of hindsight that patent protection was not necessary for its discovery and development. Such facile arguments ignore the long-term benefits that the public derives from providing patent protection in exchange for the disclosure of new and useful discoveries.

In the life sciences, early-stage companies hold roughly two-thirds of the future clinical pipeline. Boston Consulting Group, Rising to the Productivity Challenge 6 & Ex. 4 (2004). Without patent protection for isolated DNA molecules, many companies would be unable to see those projects through to completion.

See the BIO/AUTM Brief here:  BIO-AUTM Amicus Brief AMP v Myriad

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Earlier, the American Civil Liberties Union (ACLU), the Public Patent Foundation (PUBPAT), and a whole gaggle of others filed a lawsuit challenging patents covering diagnostic tests for mutations in genes.   Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al.

On March 29, 2010, the University of Utah and Myriad Genetics lost a U.S. court ruling over some of its patents for detecting inherited breast cancer related to the human genes known as Breast Cancer Susceptibility Genes 1 and 2, or “BRCA1” and “BRCA2.”  The 152-page decision (Myriad Decision) addresses questions about whether human genes should be subject to patent protection.

Sandra Wells, VP and Chief IP Counsel of Affymetrix, gave her view that a purified product must possess “markedly different characteristics” from a product of nature in order to be patentable.  Wells believes that gene patents potentially inhibit development and commercialization of products and technologies that look at many genes simultaneously, à la Affymetrix.

Now, the briefs are rolling in to the CAFC, including Myriad’s own brief (Myriad’s Brief of Appellant) arguing that Judge Sweet’s ruling is an erroneous application of settled patent law and policy that, if upheld, “would have far-reaching negative consequences” for the continued development of biotechnology.

In an amicus brief filed by the Department of Justice (DOJ), on behalf of the United States, the Government has gone against the longstanding policy of the US Patent and Trademark Office (PTO) in arguing that isolated human genes, without further modification, are a product of nature and do not constitute patent-eligible subject matter under § 101 of the Patent Act.

In 2001, PTO published revised examination guidelines for the “utility” requirement of section 101. See Utility Examination Guidelines, 66 Fed. Reg. 1092 (Jan. 5, 2001). The PTO stated that, if the specification of a patent discloses a particular use for a gene — e.g., that the specified gene expresses a useful protein — then “an inventor’s discovery of a gene can be the basis for a patent on the genetic composition isolated from its natural state and processed through purifying steps that separate the gene from other molecules naturally associated with it.”  The PTO stated that a DNA molecule that has been “isolated” in this way is not a product of nature “because that DNA molecule does not occur in that isolated form in nature.”

The Government argues that no court has previously addressed whether an isolated but otherwise unaltered genomic DNA itself — that is, genomic material excised from an organism’s genome and isolated from the cellular environment in which it normally occurs, but without material change to its naturally occurring chemical structure and function — is patentable subject matter under 35 U.S.C. § 101.

QUESTIONS PRESENTED

Whether human-engineered DNA molecules, such as cDNAs, are patent-eligible subject matter under 35 U.S.C. § 101.

Whether isolated but otherwise unmodified genomic DNA is patent-eligible subject matter under section 101.

The Government’s brief argues that:

The boundary between eligible and non-eligible subject matter is defined, in significant part, by the settled principle that the patent laws do not embrace laws of nature, physical phenomena, or abstract ideas. See Bilski, 130 S.Ct. at 3225.

In attempting to apply that principle here, the district court erroneously cast doubt on the patent-eligibility of a broad range of man­made compositions of matter whose value derives from the information-encoding capacity of DNA. Such compositions — e.g., cDNAs, vectors, recombinant plasmids, and chimeric proteins, as well as countless industrial products, such as vaccines and genetically modified crops, created with the aid of such molecules — are in every meaningful sense the fruits of human ingenuity and thus qualify as “‘human-made inventions’” eligible for patent protection under section 101. J.E.M. Ag  Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 130 (2001) (quoting Diamond v. Chakrabarty, 447 U.S. 303, 313 (1980)). The district court therefore erred in invalidating the challenged composition claims, such as claim 2 of the ‘282 patent, that are directed solely to cDNAs.

The district court correctly held, however, that genomic DNA that has merely been isolated from the human body, without further alteration or manipulation, is not patent-eligible. Unlike the genetically engineered microorganism in Chakrabarty, the unique chain of chemical base pairs that induces a human cell to express a BRCA protein is not a “human-made invention.” Nor is the fact that particular natural mutations in that unique chain increase a woman’s chance of contracting breast or ovarian cancer. Indeed, the relationship between a naturally occurring nucleotide sequence and the molecule it expresses in a human cell — that is, the relationship between genotype and phenotype — is simply a law of nature. The chemical structure of native human genes is a product of nature, and it is no less a product of nature when that structure is “isolated” from its natural environment than are cotton fibers that have been separated from cotton seeds or coal that has been extracted from the earth.

Thus, the patent laws embrace gene replacement therapies, engineered biologic drugs, methods of modifying the properties of plants or generating biofuels, and similar advanced applications of biotechnology. Crossing the threshold of section 101, however, requires something more than identifying and isolating what has always existed in nature, no matter how difficult or useful that discovery may be.

The Patent and Trademark Office has issued thousands of patents on genes of various organisms, including on an estimated 20 percent of human genes.  The fact that the Government is jumping into the fray now probably has a lot to do with the bad publicity Myriad has attracted on its patents covering BRCA1 and BRCA2 genes — along with the over $3,000 that Myriad charges to perform the test on the genes to see if women carry mutations that predispose them to breast and ovarian cancers.

The brief does not mention that biotechnology companies spent an average of eight years and $1.2 billion to get a new treatment to the market, about 24 percent more than it cost makers of traditional drugs to develop a medicine. Source: Tufts University.

Government programs directly cover 27.8% of the population (83 million), including the elderly, disabled, children, veterans, and some of the poor, and federal law mandates public access to emergency services regardless of ability to pay. Public spending accounts for between 45% and 56.1% of U.S. health care spending.  You can see why the federal government would be so interested in biotech patents:

Ernst & Young estimate global biotech industry revenues for publicly-held companies at $79.1 billion for 2009, an 11.8% decrease from the previous year.  The firm also estimates that revenues of publicly-held biotech companies in the U.S. declined 13% to $56.6 billion.

Genetically-engineered drugs, or “biotech” drugs, represent about 9% of the total global prescription drugs market, and about 19% of the U.S. prescription market.  The U.S. Centers for Medicare & Medicaid Services (CMS) forecast called for prescription drug purchases in the U.S. to total about $260.1 billion during 2010, representing about $800 per capita.  That projected total is up from $246.3 billion in 2009 and a mere $40 billion in 1990.

The Government stated flat out that this was a reversal of decades long practice at the PTO, writing:  “We acknowledge that this conclusion is contrary to the longstanding practice of the Patent and Trademark Office, as well as the practice of the National Institutes of Health and other government agencies that have in the past sought and obtained patents for isolated genomic DNA.”

The Government’s new policy seems to be a result of discussions among agencies within the Obama administration, including the National Institutes of Health and the Patent and Trademark Office.  For now, the patent office said that it would not immediately put the policy into effect and will “maintain the status quo while this matter is pending resolution by the Federal Circuit Court of Appeals.

See the Governments brief here:  US Amicus Brief in AMP

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Browsing the aisles of Costco, taking in the consumerism the Christmas has come to denote, my mind was drawn to its jewelry and watch section. As I was feasting my eyes upon baubles and trinkets I have no use for, I recalled the not so recent Ninth Circuit Costco v. Omega which in turn reminded me that Supreme Court is all set to hear the case. What better time to refresh our memory and ponder over the implications of the case ruling?

Costco Wholesale Corporation sold Swiss watches manufactured by Omega S.A. without prior permission from Omega. Omega brought a copyright infringement suit against Costco claiming that Costco’s act of selling watches manufactured by Omega was an infringement of Omega’s copyright protection as afforded by United States laws. Essentially Costco had purchased watches meant for international markets other than the United States (hence the lower price) and sold it in the U.S. at prices lower than offered by other U.S. distributors. Costco sought protection under the first sale doctrine.

The first sale doctrine was first propounded by the Supreme Court in 1908 in the case of Bobbs Merrill Co. v Straus and later included in the US Copyright Act as a limitation on copyright. Briefly the first sale doctrine allows the purchaser to transfer, sell or donate a copyrighted work without permission of the copyright holder once it has been obtained. This implies that the copyright holder relinquishes all rights related to that particular copy once sold so long as no further copies are made by the purchaser. Parallel importation refers to a good that has been produced and sold legally but illegally imported into a country, without the consent of the copyright owner. Thus parallel imported goods are often referred to as ‘grey goods’ because they are produced with the consent of the copyright owner unlike black market goods. This restriction provides that the same material does not compete with itself on price. Consequently geographical product monopolies are set up.

Costco claims that the first sale doctrine is not territorial. The Ninth Circuit held that the first sale doctrine is indeed territorial and does not apply to imported goods manufactured abroad. A similar argument was used in BMG v. Perez where the Ninth Circuit Court of Appeals held that the importation of phonorecords, which were lawfully purchased in Mexico, violated U.S. Copyright Law when they were imported into the United States. The Ninth Circuit pointed out that since copyrights are territorial, U.S. Copyright Law is not applicable outside of the United States and thus, first sale had not occurred in Mexico.

According to the Ninth Circuit §109(a) granted protection of first sale doctrine only to copies legally made and sold in the U.S. Granting protection of first sale doctrine to copies made and sold outside of the U.S. would render § 602 meaningless.

17 U.S.C. § 109(a): Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

17 U.S.C. § 602(a): Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501

In the Quality King case, the product was manufactured and sold in the United States and then re-imported. The manufacturers had already relinquished their rights as soon as the product was sold and shipped outside of the U.S. The Supreme Court reversed the Ninth Circuit Court’s decision and held that “[T]he whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution.”

Returning to the case at hand, it seems odd that while Omega enjoys copyright protection for its “Omega Globe Design” in the U.S., still claims that a copy manufactured in a foreign country enjoys the foreign copyright law, not United States law. The Ninth Circuit decision is extremely narrow in perspective. It does not take into account the economic implications of its decision. It essentially means that copyright holders do not relinquish their rights upon copies sold or given away. There would be no downstream market. Also, manufacturing copies abroad under foreign copyright laws while still enjoying selectively United States copyright protection is what it seems Omega is doing. It seems counter-intuitive that even when using a logo protected by U.S. laws, Omega insists that the articles were manufactured abroad.

The Ninth Circuit gracefully agrees with prior Supreme Court decisions that the first-sale doctrine applies to works manufactured in the U.S. However, what are the factors that decide where an article was manufactured? Would manufacturers shift production units abroad and thus circumvent the first sale doctrine as well as control over the resales in the U.S? What does this portend for the already deteriorating U.S. job market?

In light of the current economic circumstances, the Supreme Court should allot a wider realm of meaning to the first sale doctrine. Players like Omega should be dissuaded from using U.S. protection for logos for articles manufactured abroad and simultaneously putting at a disadvantage the U.S. retailers.

Today’s post is by Guest Barista Shalini Menezes of ::O.bi:t.er: D:ic.t:um.

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Huw G. Hallybone, a Partner at Carpmaels & Ransford, gave a talk at the BIO IP Counsels Committee Conference (IPCC) in Boston last week about allowable subject matter at the EPO.

Article 53

Exceptions to patentability

European patents shall not be granted in respect of:

(a) inventions the commercial exploitation of which would be contrary to “ordre public” or morality; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;

(b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision shall not apply to microbiological processes or the products thereof;

(c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.

Rule 27

Patentable biotechnological inventions

Biotechnological inventions shall also be patentable if they concern:

(a) biological material which is isolated from its natural environment or produced by means of a technical process even if it previously occurred in nature;

(b) plants or animals if the technical feasibility of the invention is not confined to a particular plant or animal variety;

(c) a microbiological or other technical process, or a product obtained by means of such a process other than a plant or animal variety.

Rule 28

Exceptions to patentability

Under Article 53(a), European patents shall not be granted in respect of biotechnological inventions which, in particular, concern the following:

(a) processes for cloning human beings [drats!, I guess there won’t be two of me];

(b) processes for modifying the germ line genetic identity of human   beings;

(c) uses of human embryos for industrial or commercial purposes;

(d) processes for modifying the genetic identity of animals which   are likely to cause them suffering without any substantial   medical benefit to man or animal, and also animals resulting   from such processes.

Rule 29

The human body and its elements

(1) The human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, cannot constitute patentable inventions.

(2) An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.

(3) The industrial application of a sequence or a partial sequence of a gene must be disclosed in the patent application.

Monsanto v. Cefetra (C-428/08)

Takeaways:

  • Not possible to rely on DNA claims to protect materials incorporating the DNA where the DNA is not able to perform the specific function for which it was patented
  • Appears to abolish absolute protection for DNA as such
Monsanto’s invention relates to gene conferring herbicide resistance in soy bean plants grown in Argentina (where there is no patent protection).  Cefetra imported soymeal into The Netherlands where Monsanto brought action for infringement of NL(EP) patent against Cefetra.
  • Claim 1: Isolated DNA
  • Claim 6: A DNA sequence encoding a Class II EPSPS enzyme selected from the group consisting of SEQ ID NO:3 and SEQ ID NO:5
  • Claim 7: Recombinant, dsDNA
  • Claim 14: Method of producing genetically transformed plants
  • Claims 21/24: Glyphosate tolerant plant cell/plant
  • Claim 28: Method for selectively controlling weeds
Article 9 Biotech Directive: The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material … in which the product is incorporated and in which the genetic information is contained and performs its function.

ECJ’s ruling

Article 9 of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions is to be interpreted as not conferring patent right protection in circumstances such as those of the case in the main proceedings, in which the patented product is contained in the soy meal, where it does not perform the function for which it is patented, but did perform that function previously in the soy plant, of which the meal is a processed product, or would possibly again be able to perform that function after it had been extracted from the soy meal and inserted into the cell of a living organism.

Referral:

Does the protection of a patent on biological material as provided by the Directive, in particular under Article 9, preclude the national patent legislation from conferring (in parallel) absolute protection on the product (the DNA) as such, regardless of whether the DNA performs its function, and must the protection provided under Article 9 therefore be deemed to be exhaustive?

ECJ’s ruling

Article 9 of the Directive effects an exhaustive harmonisation of the protection it confers, with the result that it precludes the national patent legislation from offering absolute protection to the patented product as such, regardless of whether it performs its function in the material containing it.

The EU court case is C-428/08 Monsanto Technology LLC v. Cefetra BV, Cefetra Feed Service BV, Cefetra Futures BV and State of Argentina and Monsanto Technology LLC v. Vopak Agencies Rotterdam BV and Alfred C. Toepfer International GmbH.

Stem Cells G2/06 [WARF]

Claim 1. A cell culture comprising primate embryonic stem cells which (i) are capable of proliferation in vitro [sic] culture for over one year, (ii) maintain a karyotype in which all chromosomes normally characteristic of the primate species are present and are not noticeably altered through culture for over one year, (iii) maintain the potential to differentiate to derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and (iv) are prevented from differentiating when cultured on a fibroblast feeder layer.

Rule 28(c) EPC … forbids the patenting of claims directed to products which – as described in the application – at the filing date could be prepared exclusively by a method which necessarily involved the destruction of the human embryos from which the said products are derived, even if the said method is not part of the claims.

Takeaways:

  • Not relevant that methods not involving destruction of embryos might emerge later;
  • Not relevant that the claims did not recite a step requiring destruction of an embryo;
  • Specification made it clear that the method involved such a step; and
  • Relates to embryonic stems not stem cells in general.
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At the BIO IP Counsels Committee Conference (IPCC) in Boston last week, Sandra Wells, VP and Chief IP Counsel of Affymetrix, gave a talk about the evolving patent-eligibility standards for genes.

Earlier, the American Civil Liberties Union (ACLU), the Public Patent Foundation (PUBPAT), and a whole gaggle of others have filed a lawsuit challenging patents cover diagnostic tests for mutations along the genes, known as BRCA1 and BRCA2, which are responsible for most cases of hereditary breast and ovarian cancers.   Association for Molecular Pathology, et al. v. United States Patent and Trademark Office, et al. (09 Civ. 4515). A copy of the decision is here: Myriad Decision (pdf).

On March 29, 2010, the University of Utah and Myriad Genetics lost a U.S. court ruling over some of its patents for detecting inherited breast cancer related to the genes BRCA1 and BRCA2.  The 152-page decision addresses questions about whether human genes should be subject to patent protection.

Wells reviewed the policy arguments against gene patents:

1.  Gene patents:
  • Are not necessary to incentivize gene discovery
  • Are not necessary to incentivize commercialization of gene tests
  • Lead to fewer genetic test providers
  • Cause inflated prices for genetic tests
  • Restrict patient access to genetic tests
  • Lead to lower quality of genetic tests and other genetic technology
  • Stifle basic or applied research into new or improved genetic technologies
  • Create infringement liability for women who donate cancer samples for research
  • Prevent patients from getting a second opinion

2.  The claims preempt all uses of the information the genes contain, regardless of variation or of method used for analysis, i.e., there is no way to design around.

3.  The scope of patentable subject matter should balance reward for research and ensuring opportunity for future innovation, i.e., Myriad is being overcompensated for its contribution.

Are isolated human genes and the comparison of their sequences patentable?

Are the sequences products of nature?  That is:  “a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter.” Chakrabarty, 447 U.S. at 309.  But Chakrabarty in contrast found patentable “a new bacterium with markedly different characteristics from any found in nature.”  Is sequencing a gene more like finding a plant in the wild than a newly engineered bacterium?

For composition of matter claims, the purified product must possess “markedly different characteristics” from a product of nature.  Wells noted that the isolated and purified products do not have any functions that they did not have already so the required change is absent.

Question: Is “Isolated DNA” claimed by Myriad “markedly different” from native DNA as it exists in nature?

Judge Sweet’s Opinion: “Isolated DNA” not Patentable.

“In light of DNA’s unique qualities as a physical embodiment of information, none of the structural and functional differences … between native BRCA1/2 DNA and the isolated BRCA1/2 DNA claimed in the patents … render the claimed DNA ‘markedly different.’”

“The preservation of this defining characteristic of DNA in its native and isolated forms mandates the conclusion that the challenged composition claims are directed to unpatentable products of nature.”

Typically, when the question of patent-eligibility has come up, the Supreme Court  has identified human intervention as the touchstone. Diamond v. Chakrabarty; (“the invention is not nature’s handiwork, but his own”), accord J.E.M. Ag-Supply; Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.N.Y. 1911). (Purified adrenaline so superior to previous adrenal gland extracts so as to be different not just in degree, but in kind).  The invention must have been transformed through human intervention from the natural thing into something that is qualitatively different, new, and man-made.

Wells then proceeded to give an overview of the history of product of nature case law:

  1. American Wood-Paper Co. v. Fibre Disintegrating Co., 90 U.S. 566 (1874) (pure cellulose pulp preparation prepared by novel chemical process held not novel over prior art cellulose pulp preparations made by old process);
  2. Cochrane v. BASF, 111 U.S. 293 (1884)(claimed “artificial alizarine” prepared by new chemical process not novel over prior art impure alizarine extracts from madder root);
  3. American Fruit Growers v. Brogdex Co., 283 U.S. 1 (1931)(Borax-treated citrus fruit is insufficiently changed from natural fruit, and not a manufacture within the meaning of the Patent Act);
  4. Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948)(claimed inoculate of mutually non-inhibitive root-nodule bacteria held not inventive over preexisting state of the art);
  5. Lab. Corp. v. Metabolite, 548 U.S. 124 (2006)( Breyer., J. dissenting from dismissal as improvidently granted) A diagnostic method correlation claim is an unpatenable discovery of a law of nature.

Wells also noted that some some claims might be invalid under other provisions, for example claim 5 of the ‘282:

1. An isolated DNA coding for a BRCA1 polypeptide, said polypeptide having the amino acid sequence set forth in SEQ ID NO:2.

5. An isolated DNA having at least 15 nucleotides of the DNA of claim 1.

Claim 5 is directed at any 15 nucleotide sequence coding for any part of BRCA1 protein.  This includes ~1.6 million sequences or about 1 in 600 of all possible 15-mers with 340,000 “infringing” 15-mers on human chromosome 1.

Wells believes that gene patents potentially inhibit development and commercialization of products and technologies that look at many genes simultaneously.

While it has to be noted that Affymetrix has a personal interest in having gene sequences free from patents — Affymetrix sells integrated GeneChip microarrays (chips) consisting of nucleic acid sequences with total revenues of $327.1 million for 2009 — it was eye-opening to know that the cost of sequencing the entire human genome is projected to be $1,000 in near future.  If you add just $100 per gene for royalties for each of the 25,000 genes, the cost would be $2,501,000!  That, of course, is if you can get all of the patentees to agree.

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solipsism – n. – the theory that the self can be aware of nothing but its own experiences.

You already know they exist — out there somewhere — waiting to bash your company.  Just look at websites such as “I Hate Boingo” and “PayPal Sucks.”  Don’t even get me started on all the variations of “Microsoft Sucks.”

Richard Telofski addresses this troubling problem in his new book, Insidious Competition: The Battle for Meaning and the Corporate Image, which outlines the battle for meaning with regard to your corporate image and explains how you can fight back in today’s online world.

How does one control a crowd? If left unchecked, a crowd can easily turn into a lynch mob, with your business as the target?  Insidious Competition is dedicated to making companies aware that this competition for their corporate images is real with harmful effects and that, unlike other traditional competitors, is just not being taken seriously.

What makes non-traditional and insidious completion “competition” is that people are competing for the image of the corporation and are doing so online, within the social web.  Please note that here Insidious Competition does not include legitimate complaints about a company.  Insidious Competition is not the considered criticism of a product or a service, which may enable the marketers of that product or service to improve their offering, that should worry management.  It’s not the balanced argument which contributes to reasonable discourse that threatens the corporate image.  No, it’s the antithesis of these, coming from within social media, that threatens the corporate image.

What are the Five Factors of Insidious Competition?

Factor Explanation
1.  Anonymity Social media doesn’t require that participants are correctly identified.
2.  Power The anonymity can lead to a corruption of ethical behavior, making users feel powerful.
3.  Contagion Power corrupts.  Social media users are susceptible to this infection.  And it spreads like a virus.
4.  Instinct Powerful-feeling individuals perform behaviors which they instinctively believe will be in support of the crowd’s collective interests.
5.  Disdain Deep-rooted dislike of institutions is amplified and perpetuated by the other four factors.

It’s the innuendo, insinuation, spin, implication, hint, overtone, undertone, aspersion, or allusion to the inferiority or wrongdoing of a company and/or its products or services falsely created within social media that supports the threat of insidious competitionInsidious because these innuendos, insinuations, spins, implications, hints, overtones, undertones, aspersions, or allusions proceed in a gradual and subtle manner to harm the corporate image, repeatedly, gradually, and incrementally, over time.  The danger and its effects are not noticed until it is too late.  What this process constitutes is a distortion of reality, or a battle for meaning.

Telofski notes that if we are to understand and attempt, at least, to manage insidious competition and to win that battle for meaning, then we must have the foundation for understanding that competition.  Insidious Competition then helps explain how to counter such attacks with suggested strategies and tactics tailored to the threat.

One such threat is the Mommy Blogger – “they’re nice, they’re everywhere and they converse with other mommies far and wide, 24/7/365 on a broad range of topics?  So, how can that be a bad thing?” Telofski details how Mommy Bloggers write with emotion and passion that connects with readers.  These emotions bring veracity wrapped around basic concepts of society.  How can we argue against mommies?  Unfortunately, their readers often select out the parts they see as most important to pass along and the conversation gets taken out of context.  Soon you experience a drift in message that gets passed along in a mutated mess of your corporate image.

Don’t wait until “YourCompanySucks.com” starts lambasting you.

About the Author

Richard Telofski is a competitive strategy analyst. Specializing in anti-corporate activism, he examines the actions of “irregular competitors” (i.e., activists and NGOs) and how those organizations impact business from within online and offline media.

Insidious Competition: The Battle for Meaning and the Corporate Image is available through Amazon.

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I’m on my way to the BIO IP Counsels Committee Conference.  The 2010 Fall IPCC Conference, in Boston, MA, is scheduled for October 18-20, 2010.  It is an opportunity for BIO members and other industry IP professionals to come together to hear, discuss and learn about current and projected topics related to biotech IP.

Program Highlights

Hear from fellow in-house colleagues, outside counsel, and PTO representatives about:

  • Evolving patent-eligibility standards for genes, biomarkers, diagnostics, and cell-based therapies;
  • Valuation of IP when selling, licensing, or acquiring biotech patent rights;
  • Present and impending changes to the way you practice before the PTO;
  • How to defend your patent in an inter partes reexam;
  • Whether inequitable conduct reform is close or elusive;
  • Inducement, divided infringement, “abstract idea” exceptions, and other things that go “bump” in the dark if you own biotech method patents;
  • Tales from the edge and beyond: accounts of biotech investment in emerging market countries.
  • Join us for private dinner reception at the New England Aquarium where attendees will get to explore a four-story ocean water tank filled with exotic fish and animals in their natural habitat.

Click here to view a conference agenda for the 2010 IPCC Fall Conference scheduled for October 18-20, 2010.

I hope to see you there!

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Frost Brown Todd has been named one of eight “standout” law firms in IP litigation in the Litigation Outlook 2011 report published by Law360 and conducted by The BTI Consulting Group.

According to BTI’s report – for which 240 corporate counsel, including 18% of the Fortune 100, were surveyed – standout firms have “made an indelible mark on clients. These firms have positioned themselves with the world’s most demanding clients as the ones corporate counsel would most like to have by their side in head-to-head competition. In essence, they are the best players in the game.”

“We believe this ranking is the result of our continuing efforts to provide superior service at a competitive cost, and to act as a partner with in-house counsel to bring innovative solutions to their most challenging problems,” said John R. Crockett III, Chairman of the Firm.

In an article published in Law360 the president of BTI Consulting, Michael Rynowecer outlined the criteria for the award when he said that “emphasis on client service, paired with some form of innovation, helped these firms rise to the top.”

The outstanding Intellectual Property Litigation Group at Frost Brown Todd includes: James Dimos, Thomas P. O’Brien III, David E. Schmit, Ann G. Schoen, Joel E. Tragesser, and a skilled group of associates, paralegals and project assistants. The IP litigation team at Frost Brown Todd is very familiar with federal courts and has handled cases all across the United States.

“We believe our IP litigation Group’s business-solution approach to IP disputes is unique,” says Ms. Schoen, Chair of the firm’s Intellectual Property Practice “We offer our clients cost-effective staffing and cost management while also providing them with some of the leading Intellectual Property lawyers in the region.

The FBT Intellectual Property group provides an uncommon advantage in patent litigation since several of its experienced patent litigators are also registered patent attorneys. Recent patent suits include those relating to processed agricultural products, business method patents in the financial services area, aluminized steel, high security locks, automobile parts, high speed sorters, elevators, consumer products and computer software, among others.

The Frost Brown Todd Intellectual Property Practice Group has been recognized as one of the top patent practices in the region (2009 and 2010 Chambers USA Business Lawyers Guide) and one of the top ten patent litigation practices in the nation by Intellectual Property Magazine. The group includes registered patent practitioners with a wide range of technical backgrounds, including a number with advanced technical degrees. Several of the group’s lawyers have been recognized in such publications as Chambers USA, Best Lawyers in America, and Super Lawyers, as top practitioners in their field.

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