Patent Docs

Amgen Inc. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)

January 8, 2020

By Kevin E. Noonan —

Transitional terms in patent law (conventionally, "comprising," "consisting of," and the more arcane "consisting essentially of") have their own provenance and meaning, denoting limitations that are "open" (comprising) or "closed" (consisting). But how should a court construe instances where these terms seem to be at odds with one another? The Federal Circuit provided an answer, at least with regard to the interplay between "comprising" and Markush group language ("selected from the group consisting of") in one of its first opinions of the New Year, Amgen Inc. v. Amneal Pharmaceuticals LLC.

The case arose in ANDA litigation over generic versions of Amgen's Sensipar^® formulation for treating "secondary hyperparathyroidism in adult patients with chronic kidney disease who are on dialysis and to treat hypercalcemia in patients with parathyroid cancer and primary and secondary hyperparathyroidism." Amneal (and its affiliated companies), Piramal Healthcare UK Ltd., and Zydus Pharmaceuticals (and its affiliated companies) each filed an ANDA to market a generic version of the drug, and Amgen brought suit, asserting various claims of U.S. Patent No. 9,375,405 against the three defendants (claims 1, 2-4, 6, 8-12, and 14-18 against Amneal, claim 1-6 and 8-20 against Piramal, and claims 1-4, 6, 8-9, 15-17, and 19 against Zydus). The parties agreed (for the purposes of the appeal) that claim 1 was representative:

A pharmaceutical composition comprising:
    (a) from about 10% to about 40% by weight of cinacalcet HCl in an amount of from about 20 mg to about 100 mg;
    (b) from about 45% to about 85% by weight of a diluent selected from the group consisting of microcrystalline cellulose, starch, dicalcium phosphate, lactose, sorbitol, mannitol, sucrose, methyl dextrins, and mixtures thereof,
    (c) from about 1% to about 5% by weight of at least one binder selected from the group consisting of povidone, hydroxypropyl methylcellulose, hydroxypropyl cellulose, sodium carboxymethylcellulose, and mixtures thereof; and
    (d) from about 1% to 10% by weight of at least one disintegrant selected from the group consisting of crospovid[o]ne, sodium starch glycolate, croscarmellose sodium, and mixtures thereof,
    wherein the percentage by weight is relative to the total weight of the composition, and wherein the composition is for the treatment of at least one of hyperparathyroidism, hyperphosphonia, hypercalcemia, and elevated calcium phosphorus product.

The District Court bifurcated proceedings and determined infringement first. The panel opinion states that "[t]he prosecution history is particularly relevant to [this] appeal." The relevant portions of this history involved introduction of the Markush groups in subparts (b), (c), and (d), which were not recited in the claim as filed. The applicant introduced this language into subpart (b) and the Examiner (by Examiner's amendment) introduced the language into subparts (c) and (d) as a condition for allowance to overcome rejections over the prior art (to which the applicant acquiesced). The significance of this history before the District Court related to whether or not the claim elements should be open to the presence of other components in formulations that would be infringing; Amgen contended such infringing formulations could comprise these unrecited components and the District Court disagreed. According to the opinion, the District Court held that "Amgen ha[d] not overcome the very strong presumption that the Markush groups for the binder and disintegrant elements are closed to unrecited binders and disintegrants," relying on Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 831 F.3d 1350 (Fed. Cir. 2016). Under this construction, the District Court found that Amneal did not infringe because its accused formulation contained as a binder Opadry Clear YS-1-7006, a product that contains hydroxypropyl methylcellulose ("HPMC"), polyethylene glycol 400, and polyethylene glycol 8000, which was not recited in subpart (c) (which recited HPMC).

Similarly, the District Court found that Piramal's accused formulation used pregeletinized starch as a binder which the District Court held was not equivalent to povidone, a compound recited in the Markush language recited in subpart (c) of the claim. That Amgen accepted the Examiner's amendment to obtain allowance of the claim raised prosecution history estoppel that precluded the District Court from considering any purported equivalents to the compounds expressly recited in the claim according to the District Court.

On the other hand, the District Court found that Zydus's accused formulation was infringing under § 271(e)(2) because the function of pregelatinized starch in its formulation was as a diluent, and starch was recited as a diluent in the claim. Thus, the District Court found Zydus literally infringed the claim.

The Federal Circuit vacated and remanded as to the District Court's decision that Amneal did not infringe based on incorrect claim construction, but affirmed with regard to Piramal's non-infringement under the doctrine of equivalents and Zydus's literal infringement. The opinion notes that, "as a preliminary matter," the panel needed to consider its jurisdiction over Zydus, because Zydus had pending defenses and counterclaims of invalidity against Amgen and thus the District Court's judgment was not final. The opinion further noted, however, that Zydus's counsel at oral argument agreed to abandon these defenses should the Federal Circuit affirm the District Court's infringement decision, resolving any jurisdictional concerns.

Regarding the District Court's claim construction, that the presence of the phrase "consisting of" in the Markush language introduced during prosecution prevented Amgen from extending its claim to formulations containing other elements, the Federal Circuit held that the District Court had "read more into Multilayer and Shire [Dev., LLC v. Watson Pharm., Inc., 848 F.3d 981, 984 (Fed. Cir. 2017)] than is properly found there." Further the opinion states that:

Multilayer and Shire did not hold broadly that, whenever "consisting of" Markush group language is present in a particular claim limitation, even when the limitation follows a general claim transition phrase of "comprising," all components of an accused product that perform the general function of the particular limitation must meet the requirements of that limitation, thus precluding components outside the Markush group. No such issue was presented in those cases. Rather, each decision held only that the terms of a particular claim limitation that used "consisting of" Markush group language were restricted to members of the Markush group.

Here, the question before the panel was whether the "binder" and "disintegrant" limitations, written in Markush format, precluded other binders or disintegrants from being in the claimed composition (or an accused infringing embodiment thereof), and the Federal Circuit held that they did not. The Court's explication of both Multilayer and Shire supported this conclusion (because if not, this panel could not overturn the earlier panels' decision to the contrary). The panel finds as a "critical[] differen[ce]" here that "[t]here is no language in Amgen's claim indicating that every binder or disintegrant in the claimed formulation must be within the Markush group" because the claim also recites "at least one" of a binder or disintegrant. Moreover, the opinion states that the remaining limitations in the claims with regard to these components "merely require that those particular binders or disintegrants meet the specified weight-percentage requirements," which the panel asserted "is not inconsistent with the overall composition containing other binders or disintegrants." Relying on the plain meaning of the claim language (and finding that the specification and prosecution history do not mandate a different conclusion), the Federal Circuit held that the Markush language is not sufficient to support the District Court's construction that the claims do not encompass formulations containing other disintegrants or binders.

The opinion also found it significant that the claims recite "comprising " with regard to the components contained in the claimed formulations. Having found nothing in the expressly recited limitations that would be "inconsistent with the presence of binders and disintegrants beyond those identified in those limitations" recited in Markush language, the panel further relied on Amgen's use of the term "comprising" to "reinforce[] the conclusion that the language of those limitations is best construed not to foreclose such additional binders and disintegrants."

Accordingly, the panel held that the claims properly construed do not preclude infringement if the accused formulation included an "additional component [that is] functionally similar to the component identified in the Markush group limitation," unless there was another basis, not found here, for such a finding. The panel found that the District Court's claim construction was incorrect and vacated the determination that Amneal's ANDA formulation did not infringe, remanding to the District Court for further proceedings based on the panel's construction.

The Federal Circuit also vacated the District Court's finding that Amneal's formulation, comprising Opadry, did not satisfy the claim limitation that an infringing formula comprise HPMC, holding that on remand the District Court should determine whether the amount of Opadry in Amneal's formulation comprises 1% to 5% by weight of HPMC.

Regarding Piramal's product, the question before the Court was whether Amgen was precluded by prosecution history estoppel from a finding that this formulation infringed under the doctrine of equivalents. The District Court found, and the Federal Circuit affirmed, that Amgen had narrowed the claims for "reasons related to patentability" by accepting the Examiner's amendment that inserted Markush language regarding the binder and disintegrant limitations. Thus, Amgen was estopped from asserting that the Piramal formulation's pregelatinized starch was an equivalent to the expressly recited povidone in its claims (despite a paper submitted on the record during prosecution after the Examiner issued a Notice of Allowance that "[t]hese amendments have not been made in response to a prior art rejection but rather to place the claims in proper format and to better define the claimed subject matter, including equivalents"). And the panel also found unavailing Amgen's argument that these amendments were tangential to patentability because they were made to avoid the prior art.

Finally, with regard to Zydus's product, the Federal Circuit affirmed the District Court's finding that its product would infringe Amgen's claims. In this case, Zydus's product comprised starch as a diluent, a component expressly recited amongst the Markush group of diluents in Amgen's claims. The panel did not find credible Amgen's expert testimony (proffered with regard to Piramal's product and asserted by Zydus against Amgen's infringement contentions) that starch was a binder and not a diluent (on the ground that the expert proffered inconsistent testimony, changing it somewhat three times). The panel held that the District Court did not err in it infringement finding and affirmed that Zydus's ANDA formulation literally infringed Amgen's asserted claims.

Amgen Inc. v. Amneal Pharmaceuticals LLC (Fed. Cir. 2020)
Panel: Circuit Judges Newman, Lourie, and Taranto
Opinion by Circuit Judge Lourie
USPTO Support for Filing in DOCX Format Still a Work in Progress

January 7, 2020

By Michael Borella —

In August, the U.S. Patent and Trademark Office announced that it planned on raising various fees. One of those involved an additional $400 fee for non-provisional utility application filings with a PDF specification. This fee would be avoidable if the specification was filed in DOCX format. The USPTO's electronic filing system (EFS) has supported DOCX specification filings for over two years.

As of the time of this writing, the USPTO has not made a final decision on this issue. In anticipation of the fee increase, patent attorneys, agents, and paralegals have been trialing DOCX uploads. So far, the EFS DOCX parser has proven to work well with many files, but it is rather fragile in some cases, and outright buggy in others.

DOCX is an open standard for word processing files. Since Microsoft Word 2007, it has been the default choice for the save format of that application. Unlike the proprietary DOC files that Microsoft Word used to produce, DOCX files are structured in XML. This makes them more portable between word processing applications and easier to parse.

The USPTO justified its encouragement of DOCX adoption based on the format's ability to facilitate instant feedback in EFS regarding common document errors, improved searchability, metadata removal, and general compatibility. Behind the scenes, it is likely that the USPTO intends to automate some of its application intake processes, such as automatically detecting the number and type of claims and classifying applications into art units.

We have been testing the USPTO's DOCX upload options in EFS. What we found was not particularly encouraging. Most notable was that EFS will often reject a DOCX specification upload, stating that it found one or more particular types of errors in the application file. But upon inspection, we found that the indicated errors frequently did not exist. Instead, the parser flags false positives when it encounters legitimate formatting or content that it cannot properly handle.

One such issue relates to font support. For one particular application, we received dozens of error messages alleging that the file contained text in the unsupported Century font. We thoroughly reviewed the application and determined that there was no Century characters present. After some trial and error, we ultimately determined that this error was actually being caused by our custom Microsoft Word styles. These styles allow the drafter to rapidly format applications so that they are consistent with one another and pleasing to the eye. But some of our styles had been based on other styles. Apparently this was problematic, because the errors went away once we changed these styles to be based on "no style".

Even worse, one of our applications kept getting rejected because it allegedly contained two or more of the specification, claims, and abstract (EFS DOCX support requires these three sections of the application be uploaded in three separate DOCX files). Yet, the file clearly contained only the specification. After manually removing sections of the application in a systematic fashion, we found the culprit — the USPTO's DOCX parser apparently will not accept the word "conclusion" on a line by itself. When placed in a sentence, no problem. But on its own, "conclusion" consistently resulted in a rejected upload. Again, the error provided had nothing to do with the purported problem with the DOCX file. Only after hours of manual debugging were we able to satisfy EFS.

Needless to say, DOCX support is not ready for prime time. Practically speaking, an attorney or agent up against a bar date may find that he or she cannot upload a reasonably-formatted DOCX file, and may be unable to address the issue in the necessary time frame due to the DOCX parser's obtuse and misleading error messages. Instead, he or she may have to just eat the $400 fee and file a PDF.

But that's not all. When you can successfully upload a DOCX file, the USPTO converts it into a PDF. Afterward, EFS provides a link to the PDF and displays the message, "The PDF(s) have been generated from the docx file(s). Please review the PDF(s) for accuracy. By clicking the continue button, you agree to accept any changes made by the conversion and that it will become the final submission." This effectively puts the onus on the attorney or agent to manually check, line by line, that the USPTO's conversion from DOCX to PDF is correct. Doing so is especially important if your application contains complex mathematical expressions or chemical formulas.

We are not to the first to point out some of these issues. I highly recommend an article by Carl Oppedahl criticizing the USPTO's implementation of DOCX.

While the USPTO may have legitimate reasons for transitioning to DOCX, the fundamental defects in the DOCX parser reflect a lack of adequate software quality assurance. Thus, it needs to address these problems before imposing the $400 fee on non-DOCX specification filings. If anything, the USPTO's attempt to reduce its application intake burden currently transfers much of that burden to individuals preparing the applications.
Top Five Stories of 2019

January 5, 2020

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 13th annual list of top patent stories. For 2019, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. In previous posts, we counted down stories #15 to #11 and stories #10 to #6, and today we count down the top five stories of 2019. As with our other lists (2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2019" on January 22, 2020 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

5. USPTO Updates Subject Matter Eligibility Guidance (Not Once, But Twice)

In January, the U.S. Patent and Trademark Office published updated examination guidance regarding the subject matter eligibility of inventions involving abstract ideas. At first blush, the updated guidance does not appear to be a radical departure from substantive USPTO examination practice despite raising a few additional procedural hurdles that examiners are to overcome before rejecting claims under 35 U.S.C. § 101. In October, the USPTO released an update to its January 2019 Subject Matter Eligibility Guidance, in which the Office sought to clarify issues brought up in public comments on the January Guidance. The patent community will have to wait and see how the new guidance plays out in practice. If anything, the additional procedural requirements introduced and the limiting of abstract ideas to only three categories is likely to favor applicants for at least some types of inventions. It is unlikely, however, that any claims that could be found patent-eligible under previous examination procedures are suddenly going to be viewed as ineligible under the new guidance.

For information regarding this and other related topics, please see:

• "USPTO Subject Matter Eligibility October Update: Example 46," November 17, 2019
• "USPTO Publishes Update to Its Subject Matter Eligibility Guidance," October 17, 2019
• "The PTAB Goes to Europe: Four Recent Section 101 Decisions Designated as Informative," July 28, 2019
• "USPTO Presentation on Evaluating Computer-Implemented Functional Claiming under 35 U.S.C. § 112," June 18, 2019
• "USPTO on Patent Eligibility — Examples 41 and 42," January 24, 2019
• "USPTO on Patent Eligibility — Example 40," January 20, 2019
• "USPTO on Patent Eligibility — Examples 38 & 39," January 15, 2019
• "USPTO on Patent Eligibility — Example 37," January 14, 2019
• "USPTO Issues Updated Subject Matter Eligibility Guidance," January 7, 2019

4. Post-grant Review of Pre-AIA Patents Constitutional — USPTO Appointment of APJs at PTAB Unconstitutional

In July, the Federal Circuit in Celgene Corp. v. Peter affirmed a determination by the Patent Trial and Appeal Board (PTAB) that two patents owned by Celgene Corp. were invalid. In rendering that decision, however, the Federal Circuit also addressed on the merits Celgene's argument that retroactive invalidation of its patents under the inter partes review (IPR) procedures introduced into U.S. patent law by the Leahy-Smith America Invents Act (AIA) is unconstitutional because its patents were granted before enactment of these IPR procedures and thus amounted to a taking under the Fifth Amendment. The Federal Circuit based its decision that IPRs are not unconstitutional on the history, beginning in 1980, of Patent Office review of previously granted patents, which at least put patentees on notice that the Office could reconsider the validity of the patent grant. This history made that grant contingent on there not being a successful post-grant challenge, and thus an IPR is nothing more than the latest iteration of such proceedings.

And then in October, the Federal Circuit in Arthrex, Inc. v. Smith & Nephew, Inc. determined that the way in which the U.S. Patent and Trademark Office has appointed administrative patent judges at the PTAB violates the Appointments Clause of the Constitution (Art. II, sec. 2, cl. 2). According to the opinion, because administrative patent judges are principal officers they must be nominated by the President and confirmed by the Senate.

For information regarding this and other related topics, please see:

• "Federal Circuit Holds APJs Are Principal Officers," October 31, 2019
• "OSI Pharmaceuticals, LLC v. Apotex Inc. (Fed Cir. 2019)," October 8, 2019
• "Enzo Life Sciences, Inc. v. Becton, Dickinson and Co. (Fed. Cir. 2019)," August 21, 2019
• "Celgene Corp. v. Peter (Fed. Cir. 2019)," August 5, 2019

3. Courts Continue to Address Question of Sovereign Immunity in Patent Cases

In April, the U.S. Supreme Court denied a petition for writ of certiorari by the St. Regis Mohawk Indian Tribe on the question (answered in the negative by the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office and the Federal Circuit) of whether tribal sovereign immunity could protect the tribe from being named as a party in an inter partes review (IPR) proceeding after Allergan assigned to the tribe its patents in IPR. Then in June, in Regents of the University of Minnesota v. LSI Corp., the Federal Circuit determined that State sovereign immunity does not preclude institution of IPR proceedings before the PTAB. In September, the State of Minnesota filed a petition for certiorari, contending that the Federal Circuit erred in deciding that the University of Minnesota, as an "arm of the state," could not assert sovereign immunity against LSI Corp., which sought to have the PTAB institute an IPR against University-owned patents. And last fall, the Federal Circuit in Board of Regents of the University of Texas System v. Boston Scientific Corp. refused to recognize the immunity as advanced by the State, in this case asserted over the question of proper venue. Given the number of cases in which the issue of sovereign immunity in patent cases has been raised, this issue is likely to be selected again for our top stories list in 2020.

For information regarding this and other related topics, please see:

• "Board of Regents of the University of Texas System v. Boston Scientific Corp. (Fed. Cir. 2019)," September 19, 2019
• "State of Minnesota Petitions for Certiorari in Regents of University of Minnesota v. LSI Corp.," September 15, 2019
• "Regents of the University of Minnesota v. LSI Corp. (Fed. Cir. 2019)," June 16, 2019
• "Supreme Court to Revisit Abrogation of State Sovereign Immunity From IP Infringement," June 4, 2019
• "Supreme Court Denied Certiorari Writ by St. Regis Mohawk Indian Tribe in Restatis® IPR," April 15, 2019

2. Federal Circuit Strikes Down Diagnostic Patent in Athena v. Mayo, But Cannot Find Consensus on Subject Matter Eligibility Solution

In February, in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, the Federal Circuit affirmed a District Court decision holding claims 6-9 of U.S. Patent No. 7,267,820 invalid under 35 U.S.C. § 101. The '820 patent is directed to methods for diagnosing neurological disorders by detecting antibodies to a protein called muscle-specific tyrosine kinase (MuSK). In July, the Federal Circuit issued a per curiam Order, denying a petition for rehearing en banc filed by Athena. The per curiam Order was accompanied by eight opinions, four concurring in the denial of the petition and four dissenting in the denial of the petition. The four concurring opinions were authored by Circuit Judges Lourie, Hughes, Dyk, and Chen, with Chief Judge Prost and Circuit Judges Reyna, Taranto, and Hughes joining in one of the concurrences and Circuit Judge Chen joining in one concurrence and several parts of another. The four dissenting opinions were authored by Circuit Judges Moore, Newman, Stoll, and O'Malley, with Circuit Judges O'Malley and Stoll joining in one of the dissents and Circuit Judge Wallach joining in three of the dissents. Thus, a total of seven members of the Court (Chief Judge Prost and Circuit Judges Lourie, Dyk, Reyna, Taranto, Chen, and Hughes) authored or joined opinions concurring in the denial, and a total of five members (Circuit Judges Newman, Moore, O'Malley, Wallach, and Stoll) authored or joined opinions dissenting in the denial. The Federal Circuit had difficulty reaching a consensus on the solution to the problem of subject matter eligibility. Some judges felt the Federal Circuit was bound by the Supreme Court's decision in Mayo, some hinted that the problem could only be solved by the Supreme Court or that the Federal Circuit would at least benefit from the Supreme Court's guidance, some thought the Federal Circuit could solve the problem by better distinguishing Mayo, and some thought Congress should step in to solve the problem. Last fall, Athena filed a petition for a writ of certiorari in the case, requesting that the Supreme Court "provide much-needed guidance on the important question of the patent eligibility of medical diagnostic tests." (In his brief in Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc., the Solicitor General suggested that the Supreme Court "should provide additional guidance in a case where the current confusion has a material effect on the outcome of the Section 101 analysis," offering as one example a case involving the patent eligibility of medical-diagnostic methods, and pointing in particular to Athena v. Mayo.) The Supreme Court is scheduled to discuss Athena's petition at Conference on January 10, 2020.

For information regarding this and other related topics, please see:

• "Athena Diagnostics Seeks Supreme Court Review of Athena Diagnostics v. Mayo Collaborative Services," December 16, 2019
• "iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)," September 3, 2019
• "Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH (Fed. Cir. 2019)," August 22, 2019
• "Australia Reigns Supreme over U.S. in Patenting Diagnostic Methods," August 6, 2019
• "The Proper Role of the Federal Circuit," July 25, 2019
• "Athena Diagnostics v. Mayo Collaborative Services — The Dissents," July 17, 2019
• "Athena Diagnostics v. Mayo Collaborative Services — The Concurrences," July 14, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," July 9, 2019
• "Invitation to Join Amicus Brief in Athena Diagnostics v. Mayo," April 11, 2019
• "Cleveland Clinic Foundation v. True Health Diagnostics LLC (Fed. Cir. 2019)," April 7, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," February 12, 2019

1. Supreme Court: Secret Sales Trigger On-sale Bar under AIA

In January, the Supreme Court addressed the question of whether Congress intended to change the status of "secret" sales so as not to trigger the on-sale bar of revised 35 U.S.C. § 102 of the Leahy-Smith America Invents Act (AIA) by adding the phrase "or otherwise known to the public." The Federal Circuit had held that Congress had not done so, and the Supreme Court agreed. The Court's decision, authored by Justice Thomas, was short (9 pages), unanimous (9-0), and issued quickly (handed down less than seven weeks after oral argument). The Court recognized that it had "never addressed the precise question presented in this case," but voiced its opinion that "our precedents suggest that a sale or offer of sale need not make an invention available to the public." The Court based its decision on the well-established principle that, under prior versions of § 102, "secret sales" could trigger the on-sale bar. These cases were as recent as Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), and as ancient as a trio of 19th Century cases (Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92 (1877); Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249 (1887); Elizabeth v. Pavement Co., 97 U.S. 126 (1878)). The opinion credits the Federal Circuit with making "explicit what was implicit in our precedent" with regard to the on-sale bar, citing Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353 (2001), and Woodland Trust v. Flowertree Nursery, Inc., 148 F. 3d 1368 (1998), in support of its conclusion. Based on this various precedent, the Court was able to reach the conclusion that Congress did not change what activities raised the on-sale bar, which includes secret sales, because there was insufficient evident of that intent. The Court relied expressly on the Solicitor General's argument that "if 'on sale' had a settled meaning before the AIA was adopted, then adding the phrase 'or otherwise available to the public' to the statute 'would be a fairly oblique way of attempting to overturn' that 'settled body of law.'" The Court pointed out that the catch-all phrase "otherwise available to the public" is better interpreted to capture "material that does not fit neatly into the statute's enumerated categories but is nevertheless meant to be covered."

For information regarding this and other related topics, please see:

• "Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc. (2019)," January 22, 2019
Conference & CLE Calendar

January 5, 2020

January 16, 2020 – Fireside chat with U.S. Patent and Trademark Office Director Andrei Iancu (Intellectual Property Law Association of Chicago Corporate Committee) – 12:00 to 1:00 pm (CT), Chicago, IL

January 22, 2020 – "Top Patent Law Stories of 2019" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)
Webinar on Top Patent Law Stories of 2019

January 4, 2020

McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on the "Top Patent Law Stories of 2019" on January 22, 2020 from 10:00 am to 11:15 am (CT). Since 2007, the Patent Docs weblog has presented an annual, end-of-the-year review of the top stories in patent law. In this presentation, Patent Docs co-authors Donald Zuhn, Kevin Noonan, and Michael Borella will take a look back at the top patent stories of 2019, many of which will likely impact patent applicants and practitioners in the coming year.

While there is no fee to participate, attendees must register in advance. Those wishing to register can do so here. CLE credit is pending for the states of California, Illinois, New Jersey, New York, North Carolina, and Virginia.
Fireside Chat with USPTO Director Iancu

January 4, 2020

The Intellectual Property Law Association of Chicago (IPLAC) Corporate Committee will be hosting a fireside chat with U.S. Patent and Trademark Office Director Andrei Iancu on January 16, 2020 from 12:00 to 1:00 pm (CT) at Google's offices Chicago, IL. The fireside chat, which will focus on topics related to fostering innovation, diversity, and entrepreneurship, will be moderated by Sylvia Chen of Google.

There is no cost to attend the event, but those interested in registering for the event should register by January 9, 2020 by contacting Billie Hinnen at bhinnen@sram.com. Additional information regarding the event can be found here.
Top Stories of 2019: #6 to #10

January 2, 2020

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 13th annual list of top patent stories. For 2019, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Yesterday, we counted down stories #15 to #11, and today, we count down stories #10 to #6, as we will work our way towards the top five stories of 2019. As with our other lists (2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2019" on January 22, 2020 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

10. Federal Circuit Applies Doctrine of Equivalents (And Not Only in "Exceptional" Cases)

In May, the Federal Circuit dismissed Amgen's doctrine of equivalents argument in Amgen Inc. v. Sandoz Inc., stating that "[t]he doctrine of equivalents applies only in exceptional cases and is not 'simply the second prong of every infringement charge, regularly available to extend protection beyond the scope of the claims,'" citing its pre-Warner-Jenkinson v. Hilton Davis Chemical Co. precedent in London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991). The Court based its decision on the reasoning that "Sandoz does not infringe claim 7 under the doctrine of equivalents because its one-step, one-solution purification process works in a substantially different way from the claimed three-step, three-solution process" recited in Amgen's claims. Four months later, the Federal Circuit issued an order modifying its opinion to read: "The doctrine of equivalents applies only in exceptional cases and is not 'simply the second prong of every infringement charge, regularly available to extend protection beyond the scope of the claims.'" In between its May decision and September order in Amgen, the Federal Circuit issued at least five decisions applying the doctrine of equivalents (and issued a sixth decision applying the doctrine in November).

The doctrine of equivalents is a Supreme Court-created patent doctrine that arose in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950) (an uncharacteristically pro-patent decision by the Court, the doctrine recognized that an "unscrupulous copyist" could practice a claimed invention without literal infringement in some circumstances, and as a consequence the patent right could be turned into a "hollow and useless thing"). The doctrine fell into disfavor at the Federal Circuit during the 1990's and arguably provided the first inkling to the Supreme Court that the Federal Circuit's patent jurisprudence would benefit from the Court's closer oversight. In Warner-Jenkinson Co. v. Hilton Davis Chem. Co. and Festo v. Shoketsu Kinzoku Kogyo Kabushiki, the Supreme Court reiterated the vibrancy of the doctrine; nevertheless, its successful assertion has continued to decline. Thus, the Federal Circuit's decision in UCB, Inc. v. Watson Laboratories Inc. in June, affirming a District Court's determination in ANDA litigation that the generic challenger's product infringed under the doctrine, was a welcome surprise.

For information regarding this and other related topics, please see:

• "Pharma Tech Solutions, Inc. v. Lifescan, Inc. (Fed. Cir. 2019)," November 27, 2019
• "Federal Circuit Issues Order Clarifying Status of Doctrine of Equivalents," September 5, 2019
• "Ajinomoto Co. v. International Trade Commission (Fed. Cir. 2019)," August 13, 2019
• "Eli Lilly & Co. v. Hospira, Inc. (Fed. Cir. 2019)," August 12, 2019
• "Amgen Inc. v. Coherus BioSciences Inc. (Fed. Cir. 2019)," August 11, 2019
• "Indivior Inc. v. Dr. Reddy's Laboratories, S.A. (Fed. Cir. 2019)," July 24, 2019
• "UCB, Inc. v. Watson Laboratories Inc. (Fed. Cir. 2019)," July 16, 2019
• "Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2019)," May 12, 2019

9. Federal Circuit Finds More Method of Treatment Patents Eligible

Following on the heels of its 2018 decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals Int'l, the Federal Circuit issued two more decisions concerning the patent eligibility of method of treatment claims in 2019. In Vanda, which made our Top Stories list last year (coming in at #12), the Federal Circuit affirmed a District Court decision finding that the claims of U.S. Patent No. 8,586,610, which are directed to methods of treating a patient suffering from schizophrenia with iloperidone, were not invalid under 35 U.S.C. § 101. In April, the Federal Circuit decided Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc., reversing a District Court decision holding the claims of U.S. Patent No. 8,808,737, which are directed to methods of using oxymorphone to treat pain in patients with impaired kidney function, to be ineligible under 35 U.S.C. § 101. In reversing the District Court, the Federal Circuit determined that the asserted claims of the '737 patent were legally indistinguishable from the claims at issue in Vanda. Only a few weeks earlier, the Federal Circuit decided Natural Alternatives International, Inc. v. Creative Compounds, LLC, reversing and remanding a District Court decision granting a motion for judgment on the pleadings that the asserted claims of six patents, which relate to the use of beta-alanine in dietary supplements to increase the anaerobic working capacity of muscle and other tissue, were not patent eligible. The United States closed 2019 by filing a brief in response to a Supreme Court order inviting the Solicitor General to express the views of the United States on the petition for certiorari filed by Petitioners Hikma Pharmaceuticals USA Inc. and Hikma Pharmaceuticals International Ltd. (previously West-Ward Pharmaceuticals International Ltd.) in Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. The Solicitor General concluded that Vanda "is not an optimal vehicle for bringing greater clarity because the court of appeals majority arrived at the correct result," noting that "[i]n cases involving medical-diagnostic methods, by contrast, the Federal Circuit's recent decisions suggest that the court might well have reached different outcomes if it were not bound by the Mayo framework." The Solicitor General therefore recommended that "[t]he Court should await a case in which lower courts' confusion about the proper application of Section 101 and this Court's precedents makes a practical difference." The Supreme Court is scheduled to discuss Hikma's petition at Conference on January 10, 2020.

For information regarding this and other related topics, please see:

• "Solicitor General Recommends That Supreme Court Deny Certiorari in Hikma Pharmaceuticals v. Vanda Pharmaceuticals," December 8, 2019
• "Endo Pharmaceuticals Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2019)," April 1, 2019
• "Natural Alternatives International, Inc. v. Creative Compounds, LLC (Fed. Cir. 2019)," March 19, 2019

8. Supreme Court: Prevailing Applicants Not Liable for USPTO's Attorney's Fees

Last month, in Peter v. NantKwest, Inc., the Supreme Court considered whether the U.S. Patent and Trademark Office could compel an aggrieved applicant to pay its attorney's fees in a § 145 review, regardless of who wins or loses. The Court unanimously rejected the USPTO's arguments. In doing so, the Court bolstered the "American Rule" on attorney's fees and preserved § 145 proceedings as a financially viable option for review of adverse Patent Trial and Appeal Board (PTAB) decisions. The decision expressly considered only patent reviews, but it also applies to analogous reviews of trademark decisions. Thus, it has impact on cases far more broadly than just § 145 proceedings.

For information regarding this and other related topics, please see:

• "Peter v. NantKwest, Inc. (2019)," December 11, 2019
• "Peter v. NantKwest: PTO Faces Skeptical Justices over Assessment of Fees," October 7, 2019
• "Supreme Court Grants Certiorari in Iancu v. NantKwest, Inc.," March 4, 2019

7. Supreme Court: Federal Government Cannot Petition for Review in AIA Post-grant Proceedings

In June, the Supreme Court determined in Return Mail, Inc. v. United States Postal Service that federal government agencies cannot avail themselves of America Invents Act (AIA) post-grant proceedings. This decision was based on the Court's determination that the government is not a "person" as that term is used in relation to inter partes review (IPR), post-grant review (PGR), and covered business method (CBM) proceedings. To parties accusing the federal government of infringing their patents, the decision means that they will be free of AIA post-grant challenges from the accused agency.

For information regarding this and other related topics, please see:

• "Return Mail, Inc. v. United States Postal Service (2019)," June 10, 2019
• "Supreme Court Hears Oral Argument in Return Mail v. U.S. Postal Service," February 19, 2019

6. Congressional Effort to Reform § 101 Slows

In April, Senator Thom Tillis (R-NC), Chair of the Senate Judiciary Subcommittee on Intellectual Property, and Senator Chris Coons (D-DE), Ranking Member, joined by Representative Doug Collins (R-GA-9), Ranking Member of the House Judiciary Committee, and Representatives Hank Johnson (D-GA-4), and Steve Stivers (R-OH-15), released a "bipartisan, bicameral framework on Section 101 patent reform." A month later, the group released a draft bill proposing significant changes to 35 U.S.C. § 101 and the law of patent eligibility. The draft bill would completely eliminate the notion of a judicial exception to patent eligibility as well as clarify that the § 101 inquiry is separate from those of §§ 102, 103, and 112. In other words, patentable subject matter under the draft bill would likely be as broad or even broader than the "anything under the sun that is made by man" language of Diamond v. Chakrabarty. In June, the Senate Subcommittee on Intellectual Property held hearings on its proposal to revise 35 U.S.C. § 101, and in particular the draft bill that was released in May. Chairman Tillis and Ranking Member Coons (with an occasional third senator in the room) heard testimony from forty-five individuals representing a broad swathe of patent expertise including industry executives and groups, inventors, a former Federal Circuit judge, former U.S. Patent and Trademark Office officials, and law professors. Following those hearings, Senators Tillis and Coons released a statement regarding their takeaway from the hearings. If anything, their statement reflected an understanding that the law needs to change, the Senators are committed to doing so, and that they still need to work out the details. Despite the whirlwind of activity in April, May, and June, legislative progress has slowed since Senators Tillis and Coons released their statement at the end of June, and the patent community awaits the Senators' next move.

For information regarding this and other related topics, please see:

• "Biotech Prospects for Patent Reform," June 26, 2019
• "Senators Tillis and Coons Release Statement on Recent Patent Reform Hearings," June 26, 2019
• "Senate Subcommittee on Intellectual Property Holds Hearings on Proposed Revisions to 35 U.S.C. § 101," June 17, 2019
• "ACLU (Predictably) Opposes Patent Subject Matter Eligibility Proposal," June 3, 2019
• "Senate Proposal for Section 101 Reform: Effect on Biotech/Pharma Inventions," May 23, 2019
• "Congress Proposes Draft Bill to Change 35 U.S.C. § 101," May 23, 2019
• "Congress Releases Framework for Section 101 Reform," April 17, 2019
• "Law Review Article Advocates Supreme Court's Patent Eligibility Law is Unconstitutional," February 20, 2019
Top Stories of 2019: #11 to #15

January 1, 2020

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 13th annual list of top patent stories. For 2019, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Today, we count down stories #15 to #11, and in the coming week, we will work our way towards the top stories of 2019. As with our other lists (2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2019" on January 22, 2020 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

15. USPTO Declares Interference Between Broad Institute and UC Berkeley over CRISPR Technology

In December 2015, the journal Science picked the CRISPR (clustered regularly interspaced short palindromic repeats) technology as its "Breakthrough of the Year," declaring that the technology had "matured into a molecular marvel." Not surprisingly, CRISPR's status as breakthrough molecular marvel has resulted in a battle over who has the best patent position with respect to this technology. In June, the U.S. Patent and Trademark Office declared an interference between patents (and an application) assigned to the Broad Institute, Inc., the Massachusetts Institute of Technology, and the President and Fellows of Harvard College and applications assigned to the Regents of the University of California, the University of Vienna, and Emmanuelle Charpentier. If the new interference sounds to Patent Docs readers like deja vu all over again, it is and it isn't –– the strategy employed by UC Berkeley has induced the Office to address the issues of priority raised in the earlier interference between the parties. The parties have filed a number of motions and responses to those motions, as evidenced by the links below, and Patent Docs will continue to cover the latest battle over the rights to this revolutionary genome engineering technology.

For information regarding this and other related topics, please see:

• "CRISPR Interference Update," December 26, 2019
• "Broad Files Reply Brief to Berkeley's Opposition to Substantive Motion No. 1," December 17, 2019
• "Berkeley Files Responsive Motion to Broad's Substantive Motion No. 2 in Interference," December 12, 2019
• "Berkeley Files Substantive Motion No. 2 to be Accorded Benefit to Earlier Priority Application in Interference," December 10, 2019
• "CRISPR Housekeeping," November 25, 2019
• "CRISPR Motions Day at the PTAB: Broad Files Its Substantive Motion No. 4," November 24, 2019
• "CRISPR Motions Day at the PTAB: Broad Files Its Substantive Motion No. 3," November 20, 2019
• "CRISPR Motions Day at the PTAB: Broad Files Its Substantive Motion No. 2," November 18, 2019
• "Berkeley Files Opposition to Broad's Substantive Motion No. 1 in Interference," November 10, 2019
• "Board Denies CVC Motion to Seal Priority Statement," November 4, 2019
• "Sigma-Aldrich Tries Again," October 27, 2019
• "University of California/Berkeley et al. Authorized to File Motion Opposed to Broad Substantive Motion No. 1," September 30, 2019
• "Broad Institute Takes Its Turn in Interference Motion Practice," September 24, 2019
• "CRISPR Interference: Motion Practice," September 11, 2019
• "PTAB Redeclares CRISPR Interference and Grants Leave for Some (But Not All) of Parties' Proposed Motions," August 29, 2019
• "University of California/Berkeley Granted Yet Another CRISPR Patent," August 25, 2019
• "CRISPR Interference Parties Propose Motions," August 1, 2019
• "Sigma-Aldrich Wants Its Piece of CRISPR Pie," July 21, 2019
• "New CRISPR Interference: The Details," July 8, 2019
• "CRISPR Battle Joined Again," July 1, 2019
• "Another U.S. Patent Issued for CRISPR," April 28, 2019
• "CRISPR Patent Watch," March 12, 2019

14. Solicitor General: Berkheimer Not Appropriate Vehicle for Addressing Uncertainty Concerning § 101 Standards

Berkheimer v. HP Inc. was decided by the Federal Circuit in February 2018 and stands for — in the words of Judge Moore — "the unremarkable proposition that whether a claim element or combination of elements would have been well-understood, routine, and conventional to a skilled artisan in the relevant field at a particular point in time is a question of fact." In September 2018, HP petitioned the Supreme Court for certiorari, and earlier this year, the Court requested that the Solicitor General file a brief expressing the views of the United States in this matter. That brief arrived in December, and the Solicitor General expressed the opinion that the overall lack of clarity regarding the fundamental issues surrounding patent eligibility under 35 U.S.C. § 101 makes addressing the points of Berkheimer premature. The Solicitor General began the brief by declaring that "this Court's recent decisions have fostered uncertainty concerning those substantive Section 101 standards," noting that the uncertainty lies mainly in the "the scope of the exceptions and the proper methodology for determining whether a particular patent implicates them." Berkheimer being largely a procedural case, the Solicitor General suggests that it would not be the appropriate vehicle for addressing the more fundamental substantive questions, opining that HP's question "would be difficult to answer in any cogent manner while uncertainty about the substance of the Section 101 inquiry persists." The Supreme Court is scheduled to discuss HP's petition at Conference on January 10, 2020.

For information regarding this and other related topics, please see:

• "Solicitor General Files Brief in Berkheimer v. HP," December 9, 2019

13. Federal Circuit Revisits Safe Harbor Provisions of 35 U.S.C. § 271(e)(1)

The Federal Circuit has grappled with, divisively in some instances, the extent to which the safe harbor provisions of 35 U.S.C. § 271(e)(1) extend to activities that are not strictly for obtaining regulatory approval, such as post-approval quality testing and "stockpiling" product used for commercial purposes. For example, in 2011, in Classen Immunotherapies, Inc. v. Biogen IDEC, then-Chief Judge Rader joined by Judge Newman held that "routine" post-approval submissions are outside the safe harbor (over a vigorous dissent by Judge Moore), whereas in 2012, in Momenta Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc., the roles were reversed, with Judge Moore finding herself in the majority (with Judge Dyk), and then-Chief Judge Rader filing a dissent. In December, the Federal Circuit revisited these issues in Amgen Inc. v. Hospira, Inc., in a decision authored by Judge Moore and joined by Judges Bryson and Chen. The Federal Circuit affirmed the jury's decision that fourteen batches of Hospira's erythropoietin (EPO) were not protected under the § 271(e)(1) safe harbor, and that seven other batches were clearly made for purposes related to obtaining FDA approval and therefore were protected under the safe harbor.

For information regarding this and other related topics, please see:

• "Amgen Inc. v. Hospira, Inc. (Fed. Cir. 2019)," December 18, 2019

12. Supreme Court on Preemption of State Tort Liability by Compliance with Federal Law and Regulations

In May, in Merck Sharp & Dohme Corp. v. Albrecht, the Supreme Court continued its explication of the balance between state law tort liability that can be imposed on drug makers and the extent to which this liability can be pre-empted by the drug maker's compliance with Federal laws and regulations, particularly those related to FDA approval. In an opinion authored by Justice Breyer, the Court held that the pre-emption question is for a judge to decide, and not a jury. The Court also found that pre-emption is limited to those circumstances where "it is 'impossible for a private party to comply with both state and federal requirements.'" The Court also explained that the meaning of "clear evidence" (in the context of the evidence that the FDA would not have approved a manufacturer requested change to the label) to be "evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug's label to include that warning."

For information regarding this and other related topics, please see:

• "Merck Sharp & Dohme Corp. v. Albrecht (2019)," May 27, 2019

11. Federal Circuit: When "No Identifiable Efforts" Could Have Been Undertaken, Applicant Has Not Failed to Engage in Reasonable Efforts to Conclude Prosecution

In January, the Federal Circuit determined in Supernus Pharmaceuticals, Inc. v. Iancu that the U.S. Patent and Trademark Office had erred in calculating the Patent Term Adjustment (PTA) for Supernus' U.S. Patent No. 8,747,897. In particular, the Court found that because there were "no identifiable efforts" that Supernus could have undertaken in the time period between the filing of an RCE during prosecution of the application that issued as the '897 patent and the mailing of an EPO notification of opposition for a European counterpart patent (which resulted in Supernus filing a supplemental Information Disclosure Statement), Supernus had not failed to engage in reasonable efforts to conclude prosecution (pursuant to 35 U.S.C. § 154(b)(2)(C)(i)) during that time period. In October, the USPTO published a notice of proposed rulemaking in which the Office proposed certain revisions to the rules of practice concerning PTA in view of the Federal Circuit's Supernus decision. In particular, the Office proposed revising the period of reduction of PTA for several provisions of 37 C.F.R. § 1.704, in which the period of reduction will correspond to "the period from the beginning to the end of the applicant's failure to engage in reasonable efforts to conclude prosecution" as opposed to the consequences to the Office of applicant's failure to engage in reasonable efforts to conclude prosecution.

For information regarding this and other related topics, please see:

• "USPTO Proposes Revisions to PTA Rules in View of Supernus v. Iancu," October 6, 2019
• "Intra-Cellular Therapies, Inc. v. Iancu (Fed. Cir. 2019)," September 26, 2019
• "Mayo Foundation for Medical Education and Research v. Iancu (Fed. Cir. 2019)," September 17, 2019
• "USPTO Issues Notice on Impact of Federal Circuit's Supernus Decision on PTA Procedures," May 29, 2019
• "Supernus Pharmaceuticals, Inc. v. Iancu (Fed. Cir. 2019)," January 27, 2019
USPTO Makes Ex Parte Hannun An Informative PTAB Decision

December 31, 2019

By Michael Borella —

Over five and a half years on from the Supreme Court's Alice vs. CLS Bank ruling, patentees, patent professionals, judges, and USPTO personnel are still wrestling with what it means for an invention to be eligible for patenting. This is especially true for software-related innovations. Despite the software-driven digital economy accounting for approximately 7% of the U.S. gross domestic product, software inventions can have a rough path to allowance and are likely to have their eligibility challenged post-issuance. The disconnect between software being one of the main sources of innovation in the last decade and its least-favored-nation status in patent law is largely due to Alice and its progeny.

In Alice, the Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under 35 U.S.C. § 101. One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion. But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

How to apply this test in practice has been anything but clear. In response to complaints from applicants, patentees, and numerous other parties, the USPTO published its 2019 Revised Patent Subject Matter Eligibility Guidance in January and an update thereto in October.

Notably, the Guidance breaks the first part of the Alice test into two sub-steps. In the former, one determines whether the claim recites a judicial exception, such as an abstract idea. In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception." To focus the analysis, the Guidance indicates that all abstract ideas should fall into one of three categories: mathematical concepts, certain methods of organizing human activity, and mental processes. Think of these as the "Three M's" — math, money, and mental steps.

In order to put its version of the Alice test into practice, the USPTO has been publishing a series of informative PTAB § 101 decisions. We discussed four of these as well as a fifth earlier in the year. Recently, a sixth, Ex Parte Hannun, has been added to the list.

The Claimed Invention

The applicant's claimed invention is described as being directed to:

[S]tate-of-the-art speech recognition systems developed using end-to-end deep learning. In embodiments, the model architecture is significantly simpler than traditional speech systems, which rely on laboriously engineered processing pipelines; these traditional systems also tend to perform poorly when used in noisy environments. In contrast, embodiments of the system do not need hand-designed components to model background noise, reverberation, or speaker variation, but instead directly learn a function that is robust to such effects. A phoneme dictionary, nor even the concept of a "phoneme," is needed. Embodiments include a well-optimized recurrent neural network (RNN) training system that can use multiple GPUs, as well as a set of novel data synthesis techniques that allows for a large amount of varied data for training to be efficiently obtained. Embodiments of the system can also handle challenging noisy environments better than widely used, state-of-the-art commercial speech systems.

The PTAB deemed claim 11 representative. It recites:

A computer-implemented method for transcribing speech comprising:
    receiving an input audio from a user;
    normalizing the input audio to make a total power of the input audio consistent with a set of training samples used to train a trained neural network model;
    generating a jitter set of audio files from the normalized input audio by translating the normalized input audio by one or more time values;
    for each audio file from the jitter set of audio files, which includes the normalized input audio:
        generating a set of spectrogram frames for each audio file;
        inputting the audio file along with a context of spectrogram frames into a trained neural network;
        obtaining predicted character probabilities outputs from the trained neural network; and
        decoding a transcription of the input audio using the predicted character probabilities outputs from the trained neural network constrained by a language model that interprets a string of characters from the predicted character probabilities outputs as a word or words.

The Examiner's Rejection

During prosecution, the Examiner rejected claim 11 and claims depending therefrom under § 101 as being directed to patent-ineligible subject matter. Particularly, the Examiner viewed claim 11 as "using the predicted character probabilities (mathematical formula) to decode a transcription of the input audio into words or text data." The Examiner found that this was "similar to the court case Gottschalk v. Benson because the predicted character probabilities (mathematical formula or relationship) is used to convert or transcribe audio data into text data (words)." Thus, the Examiner concluded that the claim was directed to an invention falling into the mathematical concepts category.

The Examiner also characterized the claim as merely "normalizing the input audio data (manipulating data)," and "generating spectrogram frames based on each audio file (generating information sets based on prior information sets)," "using a mathematical formula to convert audio data into text data (Decoding)." The Examiner asserted that this implied that the claim was also abstract under the "certain methods of organizing human activity" and "mental process" categories because a "human can listen to an audio file and transcribe the audio data into text data which can all be done mentally."

Moreover, the Examiner found that the claim also fails under the second step of Alice. To that point, the Examiner wrote that the claimed invention "[d]oes not amount to significantly more since it is just decoding a transcription using a mathematical formula or relationship."

The PTAB's Decision

Applying the Revised Guidance, the PTAB began with the inquiry of whether the claim recites a judicial exception. Notably, the PTAB disagreed with the Examiner's contention that the claims involve either a mental process or a method of organizing human activity. The PTAB stated:

While transcription generally can be performed by a human, the claims here are directed to a specific implementation including the steps of normalizing an input file, generating a jitter set of audio files, generating a set of spectrogram frames, obtaining predicted character probabilities from a trained neural network and decoding a transcription of the input audio using the predicted character probability outputs. These are not steps that can practically be performed mentally. Nor do we see how the claimed invention recites organizing human activity.

The PTAB also concluded that the claims do not recite a mathematical concept, pointing out that while the specification discloses an algorithm, the claims do not recite the algorithm. Thus, under the Revised Guidance, no mathematical concept is recited. In particular, the PTAB referenced the USPTO's eligibility example 38, which explains that even if some claim limitations are based on mathematical concepts, the claim is not abstract unless at least one of those concepts are recited therein.

The PTAB went on to note that even if the claims were considered to recite one of the aforementioned categories of abstract ideas, the claims still "are not directed to an abstract idea because the alleged judicial exception is integrated into a practical application." Relying on statements made by the applicant, the PTAB observed that "the claims of the current application include specific features that were specifically designed to achieve an improved technological result" and "provide improvements to that technical field." As evidence of this, the PTAB looked to the specification, which describes a trained neural network used with a language model that "achieves higher performance than traditional methods on hard speech recognition tasks while also being much simpler."

Based on this analysis, the PTAB concluded that "the Examiner erred in determining that the claims are directed to an abstract idea."

Turning to the second part of Alice, the PTAB took further issue with the Examiner's reasoning. Particularly, the PTAB noted that "the Examiner concludes the claims do not include any additional elements that amounts to significantly more than a judicial exception but fails to provide sufficient factual support." Under Berkheimer v. HP, such a conclusory rationale for contending that a claim does not amount to significantly more cannot stand.

Thus, the PTAB reversed the Examiner's rejections of claim 11 and all of its dependent claims.

Analysis

This case is of note because it is one of the first in which the PTAB has confirmed that a machine learning invention can be non-abstract. While the USPTO's example 39 has suggested that one can claim a machine learning procedure without reciting any of the underlying mathematics, a mental process, or a method of organizing human activity, this decision affirms that is the case. The PTAB also seemed persuaded, based on statements made in the specification, that the claimed invention entails an improvement over previous techniques used to address the problem domain.

Of course, a district court or the Federal Circuit might agree or disagree. But, at the very least, the reasoning herein provides a roadmap for claim drafting and prosecution that may situate an invention to pass § 101 muster in the USPTO.

Ex Parte Hannun (PTAB 2019)
Panel: Administrative Patent Judges Kumar, McKeown, and Shiang
Decision on Appeal by Administrative Patent Judge McKeown
Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd. (Fed. Cir. 2019)

December 30, 2019

By Kevin E. Noonan —

Last week, the Federal Circuit affirmed a District Court decision (by Circuit Judge Bryson, sitting by designation) in an ANDA litigation, finding obvious claims asserted for treating patients having mild to moderate hepatic impairment with extended release opioid formulations, in Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd. In reaching this obviousness determination, Judge Bryson made recourse to the concept of inherent disclosure in questions of obviousness, which while limited in scope, the Federal Circuit found their colleague properly applied.

The case involved infringement under 35 U.S.C. § 271(e)(2) of Orange Book-listed U.S. Patent Nos. 9,265,760 and 9,339,499, which claimed extended release hydrocodone formulations for treating patients with hepatic impairment, who were known in the prior art to be at greater risk for opioid overdose; Persion's drug product was marketed as Zohydro ER. Claims 1 and 12 of the '760 patent are representative:

1. A method of treating pain in a patient having mild or moderate hepatic impairment, the method comprising:
    administering to the patient having mild or moderate hepatic impairment a starting dose of an oral dosage unit having hydrocodone bitartrate as the only active ingredient, wherein the dosage unit comprises an extended release formulation of hydrocodone bitartrate, and wherein the starting dose is not adjusted relative to a patient without hepatic impairment.

12. A method of treating pain in a patient having mild or moderate hepatic impairment, the method comprising:
    administering to the patient having mild or moderate hepatic impairment an oral dos- age unit having hydrocodone bitartrate as the only active ingredient, wherein the dos- age unit comprises an extended release formulation of hydrocodone bitartrate,
    wherein the dosage unit provides a release profile of hydrocodone that:
        (1) does not increase average hydrocodone AUC_0-inf in subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%;
        (2) does not increase average hydrocodone AUC_0-inf in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 30%;
        (3) does not increase average hydrocodone C_max subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 9%; and
        (4) does not increase average hydrocodone C_max in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%.

Defendant Alvogen asserted an obviousness defense over two prior art patent references: U.S. Patent Publication No. 2006/0240105 (Devane), that disclosed the Zohydro ER formulation itself and an in vivo study in which the formulation is used to treat pain; and U.S. Patent Publication No. 2010/0010030 (Jain), which disclosed Vicodin CR, a mixture of hydrocodone and acetaminophen, and that pharmacokinetic parameters for hydrocodone "were similar in normal subjects and subjects with mild and moderate hepatic impairment." The District Court also considered the contents of the Vicodin and Lortab labels (Lortab is a related hydrocodone prior art formulation).

The District Court held that Alvogen's ANDA formulation would infringe Persion's asserted patent claims but that these claims were invalid as obvious over the combination of Devane and Jain and the Vicodin and Lortab labels; the Federal Circuit's opinion provided a succinct synopsis of the District Court's reasoning:

Specifically, the district court found that in light of the teachings of Jain and the Vicodin and Lortab labels, a person of ordinary skill in the art would have been motivated to administer the extended-release hydrocodone bitartrate formulation disclosed in Devane to patients with mild or moderate hepatic impairment at an unadjusted dose and would have had a reasonable expectation of success in so doing. The district court further found that the pharmacokinetic limitations in the pharmacokinetic claims are "inherent in any obviousness combination that contains the Devane formulation" because the recited pharmacokinetic parameters were "necessarily present" in the Zohydro ER formulation described in both Devane and the asserted patents. Finally, the district court found that the objective factors of unexpected results, long-felt but unmet need, and failure of others did not weigh in favor of finding nonobviousness.

The District Court also held that Persion's asserted claims (which were broader in scope than the Zohydro ER formulation) did not satisfy the written description requirement of 35 U.S.C. § 112(a), because the specification common to the two asserted patents only specifically described Zohydro ER.

The Federal Circuit affirmed, in an opinion by Judge Reyna, joined by Judges O'Malley and Chen. The opinion was based on the Federal Circuit finding no clear error in the District Court's factual bases for its obviousness determination, as required under Supreme Court precedent (the opinion specifically citing Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123 (1969), quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).

On appeal, Persion raised four grounds of asserted error. First, Persion argued that the District Court improperly relied on inherency to determine that Devane disclosure inherently disclosed the pharmacokinetic limitations recited in claim 12 and related asserted claims. Persion also argued that it was improper for the District Court to rely on pharmacokinetic profiles from drugs that were not extended-release single-active-ingredient hydrocodone formulations, and from patients without hepatic impairment in reaching its obviousness conclusion. Persion also contended that the District Court did not properly consider its evidence of the objective indicia factors of non-obviousness. Finally, Persion contended that the District Court's holding of obviousness and inadequate written description was inconsistent with each other.

(The opinion notes, in a footnote, that Persion argued many of these points as legal issues, but the panel believes that they are based on factual determinations by the District Court, which has the more deferential "clear error" standard of review.)

With regard to inherency, the opinion cites Supreme Court precedent for the proposition that "[i]t is not invention to perceive that the product which others had discovered had qualities they failed to detect," specifically Gen. Elec. Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249 (1945). The panel further cited multiple instances of the Court's own (and CCPA) precedent, for the principle that merely discovering a new property of a prior art compound is not sufficient to defeat obviousness, including Santarus, Inc. v. Par Pharm., Inc., 694 F.3d 1344, 1354 (Fed. Cir. 2012); In re Kao, 639 F.3d 1057, 1070 (Fed. Cir. 2011); In re Kubin, 561 F.3d 1351, 1357 (Fed. Cir. 2009); and In re Wiseman, 596 F.2d 1019, 1023 (C.C.P.A. 1979). On the other hand, the opinion notes that inherency is "carefully circumscribed" in the obviousness context, to require that an inherent property is consistently present and is not a matter of probabilities. To Persion's generic challenge to the District Court's use of inherency to support its obviousness determination the panel stated:

To the extent Persion contends that inherency can only satisfy a claim limitation when all other limitations are taught in a single reference, that position is contrary to our prior recognition that "inherency may supply a missing claim limitation in an obviousness analysis" where the limitation at issue is "the natural result of the combination of prior art elements." PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194-95 (Fed. Cir. 2014) (emphasis added, internal quotations omitted).

Further, Persion argued that "Devane does not teach administering its hydrocodone-only formulation to patients with mild or moderate hepatic impairment" and that this deficiency negates inherency (an argument more fitting for rebutting invalidity for lack of novelty), and the opinion response was as follows:

The district court found that a person of ordinary skill in the art would have been motivated, with reasonable expectation of success, to administer an unadjusted dose of the Devane formulation to hepatically impaired patients. There was also no dispute that the Devane formulation, which was identical to the Zohydro ER formulation described in the patents in suit, necessarily exhibited the claimed parameters under these conditions [italics added].

The panel also rejected Persion's arguments directed to various aspects of the pharmacokinetic evidence and claims, which were what was inherent in the prior art Zohydro ER formulation. The District Court's consideration of evidence for FDA requirements for combination products was also not error, according to the panel, because the FDA standard is more rigorous than the obviousness standard, and the art (Jain) supported the conclusion that single drug formulations (or at least not combinations with acetaminophen) were preferred for patients with hepatic injury. Jain also provided evidence that the panel held the District Court properly considered in concluding that the reference suggested no difference in pharmacokinetics of hydrocodone between normal and hepatically impaired individuals. Not surprisingly, the panel also found no clear error in the District Court relying on expert testimony regarding the relevance of pharmacokinetic comparisons between normal and hepatically impaired individuals. And the panel found ample evidence related the existence of motivation to combine the teachings of these references by one of ordinary skill in the art. The opinion states:

In sum, after reviewing the entire evidentiary record, we are not left with any conviction that the district court has made a mistake. See Zenith, 395 U.S. at 123. We therefore reject Persion's challenge to the district court's factual findings, which are not clearly erroneous.

Regarding the District Court's treatment of the objective indicia, the opinion stated:

[T]he substance of the court's analysis makes clear that it properly considered the totality of the obviousness evidence in reaching its conclusion and did not treat the objective indicia as a mere "afterthought" relegated to "rebut[ting]" a prima facie case. Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 1357–58 (Fed. Cir. 2013); In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, 676 F.3d 1063, 1075 (Fed. Cir. 2012).

The Federal Circuit did not reach the District Court's decision on the written description issue, but noted that the decisions were not inconsistent based on the differences in scope that the District Court considered in invalidating the asserted claims on § 103 and § 112 grounds.

Application of inherency to obviousness determinations here was facilitated by the description in the prior art of Persion's extended release formulation, and the patentee's reliance on the pharmacokinetic properties of this formulation to distinguish their claimed method from how these drugs were administered (and to whom) in the prior art. It was those very properties that were inherent and thus could not be used to distinguish the prior art on the obviousness question. Also, the negative limitation, "and wherein the starting dose is not adjusted relative to a patient without hepatic impairment," was directly related to the absence of any in vivo difference between effectiveness or toxicity (i.e., risk of overdose) between patients with hepatic impairment and those with normal liver function. Under these facts, and in view of the deferential standard of review the Court must give to a district court's factual determinations, Federal Circuit affirmance of the District Court's decision was not particularly remarkable.

Persion Pharmaceuticals LLC v. Alvogen Malta Operations Ltd. (Fed. Cir. 2019)
Panel: Circuit Judges O'Malley, Reyna, and Chen
Opinion by Circuit Judge Reyna

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