Patent Docs

Avocado Genome Elucidated

August 8, 2019

By Kevin E. Noonan —

The avocado, having gained popularity (at least in the U.S.) as a convenient (and delicious) vehicle for consuming otherwise not particularly healthful corn chips, has more recently been hailed as a "superfood" when consumed in diets as a healthy form of fat. Recently, the avocado joined the ranks of other plants important for human nutrition (see, for example, "Genomic Sequence of Strawberry Determined"; "Genetic Analyses of Sweet Potato Genome Sheds Light on Speciation and Global Dispersion Patterns"; "Durum Wheat Genome Revealed"; and "Genetic Assessment of Squash Genomes in Related Species") in having the sequence of its genome determined, with concomitant explication of its evolutionary history and relationship to other members of the plant kingdom.

This achievement was reported in the Proceedings of the National Academy of Sciences USA, in a paper entitled "The avocado genome informs deep angiosperm phylogeny, highlights introgressive hybridization, and reveals pathogen-influenced gene space adaptation" (https://doi.org/10.1073/pnas.1822129116) by an international group of researchers.* The avocado, Persea americana, is a member of the Lauraceae family, otherwise known for the spices cinnamon, bay leaves, and sassafras (gumbo filé). Avocadoes anciently diverged from other angiosperms, and their magnoliid clade comprises 11,000 total species, which the authors assert is "minuscule in comparison to the dominant eudicot and monocot flowering plant lineages, comprising about 285,000 species combined." Conventional genetic analyses had not established the avocados' phylogenetic position relative to eudicots and monocots.

The predominant avocado is the Mexican avocado, P. americana var. drymifolia, comprising three varieties: the Mexican, Guatemalan, and West Indian varieties. Familiar to many afficianados is the Hass cultivar, which is a hybrid between the Guatemalan and Mexican races and is typically grafted onto Mexican race rootstock. Worldwide, 90% of cultivated avocado corresponds to the cultivar Hass; surprisingly, the Hass cultivar is of recent (20th century) origin.

The authors sequenced Hass and Mexican cultivars as reference genomes, and resequenced three other cutivars (vars. drymifolia, guatemalensis, and americana), as well as wild avocados of the West Indian variety (P. america1na var. costaricensis), and Persea shiedeana (the edible coyo), a species that is relatively closely related to P. americana. The avocado genome comprises 12 chromosomes, and these authors report that the genome size of P. americana var. drymifolia is 920 Mb in size, while the P. americana Hass cultivar has a 912.6 Mb estimated genome size. Analysis of protein coding sequences was based on a comparison with protein sequences from the following angiosperm species: Sorghum bicolor (33,032 proteins), Vitis vinifera (26,343 proteins), Solanum lycopersicum (34,727 proteins), and Arabidopsis thaliana (27,416 proteins). These authors reported an estimated number of protein-coding genes in each genome: 22,441 protein-coding genes from the Mexican genome and 24,616 protein-coding genes from the Hass cultivar genome.

Turning to genome structure, the authors used principal component analysis of genome-wide single nucleotide polymorphisms (SNPs) to show relative uniformity in Costa Rican/West Indian/Guatemalan cultivars but strong heterogeneity within the Mexican subpopulation. The paper reported 5,050 SNP markers, distributed as follows:

Results of these analyses of the Hass cultivar were intermediate between the Guatemalan and Mexican subpopulations, which was in agreement with the hybrid nature of this variety. Also consistent with the recent appearance of the Hass cultivar, its genome showed significant (39%) introgression of DNA having Guatamalan variety structure into a Mexican genomic background. Haas cultivar Chromosome 4 illustrates these analyses, demonstrating that a "huge" Guatemalan block, which could encompass an entire chromosomal arm, is present in the Hass genome. Figure 2A (at right) in the article illustrates a 22 megabase (Mb) stretch of DNA on chromosome 4 exemplifyng genomic introgression from the Guatemalan avocado race (var. guatemalensis) into a Mexican (var. drymifolia) genetic background.

The authors further report that the relatively long length of this Guatemalan-derived block is uninterrupted by recombination, reflecting the extremely recent hybrid origin of the cultivar.

Further, genomic analysis revealed evidence of two "ancient" polyploidy events, which the authors report are lineage-specific and both postdate the divergence of the avocado from common ancestry with other angiosperm species. Avocado divergence from other species appears to have occurred from 7.4 to 3.8 million years ago. Unfortunately, these relationships could not be unambiguously resolved because the outcome varied with the way the analysis was performed. Based on comparison of protein sequences, for example, avocado was resolved as a sister to monocots plus eudicots (i.e., branching occurred before their divergence from each other), whereas from analysis of coding sequences avocado was placed as sister to monocots only.

The authors also reported the phenotypic effects of genome structure, specifically the occurrence of tandem duplications, on gene expression related to potentially important metabolic responses. Enrichment of tandem duplications was found in chromosomal regions that the authors contend could be related to recent adaptation against fungal pathogens. On the other hand, ancient polyploid duplicates were enriched with "transcriptional regulatory functions reflective of core physiological and developmental processes" (specifically, "among 2,433 total polyploid duplicates, regulation of transcription, DNA-templated was significantly overrepresented by 352 genes"). Transcriptional activity in tandem duplicates was found to increase following anthracnose infection, the authors positing that some of the up-regulated genes could be related to defense responses. These included genes involved in phenylpropanoid biosynthesis and closely related pathways that are significantly enriched among tandem duplicates. The authors further state:

This functional enrichment in a long-lived tree may have evolved in response to pathogen infection, including Colletotrichum (anthracnose) and Phytophthora cinnamomi (avocado root rot), both of which are reported to activate the phenylpropanoid biosynthetic pathways in avocado. . . . Several . . . functional enrichments among avocado tandems (for example, 1,3-beta-D-glucan synthase activity and regulation of cell shape) relate to callose synthase activity, a recently discovered avocado defense mechanism against P. cinnamomi. Other significantly enriched [metabolic pathways] include phenylpropanoid metabolic process, lignin biosynthetic process, and UDP-glycosyltransferase activity, categories directly or closely related to phenylpropanoid biosynthesis. The lignin functional enrichment, for example, includes diverse tandemly duplicated genes involved in many pathway-interrelated processes, including homologs of both biosynthetic and regulatory genes encoding hydroxycinnamoyl-CoA shikimate/quinate hydroxycinnamoyl transferase (HCT), cinnamyl alcohol dehydrogenase 5 (CAD5), laccase 17 (LAC17), caffeate o-methyltransferase 1 (COMT1), peroxidase 52 (PRX52), NAC domain containing protein 12 (NAC012), and NAC secondary wall thickening promoting factor 1 (NST1). As could be expected from the above, the [metabolic pathways] involved in defense response and defense response to fungus are significantly enriched among tandem duplicates, as has been discovered for other plant genomes, and involving many different gene families and responses. Tandem O-methyltransferases homologous to COMT1 may also contribute to synthesis of the phenylpropanoid derivative and insecticide estragole, which is largely responsible for the anise-like leaf scent and fruit taste of many avocado cultivars, particularly of the Mexican race. Another relevant enriched . . . category among tandems is ethylene-activated signaling pathway, which annotates many different transcription factor duplicates. Ethylene signaling factors such as ERF1 (represented by 2 homologs) are heavily involved in pathogen-induced responses, including to infection by Colletotrichum and other necrotrophic fungi. Also identified are 3 homologs of EIN3, a transcription factor that initiates downstream ethylene responses, including fruit ripening. Avocado fruit matures on the tree in a process that involves ethylene synthesis and signaling, while it does not ripen until harvested—a desirable trait that allows growers to delay harvesting for several months.

The authors characterize tandem duplicates as "evolutionarily recent 'tuning knobs' in the genome adaptive landscape[]" of the avocado species:

[M]ost tandem duplicates in the genome are expected to be of more recent origin, having been generated by ongoing gene birth–death–innovation processes that operate in all eukaryotic genomes. As such, sub- or neofunctionalized tandem duplicates that survive the usual fate of duplicated genes—pseudogenization—should be enriched in functions that fine-tune a given species' recent selective environment. In the case of avocado, response to fungal pathogens is precisely reflected in its tandemly duplicated gene complement.

The authors conclude their report with a concise explanation of its significance:

Our genomes of Mexican and Hass avocados provide the requisite resources for genome-wide association studies to identify important traits among natural avocado genetic diversity present in Mesoamerica, to develop genome-assisted breeding and genetic modification efforts crucial for the improvement of this long-life-cycle crop, to fight threatening avocado diseases, and to optimize growth and desirable phenotypic traits.

* Martha Rendón-Anaya^a,^b,¹,
Enrique Ibarra-Laclette^a,^c,¹,
Alfonso Méndez-Bravo^a,^d,
Tianying Lan^e,
Chunfang Zheng^f,
Lorenzo Carretero-Paulet^g,
Claudia Anahí Perez-Torres^a,^c,
Alejandra Chacón-López^a,
Gustavo Hernandez-Guzmán^a,^h,ⁱ,
Tien-Hao Chang^e,
Kimberly M. Farr^e,
Brad Barbazuk^j,
Srikar Chamala^k,
Marek Mutwil^l,
Devendra Shivhare^l,
David Alvarez-Ponce^m,
Neena Mitterⁿ,
Alice Haywardⁿ,
Stephen Fletcherⁿ,
Julio Rozas^o,^p,
Alejandro Sánchez Gracia^o,^p,
David Kuhn^q,
Alejandro F. Barrientos-Priego^r,
Jarkko Salojärvi^l,
Pablo Librado^s,^t,
David Sankoff^f,
Alfredo Herrera-Estrella^a,
Victor A. Albert^e,^l,², and
Luis Herrera-Estrella^a,^u,²

^aUnidad de Genomica Avanzada/Langebio, Centro de Investigación y de Estudios Avanzados, Irapuato 36821, México; ^bDepartment of Plant Biology, Uppsala BioCenter, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden; ^cRed de Estudios Moleculares Avanzados, Instituto de Ecología A.C., 91070 Xalapa, México; ^dEscuela Nacional de Estudios Superiores, Laboratorio Nacional de Análisis y Síntesis Ecológica, Universidad Nacional Autónoma de México, 58190 Morelia, México; ^eDepartment of Biological Sciences, University at Buffalo, Buffalo, NY 14260; ^fDepartment of Mathematics and Statistics, University of Ottawa, Ottawa, ON, Canada K1N 6N5; ^gCenter for Plant Systems Biology, Vlaams Instituut voor Biotechnologie (VIB), University of Ghent, 9052 Ghent, Belgium; ^hDepartamento de Alimentos, Universidad de Guanajuato, 36500 Irapuato, México; ⁱDivisión de Ciencias de la Vida, Universidad de Guanajuato, 36500 Irapuato, México; ^jDepartment of Biology, University of Florida, Gainesville, FL 32611; ^kDepartment of Pathology, Immunology and Laboratory Medicine, University of Florida, Gainesville, FL 32610; ^lSchool of Biological Sciences, Nanyang Technological University, Singapore 637551; ^mDepartment of Biology, University of Nevada, Reno, NV 89557; ⁿCentre for Horticultural Science, Queensland Alliance for Agriculture and Food Innovation, The University of Queensland, St. Lucia, QLD 4072, Australia; ^oDepartament de Genètica, Microbiologia i Estadística, Universitat de Barcelona, 08007 Barcelona, Spain; ^pInstitut de Recerca de la Biodiversitat, Universitat de Barcelona, 08007 Barcelona, Spain; ^qSubtropical Horticulture Research Station, Agricultural Research Service, US Department of Agriculture, Miami, FL 33158; ^rPosgrado en Horticultura, Departamento de Fitotecnia, Universidad Autónoma Chapingo, 56230 Texcoco, México; ^sCentre for GeoGenetics, Natural History Museum of Denmark, 1017 Copenhagen, Denmark; ^tLaboratoire d'Anthropobiologie Moléculaire et d'Imagerie de Synthèse, CNRS Unité Mixte de Recherche 5288, Université de Toulouse, Université Paul Sabatier, 31330 Toulouse, France; ^uDepartment of Plant and Soil Science, Texas Tech University, Lubbock, TX 79409

Image of Avocados (Persea americana) by B.navez, from the Wikimedia Commons under the Creative Commons Attribution-Share Alike 3.0 Unported, 2.5 Generic, 2.0 Generic and 1.0 Generic license.
IPO Releases List of Top 300 Patent Holders for 2018

August 7, 2019

Life Sciences Top 49

By Donald Zuhn —

Last month, the Intellectual Property Owners Association (IPO) announced the release of its 36th annual list of the top 300 organizations receiving U.S. utility patents (see "Top 300 Organizations Granted U.S. Patents in 2018"). Patent Docs Readers may recall that the U.S. Patent and Trademark Office stopped releasing its annual list of top patent recipients in 2006 in order to "discourag[e] any perception that we believe more is better."

The IPO compiled its list by counting the number of utility patents granted during 2018 that listed an organization or a subsidiary as the owner on the printed patent. The IPO notes that patents that were granted to two or more organizations jointly were attributed to the organization listed first on the patent. The IPO also noted that 307,759 patents were issued in 2018, which was an decrease from the 318,829 patents that issued in 2017. The top fifteen companies on the IPO Top 300 are listed below (click on table to expand):

Samsung Display Co., Ltd.; Sony Corp.; and Amazon Technologies, Inc. fell out of the Top 15 in 2018. Samsung Display Co., Ltd. dropped from 11th to 17th; Sony Corp. dropped from 13th to 18th; and Amazon Technologies, Inc. dropped from 15th to 16th in 2018. Jumping into the Top 15 were Dell Technologies; Ford Global Technologies, LLC; and United Technologies Corp.

As in past years, Patent Docs used the IPO's list of top patent holders to compile a list of the top "life sciences" companies and organizations receiving U.S. utility patents in 2018. Each organization's IPO top 300 ranking for 2018 is indicated in the "2018 IPO Rank" column; the IPO top 300 ranking for 2017 (if available) is indicated in the "2017 IPO Rank" column; and the change in number of patents from 2017 is indicated in "% Change from 2017." The Life Sciences Top 49 is listed below (click on table to expand):

Please note that some of the companies and organizations listed above may be involved in work outside the life sciences sector, and therefore, a portion of the patents granted to these companies and organizations may be directed to other than life sciences-related inventions. In addition, our list includes medical device companies.

For additional information regarding this topic, please see:

• "IPO Releases List of Top 300 Patent Holders for 2017," July 4, 2018
• "IPO Releases List of Top 300 Patent Holders for 2016," June 14, 2017
• "IPO Releases List of Top 300 Patent Holders for 2014," July 1, 2015
• "IPO Releases List of Top 300 Patent Holders for 2013," July 7, 2014
• "IPO Releases List of Top 300 Patent Holders for 2012," June 24, 2013
• "Another Look at IPO Top 300 and Life Sciences Top 53," June 11, 2012
• "IPO Releases List of Top 300 Patent Holders for 2011," June 7, 2012
• "IPO Releases List of Top 300 Patent Holders for 2010," June 30, 2011
• "IPO Releases List of Top 300 Patent Holders for 2009," May 26, 2010
• "IPO Releases List of Top 300 Patent Holders for 2008," May 14, 2009
• "IPO Releases List of Top 300 Patent Holders," May 22, 2008
• "IPO Posts List of Top 300 Patent Holders," April 20, 2007
News from Abroad — Australia Reigns Supreme over U.S. in Patenting Diagnostic Methods

August 6, 2019

By Grant Shoebridge* —

In July 1969, as a young boy, I watched in awe, along with the rest of world, as the United States of America put two men on the moon. Years later in 2011, the then Prime Minister of Australia, Julia Gillard, stood before U.S. Congress and recalled the same moon-landing memory and with acquiescence wept that "Americans could do anything!" Today, the U.S. seems to have entered, what was once described in an episode of Seinfeld as, "Bizzaro world" — Donald Trump is in the White House and, even more astonishingly, researchers are unable to protect what have been described judicially as "truly meritorious" and "ground breaking" innovations in the diagnostics and personal medicine space. Today, it is Australia that reigns supreme over the U.S., as the Federal Court in Sequenom, Inc. v Ariosa Diagnostics, Inc. [2019] FCA 1011 (27 June 2019) confirmed that a non-invasive method of detecting fetal characteristics and abnormalities is patent eligible subject matter in Australia!

Background

The inventors of the patent-in-suit, Australian Patent No 727919, in the name of Sequenom, Inc., discovered that the cell-free fractions of a pregnant woman's blood contain surprisingly large amounts of cell-free fetal DNA (cffDNA). Traditionally, this portion of the plasma or serum was discarded as medical waste. This pioneering discovery led to the development of the claimed non-invasive method to determine fetal characteristics and abnormalities, such as Down syndrome. Ariosa Diagnostics Inc, who sought to revoke Sequenom's Patent, conducts and licenses others to conduct a non-invasive prenatal diagnosis test, marketed under the name "Harmony", which Sequenom claims infringes their patent.

The significance of the Australian Sequenom decision has been fueled by the corresponding U.S. case where the claims of Sequenom's patent were found to be patent ineligible because they were held to be directed to naturally-occurring matter. The ensuing detrimental impact on U.S. diagnostics industry has subsequently resulted in a proposal for changes to the patentable subject matter legislation, which is currently being considered by US Congress.

Issues and findings

Under Australian law, patent eligibility is guided by the principles of the High Court's decision in National Research Development Corporation v Commissioner of Patents('NRDC') [1959] HCA 67. In that landmark decision, it was held that subject matter was considered patent eligible if it was "an artificially created state of affairs" having "economic significance".

Ariosa's case relied heavily on the approach that proved successful in the U.S., namely that the claims cover a mere discovery, that being the presence of cffDNA, which can be detected in the plasma or serum of pregnant women, and that the end result of each claim is not an artificially created state of affairs. Ariosa further submitted that the claims involve nothing more than the use of well-known techniques to detect cffDNA in maternal blood.

Ariosa also suggested that the Court should follow the U.S. position, which they suggested was in harmony with the Australian Myriad decision. Judge Beach's response was an emphatic, "I hardly think so". In fact, in considering the Australian High Court Myriad decision, Beach J emphasised the difference between the gene product claims considered in Myriad and the method defined in the claims of Sequenom's patent. In particular, he stated that "in nature, the presence of cffDNA in the maternal blood has not and cannot be detected without human action. Accordingly, unlike the claims considered in Myriad, the invention claimed adds to human knowledge and involves the suggestion of an act to be done which results in a new result, or a new process".

The Court also agreed with Sequenom that the substance of the claimed method is distinct to simply the identification of a natural phenomenon, namely the presence of cffDNA in maternal blood. This, the Judge said, is made clear by the patent specification, which explains that the invention offers a new approach for non-invasive prenatal diagnosis, which only occurs through human intervention and provides a significant advantage over existing fetal DNA detection methods, thus producing a result possessing economic utility.

Consistency with foreign law

Given the intense spotlight that has illuminated patentability issues in the U.S. for diagnostic methods in recent times, the consistency of the Australian decision and the corresponding UK proceedings between Ariosa and Sequenom (Illumina, Inc v Premaitha Health Plc[2017] EWHC 2930), will likely go unnoticed. Those, however, looking for controversy in the conflicting Australian/U.S. findings should look no further than Judge Beach's swatting away of the issue by stating that the conclusion reached in the U.S. decision is problematic because of the U.S. Court's dissection of the claims into their constituent parts, which is contrary to Australia's NRDC and Myriad decisions — end of story.

Conclusions

This decision, and the recent decision in Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, make it clear that claims directed to practical applications of naturally-occurring phenomena, including gene sequences, used in methods of diagnosis and prognosis are patent eligible subject matter in Australia. This will come as a welcome relief to the diagnostics and personal medicine industry and can be considered as "one small step" forward for Australian patent law but also, hopefully, "one giant leap" that influences beneficial change to the patent eligibility laws in the U.S.

* Dr. Shoebridge is a Principal with Shelston IP.
Celgene Corp. v. Peter (Fed. Cir. 2019)

August 5, 2019

By Kevin E. Noonan —

The Federal Circuit affirmed a determination by the Patent Trial and Appeal Board (PTAB) that two patents owned by Celgene Corp. were invalid in Celgene Corp. v. Peter decided last week. In rendering its decision, the Court 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 is unconstitutional because its patents were granted before enactment of these IPR procedures and thus amounted to a taking under the Fifth Amendment. The Court had avoided such constitutional challenges in earlier cases, most recently in Trading Technologies International, Inc. v. IBG LLC, 921 F.3d 1378 (Fed. Cir. 2019), on the grounds that in that case, TT's counsel had insufficiently raised and supported the argument. Here, the Court found that Celgene's efforts had been "sufficiently thorough" as "a single constitutional issue [that] received thorough briefing from the parties and [was] addressed extensively at oral argument" for the panel to render a decision. Predictably, that decision was to find that IPRs pass constitutional muster.

The case arose from a challenge by the Coalition for Affordable Drugs VI LLC ("CFAD") of Celgene's U.S. Patent Nos. 6,045,501 and 6,315,720. The PTAB determined that all claims of the '501 patent and claims 1-9 and 11-32 of the '720 patent were invalid for obviousness. The patents are directed to methods for safely providing teratogenic agents, particularly thalidomide, to patients without risking distributing the drug to patients who are pregnant or at risk of becoming pregnant. Claim 1 of the '501 patent and claim 1 of the '720 patent are representative; the technology embodied in the '501 patent was termed the "System for Thalidomide Education and Prescription Safety" and that embodied in the '720 patent was known as "Enhanced S.T.E.P.S.":

'501 patent:

1. A method for delivering a teratogenic drug to patients in need of the drug while avoiding the delivery of said drug to a foetus comprising:
    a. registering in a computer readable storage medium prescribers who are qualified to prescribe said drug;
    b. registering in said medium pharmacies to fill prescriptions for said drug;
    c. registering said patients in said medium, including information concerning the ability of female patients to become pregnant and the ability of male patients to impregnate females;
   d. retrieving from said medium information identifying a subpopulation of said female patients who are capable of becoming pregnant and male patients who are capable of impregnating females;
    e. providing to the subpopulation, counseling information concerning the risks attendant to fetal exposure to said drug;
    f. determining whether patients comprising said subpopulation are pregnant; and
    g. in response to a determination of non-pregnancy for said patients, authorizing said registered pharmacies to fill prescriptions from said registered prescribers for said non-pregnant registered patients.

'720 patent:

1. In a method for delivering a drug to a patient in need of the drug, while avoiding the occurrence of an adverse side effect known or suspected of being caused by said drug, wherein said method is of the type in which prescriptions for said drug are filled only after a computer readable storage medium has been consulted to assure that the prescriber is registered in said medium and qualified to prescribe said drug, that the pharmacy is registered in said medium and qualified to fill the prescription for said drug, and the patient is registered in said medium and approved to receive said drug, the improvement comprising:
    a. defining a plurality of patient risk groups based upon a predefined set of risk parameters for said drug;
    b. defining a set of information to be obtained from said patient, which information is probative of the risk that said adverse side effect is likely to occur if said drug is taken by said patient;
    c. in response to said information set, assigning said patient to at least one of said risk groups and entering said risk group assignment in said medium;
    d. based upon said information and said risk group assignment, determining whether the risk that said adverse side effect is likely to occur is acceptable; and
    e. upon a determination that said risk is acceptable, generating a prescription approval code to be retrieved by said pharmacy before said prescription is filled.

CFAD's obviousness contentions regarding the '501 patent asserted in support three scientific references on how to safely administer three teratogenic drugs: thalidomide, isotretinoin (Accutane®), and clozapine. For the "enhanced" system claimed in the '720 patent, CFAD asserted the thalidomide package insert; U.S. Patent No. 5,832,449; a scientific reference on "controlling and monitoring access to thalidomide"; and another scientific reference regarding mechanisms and significance of transfer of chemicals to animal and human semen. Using rationales applying this art in varying combinations, the Board found that CFAD had established obviousness of all claims in the IPR except claim 10 of the '720 patent. When CFAD declined to join Celgene's appeal, the Director of the U.S. Patent and Trademark Office intervened under 35 U.S.C. § 143.

The Federal Circuit opinion was written by Chief Judge Prost, joined by Judges Bryson and Reyna. On the merits regarding the '501 patent, the panel rejected Celgene's arguments on three points: "(1) its finding that the prior art satisfies the 'computer readable storage medium,' limitation, which rises and falls with a claim construction argument; (2) its finding that it would have been obvious to counsel male patients about the risks of teratogenic drugs; and (3) its findings on secondary considerations." On the first point, Celgene argued that the term should be limited to a centralized computer readable storage medium, which the Federal Circuit rejected because that was not what was recited in the claims of the '501 patent nor was that how the computer readable storage medium was described in the specification. The panel also agreed with the PTAB that neither the prosecution history nor extrinsic evidence argued by Celgene supported this construction of the term. In assessing the correctness of the Board's claim interpretation, the panel relied on the canon of claim construction that use of the indefinite article (a or an) in conjunction with the open claim term "comprising" indicates "one or more" of a particular term (here, the computer readable storage medium). Nothing in the claim language, specification, nor prosecution history supported any exception to this general rule for construing claim terms, nor was there an unambiguous disclaimer of a non-centralized computer in the record, in the panel's opinion. And the panel also affirmed the Board's refusal to allow Celgene's extrinsic evidence to "trump the persuasive intrinsic evidence in this case."

Turning to the second point, the Federal Circuit agreed with the PTAB that providing information to male patients "capable of impregnating females" with information regarding the risks was obvious, based on CFAD's expert's testimony regarding how a person of ordinary skill would have understood one of the asserted prior art references (despite express teachings in another of the asserted references that "[n]o effects [of teratogenic drugs] on male sperm are recognized"). This teaching, in the context of the reference, referred to the contraceptive effects of thalidomide and not its teratogenic effects, according to the Board, and the Federal Circuit agreed.

As to Celgene's objective indicia argument, Celgene challenged the Board's failure to credit its evidence of unexpected results and long-felt but unmet need. The Federal Circuit rejected those challenges, substantially because the Court refused to reweigh the evidence on appeal. The Court also did not find dispositive the "tension" between the Board's refusal to weigh the evidence in Celgene's favor as to the '501 patent, but finding the evidence persuasive regarding claim 10 of the '720 patent, because "[t]he fact that there is no long-felt, unmet need does not necessarily mean that there is no motivation to improve a system [as claimed in the '720 patent]," citing Spectrum Pharm., Inc. v. Sandoz Inc., 802 F.3d 1326, 1336 (Fed. Cir. 2015).

The opinion then turned to the '720 patent. Evidence of motivation used to support the Board's obviousness rejection of the claimed improved methods was the general motivation to "improve the existing distribution methods of potentially hazardous drugs because 'where significant safety risks exist with a drug, one would continuously search for safer ways to control the distribution of the drug.'" The Federal Circuit agreed that the Board properly rejected Celgene's argument that there was no motivation to improve the S.T.E.P. system disclosed and claimed in the '501 patent because "there had been no reports of birth defects or even potential fetal exposure to thalidomide using that system." The Court found that this motivation was not "generic" (as Celgene argued), based on the policy argument that "[i]n a case like this, where safety is a concern and where the potential adverse side effects are so severe, the Board did not err in finding that the desire to improve a system that is working well qualifies as a valid motivation."

On more specific grounds, Celgene argued that even if there was generic motivation to improve its S.T.E.P. system, the Board erred by finding that the "particular, prospective, doctor-interfering system claimed by the '720 patent" was obvious (emphasis in opinion). The Federal Circuit disagreed, finding that "the Board incorporated the notion of affirmative risk assessment [one of the particular limitations Celgene argued distinguished its claims from the cited art] into its claim construction and considered it in its obviousness findings." The panel did not fault the Board's omission of the term "prospective" from its Final Written Decisions, because that term is not found in the contested claims, and rejected on similar grounds Celgene's arguments with regard to the limitation that the claimed enhanced system can "override" a physician's prescription. Accordingly, the Federal Circuit affirmed the Board's determination that claims 1-9 and 11-32 of the '720 patent were obvious.

On the constitutional issue, the panel first addressed whether reaching this issue was proper in this case, deciding that it was. The basis for this portion of the Federal Circuit's opinion was that, despite the fact that Celgene made it argument for the first time on appeal, that was not improper and the Court had discretion to reach the issue in this limited circumstance. Citing the "interest of justice" and the "growing number of retroactivity challenges following the Supreme Court's decision in Oil States" (where the Supreme Court raised without deciding the issue of whether an IPR could constitute a taking under the Due Process Clause or the Takings Clause), the timing of the Supreme Court's Oil States decision ("well after the Board's . . . final written decisions in the IPRs involved in this appeal") supported the Federal Circuit's decision to consider the question. Other factors in favor of review include the question's status as a pure matter of law, and that even had Celgene raised the issue before the Board "it is unclear how the Board could have corrected the alleged constitutional defect . . . ." (In a footnote, the opinion cites Supreme Court precedent that "adjudication of the constitutionality of congressional enactments has generally been thought beyon
d the jurisdiction of administrative agencies," Elgin v. Dep't of Treasury, 567 U.S. 1, 16 (2012) (quoting Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215 (1994)). Interestingly, the PTO at oral argument answered the question of whether the Board had the authority to address the constitutional argument by stating that "the Board could exercise its discretion to decline to institute the IPR," which as the Court notes, would be a decision unreviewable except possibly for mandamus.) The Court thus found this "one of those exceptional circumstances in which our discretion is appropriately exercised to hear Celgene's constitutional challenge even though it was not raised below."

On the merits, the panel 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. Characterizing IPRs in this way removed much of the force of the retroactivity argument, without which the constitutional challenge falls. It is also consistent with the Court's decisions in Patlex Corp. v. Mossinghoff, 758 F.2d 594 (Fed. Cir. 1985), and Joy Technologies, Inc. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992), where the Court rejected similar challenges to ex parte reexamination. (Happily, "[t]he PTO [did] not dispute that a valid patent is private property for the purposes of the Takings Clause.") According to the opinion, "Celgene's pre-AIA patents were therefore granted subject to existing judicial and administrative avenues for reconsidering their validity" and "[f]or several decades [prior to Celgene applying for its patents], the Patent Office also possessed the authority to reexamine—and perhaps cancel—a patent claim that it had previously allowed."

The Office also persuasively argued that invalidation of a patent is not an unconstitutional taking because "the patent owner 'never had a valid property right because the patent was erroneously issued in the first instance.'" And of course the panel notes that "[t]he validity of patents has always been subject to challenge in district court," although there is (or should be) a distinction between the agency reversing itself within its own sphere of expertise and a court deciding that the agency had erred.

In view of the similarities between IPRs and these earlier types of post-grant review proceedings, the panel states that:

[I]t suffices for us to decide that IPRs do not differ sufficiently from the PTO reconsideration avenues available when the patents here were issued to constitute a Fifth Amendment taking. Celgene identifies a number of differences between reexaminations and IPRs, including that IPRs are adjudicative and have discovery, briefing, and an oral hearing, . . . but as explained below [where the panel recites the many similarities between IPRs and earlier post-grant review proceedings], these differences are not sufficiently substantive or significant to constitute a taking."

And the panel finds solace in several recent Supreme Court decisions, including SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1353 (2018), and Return Mail, Inc. v. United States Postal Serv., 139 S. Ct. 1853, 1860 (2019), for its decision that IPRs are not unconstitutional.

One aspect of Celgene's argument that the panel did not expressly address is that an IPR "unfairly interferes with its reasonable investment-backed expectations without just compensation." While this argument may not have gained any traction on patentee's behalf in this case, it does suggest that there is a class of individuals, namely investors, who may have a cognizable reliance interest that should be recognized and recompensed when a patent is invalidated in an IPR. Investors, like patentees are on notice that patents can be invalidated in district court or before the Patent Office in post grant review proceedings in all their many flavors. But the decision to invest rests at least in part on the investor relying on the presumption of validity, ensconced in statute and resting on the presumption that the Patent Office has properly granted a valid patent. While infallibility is not one of the features of (or representations by) the Patent Office, as a part of the Federal government there should be a consequence in favor of relatively innocent by-standers when the government fails the public trust by improvidently granting invalid patents. After all, inventions protected by patents do not satisfy their raison d'etre of "promoting progress" if these inventions are not commercialized, and commercialization requires investment. Perhaps it would be fair to recognize that reliance interest and the injury to that interest by the Federal government declaring "do-over" (with frightening frequency, as Celgene argued), by creating a cause of action against the government to recoup at least some of an investor's losses occasioned by invalidation of presumptively valid patents. In addition to the quality of justice that this would create, it might lessen the inhibitions (if not a distinct chill) to investment that the AIA's post-grant review proceedings have created.

Celgene Corp. v. Peter (Fed. Cir. 2019)
Panel: Chief Judge Prost and Circuit Judges Bryson and Reyna
Opinion by Chief Judge Prost
ChargePoint, Inc. v. SemaConnect, Inc. (Fed. Cir. 2019)

August 4, 2019

By Michael Borella —

On July 23, 2019, the Federal Circuit denied ChargePoint's request for panel rehearing and en banc review of its March 28, 2019 decision rendering four ChargePoint patents invalid under 35 U.S.C. § 101. Since we did not review this case when the panel decision came down, and because the case subsequently garnered attention as being one of the more problematic § 101 decisions of late, today we provide a review and some perspective of the substantive issues at hand.

ChargePoint sued SemaConnect in the District of Maryland, asserting infringement of U.S. Patent Nos. 8,138,715, 8,432,131, 8,450,967, and 7,956,570. All four patents share the same specification. SemaConnect moved for dismissal under Rule 12(b)(6) on the grounds that the patents failed to meet the eligibility requirements of § 101. The District Court sided with SemaConnect. ChargePoint appealed.

2014's Alice Corp. vs. CLS Bank Int'l Supreme Court case set forth a two-part test to determine whether claims are eligible for patenting under § 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.

As described by the Court, the focus of the claimed inventions is "charging stations for electric vehicles." Traditionally, charging was a long, slow, one-way process that required parking overnight or for a long period of time. ChargePoint's technology purported to solve two semi-related problems with this charging. First, allowing restaurants, shopping centers, or apartment complexes to control access to vehicle chargers on their premises. Second, allowing electric vehicles to transfer power to the electrical grid in times of high demand on the grid. In the words of the Court:

ChargePoint contends that its inventors created improved charging stations that address the various needs inherent in electric vehicle charging. This was accomplished by creating networked charging stations. According to ChargePoint, this network connectivity allows the stations to be managed from a central location, allows drivers to locate charging stations in advance, and allows all users to interact intelligently with the electricity grid.

Claims 1 and 2 of the '715 patent recite:

1. An apparatus, comprising:
    a control device to turn electric supply on and off to enable and disable charge transfer for electric vehicles;
    a transceiver to communicate requests for charge transfer with a remote server and receive communications from the remote server via a data control unit that is connected to the remote server through a wide area network; and
    a controller, coupled with the control device and the transceiver, to cause the control device to turn the electric supply on based on communication from the remote server.

2. The apparatus of claim 1, further comprising an electrical coupler to make a connection with an electric vehicle, wherein the control device is to turn electric supply on and off by switching the electric coupler on and off.

In addressing procedural aspects of the § 101 inquiry, the Court noted that "we have found the specification helpful in illuminating what a claim is 'directed to.'" On the other hand, "while the specification may help illuminate the true focus of a claim, when analyzing patent eligibility, reliance on the specification must always yield to the claim language in identifying that focus."

With that in mind, the Court rapidly concluded that "[i]t is clear from the language of claim 1 that the claim involves an abstract idea—namely, the abstract idea of communicating requests to a remote server and receiving communications from that server, i.e., communication over a network." But this was insufficient to determine whether the focus of the claim was an abstract idea. So the Court continued by looking to the specification to understand the problem being solved by the inventors.

Reviewing its own precedent, the Court observed that statements made by the inventors in the specification can be used to determine this focus. But hardware components described only at a high level of detail or functionally are generally outside of this focus.

The problem facing the inventors, according to the Court, was "the lack of a communication network that would allow drivers, businesses, and utility companies to interact efficiently with the charging stations." "From these statements," the Court concluded, "it is clear that the problem perceived by the patentee was a lack of a communication network for these charging stations, which limited the ability to efficiently operate them from a business perspective." To further justify its interpretation, the Court observed that "the specification never suggests that the charging station itself is improved from a technical perspective, or that it would operate differently than it otherwise could . . . [n]or does the specification suggest that the invention involved overcoming some sort of technical difficulty in adding networking capability to the charging stations." Thus, "the specification suggests that the invention of the patent is nothing more than the abstract idea of communication over a network for interacting with a device, applied to the context of electric vehicle charging stations."

After establishing the problem to be solved, the Court turned to the language of the claims and found that it would "preempt the use of any networked charging stations." The Court indicated that the breadth of the claims dictated such an expansive preemption, as the claims would effectively cover all solutions for achieving a desired result.

To sum up the analysis of claim 1:

In short, the inventors here had the good idea to add networking capabilities to existing charging stations to facilitate various business interactions. But that is where they stopped, and that is all they patented. We therefore hold that claim 1 is "directed to" an abstract idea.

The Court shot down claim 2 on similar grounds, finding that the limitation of an "electrical coupler to make a connection with an electric vehicle" does not change the nature of the invention being claimed. Thus, both claims are directed to an abstract idea.

The Court applied a similar analysis to the claims of the other patents and came to the same outcome. Indeed, the Court made the dangerously sweeping statement that "[c]ommunication over a network for [the purpose of device interaction] has been and continues to be a building block of the modern economy" — an abstract idea. Undoubtedly, these words will be quoted over and over in future district court and Federal Circuit litigation in attempts to establish that any invention involving networked communication is per se ineligible under § 101. Patent professionals are sadly shaking their heads at this all-too-likely and probably unintended consequence.

In any event, the Court moved on to part two of the Alice test. ChargePoint contended that it has presented factual allegations that, under Berkheimer v. HP, would preclude a Rule 12(b)(6) dismissal. These included purported unconventional approaches involving "(a) the ability to turn electric supply on based on communications from a remote server; (b) a network-controlled charging system; and (c) a charging station that receives communication from a remote server, including communications made to implement a demand response policy."

The Court's response — unfortunately predictable at this point — was that these innovations were directed to network control, which is the abstract idea itself. To that end, the Court noted that "a claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention 'significantly more' than that ineligible concept."

The Court wrapped up:

ChargePoint, of course, disagrees with this characterization, arguing that its patents claim "charging stations enabled to use networks, not the network connectivity itself." But the specification gives no indication that the patented invention involved how to add network connectivity to these charging stations in an unconventional way. From the claims and the specification, it is clear that network communication is the only possible inventive concept. Because this is the abstract idea itself, this cannot supply the inventive concept at step two.

Thus, the claims were ruled ineligible under § 101 and invalidated accordingly.

Yes, the claims were broad. Yes, they were vague, and the specification probably didn't describe the invention as well as it should have. But for the 5,000th time, we have more well-founded and objective tests for these issues in §§ 102, 103, and 112. Lumping obviousness and written description into § 101 results in the skewed analysis that you see here and in other eligibility decisions.

And the outcome herein is indicative of the hazard associated with applying a variation of the "technical solution to a technical problem" test. Sure, such a test has been used in Europe and other jurisdictions for quite some time. But it is being used differently here (i.e., the problem and state of the art are based on statements in the specification rather than prior art, and the test is separate from the obviousness analysis). As a result, the Federal Circuit is shooting more holes in the long-standing principle that the invention is defined by the claims. Instead, the invention is now defined by a subjective evaluation of what a judge believes to be the problem being solved, and then this identified problem is used to color the interpretation of the claims under § 101. If the problem is viewed as non-technical, then the claims can easily be found abstract, as was the case with ChargePoint. The fact that the Federal Circuit has previously found claims that solve business problems to be eligible under § 101 (e.g., DDR Holdings v. Hotels.com) seems to be beside the point.

The ensuing cognitive dissonance — ChargePoint's device-oriented claims being viewed as abstract — illustrates the judicial-exception-creep that has been occurring since Alice. Since the § 101 inquiry can be applied in an outcome oriented fashion, more and more non-abstract devices, systems, structures, and components are now being lumped into the abstract idea classification or ignored as "conventional" in part two of the Alice test. The abstract idea exception is a legal fiction that has been expanded to the point of meaninglessness — thinking about network communication is truly abstract, but actual network communication or the facilitation thereof is not.

Indeed, the language of the claims matter little when one can try to infer from the specification what the claims "really mean" and then analyze that ascribed meaning rather than what the claims actually recite. The door is left open for bad actors to try to convince the judiciary that virtually everything involving a computer, software, or a network is abstract. At what point do we realize that, as just one example, the little computers we carry around in our pockets use software in a tangible fashion to communicate and have a concrete impact on themselves and other devices? At what point does the legal fiction of the abstract idea swallow all of patent law? Hint: this case.

ChargePoint Inc. v. SemaConnect Inc. (Fed. Cir. 2019)
Per Curiam
Conference & CLE Calendar

August 4, 2019

August 6, 2019 – "Section 101 Litigation After Cellspin" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

August 15, 2019 – Technology Center 2800 customer partnership meeting (U.S. Patent and Trademark Office) – 11:30 am to 4:30 pm (ET) on

August 20, 2019 – "Section 101 Reform: Prospects and Pitfalls" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

October 3-4, 2019 – Paragraph IV Disputes Master Symposium (American Conference Institute) – Chicago IL
IPO Webinar on Section 101 Litigation

August 3, 2019

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Section 101 Litigation After Cellspin" on August 6, 2019 from 2:00 to 3:00 pm (ET). Maxine Graham of American Express, Larry Hadley of Glaser Weil, and Kevin Rodkey of Finnegan will provide tools and insights on courtroom tactics for litigating patent eligibility issues, and discuss:

• New strategies for patent owners that start with the infringement complaint;
• Ways defendants can counter plaintiff's attempts to create factual disputes; and
• Maintaining maximum flexibility for clients in an unpredictable environment.

The registration fee for the webinar is $135 (government and academic rates are available upon request). Those interested in registering for the webinar can do so here.
CRISPR Interference Parties Propose Motions

August 1, 2019

By Kevin E. Noonan —

The parties (University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier, Junior Party, and The Broad Institute, Massachusetts Institute of Technology, and Harvard University, Senior Party) to the newly declared interference over patents for CRISPR technology (see "CRISPR Battle Joined Again"), yesterday submitted to the Patent Trial and Appeal Board their proposed motions for the initial phase of the interference. As is typically the case in these submissions, each party filed motions to place them in the best procedural position for the main event in the interference, a determination of who deserved priority to CRISPR, specifically embodiments of the technology for use in eukaryotic cells.

As a reminder, an interference proceeds in two stages. The first stage involves the parties presenting motions that can modify the count, have certain claims declared outside the scope of the count (or vice versa), seek to establish an earlier priority date, and ask for a finding that their opponents' claims are invalid under any of the provisions of the patent statute. If these motions are not decided in a way that would disqualify one or both parties, then the interference will move to a second stage, where the Junior Party (Berkeley, unless it can establish an earlier priority filing date) will present its proofs of conception and reduction to practice and the Senior Party will be permitted to oppose. The Senior Party is under no obligation to present proofs earlier than its earliest filing date unless the Junior Party evinces evidence of (at least) earlier conception. In practice, the parties can both be expected to submit their priority evidence.

Berkeley's motions reflected their position before the U.S. Patent and Trademark Office during examination that they deserve priority to eukaryotic embodiments of CRISPR (despite the decisions to the contrary by the PTAB and the Federal Circuit). Under the acronym "CVC" (for California, Vienna, and Charpentier, the three parties challenging the Broad's entitlement to eukaryotic CRISPR), Junior Party's Motion 1 is an "expedited" miscellaneous motion under 37 C.F.R. § 41.121(a)(3) for benefit of an earlier non-provisional application and for the Board to redeclare the interference with CVC as the Senior party. The basis for this motion is that the specification of the applications-in-interference have an identical specification to CVC's USSN 13/842,859, filed 3/15/2013 (pre-AIA). CVC asks the Board to take these actions sua sponte because identical specifications are entitled to priority under 35 U.S.C. § 120. To aid the Board, CVC provides in an Appendix a diagram showing how its applications are related:

Interestingly, PTO documents show that the Examiner and interference specialists recommended giving CVC the priority benefit to the '859 application.

CVC's Motion 2 requests benefit of priority to earlier provisional and non-provisional applications, specifically:

[E]ach of CVC's involved applications 15/947,680; 15/981,807; 16/136,168; and 16/136,175 is a continuation of U.S. Patent Application No. 14/685,504 ("the '504 application"), filed on April 13, 2015. Each of CVC's involved applications 15/947,700; 15/947,718; 15/981,808; 15/981,809; 16/136,159; and 16/136,165 is a continuation of U.S. Patent Application No. 15/138,604 ("the '604 application), filed on April 26, 2016, which in turn is a continuation of the '504 application. The '504 application is a continuation of U.S. Patent Application No. 13/842,859 ("the '859 application"), filed on March 15, 2013, which claims priority benefit to each of the following provisional applications: U.S. Provisional Application No. 61/652,086, filed on May 25, 2012 ("the '086 provisional" or "Provisional 1"); U.S. Provisional Application No. 61/716,256, filed on October 19, 2012 ("the '256 provisional" or "Provisional 2"); U.S. Provisional Application No. 61/757,640, filed January 28, 2013 ("the '640 provisional" or "Provisional 3"); and U.S. Provisional Application No. 61/765,576 ("the '576 Provisional" or "Provisional 4"), filed on February 15, 2013.

In view of the extensive history of these filings, CVC asks the Board to increase the page limit for its brief.

Motion 3, under 37 C.F.R. § 41.121(a)(1), asks the Board to treat the Broad's claims under the changes in the law effected by the Leahy-Smith America Invents Act with regard to Section 102 and 103 of the Patent Act, and for judgment that these claims are unpatentable under 35 U.S.C. § 103 over U.S. Patent Application Publication No. 2016/0298138 to Sigma in view of extensive prior art (122 references) contained in another Appendix. Ironically, this application is the basis for Sigma-Aldrich's "extraordinary" petition for the PTAB to redeclare the interference (see "Sigma-Aldrich Wants Its Piece of CRISPR Pie") to include this application. The basis for Motion 3 is that the Sigma application was filed six days earlier than the earliest Broad priority application, and that due to irregularities in the Broad's filing, they cannot "swear behind" this reference. Once again, CVC asks the Board to increase the page limits on this motion (in this case because there are 415 involved Broad claims at issue). CVC also submits a contingent motion, Motion 4 for judgment of unpatentability if the Broad applications and patents are entitled to pre-AIA treatment, under 35 U.S.C. § 103 over US 2016/0298138 to Sigma in view of extensive prior art contained in the Appendix.

CVC's Motion 5, under 37 C.F.R. § 41.121(a)(1) asks for judgment of unpatentability under 35 U.S.C. § 102(f) or (if post-AIA) 35 U.S.C. § 115(a) for "failure to name all inventors of the alleged invention. [According to its proposal] CVC will demonstrate that Broad deliberately misidentified the inventors on its involved patents and applications . . . ." Proper inventorship is important in the interference, inter alia, because the Board needs to know whose testimony can corroborate and whose needs to be corroborated under interference practice, where the uncorroborated testimony of an inventor is given no weight; see, Kolcraft Enters. v. Graco Children's Prods., Nos. 2018-1259, 2018-1260, 2019 U.S. App. LEXIS 19751 (Fed. Cir. July 2, 2019). The factual bases for this motion are differences between the named inventors in the patents- and applications-in-interference and the inventors named in a declaration by the Broad's patent attorney during a European opposition (EP 277146); it may be recalled that such irregularities involving a Rockefeller University inventor (Dr. Luciano Marraffini) not named in the EP application was the basis for that patent to be invalidated (see "The CRISPR Chronicles — Broad Institute Wins One and Loses One").

CVC's most aggressive proposed motion is Motion 6 under 37 C.F.R. § 41.121(a)(1) for inequitable conduct. According to CVC, "Broad made at least one affirmative material misstatement during prosecution of each of Broad's involved patents, applications, or parent applications to which they claim priority" — specifically, in a declaration by named inventor Zhang regarding actual reduction to practice of CRISPR-Cas9 in eukaryotic cells prior to May 2012. CVC asserts that these statements are untruthful because the CRISPR system did not comprise tracrRNA, which is necessary for CRISPR to be functional. CVC attempts to avoid the fate of a similar motion from the first CRISPR interference (for which the Board denied permission) on grounds that it is undisputed that tracrRNA is necessary for CRISPR function, using disclosure from U.S. Provisional Patent Application No. 61/736,527 as well as in the Broad's involved patents and independent prior art. CVC also asserts that Zhang's "conception" arose only after reading a Berkeley prior art disclosure. The proposal for this motion extensively analyzes purported evidence for actual reduction to practice to show the Broad's asserted failure, alleging that the Broad "cherry-picked data" that "intentionally omitted the context that shows his claims of successful DNA cleavage to be false." This motion applies to all the Broad's patents- and applications-in-interference because the alleged untruthful statements were submitted in all applications.

CVC also makes similar allegations for another declaration submitted by a different inventor, which they contend evinced "a larger pattern of deception." These allegations are supported by an e-mail from a Zhang lab member and named inventor on the Broad's provisional application (albeit in a context where there seems to exist an ax to grind against Dr. Zhang):

The 15-page declaration of [Feng Zhang] and Le Cong's luciferase data is mis- and overstated to change the examiner's decision, which seems to be a joke. . . .

After seeing your in virto [sic, in vitro] paper, Feng Zhang and Le Cong quickly jumped to the project without letting me know. My lab notebooks, emails and other files like dropbox or gel pictures recorded every step of the lab's failure process. I am willing to give more details and records if you are interested or whoever is interested to clear the truth. . . .

We did not work it out before seeing your paper, it's really a pity.

CVC's final Motion 7 is a miscellaneous motion under 37 C.F.R. § 41.121(a)(3) to add CVC's U.S. Application Nos. 16/276,361; 16/276,365; 16/276,368; and 16/276,374 to the interference. CVC also provides a pro forma motion for priority, to be decided during the priority phase of the interference if it is not resolved beforehand.

The Broad's motions are predicated on their contention that this interference is "barred by res judicata, collateral estoppel, and law of the case" over the earlier-concluded interference (No. 106,048). The Broad notes that the difference between the Count of the '048 interference and the Count in this interference as declared is that the prior Count did not require specific (covalent) linkage or fusion between the guide and tracr sequences, whereas that linkage was the basis for allowability of CVC's applications in this interference. Accordingly, the Broad asks the PTAB to limit claims in interference to those having this limitation. The Broad's Motion 1 under 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(1) is for judgment based on interference estoppel, citing MPEP § 2308.03(b): "A judgment of no interference-in-fact bars any further interference between the same parties for claims to the same invention as the count of the interference." The Broad asks that this motion be expedited. Motion 2 under 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(1) is related, for judgment based on CVC's failure to add a claim in the '048 interference reciting the linkage limitation, citing Woods v. Tsuchiya, 745 F.2d 1571, 1582 (Fed. Cir. 10 1985), and Ex parte Aoki, No. 2012-010117, 2015 WL 3827164 (P.T.A.B. June 15, 2015), for support. The Broad further requests the Board issue a Notice to Show Cause (sub silentio apparently characterized as "Motion 3") why this interference is not precluded by judgment in the earlier '048 interference, based on the "showing" that CVC cannot antedate actual reduction to practice of applying CRISPR to eukaryotic cells in view of evidence of record in the '048 interference (CVC "cannot win on the merits" according to this portion of the Broad's argument).

As a hedge against failing to prevail on these motions, Motion 4 (contingent) under 37 C.F.R. §§ 41.121(a)(1)(i) and 41.208(a)(2) asks the Board to substitute the count with an alternative count that would be "broad enough to cover Broad's best proofs," specifically:

Proposed Count 2

A method comprising:
introducing into, or expressing in, a eukaryotic cell having a DNA molecule,
(I) a Cas9 protein or a nucleotide sequence encoding the Cas9 protein, and
(II) RNA or a nucleotide sequence encoding the RNA, the RNA comprising:
    (a) a targeter-RNA or a first RNA, the first RNA comprising a first ribonucleotide sequence and a second ribonucleotide sequence, and
    (b) an activator-RNA or a second RNA,
wherein (II) (a) and (II) (b) are fused to one another or are covalently linked to one another with intervening nucleotides; and
wherein, in the eukaryotic cell, the activator-RNA or the second RNA form an RNA duplex with the targeter-RNA or the second ribonucleotide sequence, and the targeter-RNA or the first ribonucleotide sequence directs the Cas9 protein to a target sequence of the DNA molecule, and the DNA molecule is cleaved or edited or at least one product of 20 the DNA molecule is altered.

Should the Board substitute the present Count for this one, the Broad argues that only "claims 4, 11, and 18 of U.S. Patent No. 8,697,359; claim 5 of U.S. Patent No. 8,771,945; claim 5 of U.S. Patent No. 8,906,616; and claim 8 of U.S. Patent No. 8 9,840,713" should remain in the interference. Similar Motion 5 (contingent) under 37 C.F.R. 1 §§ 41.121(a)(1)(i) and 41.208(a)(2) asks the Board to substitute or add Count 3 to the interference:

Proposed Count 3

A method, in a eukaryotic cell, of cleaving or editing a target DNA molecule, or altering expression of at least one product encoded by the target DNA molecule, the method comprising:
    contacting, in a eukaryotic cell, a target DNA molecule having a target sequence with an engineered and/or non-naturally-occurring Type II Clustered 8 Regularly Interspaced Short Palindromic Repeats (CRISPR)-CRISPR associated 9 (Cas) (CRISPR-Cas) system comprising:
a) a Cas9 protein,
and
b) RNA comprising
    i) a targeter-RNA that is capable of hybridizing with the target sequence of the DNA molecule or a first RNA comprising (A) a first sequence capable of hybridizing with the target sequence of the DNA molecule and (B) a second sequence; and
    ii) an activator-RNA that is capable of hybridizing to the targeter-RNA to form an RNA duplex in the eukaryotic cell or a second RNA comprising a tracr sequence that is capable of hybridizing to the second sequence to form an RNA duplex in the eukaryotic cell,
wherein, in the eukaryotic cell, the targeter-RNA or the first sequence directs the Cas9 protein to the target sequence and the DNA molecule is cleaved or edited or at least one product of the DNA molecule is altered.

This claim is ("essentially") identical to the Count of the '048 interference for which the Broad asserts another "best proofs" justification. The Broad takes the position that CVC would be estopped from showing priority to claims corresponding to this count based on the outcome of the '048 interference.

Motion 6 through Motion 9, all under 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(2) ask the Board to designate most of the Broad's claims as not corresponding to any or various permutations of the counts, in an effort to limit the Broad's exposure to losing their claims. Motion 10 under 37 C.F.R. §§ 41.121(a)(1)(ii) and 41.208(a)(3) requests priority benefit of the Broad's prior applications, having an earliest priority date of December 12, 2012; in view of the extensiveness of the list the Broad requests "at least" 35 pages for its motion and brief. Motion 11 under 37 C.F.R. §§ 41.121(a)(1)(iii) and 41.208(a)(1) seeks judgment against Berkeley on the grounds that the CVC claims are unpatentable for failure to satisfy the written description and/or enablement requirements of 35 U.S.C. § 112(a) and under 35 U.S.C. § 102(a) and/or 35 U.S.C. § 102(e) and 35 U.S.C. § 103, based on "the PTAB's binding finding that a POSA in 2012 would require the results of successful eukaryotic experiments to have a reasonable expectation of success that CRISPR-Cas9 could be made to work in eukaryotic cells, and given that D1 and D2 indisputably fail to disclose any eukaryotic experiments," and citing numerous scientific references (including Broad references). And Motion 12 under 37 C.F.R. §§ 41.121(a)(3) asks the Board to require CVC to keep the Broad and the Board apprised of any notice of allowance in any pending, related applications. Finally, the Broad also submits a pro forma motion for priority.

The Board has set August 5th as the date for a teleconference with the parties jointly; shortly thereafter (typically less than a week) the Board will issue an Order notifying the parties as to which motions they are authorized to file and which have been deferred or denied. During the call the parties are able to inform the Board more specifically of the bases for their motions, provide a proffer if the Board needs additional evidence or information, and provides opposing parties the opportunity to give the Board their views. With the Order on which motions are permitted the Board will also set a briefing schedule; a sample schedule is as follows:

TIME PERIOD 1

File motions
File (but serve one business day later) priority statements

TIME PERIOD 2

File responsive motions to motions filed in TIME PERIOD 1

TIME PERIOD 3

File oppositions to all motions

TIME PERIOD 4

File all replies

TIME PERIOD 5

File request for oral argument
File motions to exclude evidence
File observations

TIME PERIOD 6

File oppositions to motions to exclude
File response to observations

TIME PERIOD 7

File replies to oppositions to motions to exclude

DEFAULT ORAL ARGUMENT DATE

The Board permits the parties to stipulate to extensions and revisions to the schedule except for the last three dates; the oral argument date is (relatively) inviolate (unless the Board needs to reschedule) and occurs about seven months after the end of Time Period 1.

Patent Docs will provide the details of the Board's decisions on which motions it will permit the parties to file when they become available.
News from Abroad — Swiss-type Patent Claims in Australia

July 31, 2019

By Tim Fitzgerald* and Michael Finney** —

'Swiss format' or 'Swiss-type' patent claims have a general structure similar to the following:

Use of compound X in the manufacture of a formulation for the treatment of medical condition Y.

Swiss-type claims were originally approved by the Swiss Patent Office as a mechanism to allow for protection of a new therapeutic use of a known compound (i.e., second or further medical use), given prohibition of claims to methods of medical treatment.[1] The claim format was subsequently accepted at the European Patent Office (EPO) and affirmed in the Enlarged Board of Appeal decision G05/83. In particular, the Enlarged Board held that it was "legitimate in principle" to allow Swiss-type claims where the formulation was for a specified new and inventive therapeutic application, even where the process of manufacture did not differ from known processes using the same active ingredient.

Under the provisions of the Convention on the Grant of European Patents 2000 (EPC 2000), claims in the format "Compound X for use in treating condition Y" ('European use format') are construed as use-limited for novelty purposes, and Swiss-type claims are no longer allowable in Europe.[2] Nevertheless, previously issued European patents containing Swiss-type claims have the potential to remain in force until at least 2031.[3] In recent years, there has been substantial judicial assessment of infringement requirements for Swiss-type claims of existing European patents, including in the UK.[4]

In Australia, claims to methods of medical treatment are permissible[5] and, accordingly, Swiss-type claims are not necessary to achieve protection for new uses of a known therapeutic. Nevertheless, Swiss-type claims have long been considered acceptable under Australian patent office practice. Notwithstanding this, for many years Swiss-type claims went largely without judicial consideration in Australia. Since 2015, however, several Australian decisions have issued which provide clarification of the role of Swiss-type claims in Australia. Here we provide a high-level overview of applicable findings within these decisions, and conclude with a summary of current Australian law regarding Swiss-type claiming.

Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634 ('Otsuka')

In Otsuka, a decision of the Federal Court of Australia, a single judge (Justice Yates) provided the first detailed judicial consideration of Swiss-type claims in Australia. As a key element of the decision, His Honour considered whether Swiss-type claims should be construed as method claims or product claims, and concluded that the subject matter of a Swiss-type claim is "appropriately characterised as method or process".[6] His Honour also prima facie accepted, although did not actively decide upon, established Australian patent office practice that novelty can be conferred for Swiss-type claims by the therapeutic use recited in the claim.

Justice Yates' also expressed an obiter opinion in Otsuka in relation to infringement of Swiss-type claims. His Honour's stated position was that the manufacturer of the composition would be the direct infringer of a Swiss-type claim, which again accorded with prior assumptions under Australian practice. However, his Honour went on to comment that, in determining infringement of Swiss-type claims, "[t]he question is whether, objectively ascertained, the medicament that results from the claimed method or process is one that has the therapeutic use defined in the claim".[7] His Honour further noted that "[t]he question is not really about how the alleged infringer markets its product, although, plainly, its conduct in that regard may well assist in determining, objectively, whether the accused product has the claimed therapeutic use".[8]

His Honour's obiter comments on infringement requirements were interpreted by some commentators as suggesting that a product will infringe a Swiss-type claim so long as it has therapeutic use that falls within the scope of the claims, regardless of the intended use of the product. In conjunction with His Honour's acceptance of the proposition that Swiss-type claims can achieve novelty based on the recited therapeutic use, this could be seen to lead to a confounding result. Specifically, under these circumstances, a Swiss-type claim reciting a new use could be granted for a previously known composition, with the known composition then infringing the claim by virtue of it being effective for the new use. It appeared unlikely that His Honour had intended for such a result. Accordingly, after Otsuka, some commentators (including the writers) called for clarification of the role of intended use of the manufactured product for the infringement of Swiss-type claims, noting that similar issues had (at that time) recently been judicially addressed in the UK.[9]

Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94 ('Apotex')

As for Otsuka, Apotex was an Australian Federal Court decision issued by a single judge (Justice Nicholas). In Apotex, Justice Nicholas was asked to consider whether an offer made, during the term of a patent, to supply infringing products after patent expiry, would itself constitute infringement of the patent. Relevantly, the patent in question (AU 714980) contained both an independent method of medical treatment claim and a corresponding independent Swiss-type claim. Accordingly, His Honour assessed the question for each of these respective claim types.

Justice Nicholas noted that, under Australian law, it is an infringement of a patent claim to "exploit" the claimed invention within Australia during the term of the patent, and that Schedule 1 of the Patents Act 1990 (Cth) (henceforth, 'the Patents Act') defines "exploit" to include:

(a) where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process – use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.

In relation to the method of medical treatment claims, His Honour concluded that the method did not result in the making of any product, and therefore the reference in paragraph (b) to "any act mentioned in paragraph (a) in respect of a product resulting from such use" meant that the paragraph (b) provisions could not apply to this method of treatment claim. However, in relation to the Swiss-type claims, His Honour identified that the method results in the production of a product (a manufactured medicament), and that part (b) of the definition of "exploit" is applicable. With this in mind, His Honour concluded that the definition of "exploit" under the Patents Act encompasses an offer made, during the term of the patent, to supply a product manufactured according to a Swiss-type claim after patent expiry, and that the Swiss-type claim had therefore been infringed.

The decision in Apotex has confirmed that there can be clear benefits of including Swiss-type claims in Australian patents. Importantly, this decision establishes that Swiss-type claims can offer a broader scope of protection than corresponding method of medical treatment claims, at least in relation to commercial offers by third parties.

Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129 ('AbbVie')

In AbbVie, three judges of the Australian Federal Court heard an appeal from a decision of the Australian Administrative Appeals Tribunal (AATA).[10] AbbVie dealt with a highly specific aspect of Australian law, relating to the possibility of relying on Swiss-type claims to obtain an extension of term for pharmaceutical patents.

Relevantly, Subsection 70(2) of the Patents Act deals with pharmaceutical patent extensions, and defines that a patent relating to a pharmaceutical substance may have its term extended by up to five years, where one or both of the following apply:

(a) one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification;

(b) one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification.

In this case, AbbVie Biotechnology Ltd had applied for extensions of term for three Australian patents (AU 2012261708; AU 2013203420; AU 2013257402) on the basis of the inclusion of Swiss-type claims reciting a pharmaceutically active substance which is routinely produced by a recombinant DNA process (although this was not stated in the claim), attempting to rely on (b), above. The Australian Commissioner of Patents had originally found that the Swiss-type claims were not valid basis for the requested extensions, however this decision had been overturned by the AATA.

The Full Court overturned the findings of the AATA, and reverted to the original position of the Commissioner of Patents. In doing so, the Full Court approved the determination in Otsuka, supra, that Swiss-type claims are method or process claims, not product claims. The Full Court elaborated that such claims are directed to methods of manufacturing a formulation or medicament using an active substance, not to the formulation or the active substance itself. On this basis, the Full Court decided that the active pharmaceutical substance recited in the Swiss-type claims, while produced by recombinant DNA technology, did not "fall within the scope" of these claims, and that the circumstances as per subsection 70(2)(b) of the Patents Act were therefore not met.

AbbVie appears to clearly establish that Swiss-type claims cannot be relied upon for term extension of pharmaceutical patents in Australia. More broadly, the Full Court's decision appears to clarify that, even in the case of subsection 70(2)(b) of the Patents Act, a pharmaceutical substance itself (as compared to a method involving the substance) must be claimed in order for an extension to be obtained.

Apotex v ICOS Corporation (No 3) [2018] FCA 1204 ('ICOS')

Among a number of other considerations in ICOS, a single Federal Court judge (Justice Besanko) was asked to assess whether importation into Australia of an infringing product, wherein the product was manufactured outside of Australia, could result in infringement of a Swiss-type claim directed to manufacture of the product. With reference to the definition of "exploit" as per Schedule 1 of the Patents Act (set out above), Justice Besanko concluded that such circumstances would represent importation of a product produced according to a claimed method as per part (b) of the definition, and could indeed constitute infringement.

Given that pharmaceuticals sold in Australia are frequently manufactured overseas prior to importation, Justice Besanko's ruling would appear to be of substantial practical relevance. That is, if the scope of Swiss-type claims had been found to exclude use of products that have been imported into Australia after being manufactured elsewhere, a large proportion of Australian pharmaceuticals would escape infringement of these claims on that basis alone.

Mylan Health (formerly BGP) v Sun Pharma (formerly Ranbaxy) [2019] FCA 28 ('Mylan')

Nearly four years after Justice Yates' obiter comments in Otsuka, discussed above, Justice Nicholas provided the first formal consideration of the requirements for Swiss-type claim infringement in Australia, in the Federal Court decision of Mylan. His Honour was required to determine whether sale in Australia of a pharmaceutical composition with suitable properties for use as recited in a Swiss-type claim would infringe the Swiss-type claim.

In arriving at his decision, Justice Nicholas was guided by their Lordships' observations in the UK Supreme Court decision Warner Lambert Company LLC v Generics (UK) Ltd [2018] UKSC 56 ('Warner Lambert') which had issued the previous year. In particular, His Honour accepted that Swiss-style claims should be construed as use-limited both for novelty and infringement purposes, where the scope of such claims relates to the therapeutic use to which the formulation is applied. That is, the monopoly claimed was considered to relate to manufacture of a pharmaceutical composition for treatment of a particular medical condition. His Honour further accepted that, in determining infringement of a Swiss-type claim, the intent of the manufacturer is relevant. That is, for a Swiss-type claim to be infringed, it must be established that a manufacturer intended for the composition to be used for the recited condition.

Justice Nicholas elaborated on the concept of intent, drawing further from Warner Lambert in discussing concepts of "objective intent" and "subjective intent" of a manufacturer. His Honour explained that assessing subjective intent would require establishing the state of mind of the manufacturer and whether, in fact, the manufacturer had produced the product for the purpose recited in a Swiss-type claim. His Honour explained that, in contrast, assessment of objective intent would be performed using a legal framework to decide, under all of the circumstances, if it should be considered that the product had been produced for the recited purpose, whether or not this was consistent with the manufacturer's actual state of mind.

In Mylan, whether an objective or subjective approach was adopted, Justice Nicholas concluded that the evidence presented would be insufficient to support a finding of intent for infringement purposes. Accordingly, His Honour did not believe it was necessary to determine which approach to establishing intent was correct, although His Honour appeared to favour an objective approach.[11] It is further relevant to note that, in regard to establishing objective intent, His Honour stated, obiter, that relevant considerations could include "approved product information ("PI") for the product, any product labelling, and the nature, size and other pertinent characteristics of the market into which the product is to be sold"[12] and that "[t]he fact that it may be reasonably foreseeable or even likely that a substantial portion of the product manufactured will be used to treat that condition is certainly not determinative at least not where the product is also used extensively in the treatment of other non-designated conditions."[13] These comments indicate that His Honour's characterisation of objective intent differs from that discussed in Warner Lambert. Indeed, Justice Nicholas' concept of objective intent appears to incorporate elements of the "outward presentation test" propounded by Lord Sumption in Warner Lambert,[14] which was considered a separate test in that decision.

At the time of writing, Mylan has been appealed to the Full Federal Court, including in relation to infringement of the Swiss-type claims. Furthermore, while awaiting the outcome of this appeal, interim injunctive relief was applied for.[15] Interestingly, the application for injunctive relief was heard by Justice Yates, responsible for the decision in Otsuka, which provided an opportunity for His Honour to elaborate on his obiter comments on infringement of Swiss-type claims in that case.

Essentially, Justice Yates noted that, in Mylan, Justice Nicholas had addressed the issue of intent with the benefit of the UK Supreme Court decision in Warner Lambert, and did not actively push back against Justice Nicholas' finding that a manufacture's intention in relation to therapeutic use of a product was relevant to infringement of Swiss-type claims.[16] Accordingly, Mylan appears to establish that intent is indeed relevant to infringement of Swiss-type claims. However, the question of how to determine intent, in particular whether an objective or subjective approach should be used,[17] remains open. The outcome of the Full Federal Court appeal is expected to provide further guidance in this respect.

Summary

As at writing, precedent is available in Australia for several significant issues relating to Swiss-type claims. Critically, there appears to be agreement among all decisions issued that Swiss-type claims can be validly included within Australian patents; that these claims should be construed as method or process claims; and that the therapeutic use recited in a Swiss-type claim can confer novelty.

It has also been confirmed, in Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94, that the scope of a Swiss-type claim will differ from that of a corresponding method of medical treatment claim. Relevantly, at least in respect of third party offers to supply products after the expiry date of a patent, Swiss-type claims can offer broader protection than method of medical treatment claims.

The potential for Swiss-type claims to be relied upon for pharmaceutical patent extension has also been judicially assessed, in Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129. It has been clearly established that such extensions cannot be obtained on the basis of Swiss-type claims, regardless of whether an active agent used in manufacture of the therapeutic composition is produced using recombinant DNA technology.

Furthermore, Apotex v ICOS Corporation (No 3) [2018] FCA 1204 has provided clarification that infringement of Swiss-type claims of an Australian patent does not necessarily require manufacture in Australia. This is of substantial practical consequence given that pharmaceutical products are commonly imported into Australia after manufacture overseas.

Finally, Mylan Health (formerly BGP) v Sun Pharma (formerly Ranbaxy) [2019] FCA 28 provides initial precedent establishing that infringement of Swiss-type claims requires relevant intent on behalf of a manufacturer in relation to therapeutic use of a manufactured product. The outcome of an appeal from this decision is expected to further clarify how intent is to be established, i.e., using subjective and/or objective approaches.

Of course, there will remain some uncertainty regarding the proper judicial approach to Swiss-type claims in Australia absent determinations by the High Court. Nevertheless, decisions issued over the last five years have vastly increased the available judicial precedent in this area of patent law.

[1] Official Journal of the European Patent Office (1984) 11: 581-584.
[2] See, EPO Guidelines for Examination G-VI, 7.1.
[3] Or 2036 under Supplementary Protection Certificate provisions.
[4] Including the UK Supreme Court decision in Warner Lambert Company LLC v Generics (UK) Ltd t/a Mylan and another [2018] UKSC 56.
[5] Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50. As are claims to therapeutics in ‘when used’ format, which have essentially the same scope as method claims, see Wellcome Foundation Ltd v Commissioner of Patents (1980) 145 CLR 520.
[6] With no useful distinction existing between the descriptors “method” and “process”, in the context of patent claiming. Otsuka at [120].
[7] Ibid at [172].
[8] Ibid.
[9] Warner-Lambert Company, LLC v Actavis Group Ptc EHF & Others [2015] EWHC 72.
[10] Re AbbVie Biotechnology Ltd v Commissioner of Patents [2016] AATA 682.
[11] Mylan at [102].
[12] Ibid.
[13] Ibid at [103].
[14] Warner Lambert at [84].
[15] Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (No 2) [2019] FCA 505.
[16] Ibid at [86].
[17] And any relevance of “outward presentation” as per 14, above, in this context.

* Dr. Fitzgerald is a Senior Registered Patent & Trade Marks Attorney with IP Gateway Patent and Trade Mark Attorneys.

** Mr. Finney is a Senior Associate of Bennett & Philp Lawyers.
Dr. Falk Pharma GmbH v. Generico, LLC (Fed. Cir. 2019)

July 30, 2019

By Kevin E. Noonan —

The interplay (or perhaps utilization) of inter partes review (IPR) in ANDA litigation was illustrated by the Federal Circuit in last month's Dr. Falk Pharma GmbH v. Generico, LLC nonprecedential decision.

The case arose over U.S. Patent No. 8,865,688 owned by Dr. Falk Pharma GmbH and exclusively licensed to Salix. The claimed invention relates to a method for treating ulcerative colitis using extended-release, granulated mesalamine formulations, sold by Salix as 375 mg capsules under the brand name Apriso®. The claimed method addressed known deficiencies in the art, particularly premature release of mesalamine, which prevented the drug from reaching the colon where it must act.

Claim 1 of the '688 patent is representative:

1. A method of maintaining the remission of ulcerative colitis in a subject comprising
    administering to the subject a granulated mesalamine formulation comprising four capsules each comprising 0.375 g of granulated mesalamine once per day in the morning, without food, wherein:
    said method maintains remission of ulcerative colitis in a subject for a period of at least 6 months of treatment;
    remission is defined as a DAI score of 0 or 1;
    the granulated mesalamine formulation is not administered with antacids; and
    wherein 85% to 90% of the mesalamine reaches the terminal ileum and colon.

Generico, LLC; Flat Line Capital LLC; and Mylan Pharmaceuticals Inc. each successfully petitioned for inter partes review of the '688 patent. Before the Patent Trial and Appeal Board (PTAB), Mylan, Generico, and Flat Line Capital LLC argued that the claims of the '688 patent were obvious over two separate press releases by Salix and a scientific journal reference, in view of either of two other scientific journal references.

In parallel litigation, Mylan filed its ANDA having a Paragraph IV certification and Salix filed suit; the District Court dismissed without prejudice Defendants' affirmative defenses and counterclaims in favor of the outcome of the IPR before the PTAB.

In the IPR, the PTAB in a Final Written Decision determined that claims 1 and 16 were invalid for obviousness. The PTAB construed the claim language, wherein the first ("administering to the subject a granulated mesalamine formulation comprising four capsules each comprising 0.375 g of granulated mesalamine once per day in the morning, without food") and fourth ("the granulated mesalamine formulation is not administered with antacids") limitations recited steps in the method while the other limitations ("said method maintains remission of ulcerative colitis in a subject for a period of at least 6 months of treatment"; "remission is defined as a DAI score of 0 or 1"; and "wherein 85% to 90% of the mesalamine reaches the terminal ileum and colon") recited the results of the practice of the method.

Important to the PTAB's decision, the specification expressly defined "the DAI score":

Ulcerative colitis disease activity was assessed using a modified Sutherland Disease Activity Index1 (DAI), which is a sum of four subscores based on stool frequency, rectal bleeding, mucosal appearance on endoscopy, and physician's rating of disease activity. Each subscore can range from 0 to 3, for a total possible DAI score of 12.

The asserted prior art taught the following:

• Press release: Salix's own announcement regarding successful Phase III results with their mesalamine formulations

• "Endonurse": another Salix press release regarding successful Phase III trial results

• Davis: an academic paper showing that the presence of food in the stomach can increase acid and retard release from stomach, compromising mesalamine delivery to colon

• Marakhouski: another academic paper comparing pellets vs tablet administration of 5-acetylsalacylic acid, and that pellets are more advantageous

• Brunner: similar disclosure showing pellets advantageous over tablets

The PTAB found the claims obvious in view of this prior art, considering Marakhouski as the primary reference, based on construction of the term "DAI score" to mean "remission is defined as a DAI score of 0 or 1, where the DAI score is a sum of four subscores." As explained by the Federal Circuit:

Specifically, the Board found that a skilled artisan would have been motivated to combine the method of the September 2007 Press Release and Endonurse with the teachings of either Marakhouski or Brunner that the granulated mesalamine formulation could be administered without food. The Board cited as its rationale the fact that all four prior art references pertain to the same or similar granulated mesalamine formulation for treatment of the same disease and because Marakhouski and Brunner teach that an advantage of a granulated mesalamine formulation is the ability to administer the drug independent of food.

The PTAB also found the required reasonable expectation of success from Salix's press releases, wherein the absence of teaching that the drug must be administered with food was interpreted to support the claim term affirmative requiring that the drug not be administered with food; this conclusion was also supported by other asserted art (Davis) and expert testimony. The Board also rejected Dr. Falk's contention that the art was deficient for not teaching a comparative food study, i.e, comparing the results of administration of mesalamine with and without food. Finally, the Board rejected Dr. Falk's assertion of objective indicia of non-obviousness, characterizing this evidence as Salix's own failures which did not satisfy the "failure of others" secondary consideration.

In the parallel litigation, the District Court construed the term "wherein 85% to 90% of the mesalamine formulation reaches the terminal ileum and colon" to provide both lower and upper limits on delivery percentages and found noninfringement based on the delivery performance of Mylan's generic drug and whether its formulation was a granulated mesalamine formulation.

The Federal Circuit affirmed the PTAB's obviousness determination in the IPR and vacated as moot the District Court decision (and thus did not reach the correctness of the District Court's noninfringement determination), in an opinion by Judge O'Malley, joined by Judges Lourie and Reyna.

Regarding the PTAB, the Court held that the Board correctly construed the DAI score limitation based on the express definition in the specification, using either the broadest reasonable interpretation test or the Phillips v. AWH test. This conclusion was also supported by the patentee conceding that the DAI score was "ordinarily understood" to be the sum of four subscores. In addition, the opinion notes that in patentee's specification, "when the DAI score was identified as being the sum of only two subscores [in the '688 specification] it was called a 'revised Sutherland Disease Activity Index' which is not a term used in the claims." (This raises the possibility that Dr. Falk could file a narrowing reissue to amend the claims for validity, but the PTO might correctly determine that such an amendment would be broadening rather than narrowing.)

Turning to the "without food" limitation, the Federal Circuit disagreed with Dr. Falk's contention that in this case the PTAB had changed the basis for its obviousness determination from institution to final written decision, contrary to SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016). Here, the Court explained that what was prohibited was failing to give a patentee the opportunity to address the "new" grounds for the Board's decision. This was not the case here, in the Federal Circuit's opinion, because Dr. Falk (in the Court's view) had sufficient notice and opportunity and did in fact address the question of whether drug administration without a "food effect" was recognized in the prior art (where the food effect is "that taking the formulation without food is preferable to taking it with food"). The panel also held that the skilled worker had a reasonable expectation of success of achieving the invention set forth in the claims (requiring that the patient not take food) even without the art teaching this feature (typically by containing a "food effect" study), based on "other rationales" for avoiding food, not specified in the opinion.

Finally, the Court also affirmed the PTAB conclusion that, despite there being an affirmative limitation that administration occur "without food" the art did not need a food study to establish this effect because the specification taught that the formulation could be administered with or without food, and that the Board correctly did not find its obviousness conclusion contradicted by the asserted secondary considerations.

This outcome shows that even under circumstances where the district court conducts a trial on infringement under 35 U.S.C. § 271(e)(2), an ANDA defendant can benefit by moving its invalidity case to the PTAB and avoid the cost of putting on affirmative defenses and counterclaims before a lay judge not having the PTAB's purported expertise (or apparent anti-patent bias).

Dr. Falk Pharma GmbH v. Generico, LLC (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Circuit Judges Lourie, O'Malley, and Reyna
Opinion by Circuit Judge O'Malley

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