By Kevin E. Noonan —

Last January 17th, the Opposition Division (OD) of the European Patent Office revoked in its entirety European Patent No. EP 2771468, which named as Proprietors The Broad Institute, MIT, and Harvard College and had been opposed by Novozymes A/S, CRISPR Therapeutics GG, and several strawmen).  Almost one year later to the day, the Technical Board of Appeal affirmed the revocation (after suggesting it would refer some of the Broad's questions and challenges to the OD's decision to the Enlarged Board of Appeal).

To recap, representative claims revoked by the OD are as follows:

1.  A non-naturally occurring or engineered composition comprising:
a Clustered Regularly Interspersed Short Palindromic Repeats (CRISPR)-CRISPR associated (Cas) (CRISPR-Cas) system chimeric RNA (chiRNA) polynucleotide sequence, wherein the polynucleotide sequence comprises
    (a) a guide sequence of between 10 – 30 nucleotides in length, capable of hybridizing to a target sequence in a eukaryotic cell,
    (b) a tracr mate sequence, an
    (c) a tracrRNA sequence
    wherein (a), (b) and (c) are arranged in a 5' to 3' orientation,
    wherein when transcribed, the tracr mate sequence hybridizes to the tracrRNA sequence and the guide sequence directs sequence-specific binding of a CRISPR complex to the target sequence,
    wherein the CRISPR complex comprises a Type II Cas9 protein complexed with (1) the guide sequence that is hybridized to the target sequence, and (2) the tracr mate sequence that is hybridized to the tracrRNA sequence,
    wherein the tracrRNA sequence is 50 or more nucleotides in length.

2.  A Clustered Regularly Interspersed Short Palindromic Repeats (CRISPR)-CRISPR associated (Cas) (CRISPR-Cas) vector system comprising one or more vectors comprising
    I. a first regulatory element operably linked to a nucleotide sequence encoding a CRISPR-Cas system chimeric RNA (chiRNA) polynucleotide sequence as defined in claim 1, and
    II. a second regulatory element operably linked to a nucleotide sequence encoding a Type II Cas9 protein comprising one or more nuclear localization sequences, of sufficient strength to drive accumulation of said Cas9 protein in a detectable amount in the nucleus of a eukaryotic cell;
    wherein components I and II are located on the same or different vectors of the system.

12.  Use of the composition of claim 1, or the vector system of claim 2 or any claim dependent thereon for genome engineering, provided that said use is not a method for treatment of the human or animal body by surgery or therapy, and provided that said use is not a process for modifying the germline genetic identity of human beings.

17.  Use of the composition of claim 1, or the vector system of claim 2 or any claim dependent thereon, in the production of a non-human transgenic animal or transgenic plant.

The OD issued its formal opinion on March 26th, which was consistent with a preliminary opinion prior to summoning Proprietor Broad Institute and the opponents to oral hearing.  While this opinion found defects in certain substantive matters (such as claims 1, 2, 14, and 15 not satisfying Article 123(2) EPC), the majority of the claims were found to lack novelty (claims 1-6 and 9-17) or inventive step (claims 7 and 8) as a consequence of the OD's decision that EP 2771468 was not entitled to its priority claim.

The priority issue was raised based on the earliest two provisional applications (U.S. Provisional Application Nos. 61/736,527 and 61/748,427), as well as U.S. Provisional Application Nos. 61/791,409 and U.S. 61/835,931, which named Luciano Marraffini as an inventor, and which were owned by Rockefeller University.  The priority documents and their named inventors are as follows:

• U.S. 61/736,527 named Zhang, Cong, Hsu, Ran, Habib, Cox, Lin and Maraffini as inventors
• U.S. 61/748,427 named Zhang, Cong, Hsu, Ran, Habib, Cox, Lin and Maraffini as inventors
• U.S. 61/758,468 named Zhang, Cong, Hsu, and Ran as inventors
• U.S. 61/769,046 named Zhang, Cong, Hsu, and Ran as inventors
• U.S. 61/791,409 named Zhang, Cong, Hsu, Ran, Habib, Cox, Lin and Maraffini, Bikard and Jian as inventors
• U.S. 61/802,174 named Zhang, Cong, Hsu, Ran, and Platt as inventors
• U.S. 61/806,375 named Zhang, Cong, Hsu, Ran, and Platt as inventors
• U.S. 61/814,263 named Zhang, Cong, Hsu, Ran, and Platt as inventors
• U.S. 61/819,803 named Zhang, Cong, Hsu, Ran, and Platt as inventors
• U.S. 61/828,130 named Zhang, Cong, Hsu, Ran, and Platt as inventors
• U.S. 61/835,931 named Zhang, Cong, Hsu, Ran, Cox, Lin, Maraffini, Platt, Santjana, Bikard and Jian as inventors
• U.S. 61/836,127 named Zhang, Cong, Hsu, and Ran as inventors

In Europe, under Article 87 EPC and Paragraph IV of the Paris Convention, priority to an earlier-filed application can be validly claimed by the prior applicant or by her successor in interest.  In either case, the applicant must be someone having the right to claim priority.  In the U.S., these provisional applications were filed in the name of the inventor and the EPO requires that there be an assignment of the invention on or before a European or PCT application is filed.  (Of course, a PCT application can always be filed naming the inventors as applicants.)  In this case, proper application of the applicable rules required both the named applicants (The Broad Institute, MIT and Harvard College) and Rockefeller to have been named as applicants when the application was filed.  Rockefeller was not named as an applicant.  Accordingly, the OD determined that the named Proprietors could only validly claim priority to the third provisional application, and by the filing date of that application there had published prior art that invalidated the granted claims.  In this regard, the formal opinion followed the earlier preliminary opinion in stating that "[i]n both the EPC and the Paris convention systems the decisive fact for a valid claim of priority is the status of applicant, rather than the substantial requirement . . . to the subject matter of the first application" (emphasis in opinion).  The OD determined that "neither the requirement of the applicant's identity nor the proof of a valid success in title [had] been fulfilled" for the claimed invention, and stressed that these were requirements to promote legal certainty that would protect third parties' interests, and that these requirements were not subject to the national law of the priority document.  Nor, according to the preliminary opinion could the granted European patent properly claim priority to U.S. 61/758,468 because that document failed to disclose the length of the guide sequence as claimed.

The Broad made three arguments, all of which the OD rejected:

I.  The EPO should have no power to assess legal entitlement to the right of priority.

II.  In case of joint/multiple applicants in a first application, the meaning of the term "any person" under Article 87 EPC should be interpreted to mean "one or some indiscriminately" of the co-applicants.

III.  The meaning of "any person who has duly filed" should be interpreted according to national law, in this case U.S. law.

The formal opinion noted that "[t]hese perspectives were not fully addressed by the OD's preliminary opinion, as they were submitted at a later stage," and the Technical Board of Appeal (TBoA) considered (and rejected) these arguments.

With regard to the first argument, the Broad contended that the OD (and the TBoA) should reconsider established practice and case law regarding the requirements for priority.  The formal opinion set forth in this regard the status of the European Patent Convention as a "special agreement" as contemplated by Article 19 of the Paris Convention (PC), and thus the EPC cannot contravene the provisions of the PC.  The purpose of the PC, according to the opinion, was to "provide a mechanism as simple as possible and appropriate for applicants to obtain international protection for their invention, as well as for patent offices to assess the validity of priority claims."  The Broad challenged the EPO's competence to make priority determinations, which it contended were within the purview of the jurisdictions of the national courts of each member state.  In their view, the EPO should presume that priority is properly claimed, and should be reviewed only on the basis that the priority document discloses the same invention claimed in any application filed under the EPC.  The jurisdictional argument was based on the assertion that the EPO was never intended to have jurisdiction over whether a party was entitled to ownership of the property right to a priority document.  If the EPO were to have such jurisdiction, it would need to be empowered to apply the national laws regarding ownership in each contracting state, according to the Broad.  Also, under most legal systems, only a person alleging to be the rightful owner has a right to challenge ownership of a priority right.  Finally, the proper portion of the EPC to be applied is Article 60(1) regarding determination of ownership of an EPC application, which is left to the national courts.

The OD rejected this approach, based in part on its refusal to follow a non-binding opinion of the Board in T239/16, in which the Board did not address the issue as a basis for revoking the patent in that proceeding.  According to the OD, "the aforementioned established practice . . . has never been questioned to the extent of the EPO's power to assess legal entitlement to priority."  The OD stressed that "[t]he assessment of the formal requirements does not determine the rightful owner of the priority right; rather it establishes whether the priority was validly claimed by those named as applicants in the later application (applicant's status), irrespective of their actual entitlement."  The issue is not assessment of the substantive right of priority (i.e., inventorship) but the procedural point that the Applicant must have title to the priority right to properly have an application filed in its name (whether by assignment from the inventors or as successors in that title).  This requirement is the basis for the EPO to be able to properly identify the prior art, which depends (as it did here) on the priority date to which an Applicant is entitled.  If not, the EPO would be put in the position of granting patents without a reliable state of the art and, thus, invalid.  The policy implications considered to be determinative by the OD were that "[l]egal certainty and the protection of the interests of the public (against the granting of invalid patents) require that priority is validly claimed, since this is relevant for defining the effective date of a claimed invention and for determining the relevant state of the art."  The OD also rejected the Broad's argument that Article 60 was the proper basis for making the procedural priority determination, inter alia, because the Broad had not demonstrated that there was a deficiency in Articles 87-89 that needed supplementation or correction.  Also, the OD views the two provisions to serve different purposes:  Article 87 "serves to set the relevant date for the state of the art and ultimately affects the patentability of the invention" whereas Article 60 does not.

Accordingly, the OD rejected the Broad's first line of argument, stating that "the EPO has the task to assess the identity of the applicant, as well as the validity of its succession in title."

Regarding the Broad's second argument, that the meaning of the term "any person" under Article 87 EPC should be interpreted to mean "one or some indiscriminately" of the co-applicants, the OD considered the Broad's semantic argument (in French, no less) regarding the meaning of the language of the PC.  In the Broad's view these semantics were consistent with an intent under the PC for "a more permissive notion of who is allowed to claim priority" in contrast with who would be permitted to file a divisional application from a prior EPC application, for example.  The Broad further contended that as to third parties their interests would be protected by the "same invention" requirement for a valid priority claim.  Finally, the Broad's interpretation of the requirement is consistent with how the PC has been implemented in the U.S., all arguments supported by expert legal opinions proffered to the OD.

Once again, the OD refused to "deviate from established practice" regarding the procedural priority requirements.  The OD did not find "an exclusive indication as to whether the later application must be filed by 'all applicants' of the first or by 'any one' of them" in the language of 87 EPC.  Commentaries on the EPC have been consistent with the current interpretation, according to the OD, as has EPO practice and case law including national case law, citing specific examples from several EPC member states.  The OD further considered how the "all applicants" approach has been consistently applied in Boards of Appeal decisions and has been used as the "starting point [for] decisions[] concerning . . . valid assignment of the priority right" ("Stressing the fact that the right to claim priority originates from the applicant of the first application, so that, in principle, the applicant has to be the same for the first and the subsequent applications, the Boards concluded that where the first application has been filed jointly by two or more applicants, the right of priority belongs to them jointly.")

However, while the OD recognizes justifications in theory for permitting each of joint applicants to file EPC applications without the other, as a practical matter "allowing each joint applicant, separately or in different combinations with other co-applicants, to file a patent application claiming priority from the first application would lead to a multiplication of proceedings with identical content."  The "logical consequences" of permitting this state of affairs would "run counter to the interests of patent offices and the public both in terms of procedural inefficiencies and of avoiding multiplication of protections for the same subject-matter, having different patent owners."  Nor did the OD see any basis for giving U.S. provisional applications any special status and treatment.

Accordingly, the OD rejected the Broad's suggestion "to consider priority as validly claimed even when any one of the joint applicants of the first application is applicant of the later application would protect the legitimate interest of a joint applicant wishing to keep a priority right valid even when the co-operation of the other joint applicants is missing" because this approach "would have far reaching consequences, in particular the risk of multiple patenting."

Finally, with regard to the Broad's third argument that the meaning of "any person who has duly filed" should be interpreted according to national law, the OD rejected the conclusion that this was a "special case" involving U.S. priority documents disclosed several inventions and that the invention by excluded inventors and Applicant were not within the scope of the granted claims.  The OD held that the meaning of the term "any person who has duly filed" is limited to according a filing date.  Adopting a different approach according to the OD "would be contrary to the scope of simplification of proceedings, as intended by the EPC legislator when choosing to focus solely on the status of an applicant in the EPC system both in Article 87(1) and in Article 60(3)."  (The OD also notes in this regard that adopting the Broad's approach would have the effect of having U.S. law take precedence over the EPC, an outcome the OD could not accept.)  In addition, this approach would increase complexity by requiring analysis under U.S. law.  "Since this approach would disregard the wording and the scope of Article 4PC and Article 87 EPC, the OD sees no reason to depart from the established interpretation given by the BOAs that substantive entitlement is not a basis for the right of priority," the OD held and thus rejected the Broad's third argument.

Consequently, the OD further held that, in the absence of their priority claim all claims of EP 2771468 were invalid for lack of novelty and inventive step.

The TBoA does not immediately publish the basis for their decision, which will be the subject of a later post when it becomes available.  For the Broad, the decision by the TBoA is final and thus the Broad has lost exclusive rights in Europe under this patent (and, presumably the nine related patents in Europe).  Which may be one reason that the Broad issued a press release, suggesting that patent holders on CRISPR technology "move beyond litigation" and work together to ensure open and widespread access to CRISPR.

By Kevin E. Noonan —

On January 15th, the U.S. and China announced bilateral approval of an agreement resolving some of the trade disputes between the two countries that have developed (or become more evident) over the past three years.  One of the most consistent (if sometimes incoherently expressed) policy positions taken by the Trump Administration (and Mr. Trump himself) is that the trade balance between the U.S. and China has been unbalanced and in need of correction.  This idea is not unique to Mr. Trump (although its idée fixe nature may be) and has been a feature of the U.S. Trade Representative's Special 301 Report for the past decade (most recently last April).  It has been the source of numerous tariffs imposed on China by this Administration (even in the face of criticism from economists and others that U.S. consumers and farmers, not the Chinese, bore the brunt of the consequences and the costs) and the periodic imposition of these tariffs has rattled the financial markets since the time when Mr. Trump first came into office.

Representatives from the U.S. and China announced, with much fanfare, the completion of the first round of what is envisioned (or purported) to be several agreements between the two countries, and released the text of the agreement that on its face looks favorable to U.S. interests but on further study may in fact not be.

The Agreement has eight chapters and several articles for each chapter.  After reciting a Preamble containing the importance of a "bilateral economic and trade relationship" between the U.S. and China, and "adherence to international norms" to promote it, and acknowledging the "trade and investment concerns" identified by both countries and that it is desirable for the countries to resolve them, the Agreement in Chapter 1 immediately addresses Intellectual Property concerns.

These begin with generic representations such as "[t]he Parties shall ensure fair, adequate, and effective protection and enforcement of intellectual property rights.  Each Party shall ensure fair and equitable market access to persons of the other Party that rely upon intellectual property protection" (Article 1.2) and then gets into specifics regarding Trade Secrets and Confidential Business Information (Article 1, Section B); Pharmaceutical-related Intellectual Property (Section C); Patents (Section D); Piracy and Counterfeiting on E-Commerce Platforms (Section E); Geographical Indications (Section F); Manufacture and Export of Pirated and Counterfeit Goods (Section G); Bad-Faith Trademarks (Section H); Judicial Enforcement and Procedure in Intellectual Property Cases (Section I); Bilateral Cooperation on Intellectual Property Protection (Section J); and Implementation (Section K).  There are many specifics enunciated in these Sections, but they have in common that almost all of them recite a provision saying:  "The United States affirms that its existing measures are consistent with its obligations in this Chapter" while setting forth specific representations and obligations for China to adhere to under these specific Sections.  In context, these provisions appear to be an agreement that China will adopt U.S. law and practices (for example, in Article 1.5(2) regarding such specifics as when to shift the burden of proof to those accused of trade secret misappropriation in the face of a quantum of evidence that trade secret misappropriation has occurred) and "prohibit the unauthorized disclosure of undisclosed information, trade secrets, or confidential business information by government personnel or third party experts or advisors in any criminal, civil, administrative, or regulatory proceedings conducted at either the central or sub-central levels of government in which such information is submitted."

Regarding patents on pharmaceuticals, the agreement will loosen the strict application of Chinese law that has prevented applicants to provide supplemental information (i.e., not in the specification as filed) to support sufficiency of disclosure or a showing of inventive step in patent applications filed in China (which is a significant concession by China what will on its face provide patent protection for subject matter that was prior to signing the agreement unable to be patented).  China also agrees to establish patent term extensions to make up for patent prosecution and regulatory approval delays.  And the concessions in Section G regarding export of counterfeit goods may be the most significant, in view of accusations by the USTR of China's role in worldwide counterfeiting; particularly regarding counterfeit medicines, these requirements are very specific (Article 1:18(2)).

Chapter 2 involves technology transfer issues and the importance of having this objective achieved "on voluntary, market-based terms" in contrast to "forced" technology transfer, which is "a significant concern." This section addresses situations where the U.S. has alleged China has required disclosure of technology as a quid pro quo for coming to agreement with U.S. companies.

Chapter 3 sets forth the parties' agreement regarding trade in food and agricultural products, pledging "agricultural cooperation," although the terms of such agreements are "to be mutually agreed upon," i.e., not yet resolved.  The agreement also contains provisions wherein the China-United States Scientific Cooperation and Exchange Program continues and there are to be "exchanges and dialogues on agricultural topics."  But this chapter contains much more language regarding what the parties intend to address in future rather than firm (relatively) agreements on specific terms (and Annex 1:11 provides that "[f]or greater certainty, nothing in this Annex shall obligate either Party to expend, obligate, or transfer any funds, or to dedicate personnel or other resources to any cooperative activity").  Annex 2 of this Chapter concerns dairy products, infant formula, and inspections thereof (directed towards "meeting Chinese consumers' ever-growing needs").  Annex 3 concerns poultry (of particular concern in view of the propensity for variant strains of influenza to arise in domesticated poultry) and specifically committing the parties to sign and implement the Protocol on Cooperation on Notification and Control Procedures for Certain Significant Poultry Diseases within 30 days of when the agreement enters into force.  Annex 4 concerns beef and commits the parties to continue to implement the 2017 Protocol for importing U.S. beef into China (with the terms of this agreement prevailing if there are inconsistencies), Annex 5 live breeding cattle, Annex 6 pork, and Annex 7 meat, poultry and processed meats, significantly wherein China acknowledges USDA's Food Safety and Inspection Service (FSIS) oversight over U.S.-sourced "meat, poultry meat, and processed meat and poultry meat facilities" but permitting China to have the right to audit U.S. food safety regulatory systems in coordination with FSIS.  Annex 8 concerns electronic meat and poultry information systems to "access FSIS export certificates accompanying U.S. exports to China of meat, poultry, and meat and poultry products."  Annex 9 concerns aquatic products (albeit committing to "resume bilateral meetings of the U.S.-China Technical Working Group on Seafood" and identifying steps to for China to provide evidence regarding controls for seafood products to be imported into the U.S.).  Annex 10 concerns rice, and Annex 11 plant health (agreeing to consultations regarding a "phytosanitary protocol" for Chinese Bonsai, but excluding orchids).  Also within the scope of this annex are phytosanitary protocols for imports to the U.S. of Chinese fragrant pear, Chinese citrus, and Chinese Jujube, and importation into China of U.S. potatoes, nectarines, blueberries, Hass avocadoes, barley, and alfalfa, but agreeing phytosanitary protocols are not required for frozen fruits and vegetables.  Annex 12 concerns feed additives, premixes, compound feed, distillers' dried grains, and distillers' dried grains with solubles (mostly involving provisions that on-site audits or inspections are not required).  Annex 13 concerns pet food and non-ruminant derived animal feed, wherein China will lift its ban on U.S. pet food containing ruminant ingredients and eliminate the use of polymerase chain reaction testing on such products.  The parties also agree to have "technical discussions" in support of importing U.S. pet food into China while maintaining compliance with the 2004 Protocol on the Veterinary Health Requirements for Non-Ruminant Derived Animal Feed and Tallow to be Imported from the United States of America to the People's Republic of China.  Annex 14 involves tariff rate quotas regarding food products; Annex 15 concerns "domestic support" in China regarding China's WTO obligations; and Annex 16 relates to agricultural biotechnology, with China agreeing to "implement a transparent, predictable, efficient, science- and risk-based regulatory process for safety evaluation and authorization of products of agricultural biotechnology." Finally, Annex 17, related to food safety, regards agreement that "[t]he Parties shall not implement food safety regulations, or require actions of the other Party's regulatory authorities, that are not science- or risk-based and shall only apply such regulations and require such actions to the extent necessary to protect human life or health" (without regard to the irony of the Trump administration including these provisions into this agreement).  This chapter also contains appendices regarding food products not eligible for import from the U.S. to China.

Chapter 4 is directed to financial services, wherein the parties evince a belief that "they have a significant opportunity for cooperation and mutual benefit in bilateral services trade."  Article 4.2 relates to banking services; Article 4.3 to credit rating services (including provisions that the U.S. "affirms it accords non-discriminatory treatment to Chinese credit rating service suppliers"); Article 4.4 for electronic payment services (including provisions that the U.S. "affirms it accords non-discriminatory treatment to Chinese electronic payment service suppliers, including UnionPay"); Article 4.5 to financial asset management services; Article 4.6 to insurance services; and Article 4.7 for securities, fund management, futures services.

Chapter 5 is directed towards macroeconomic policies and exchange rate matters and transparency, wherein the parties pledge to "respect the other Party's autonomy in monetary policy, in accordance with its domestic law," involving "pursuing policies that strengthen underlying economic fundamentals, foster growth and transparency, and avoid unsustainable external imbalances."

Chapter 6 is more directly aspirational regarding expanding trade, having to do with "trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries."  China agrees to import no less than $200 billion of U.S. goods between January 1, 2020 and December 31, 2021, with more specific quotas (because that is what they appear to be) of particular goods set out in Article 6.2 (including manufactured goods, agricultural goods, energy products and services); the agreement contains an extensive table of the types of goods and services encompassed by these provisions of the agreement.

Chapter 7 sets forth dispute resolution provisions in an "arrangement" wherein is provided a Trade Framework Group for setting forth the mechanisms for implementing the agreement (under Article 7.2.1, entitled "High Level Engagement"), to be led by the U.S. Trade Representative and "a designated Vice Premier" of the PRC.  Also provided are "macroeconomic meetings" led by the U.S Secretary of the Treasury and the designated Vice Premier of the PRC.  For "daily work, the agreement provides a Bilateral Evaluation and Dispute Resolution Office for each country.  The agreement permits each country to request information from the other (Article 7.3) and Article 7.4 sets forth mechanisms for dispute resolution (specifics for the "working procedures" of the Group are set forth in Annex 7-A).

The final Chapter 8 involves amendments, entry into force and termination provisions, and for further negotiations.

As mentioned above, one interesting feature of the agreement is that many of the provisions setting forth standards for protection of party rights contain the affirmative statement (requirement to requirement) that "[t]he United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article," indicating that the negotiators conceded to adopt U.S. standards for intellectual property protection and other matters falling within the scope of the agreement.  Indeed, it is difficult to ascertain any concessions made by the U.S. for obtaining China's approval of these terms.  There is an aphorism that if a deal seems to good to be true then perhaps it isn't (true, that is).  It is contrary to this administration's puffery that the U.S. might not get the better part of any agreement it enters, and when making arrangements with economically weaker partners that may tend to be true because the odds tend to be stacked in our country's favor.  But in view of China's strengths it might be foolish to think that the Chinese will be as accommodating as the Trump Administration would prefer them to be, and agreements inconsistent with these realities are likely to be ephemeral.