Tag: patent

Ariosa Diagnostics, Inc. v. Sequenom, Inc. – Another Diagnostic Patent Meets its End

On Friday, June 12, 2015, the Federal Circuit issued its decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015) finding that the claims of U.S. Patent No. 6,258,540 (the ‘540 patent) did not meet the patent-eligibility requirements of 35 U.S.C. §101.

The ‘540 patent

The ‘540 patent claims certain methods of using cell-free fetal DNA (cffDNA). In 1996, the inventors, Doctors Dennis Lo and James Wainscoat, discovered cffDNA in material plasma and serum. Traditionally, this portion of maternal blood samples was discarded by researchers as medical waste. As a result, the inventors developed a method for detecting a small fraction of paternally inherited cffDNA in maternal plasma or serum to determine certain fetal characteristics, such as gender. The method was commercialized by Sequenom as the MaterniT21 test. An advantage provided by the test is that it created an alternative for prenatal diagnosis of fetal DNA that avoided the risks of widely-used techniques that took samples from the fetus or placenta.

In addition to claiming methods of using cffDNA, the ‘540 patent also provides for making a diagnosis of certain fetal characteristics based on the detection of paternally inherited cffDNA. According to the specification, a pregnant woman carrying a fetus with certain genetic defects has more cffDNA in her blood than a woman with a normal fetus.

Claims 1, 24 and 25 of the ‘540 patent recite:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises:

amplifying a paternally inherited nucleic acid from the serum or plasma sample, and

detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:

removing all or substantially all nucleated and a nucleated cell populationS from the blood sample,

amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the paternally inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises:

obtaining a non-cellular fraction of the blood sample,

amplifying a paternally inherited nucleic acid from the non-cellular fraction,

and performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

The remaining claims describe how the method of detection occurs or how it can be used. For example, claim 2, which depends from claim 1, recites amplification by polymerase chain reaction (PCR). Claim 4, which also depends from claim 1, recites detection by a sequence specific probe.

District Court Proceedings

Ariosa Diagnostics, Inc. (Ariosa) and Natera, Inc. (Natera) make and sell alternative non-invasive tests that compete with Sequenom’s MaterniT21 test. Specifically, Ariosa sells the Harmony Test, a non-invasive test used for prenatal diagnosis of certain fetal characteristics, and Natera sells the Non-Invasive Paternity Test, which is used to confirm the paternity or non-paternity of a gestating fetus from genetic information in fetal DNA available in the blood of a pregnant female.

In response to letters threatening claims of infringement, from December 2011 through early 2012, Ariosa and Natera each filed separate declaratory judgment actions against Sequenom alleging non-infringement of the ‘540 patent. Sequenom counterclaimed alleging infringement. Sequenom filed a motion seeking an preliminary injunction to enjoin Ariosa from selling the Harmony Prenatal test. In July 2012, the district court denied the motion finding that there was a substantial question over whether the subject matter of the asserted claims was directed to eligible subject matter. Sequenom appealed to the Federal Circuit.

In August 2013, the Federal Circuit vacated and remanded the case, holding that the district court erred in certain respects not relevant to this appeal. Additionally, the Court did not offer any opinion regarding the subject matter eligibility of the asserted claims.

After remand, the parties filed cross motions for summary judgment regarding invalidity under 35 U.S.C. §101. The district court found that the ‘540 patent was directed to the natural phenomenon of paternally inherited cffDNA and that the claims did not add enough to the natural phenomenon to make the claims patent eligible under §101. According to the district court, at the time of the filing of the ‘540 patent in 1997, the steps of amplifying and detecting were well-understood, routine, or conventional. Thus, the district court concluded that the ‘540 patent was not directed to patentable subject matter finding that the only “inventive concept of the processes of the ‘540 patent is to apply those well-understood, routine processes to paternally inherited cffDNA, a natural phenomenon”. Additionally, the district court also found that the claimed processes posed a risk of preempting a natural phenomenon. Sequenom appealed.

Federal Circuit Decision

The Federal Circuit began its decision by setting forth the two-prong patent-eligibility test (citing Mayo Collaborative Services v. Prometheus Laboratories, Inc. (March 2012)). The first prong is to determine whether the claims at issue are directed to a patent-ineligible concept. If answered in the affirmative, the second prong is to determine whether the elements of each claim, both individually and as an ordered combination, recite additional elements that transform the nature of the claim into a patent-eligible invention that amounts to significantly more than the ineligible concept itself.

Regarding the first prong, the Federal Circuit noted that the claims of the ‘540 patent were method claims, which generally constitute eligible subject matter. However, upon further inspection, the Court further noted that the claims were directed to a multistep method that began with cffDNA taken from a maternal plasma or serum sample. cffDNA was naturally occurring and circulated freely in the blood stream of a pregnant woman. As a result, the existence of cffDNA in maternal blood was a natural phenomena. The Court further noted that the method ended with paternally inherited cffDNA, which was also a natural phenomena. Therefore, because the method began and ended with a natural phenomenon, the Federal Circuit held that the claims were directed to naturally occurring matter. The Court stated that the specification supported its conclusion. For example, column 1, lines 50-51 states: “[i]t has now been discovered that foetal DNA is detectable in maternal serum or plasma samples”, column 13, line 11-13 states: “[t]hese observations indicate that maternal plasma/serum DNA may be a useful source of material for the non-invasive prenatal diagnosis of certain genetic disorders,” and column 16, lines 12-14 states: “[t]he most important observation in this study is the very high concentration of foetal DNA in maternal plasma and serum”.

Regarding the second prong, the Federal Circuit concluded that the practice of the method claims did not result in an inventive concept that transformed the natural phenomena of cffDNA into a patentable invention. Specifically, the Court stated that for process claims that encompass natural phenomenon, the process steps must recite additional features that are new and useful. According to the Court:

“The method at issue here amounts to a general instruction to doctors to apply routine, conventional techniques when seeking to detect cffDNA. Because the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful. The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.”

With respect to the preparation and amplification steps, the Court noted that the specification confirmed that in 1997 that these steps were well-understood, routine, conventional activities performed by doctors. Additionally, Sequenom’s expert testified that PCR and other methodologies for amplifying DNA were well known in 1997. The Court further found that the detecting steps were also similarly well-understood, routine and conventional.

Regarding the dependent claims, the Court found that these claims were broad examples of how to detect cffDNA in maternal plasma. The Court noted that these claims were focused on the use of the natural phenomenon in combination with well-understood, routine and conventional activity.

The Court concluded stating

“Thus in this case, appending routine conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art.”

Regarding preemption, Sequenom argued that there were numerous other uses of cffDNA aside from those claimed in the ‘540 patent and as a result, the ‘540 patent did not preempt all uses of cffDNA. The Federal Circuit disagreed. The Court noted that while preemption might signal patent ineligible subject matter, the absence of complete preemption did not demonstrate patent eligibility. Specifically, in this case, the Court noted that Sequenom’s attempts to limit the breadth of the breadth of the claims by showing alternative uses of cffDNA outside the scope of the claims did not change the conclusion that the claims were directed to patent ineligible subject matter.

At the end of the opinion, the Court addressed Sequenom’s arguments that before the ‘540 patent that “no one” was using plasma or serum of pregnant mothers to amplify and detect paternally-inherited cffDNA. Moreover, Sequenom noted that the 1997 Lancet publication of the inventors had been cited over a thousand times and that the claimed method utilized the man-made tools of biotechnology in a new way that revolutionized prenatal care. The Court agreed but noted, citing to Ass’n for Molecular Pathology v. Myriad Genetics, Inc. (June 2013), that just because a discovery is groundbreaking, innovative or brilliant does not by itself satisfy §101. The Court stated:

“While Drs. Lo and Wainscoat’s discovery regarding cffDNA may have been a significant contribution to the medical field, that alone does not make it patentable. We do not disagree that detecting cffDNA in maternal plasma or serum that before was discarded as waste material is a positive and valuable contribution to science. But even such valuable and contributions can fall short of statutory patentable subject matter, as it does here”.

ARTICLE BY Lisa L. Mueller of Michael Best & Friedrich LLP

© MICHAEL BEST & FRIEDRICH LLP

Allvoice Decision Provides Roadmap For Software-based Inventions

In a refreshing break from Alice/Mayo abstract idea based 35 U.S.C. § 101 rejections, the Federal Circuit released a decision invalidating certain claims of U.S. Patent No. 5,799,273 as not being directed to one of the four statutory categories of inventions (see Allvoice Developments US, LLC, v. Microsoft Corp., CAFC 2014-1258, decided May 22, 2015) The matter was on appeal, by Allvoice, from a district court decision invalidating claims 60-68 as non-statutory subject matter. The decision also affirms a non-infringement decision by the district court, while interesting that that portion of the decision is not the focus of this post.

The claims of the ‘273 Patent at issue were directed towards a speech-recognition “interface,” see claim 60 reproduced below. Both the CAFC and the district court interpreted, probably correctly, the claimed interface as software without any tangible form (e.g., not interpreted as instructions on a computer-readable medium or as part of a tangible system).

60.  A universal speech-recognition interface that enables operative coupling of a speech-recognition engine to at least any one of a plurality of different computer-related applications, the universal speech-recognition interface comprising:

input means for receiving speech-recognition data including recognised words;

output means for outputting the recognised words into at least any one of the plurality of different computer-related applications to allow processing of the recognised words as input text; and

audio playback means for playing audio data associated with the recognised words. ’273 Patent, col. 29 ll. 22–34.

Allvoice essentially reinforces the Court’s interpretation by asserting that the claimed speech-recognition interfaces are described in the specification as “interface applications,” and thus the claims are limited to software. Allvoice attempts to clarify their position by further asserting that the claims should be interpreted as reciting “software instructions,” and further asserting that the instructions must necessarily be in a machine readable, physical state, in order to exist. It is interesting to consider whether the decision in this case might have been different if Allvoice had been able to argue an interpretation of the “means” elements as including hardware components of a system. Unfortunately, such an interpretation was either not supported by the specification, or not pursued for other reasons by the litigation team.

The Court dismisses Allvoice’s assertions regarding the implied physical form, stating “this Court has recognized, instructions, data, or information alone, absent a tangible medium, is not a manufacture.” (Citing Digitech Image Techs.,758 F.3d at 1349–50 (rejecting a patentee’s attempt to argue that the disputed claims

were subject matter eligible because the claim language did not describe “any tangible embodiment of this information (i.e., in physical memory or other medium) or claim any tangible part of the digital processing system”).) Earlier in the decision, the Court had already determined that the claims were clearly not directed to a process. Thus, because the claims were not directed to a tangible article and were not process claims, the district court’s invalidity holding was upheld.

The good news from this case is that the Court provides a fairly clear roadmap for claiming software-based inventions – software must be claimed as a process (method) or as instructions on a machine-readable medium (tangible manufacture), at least outside of a system claim. While this case does not seem to cover any “new” ground per se, it does clearly reinforce that claims directed to pure software, such as the recited speech-recognition interfaces, and not fashioned as a process or machine-readable medium are not likely to find favor in the courts.

ARTICLE BY Gregory M. Stark of Schwegman, Lundberg & Woessner, P.A.
© 2015 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Patent Safe Harbor Applies To Supplemental New Drug Applications

On May 13, 2015, the Federal Circuit confirmed in Classen Immunotherapies, Inc. v. Elan Pharmaceuticals, Inc. that the safe harbor provisions of 35 U.S.C. § 271(e)(1) can shield post-FDA approval activities from liability for patent infringement when the activities generated information that was submitted to the FDA to support a supplemental New Drug Application andCitizen’s Petition. However, the Federal Circuit remanded the case to the district court to determine whether other allegedly infringing activities, such as using the information to file a patent application, also were shielded by the statute.

The Claims At Issue

The patent at issue was Classen’s U.S. 6,584,472, directed to a method for accessing and analyzing data on a commercially available drug to identify a new use of that drug, and then commercializing the new use. Claim 36 (which depends from claim 33, which was canceled during reexamination) is representative of the asserted method claims, and claim 59 is representative of the asserted kit claims:

33. A method for creating and using data associated with a commercially available product, wherein the method comprises the steps of:
accessing at least one data source, comprising together or separately, adverse event data associated with exposure to or use of the product and commercial data regarding marketing, sales, profitability or related information pertaining to the product;
analyzing the accessed data to identify (i) at least one new adverse event associated with exposure to or use of the product, (ii) at leastone new use for the product responsive to identification of the at least one new adverse event, and (iii) the potential commercial value of the at least one new use for the product; and
commercializing the newly identified product information based upon the analyzed data.

36.  The method of claim 33, wherein the commercializing step comprises formatting the data relating to at least one new adverse event associated with exposure to, or use of the product, or documenting same, such that a manufacturer or distributor of the product must inform consumers, users or individuals responsible for the user, physicians or prescribers about at least one new adverse event associated with exposure to or use of the product.

59.  A proprietary kit comprising (i) product and (ii) documentation notifying a user of the product of at least one new adverse event relating to the product, wherein determination of the new adverse event is based upon the data provided by the method of claim 36.

Footnote 1 of the Federal Circuit decision states, “Because issues of validity are not before us in this appeal, we express no opinion as to whether the asserted claims cover patent ineligible subject matter in light of the Supreme Court’s decision in Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014).”

Procedural Background

Classen asserted U.S. Patent No. 6,584,472 against Elan, alleging that Elan infringed the patent by (i) studying the effect of food on the bioavailability of the FDA-approved muscle relaxant Skelaxin, (ii) using the clinical data to identify a new use for the drug, and (iii) commercializing the new use. In particular, after Skelaxin was approved, Elan conducted clinical studies on the effect of the drug when administered with or without food, and then submitted the results to the FDA when seeking approval of a supplemental New Drug Application (“sNDA”) to revise the labeling for Skelaxin and in a Citizen’s Petition proposing changes to the approval requirements for generic versions of Skelaxin. Additionally, Elan filed patent applications based on the new clinical data and sold kits with the revised label containing information derived from the data.

The U.S. District Court for the District of Maryland granted Elan’s motion for summary judgment of non-infringement, finding that Elan’s activities were “reasonably related to the submission of information” under the Federal Food, Drug, and Cosmetic Act (FDCA), and were therefore protected by the safe harbor provision of 35 U.S.C. § 271(e)(1). Classen appealed to the Federal Circuit.

The Federal Circuit Decision

The Federal Circuit decision was authored by Judge Lourie and joined by Chief Judge Prost and District Judge Gilstrap (of the Eastern District of Texas) sitting by designation.

On appeal, Classen argued that Elan’s activities are not exempt under the safe harbor because they involved merely “routine” post-approval reporting to the FDA, which the Federal Circuit held in its 2011 decision in Classen Immunotherapies, Inc. v. Biogen IDEC lies outside the scope of the § 271(e)(1) safe harbor.

This statute provides in relevant part:

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 . . . 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 . . . .

In Classen v. Biogen, the court indicated that the safe harbor applies only to pre-marketing activities, and held that the safe harbor “does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained.” However, a year later in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc., the Federal Circuit held that the safe harbor can shield post-approval activities from giving rise to liability for patent infringement where the information submitted to the FDA “is necessary both to the continued approval of the ANDA and to the ability to market the … drug.” Thus, it is not surprising that in this case the Federal Circuit noted that the statutory language does not “categorically exclude post-approval activities from the ambit of the safe harbor.”

Turning to the activities at issue, the Federal Circuit found that post-approval studies conducted to support an sNDA “serve similar purposes as pre-approval studies in ensuring the safety and efficacy of approved drugs.” Thus, the court reasoned, “As an integral part of the regulatory approval process, those activities are ‘reasonably related to the development and submission of information’ under the FDCA, 35 U.S.C. § 271(e)(1), and are therefore exempt from infringement liability.” The court  therefore concluded that the post-approval clinical trials, sNDA and Citizen’s Petition “clearly fall within the scope of the safe harbor.”

Although the Federal Circuit remanded to the district court to determine whether Elan’s activities related to “reanalyzing the clinical data to identify patentable information and filing patent applications are commercial activities outside the scope of the safe harbor,” and whether “selling Skelaxin with the revised label that contained the information derived from the clinical study” infringed the Classen kit claims, the court took it upon itself to “assist the district court in its analysis of infringement . . . [by] mak[ing] the following observations of the record:”

  • Filing a patent application is generally not an infringement of a patent

  • Filing a patent application is not commercialization of an invention, and so a method claim requiring commercialization is likely not infringed by Elan’s actions

  • Placing information submitted to the FDA on a product label generally cannot be an act of infringement.

Given these “observations,” it seems unlikely that the district court will find that Elan infringed the claims at issue.

The Wide Mouth of the Safe Harbor

This decision is one of many Federal Circuit decisions that broadly construe the safe harbor of § 271(e)(1). Indeed, less than one year after the court seemed to draw a bright line around the scope of the safe harbor that excluded post-approval activities, the court blurred that line in Momenta and now it has erased it further in this case.

The Commercial Value of Patent Applications

Although the Federal Circuit’s “observation” that filing a patent application generally is not an act of infringement may be correct, we question its suggestion that filing a patent application is not a commercial activity. To the contrary, filing a patent application can be an essential step of a commercialization plan, and can increase the commercial value of the invention. On the other hand, we would agree that it is unusual that a patent could be infringed by “commercializing … information,” as recited in the Classen patent.

Apple-Samsung Trade Dress Case Demonstrates Potential Value of Design Patents

A jury awarded Apple more than $1 billion in damages after finding that smartphones sold by Samsung diluted Apple’s trade dress and infringed Apple’s design and utility patents. After a partial retrial limited to determining the appropriate amount of damages, Apple still arose victorious with a $930 million award. Samsung moved for judgment as a matter of law and for a new trial. The district court denied those motions, and Samsung appealed. On May 18, 2015, the Federal Circuit upheld the jury’s verdict of design and utility patent infringement, but reversed the finding of trade dress dilution.

Trade Dress Claims

At issue on appeal was whether Apple’s purported registered and unregistered trade dress associated with its iPhone 3G and 3GS products is functional. Because trademark law gives the trademark owner a “perpetual monopoly,” a design that is functional cannot serve as protectable trade dress. Apple Inc. v. Samsung Elecs. Co., Ltd., No. 14-1335, slip op. at 7 (Fed. Cir. May 18, 2015). The standard is even higher when the owner claims trade dress protection over the configuration of a product, as opposed to product packaging or other forms of trade dress. Slip op. at 8. In fact, the court noted that Apple had not cited a single Ninth Circuit case finding trade dress of a product configuration to be non-functional. Id.

Apple claimed the following elements as its unregistered trade dress:

  • a rectangular product with four evenly rounded corners;
  • a flat, clear surface covering the front of the product;
  • a display screen under the clear surface;
  • substantial black borders above and below the display screen and narrower black borders on either side of the screen; and
  • when the device is on, a row of small dots on the display screen, a matrix of colorful square icons with evenly rounded corners within the display screen, and an unchanging bottom dock of colorful square icons with evenly rounded corners set off from the display’s other icons.

Slip op. at 9. “In general terms, a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.” Id. (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982)). Because this case came to the Federal Circuit on appeal from a district court sitting in the Ninth Circuit, the Federal Circuit applied the Ninth Circuit’s Disc Golf test for determining whether a design is functional. Under that test, courts consider whether: (1) the design yields a utilitarian advantage; (2) alternative designs are available; (3) advertising touts the utilitarian advantages of the design; and (4) the particular design results from a comparatively simple or inexpensive method of manufacture. Slip op. at 10. Because this purported trade dress was not registered, Apple had the burden to prove its validity, which required Apple to show that the product features at issue “serve[] no purpose other than identification.” Id. (citing Disc Golf Assoc., Inc. v. Champion Discs, 158 F.3d 1002, 1007 (9th Cir. 1998)). The court of appeals applied those factors and found extensive evidence supporting Samsung’s claim that the alleged trade dress was functional. Slip op. at 12–14.

In addition to the unregistered product configuration discussed above, Apple also asserted a claim based on US Registration 3,470,983, which covered the design details in each of the 16 icons on the iPhone’s home screen framed by the iPhone’s rounded-rectangular shape with silver edges and a black background. Slip op. at 15. Although Apple enjoyed an evidentiary presumption of validity for its registered trade dress, the court again looked to the Disc Golffactors and found that Samsung met its burden of overcoming that presumption and proving the trade dress was functional and the registration invalid. Slip op. at 16. Because the court held Apple’s purported trade dress was functional, it vacated the jury’s verdict on Apple’s claims for trade dress dilution and remanded that portion of the case for further proceedings. Slip op. at 17.

Design Patent Claims

Apple fared better on its design patent claims. Here, Apple asserted three design patents directed to the “front face” (D’677 patent), “beveled front edge” (D’087 patent) and “graphical user interface (GUI)” (D’305 patent) of its iPhone products.

design patent claims - apple samsung

Samsung challenged the court’s claim construction and jury instructions for failing to “ignore[]” functional elements of the designs from the claim scope, such as rectangular form and rounded corners. Slip op. at 20. The court disagreed, finding that Samsung’s proposed rule to eliminate entire elements from the scope of design claims was unsupported by precedent. Id. Rather, the court found that both the claim construction and jury instructions properly focused the infringement analysis on the overall appearance of the claimed design. Id. at 21.

This victory was financially significant for Apple, as the court found they were entitled to Samsung’s entire profits on its infringing smartphones as damages. Like the district court, the court of appeals found that 35 U.S.C. § 289 explicitly authorizes the award of total profit from the article of manufacture bearing the patented design, rather than an apportionment of damages based only on the infringing aspects of the device (i.e., external features and not internal hardware/software). The court of appeals interpreted Samsung’s argument as imposing an “apportionment” requirement on Apple—a requirement the Federal Circuit previously rejected in Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998). Thus, Apple maintains a claim to at least a significant portion of the $930 million damages award in the case.

Summary and Takeaways

Ultimately, after holding that Apple’s purported trade dress covering elements of the iPhone’s overall shape, black-bordered display screen, and matrix of colorful square icons was invalid, the district court upheld the jury’s verdict that Samsung’s devices infringed Apple’s design patents relating to the iPhone’s overall shape, display screen, and matrix of colorful square icons. The image depicted in Apple’s now-invalid trade dress registration is below on the left. Figures from two of its still-valid design patents are on the right. Although the overlap in what was claimed in these different forms of intellectual property is readily apparent, Apple lost on one set of claims and prevailed on the other.

design patent apple samsung iphone

It remains to be seen how damages associated with the design patent claims differ from damages associated with the now-invalid trade dress claims. But this much is clear: the Federal Circuit has given a reason for companies to reevaluate the role of design patents in their intellectual property portfolios. The time and expense associated with obtaining design patents will not suit all products, but for the right product, they can provide a valuable method of recovery in litigation involving similar product designs.

ARTICLE BY Kristin J. Achterhof, Karen Artz Ash, Richard P. Bauer & Floyd A. Mandell of Katten Muchin Rosenman LLP
©2015 Katten Muchin Rosenman LLP

Amicus Briefs On Biosimilar Patent Litigation

Foley and Lardner LLP

Amgen has appealed the district court decision denying its motion for a preliminary injunction to keep Sandoz’ biosimilar version of Neupogen® off the market. The appeal is on an expedited briefing schedule at the Federal Circuit, and three amicus briefs have been filed. All of the amicus briefs argue for reversal of at least some of the district court’s decision regarding the biosimilar patent litigation framework of the BPCIA.

The Biotechnology Industry Organization

The Biotechnology Industry Organization filed an amicus brief arguing that the BPCIA should be interpreted as requiring “notice to the reference product sponsor of the initial submission of the biosimilar application” and “notice of potential commercial marketing upon approval.” BIO argues that these procedures must be mandatory in order for the patent dispute resolution provisions of the law to achieve their purpose of “provid[ing] a significant and real opportunity to resolve patent issues prior to the launch of the biosimilar.”

Abbvie Inc.

AbbVie Inc. filed an amicus brief arguing that “the notice-and-exchange provisions are mandatory” and that a biosimilar applicant’s “failure to comply with the statute is unlawful.” According to AbbVie, if the district court decision is upheld “the entire biosimilar litigation process would become a free-for-all, where biosimilar companies would utilize the data and work of innovator companies but refuse to provide basic information about their products … leaving innovators to blindly guess as to which patents they should sue on and when.”

AbbVie also argues that the BPCIA does not preempt Amgen’s state law claims of unfair competition.

Janssen Biotech, Inc.

Janssen Biotech, Inc. filed an amicus brief asking the Federal Circuit to “clarify that the statutory patent dispute resolution procedures are intended to be followed as written, and are not merely optional choices or empty formalities.” Janssen criticizes the district court decision for “transforming [the BPCIA’s patent provisions] from a carefully orchestrated dispute resolution process into a series of strategic options existing for the sole benefit of the biosimilar applicant.”

Janssen also urges the Federal Circuit to decide that the notice of commercial marketing required by the BPCIA may not be provided before a biosimilar product is licensed by the FDA. One argument Janssen makes on this point is that the notice of commercial marketing gives the reference product sponsor the right to seek a preliminary injunction based on alleged patent infringement, but a preliminary injunction cannot be granted unless commercial launch is imminent, and commercial launch is not possible until the biosimilar has been licensed by the FDA.

The Expedited Appeal Schedule 

Amgen filed its opening brief on April 3. Sandoz filed its brief on April 21. Oral arguments are scheduled for June 3.

ARTICLE BY

Courtenay C. Brinckerhoff
Foley & Lardner LLP

Target Corp. v. Destination Maternity Corp., Final Written Decision IPR2013-00532

Drinker Biddle & Reath LLP a leading law firm with a national footprint

Takeaway: Where neither party provides an interpretation of a term that provides additional clarity, the Board will give the term its plain and ordinary meaning.

In its Final Written Decision, the Board found that Petitioner had shown by a preponderance of the evidence that all challenged claims (claims 1, 2, 5, 6, 10, 11, and 15-17) of the ’531 patent are unpatentable. The ’531 patent “relates to a garment worn during different stages of pregnancy and different stages of postpartum body changes.”

The Board addressed claim construction, stating that claims in an unexpired patent are given their broadest reasonable construction in light of the specification of the patent. The Board first analyzed the term “just beneath the wearer’s breast area.” Patent Owner argued that the term means “beneath the location of the breasts by a very small margin.” However, the term “very small margin” does not provide any further clarity. The Board determined that because neither party offered a construction that provides additional clarity, the plain and ordinary meaning will be given. Also, the Board determined that the term is a term of approximation and that a garment may satisfy claim 1 for one wearer but not another because of differences in the wearers’ body types.

The Board then analyzed the term “different body types” used in claims 2 and 17. Although Patent Owner did not propose constructions for this limitation, its patentability arguments advance an implicit construction of “different body types” that requires an unspecified amount of difference between said body types. The Board determined that the broadest reasonable construction of “different body types” means “two or more body types that are not identical.”

The Board then analyzed the term “an elastic fabric that is contractible elastically to cover an abdomen during different stages of postpartum body changes” from claim 5. Although Patent Owner did not propose constructions for this limitation, the Board determined that its patentability arguments advanced an implicit construction that claim 5 requires a specific, yet unspecified, minimum amount of contractability. However, the specification does not specify any minimum amount of contractability and does not describe or identify any stages of postpartum body changes. Accordingly, the Board determined that the broadest reasonable construction of “during different stages of postpartum body changes” means “during any postpartum body change of any wearer,” which means that the fabric does not have to contract to cover postpartum body changes of every potential wearer or to cover all postpartum body changes of any wearer.

The Board next addressed the asserted grounds of unpatentability. Addressing anticipation based on a JC Penney catalog for fold-over panel jeans, the Board disagreed with Patent Owner’s assertion that the product shown in the catalog did not disclose a panel extending “high enough on the wearer’s body.” The Board found that the JC Penney catalog disclosed a panel substantially covering the belly region and noted that it was the belly region, and not the panel, that the claims require to extend to just beneath the wearer’s breast area. Thus, the Board was persuaded that claim 1 was anticipated by the JC Penney reference. Also, the Board disagreed with Patent Owner’s assertion that Petitioner has failed to prove that the panel of the JCP fold-over panel jeans stretches or expands enough to conform to different body types, because the claims do not require any quantified amount of stretching or expansion and the term “different body types” includes any two or more body types that are not identical. The Board was also not persuaded by Patent Owner’s argument that the panel of the JCP fold-over panel jeans is not described as being contractible as allegedly recited in claim 5. The Board indicated that contraction is always present where there is contraction, and the claims did not require any specific amount of contraction.

With respect to dependent claims 6, 11, 15, and 16, Petitioner asserted obviousness based on the JC Penney catalog applied to claim 1 in view of JC Penney Bootcut jeans. Patent Owner alleged nonobviousness based on the secondary consideration of commercial success. However, Patent Owner failed to link the alleged commercial success of the products to the inventions of claims 6, 11, 15, and 16. Specifically, Patent Owner’s witness conceded that the commercial success of Patent Owner’s products had nothing to do with the unique characteristics of claims 6 and 11, which add limitations directed exclusively to features of the garment lower portion.

Target Corp. v. Destination Maternity Corp., IPR2013-00532
Paper 76: Final Written Decision
Dated: February 12, 2015
Patent: RE43,531 E
Before: Jennifer S. Bisk, Michael J. Fitzpatrick, and Mitchell G. Weatherly
Written by: Fitzpatrick
Related Proceedings: Destination Maternity Corp. v. Target Corp., Case No. 2:12-cv-05680-AB (E.D. Pa.); IPR2013-00531; IPR2014-00508; IPR2013-00530; IPR2013-00533; IPR2014-00509

ARTICLE BY

Carrie A. Beyer
OF
Drinker Biddle & Reath LLP

Life Sciences: Protecting the Crown Jewels

Sills Cummis & Gross P.C

An innovator or owner of patent rights or other technology in the life sciences arena is often unable, because of lack of financial or other resources, to develop or commercialize a pharmaceutical product covered by such intellectual property rights. In these cases, the innovator/owner (the licensor) will frequently out-license the invention to a third party (the licensee) for development and commercialization by such licensee. The resulting license agreement can be a complicated document. In this article, I will address some of the important licensing considerations that a licensor should take into account before executing a license agreement.

Consider the Exclusivity v. Non-exclusivity of the License Grant

An initial consideration in a license agreement is whether the license grant will be exclusive or non-exclusive to the licensee. If the license grant is exclusive, then the licensor typically agrees not to grant a license to any third party. If the license grant is non-exclusive, then the licensor typically is permitted to grant further licenses to third parties. Even in an exclusive license, however, the licensor may want to retain certain rights for itself. For instance, the licensor may want to preserve for itself the right to enter into certain geographical markets or fields of use. The parties should be very clear in the license agreement as to whether or not the licensor is permitted to exercise any R&D, commercialization or other rights during the term of the license agreement.

Whether a license is exclusive or nonexclusive will set the tone for the associated rights and obligations of the parties set forth in the remainder of the license agreement. For example, an exclusive licensee is usually subject to “diligence” obligations, requiring it to exploit the licensed technology in order to maintain the license grant; a non-exclusive licensee is usually subject to limited or no such obligations. Also, an exclusive licensee usually has more rights than a non-exclusive licensee with respect to the prosecution, maintenance, defense and enforcement of patent rights.

Also Consider the Scope of the “Field of Use” and “Territory”

Other important initial considerations in the license agreement are the scope of the licensed field of use and the scope of the licensed territory. A “field of use” defines the field in which the licensee may exercise the licensed rights and may take one of many forms. For example, the field of use may be all encompassing (“any and all fields and applications”), may be limited to only therapeutic or only diagnostic products, may be limited to only biologics or only small molecule products, or may be limited to a specific medical indication (e.g., cardiac indications). Especially in the case of an exclusive license (and based on the nature of the licensee), it is sometimes better for the licensor to limit the field of use. Then the licensor would be permitted to grant subsequent rights to other parties in the non-licensed fields. Alternatively, if the field of use is broad, the licensor should require that the licensee actually exercise its rights in certain specified fields in order to maintain such rights. If the licensee fails to exercise its rights in a specified field of use within a certain period of time, the licensor’s remedies could include the right to terminate the license agreement in its entirety, the right to terminate the license agreement with respect to one or more specific fields and/or the right to convert an exclusive license grant in such field to a non-exclusive grant.

Considerations regarding the “territory” are very similar to the considerations regarding the field of use. Often, in order to maintain an exclusive worldwide territory grant, the licensee is required to exploit the licensed technology in specified countries. For example, the licensee may be required to develop and commercialize a product covered by the licensed technology (licensed products) in the United States and at least one other “major market country” (e.g., Japan, France, Germany, Italy, Spain and the United Kingdom). Again, the licensor’s remedies for the licensee’s failure to satisfy this obligation could be similar to the remedies set forth above for field of use.

Maximize the Royalty Payments

Pursuant to the terms of the license agreement, the licensee will most likely be required to pay to the licensor a royalty based on sales of licensed products. Although the determination of the amount of royalty is in large part a business decision and takes into consideration, among other things, the scope and strength of the licensed patent and other intellectual property rights, the breadth of the field of use and territory, whether the licensed product is a therapeutic product (typically a higher royalty rate) or a diagnostic product, and whether the license grant is exclusive or non-exclusive, there are many important legal nuances that the licensee could and should consider. One such nuance is the calculation of “net sales.”

The amount of royalty owed by the licensee is normally calculated by multiplying the royalty rate by the amount of sales of the licensed products. The royalty rate does not need to be a flat rate and could be graduated, for example, with a rate change as sales increase. In determining the “sales” portion of the royalty calculation, it is more advantageous to the licensor that sales be based on amounts invoiced (as opposed to amounts received) by the licensee, thus keeping the risk of bad debt (i.e., a sales amount is invoiced but not actually received by the licensee) with the licensee. Also, although “net sales” (as opposed to “gross sales”) is the usual royalty base, the licensor should restrict the deductions taken into account to determine such net sales. For example, although the “net sales” calculation frequently includes deductions from gross sales for governmental taxes and charges, customer credits and rebates, and transportation, storage and insurance expenses, the licensor should avoid less typical deductions such as sales commissions owed by the licensee or a catch-all deduction for “other reasonable deductions.”

Ensure That the Inventions Are Fully Exploited

Once a licensor licenses its invention to a third party in an exclusive license arrangement, the licensor will lose much control over the day-to-day use of the technology. It is imperative that the licensor requires the licensee to actually exploit the technology in a timely manner and devote sufficient time, money and resource to such exploitation. Almost all exclusive patent or technology license agreements contain a “diligence” provision requiring the licensee to employ certain efforts with respect to the research, development and commercialization of licensed products. Generally, the diligence requirement provides that the licensee must use “commercially reasonable efforts” to advance the product through the pipeline and sale process. However, the meaning of “commercially reasonable efforts” is not precise and the two parties to the contract could interpret the phrase, and the corresponding diligence requirement, quite differently.

A prudent licensor defines the diligence requirement more exactly. Ideally, the diligence requirement would be accompanied by diligence milestones, contractually obligating the licensee to reach certain developmental, regulatory or sales milestones by certain target dates or to spend a certain dollar amount on the licensed product in a given time period. Additionally, different diligence standards could apply with respect to different jurisdictions. If the licensee fails to meet its target, the licensor would be entitled to one or more remedies such as a financial payment from the licensee or a right of termination.

Maintain Control over Patent Prosecution

In an exclusive patent license arrangement, the licensee usually pays for the costs associated with patent prosecution and maintenance. Even in a non-exclusive arrangement, the licensee could be required to pay for a portion of such amounts. Though the licensor bears some or all of the patent prosecution and maintenance expenses, the licensor should ensure that it ultimately has control. Ideally, the license agreement should provide that the licensor controls the prosecution and maintenance, perhaps with counsel reasonably acceptable to the licensee. The licensor could allow the licensee to provide input into where (which jurisdictions) the licensor will prosecute and maintain the patents. However, the licensor should have the final say as to the scope and jurisdiction of the patent filings. In order to address a licensee’s concern that it would be required to pay for expenses in jurisdictions where the licensee does not deem patent coverage to be necessary or desirable, the license agreement could provide that the licensee may notify the licensor that the licensee will not pay the patent costs in a particular jurisdiction – in which case the licensee would probably lose its license rights (or at least its exclusivity, in the case of an exclusive license grant) with respect to such jurisdiction.

Carefully Consider Termination Provisions

A license agreement includes customary termination provisions. For example, each party usually has the right to terminate the agreement in the case of an uncured material breach by the other party. Additionally, the licensee typically has the right to terminate the license agreement for convenience (without cause) following some notice period (e.g., 90 days). Following termination of the license agreement, the licensor may want to either resume R&D or commercialization efforts on its own or re-license the technology to another suitable third party. In order to avoid the need to duplicate efforts (and expenditures) of the first licensee, the licensor should give careful consideration to the termination provisions in the license agreement. Ideally, if the licensee terminates the license agreement for convenience (i.e., the licensee walks away from the technology) or the licensor terminates the license agreement because of an uncured material breach by the licensee, the licensee would be required to automatically assign to the licensor, for no additional consideration or for some agreed upon payment, all of the results, know-how and intellectual property generated by or on behalf of the licensee under the license agreement and all regulatory files, regulatory approvals and other rights related to the licensed product. Thus, the licensor or its new licensee would be able to capitalize on the past work performed by the licensee, expedite timelines and reduce expense.

All or some of the points described above could be very important to a licensor. Although the interrelation of these and various other provisions in a license agreement are complex, by understanding the unique issues and concerns that arise when analyzing and negotiating a license agreement, the licensor is better able to protect its invention and ultimately increase its profit.

ARTICLE BY

Lori M. Waldron
OF
Sills Cummis & Gross P.C.

This article appeared in the February 2015 issue of The Metropolitan Corporate Counsel.  The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect those of Sills Cummis & Gross P.C.   Copyright © 2015 Sills Cummis & Gross P.C.  All rights reserved.”

Target Wins Rehearing of IPR Joinder Decision with Expanded Panel

Schwegman Lundberg Woessner

Last fall, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to require joinder requests by a non-party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  Prior to that decision,  the Board had interpreted § 315(c) to allow for issue joinder by the petitioner of the original proceeding (see, for example Microsoft v. Proxyconn, IPR2013- 00109).  Of course, joinder was decided on a case-by-case basis, but had not previously been denied because the request was made by the petitioner of the original proceeding.

Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing.  The Board granted Target’s rehearing request.  In a 4:3 decision,  the majority agreed that § 315(c) had been overly narrowly interpreted in the prior decision:

Turning now to the merits of the Request for Rehearing, the contention at the heart of Petitioner’s request for rehearing is that the denial of its Motion for Joinder was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c).” Paper 22, 1. We agree with Petitioner.

The majority read § 315(c)’s reference to “any person who properly files a petition under section 311” in conjunction with § 311′s requirement that the petition filer not be the patent owner, to broadly interpret § 315(c) to include any person except the patent owner.  This interpretation is at odds with the dissent’s analysis, which reads § 315(c)’s reference to “may join as a party” to literally require a new party for joinder:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). The statute does not refer to the joining of a petition or new patentability challenges presented therein. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joinedto IPR2013-00531.

While the majority decision does align with panel decisions on joinder prior to Target, one must ask whether this issue is finally resolved by this expanded panel decision.  For example, what happens if another panel does not follow this interpretation § 315(c)?  Or suppose this decision is appealed; would the Federal Circuit reverse a Board decision on joinder as it relates to institution given its recent interpretation of 35 U.S.C. § 314(d) in In re Cuozzo Speed Technologies? (“We conclude that § 314(d) prohibits review of the decision to institute IPR even after a final decision. . . . Section 314(d) provides that the decision is both ‘nonappealable’ and ‘final,’ i.e., not subject to further review. 35 U.S.C. § 314(d).”)  Would a Federal Circuit appeal have to be in the form of a petition for writ of mandamus?  If so, how would that square with the mandamus decisions in In re Dominion Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014)(mandamus relief not available to challenge the denial of a petition for IPR) and in In re Proctor & Gamble Co., 749 F.3d 1376, 1378–79 (Fed. Cir. 2014)(mandamus relief not available to provide immediate review of a decision to institute IPR)?

ARTICLE BY

Timothy Bianchi
OF
Schwegman, Lundberg & Woessner, P.A.

Practice Considerations Post Teva v. Sandoz

Sterne, Kessler, Goldstein & Fox P.L.L.C. - Attorneys at Law

In Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., No. 13-854, slip op. 574 U.S. __ (2015), the U.S. Supreme Court ruled that underlying factual issues resolved while formally construing a disputed patent claim term at the district court level are subject to a clear error standard of review as opposed to a de novo standard.

The Patent at Issue

The litigated patent claimed a method for manufacturing Copaxone, Teva’s multi-billion dollar a year drug used in the treatment of multiple sclerosis. Sandoz, as a generic pharmaceutical challenger under the Hatch-Waxman Act, attacked the patent as indefinite because it contained claim language describing an active pharmaceutical ingredient having a “molecular weight of 5 to 9 kilodaltons.” Although three accepted definitions1 exist in the relevant art to calculate “molecular weight,” the method of calculation to be used was not described in the claim, the patent specification, or the prosecution history. The district court took evidence on this issue, namely through extrinsic expert testimony, and ruled that “molecular weight” would have been calculated by determining the “peak average molecular weight.” Accordingly, the district court held the phrase to be definite and accepted the understanding advanced by Teva’s expert. The Federal Circuit, however, reversed and held that the claim was indefinite after reviewing the district court claim construction de novo.

The Supreme Court’s Decision

In the majority opinion, authored by Justice Breyer, the Court explained that claim construction may involve both legal and factual elements that could necessitate differing levels of appellate scrutiny. Specifically, if a patent claim term is construed based upon the intrinsic evidence alone (i.e., patent claims, specification, and prosecution history), the determination is exclusively one of law, subject to de novo review. However, if the intrinsic evidence is not dispositive of the meaning of a claim term, then extrinsic evidence can be consulted (e.g., expert testimony, technical dictionary definitions, etc.) to better understand the meaning of the term. It is these underlying “facts” relating to extrinsic evidence that are reviewed according to the clear error standard. The Court reasoned that the District Judge, having presided over the entire proceeding, has a comparatively greater familiarity with the “specific scientific problems and principles” than the appellate court and should be afforded deference on factual findings. While the new scheme announced by the Court changes the standard of review for subsidiary factual matters, the ultimate issue of claim interpretation will still be reviewed de novo.

What is the Significance of Teva v. Sandoz?

The holding in Teva could have broad-ranging implications for clients in the procurement and enforcement of their patent rights. Below are a few examples of how the decision could impact current patent practice.

As an initial matter, patent owners should pay particular attention to the sufficiency of the disclosure with regard to key elements of the claims and consider specifically defining these elements in the specification through, for example, the use of a glossary. Such a strategy could help avoid protracted battles of the experts that could result in claim terms being redefined in ways never intended by the patent owner. While this approach has the potential to narrow claim scope, and may require additional time and expense during patent prosecution, it could result in a stronger, more effective patent less susceptible to post-Teva based challenges.

In the context of litigation, the Teva decision could provide motivation for litigants to create “factual issues” that are determinative of claim construction. Patentees, for example, may be tempted to try and broaden the scope of their claims by creating ambiguities in claim language in order to advance constructions that were never originally intended but may now be supported by extrinsic evidence. Alternatively, accused infringers may attempt to create as many factual disputes as possible with regard to the meaning of a claim in an effort to lock the patent owner into an unfavorable finding. Regardless of the motivations of the parties, district courts will likely become more attentive to these issues knowing their claim construction determinations could be afforded a higher standard of review. It is possible that the Teva decision could even result in broader acceptance among district court judges of “trial-like” Markman hearings with submission of expert testimony and extrinsic evidence at the claim construction stage.

Finally, in light of the changing claim construction standard of review in federal courts, parties (petitioners) should consider how this will impact the use and significance of inter partes review (IPR) proceedings. For example, IPR proceedings provide petitioners with a “broadest reasonable interpretation” standard for claim construction, while also allowing petitioners to submit an expert declaration in support. Since patent owners are typically not given an opportunity to submit a rebuttal expert declaration before the Board institutes trial, this can provide a preliminary advantage for petitioners attempting to secure a favorable construction, as an initial finding on claim construction is usually made as part of the institution process. Moreover, the patent owner may find it difficult to overturn the initial claim construction inertia, whether during the postinstitution phase or on appeal after a final decision on the merits has been made by the Board.

Many questions remain in the wake of Teva, as patent owners and challengers alike will be faced with new claim construction strategy scenarios relying on extrinsic evidence.

ARTICLE BY

Daniel E. Yonan
Jon E. Boljesic
OF
Sterne, Kessler, Goldstein & Fox P.L.L.C.

 1 The three accepted definitions to determine “molecular weight” included a (1) peak average molecular weight; (2) number average molecular weight; or (3) weight average molecular weight.

The “Top Ten” Intellectual Property Stories of 2014 (Most “Definitely”)

Schwegman Lundberg Woessner

I don’t think I can recall a more action-packed year for intellectual property law in my career, much less during the almost six years that I have been writing this blog. I am trying to write this while in transit, so there will be few footnotes or cites, but they are easy enough to find in my past posts, or online. I am not even sure that I outlined ten stories before I started typing, but here goes — in no particular order.

1,2,3 and 4. Mayo meet Alice meet Myriad – The Tortuous Path of s.101.

Although only Alice was decided in 2014, the excitement really started with the unexpected release of the PTO “Life Sciences” Guidelines in March (No. 1 Story). The draft Guidelines directed Examiners to reject claims to products of nature unless they were significantly different in structure from the products in their natural states, and declared that simple “If A, then B” diagnostic claims were patent-ineligible as attempts to patent natural phenomena.

The Guidelines were continuously criticized as based on a misreading of the earlier Mayo and Myriad S.Ct. decisions and were released in a revised form in December (No. 2 Story) via publication for comment in the Fed. Reg. The revised Guidelines recognized that the standards for claiming diagnostic tests were in flux but permitted consideration of functional differences in resolving the PE of natural products.

However, only a few days later, in U. of Utah Res. Fndn v. Ambry, (No. 3 Story) the Fed. Cir. held that primers could not be patented if not structurally changed from their natural sequence. Judge Dyk, writing for the panel, simply misread Myriad as holding that no isolated product of nature — as opposed to no naturally occurring DNA — could be patented unless it was markedly different than in its natural state. This decision followed the earlier invalidation of the claims to Dolly the cloned sheep in In re Roslin in which Judge Dyk, declared that no naturally-occurring living organism is patentable. The Utah panel also held that claims to comparing a subject’s DNA sequence to a reference sequence, wherein the claim also recited PCR amplification or probing, did not escape the Mayo requirement for an additional inventive concept in additional to the abstract idea of comparing sequences. This decision is ripe for rehearing en banc, if only to correct Judge Dyk’s manifest misreading of Myriad (and to keep the PTO Guidelines under some judicial control).

The title of this “news story” is meant to point up the tsunami-like “abstract idea” judicial exception to s. 101 patent-eligibility (PE). The Mayo v. Prometheus decision only mentions “abstract idea” once, and it is to cite to an earlier decision. The S. Ct. in Mayo reversed the Fed. Cir., holding that a claim reciting a natural phenomenon was required to recite some further inventive concept in order to be “significantly more” than a claim preempting use of the phenomenon. In Bilski, the Fed. Cir. fashioned the “machine or transformation test”. Judge Rader’s dissenting argument that a claim to hedging commodity risk was no more than an attempt to claim an abstract idea. The S. Ct. agreed with Judge Rader.

In Alice Bank, (No. 4 Story) the S. Ct. managed to marry the Mayo “test” for PE to the abstract idea exception of Bilski. The Court applied a two-step test. First, decide if a claim involves an abstract idea and then examine the claim to see if it contains significantly more than elements that are conventional and routine in the relevant art. Now, enter Utah Res. Foundation (Myriad) v. Ambry. While Ambry argued that the diagnostic claims were no more than an attempt to claim a natural phenomenon (mutations in DNA), the Fed. Cir. took a different tack and looked to itsMyriad decision for guidance.

And, lo and behold, at the Fed. Cir. level, Judge Lourie wrote that the DNA comparison claims were not PE, since they were directed to an abstract idea(!) So the Fed. Cir., simply applied the Mayo test as articulated in Alice and invalidated the method claims asserted by Myriad as attempts to claim an abstract idea, albeit with a bit of window dressing (PCR and probing). In the coming year, I can only hope that the PE of a simple “If A, then B” diagnostic claim will be resolved. And I also hope that Judge Breyer is not writing for the majority.

5. Kimble v. Marvel. The S. Ct. granted cert. to revisit the question of whether or not a requirement that a licensee pay post-expiration date royalties for a patent license is per se illegal (as it is presently).

6. Nautilus v. Biosig. While the S. Ct. tried to raise the bar for meeting s. 112(b) by requiring that claim elements be defined with “reasonable certainty,” rather than by the Fed. Cir.’s requirement that the meaning of the element not be “insolubly ambiguous” or “amenable to construction.” It is not at all clear where the new bar has been set.

7. Teva v. Sandoz. The S. Ct. granted cert. to resolve the question of whether or not it is proper for the Fed. Cir. to conduct de novo review of the district courts’ factual findings during claim construction. By the way, what is a mixed question of law and fact and how is a court to review them separately? Appeal to the Fed. Cir. and find out!

8. American Calcar v. American Honda Motors. This convoluted case stands for the observation that the inequitable conduct defense has risen from the grave of legal doctrines, to which it had been consigned by many commentators. Still, to prevail on this defense, a defendant is greatly assisted by the presence of a single (or perhaps two) “bad actors” who do things like try to patent a competitor’s drug — which, remarkably was the factual posture of two cases before the Fed. Cir. last year. You can advocate with vigor; just don’t lie.

9. Commil v. Cisco. Although the question present in the granted petition for cert. seems narrow (To what extent can evidence of a good faith belief in non-infringement negate the element of intent required to induce infringement?), this appeal is evidence that the S. Ct. is not yet tired of the challenges posed by Title 35.

10. Progress in Regulations Affecting Bringing Biosimilars to Market. In August, the FDA released its “Purple Book” listing approved reference products and actually accepted an application for a biosimilar “generic”. While some commentators feel that it will be more effective to re-conduct phase III trials than to try to navigate the hostile regulatory hurdles thrown up by the agency, the availability of biosimilar drugs seems inevitable.

ARTICLE BY

Warren Woessner
OF
Schwegman, Lundberg & Woessner, P.A.