Patent Docs

Webinar on Paragraph IV Litigation and IPRs

March 10, 2018

Strafford will be offering a webinar entitled "Paragraph IV Litigation and IPRs — Interplay Between Paragraph IV Litigation and IPRs, Multiple Generic Challengers, Key Issues in IPRs" on April 5, 2018 from 1:00 to 2:30 pm (EDT). Erin M. Dunston, Matthew L. Fedowitz, and Mythili Markowski of Buchanan Ingersoll & Rooney will discuss strategies for using IPRs in relation to Hatch-Waxman litigation, how pharmaceutical patents fare in post-grant challenges in comparison to all patents, and what the crucial issues are in post-grant challenges involving pharmaceutical patents. The webinar will review the following issues:

• Where do multiple generic challengers fit into the exclusivity scheme?
• How do pharma patents and CDER-listed biologic patents fare in post-grant challenges in comparison to all patents?
• What are the crucial issues in post-grant challenges involving pharma or biologics patents?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
FCBA Program on IPR Estoppel

March 10, 2018

The Federal Circuit Bar Association (FCBA) will be offering a program on "The Evolving Scope of IPR Estoppel" on March 29, 2018 from 1:00 pm to 2:00 pm (EST) at the FCBA office in Washington, DC. Eldora Ellison of Sterne Kessler Goldstein & Fox, PLLC will moderate a panel consisting of Brian Walsh of Bristol-Myers Squibb Company, Andrew Trask of Google LLC, and Jonathan Strang of Latham & Watkins LLP. The panel will provide an overview of the current state of estoppels following IPRs, and also consider the impact that the evolution of the application of the AIA's estoppel provisions has had on patent owners and petitioners.

The program is complimentary for FCBA members and $50 (government/academic/retired) or $125 (private practitioner) for non-members. Those interested in registering for the webcast, can do so here.
Webinar on Opinions of Counsel

March 10, 2018

Strafford will be offering a webinar entitled "Patent Infringement: Structuring Opinions of Counsel — Leveraging Opinion Letters to Reduce the Risks of Liability and Enhanced Damages" on March 28, 2018 from 1:00 to 2:30 pm (EDT). Thomas J. Scott, Jr., Senior Vice President and General Counsel, Personalized Media Communications; April E. Weisbruch of Sheppard Mullin Richter & Hampton; and Eleanor M. Yost of Carlton Fields Jorden Burt will provide patent counsel with an analysis of the evolving role of attorney opinions in the defense of patent infringement claims and the potential use of written opinions of counsel, and also discuss the issue of waiver of the attorney-client privilege and provide best practices for developing opinions of counsel. The webinar will review the following issues:

• What is the practical impact of recent decisions on utilizing opinions of counsel in defense of willful infringement and induced infringement claims?
• How does the “totality of the circumstances” standard impact legal advice on proactive clearance analysis for product planning and strategic portfolio development?
• Under what circumstances should corporate counsel seek outside opinions of counsel to protect their client from infringement claims?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
IPO Webinar on Waymo v. Uber

March 10, 2018

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Waymo v. Uber: DTSA Test Tube" on March 15, 2018 from 2:00 to 3:00 pm (ET). Diane Danoff of Dechert LLP; James Pooley of James Pooley, PLC; and Barbara Reeves of JAMS will examine the recently-settled trade secret action Waymo v. Uber as a test case for the new federal trade secret law, the DTSA, and also analyze other recent cases in other federal courts, illustrating how the risks of using the DTSA to bring suit compares to the benefits. The panel will discuss how:

• Federal judges have been making rigorous demands for specificity of TS description, both at the pleading stage and at the gateway to discovery.
• Federal courts are more likely than state courts to challenge experts and theories of harm.

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.
Webcast on Apportionment in Patent Damages

March 10, 2018

The Knowledge Group will offer a webcast entitled "Apportionment in Patent Damages: What You Need to Know and Do" on March 13, 2018 from 12:00 to 1:00 pm (ET). John Jarosz of Analysis Group, Inc., Daniel M. McGavock of Charles River Associates, and John Scalf of NERA Economic Consulting will provide attendees with the latest updates regarding apportionment of damages in patent infringements, and also offer helpful insights and tips for patent owners faced with the same case. Key topics to be addressed by the webcast include:

• Damages Apportionment in Patent Cases
• Apportionment Requirements set by the Federal Circuit
• Most Notable Court Decisions
• Latest Trends and Developments
• Practical Tips for Patent Owners

The registration fee for the webcast is $49. Those interested in registering for the webinar can do so here.
Promega Corp. v. Life Technologies Corp. (Fed. Cir. 2017)

March 8, 2018

By Donald Zuhn –-

At about this time last year, the Supreme Court reversed the Federal Circuit's determination that there are circumstances in which a party may be liable for infringement under 35 U.S.C. § 271(f)(1) for supplying or causing to be supplied a single component of a patented combination outside the United States (see "Life Technologies Corp. v. Promega Corp. (2017)"). This past November, the dispute between Promega Corp. and Life Technologies Corp. returned to the Federal Circuit on remand, with the Federal Circuit affirming the District Court's grant of judgment as a matter of law (JMOL) to Life Technologies and the District Court's denial of Promega's motion for a new trial.

The dispute between the two companies began in 2010 when Promega sued Life Technologies for infringement of U.S. Patent No. RE37,984 ("the Tautz patent") (as well as four other patents owned by Promega), alleging that Life Technologies had sold genetic testing kits that were not covered by a license agreement between the parties. The Tautz patent, which is owned by Max-Planck-Gesellschaft zur Förderung der Wissenschaften E.V. and exclusively licensed to Promega, claims a kit for testing at least one STR locus that contains: (1) a mixture of primers; (2) a polymerizing enzyme such as Taq polymerase; (3) nucleotides for forming replicated strands of DNA; (4) a buffer solution for the amplification; and (5) control DNA. Life Technologies manufactures genetic testing kits that provide components for carrying out a multiplex amplification of STR loci from DNA samples, wherein the kits contain (1) a primer mix; (2) Taq polymerase; (3) PCR reaction mix including nucleotides; (4) a buffer solution; and (5) control DNA. At trial, the parties moved for summary judgment on infringement and invalidity, with the District Court determining that Life Technologies' sales outside the license agreement's field of use were infringing. Following trial, the jury returned a verdict of willful infringement. Life Technologies then moved for judgment as a matter of law (JMOL) of noninfringement, and the District Court granted the motion, finding that Promega had failed to present sufficient evidence to sustain a jury verdict under § 271(f)(1), and the Court vacated the finding of infringement.

On appeal, the Federal Circuit determined in Promega Corp. v. Life Technologies Corp. ("Promega I") that substantial evidence supported a jury's finding that Life Technologies infringed the Tautz patent under § 271(f)(1), and therefore reversed the District Court's grant of JMOL of noninfringement. The panel was divided as to the finding of infringement under § 271(f)(1), but the divide centered on another aspect of the statute. With regard to the issue of whether infringement under § 271(f)(1) requires that at least two components be supplied from the U.S., the Federal Circuit held "that there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States," and "based on the facts of this particular case . . . conclude[d] that substantial evidence supports the jury's verdict that LifeTech is liable for infringement under § 271(f)(1) for shipping the Taq polymerase component of its accused genetic testing kits to its United Kingdom facility."

In reversing the Federal Circuit and remanding the case, the Supreme Court, in Life Technologies Corp. v. Promega Corp., determined "that a single component does not constitute a substantial portion of the components that can give rise to liability under §271(f)(1)." As the Supreme Court noted, Life Technologies manufactured all but one component of its kits in the United Kingdom — manufacturing Taq polymerase in the United States and then shipping the Taq polymerase to its United Kingdom facility to be combined with the other four components of the kit.

On remand, the Federal Circuit noted that the Supreme Court's opinion required the Federal Circuit to reconsider two of its prior holdings: (1) its reversal of the District Court's grant of Life Technologies' motion for JMOL that Promega had failed to prove its infringement case under 35 U.S.C. §§ 271(a)3 and 271(f)(1), and (2) its vacatur of the District Court's denial of Promega's motion for a new trial on damages and infringement. In reconsidering these holdings, the panel first looked to the procedural history before the District Court, noting that the District Court did not decide how many of Life Technologies' kits, which were all assembled abroad, had been sold, offered for sale, or imported into the United States (i.e., were infringing under § 271(a)) or included a substantial portion of their respective components that were supplied from the United States (i.e., were infringing under § 271(f)(1)). In addition, while the parties stipulated at trial that Life Technologies' total worldwide sales of the accused products during the pertinent time period amounted to $707,618,247, a dispute arose with respect to the effect of this stipulation. In particular, Promega and Life Technologies disagreed as to whether Promega needed to separately quantify domestic and foreign sales. Ultimately, the District Court determined that Promega needed to prove the amount of damages attributable to infringement under § 271(a) and the amount of damages attributable to infringement under § 271(f)(1), and the Court provided Promega with a second chance to meet its burden by presenting evidence of infringing sales in its rebuttal case.

In its rebuttal case, Promega presented additional evidence of infringement, but did not present evidence or elicit testimony intended to prove a specific amount of domestic, foreign, or any other subset of total sales, relying instead on the stipulated worldwide sales figure as a potential damages base. In addition, in its proposed special verdict form, Promega sought to have the jury calculate a single damages amount rather than separate damages numbers under § 271(a) and § 271(f)(1). The jury subsequently found that all of Life Technologies' worldwide damages qualified as U.S. sales, and further, that all of Life Technologies' unlicensed sales infringed Promega's asserted patents under § 271(a) and/or § 271(f)(1).

After trial, Life Technologies filed a renewed JMOL motion, arguing that Promega was entitled to no damages because, inter alia, it had failed to present adequate evidence of an amount of infringing sales under either § 271(a) or § 271(f)(1). Promega countered that the damages verdict should stand because all of the accused products infringed under § 271(f)(1) (since all of the products included Taq polymerase, which qualified as a "substantial portion" of each of the accused products) and all of the accused products also infringed under § 271(a). The District Court granted Life Technologies' JMOL motion, holding that no reasonable jury could have found that all of the accused products infringed under § 271(a) or § 271(f)(1), and finding that Promega had waived any argument that the trial record could support a damages calculation based on an amount other than worldwide sales. The District Court also denied Promega's motion for a new trial, reiterating that Promega had waived any argument based on a subset of worldwide sales by failing to respond to Life Technologies' argument on this issue in its JMOL briefing.

Following the Supreme Court's remand, the parties submitted statements to the Federal Circuit as to how the Court should proceed post-remand. Life Technologies argued that the Federal Circuit should affirm the District Court's post-trial decisions, contending that "[t]he trial judge with her 'first-hand knowledge of witnesses, testimony, and issues' simply held Promega to its own considered strategic litigation decisions, and appropriately denied Promega's retrial request." Promega, on the other hand, argued that the Federal Circuit should reinstate the judgment of infringement under § 271(a) and order a new trial on damages, because "[t]he Seventh Amendment, the Patent Act, and precedent all require a new trial on damages under § 271(a)—not a windfall judgment of noninfringement," in view of Life Technologies' admissions that it committed infringing acts in the U.S. (the opinion indicates in a footnote that "[i]t is undisputed that Life admitted to at least some infringement," pointing out that Life Technologies "admit[ed] at trial that there had been 'an infringement' and that Promega was 'entitled to be compensated for that infringement'").

The Federal Circuit began its discussion of the case by noting that Promega had expressly waived its right to any award based on a reasonable royalty, and instead only sought damages in the form of lost profits. The opinion explains that:

The linchpin of the district court's rulings on Life's JMOL motion and Promega's motion for a new trial is its finding that Promega waived any argument that the trial record supports a damages calculation based on a subset of Life's total worldwide sales. In Promega I, we held that all of the accused products infringed under § 271(f)(1) and that the jury's damages verdict—based on total sales—was supported by substantial evidence. It was therefore unnecessary for us to address the district court's waiver finding. However, now that it is undisputed that certain of the accused kits did not infringe under the Supreme Court's interpretation of § 271(f)(1)—specifically, kits containing only one component supplied from the United States that were assembled and sold overseas to foreign buyers without ever passing through the United States—we must address the district court's waiver finding [citations omitted].

With respect to the District Court's waiver finding, the Federal Circuit determined, after looking at the procedural history of the case before the District Court, that:

In the instant case, the district court could properly conclude that Promega abandoned any alternative damages base when it failed to rebut Life's argument in its Rule 50(b) motion that Promega did not present evidence that a reasonable jury could have relied on to award damages based on any subset of total worldwide sales. The district court's decision was all the more reasonable given that it warned Promega during trial that it bore the burden to separately prove infringement under § 271(a) and § 271(f)(1).

In affirming the District Court's grant of JMOL to Life Technologies, the Federal Circuit noted that:

Promega argues, and Life does not dispute, that the record contains evidence of admitted infringement by Life under § 271(a). It further argues that we should reaffirm our prior decision on § 271(a) infringement and order a new trial on damages. In Promega I, we held that an unspecified number of Life's accused products infringed the Tautz patent under § 271(a). We made no finding regarding the quantity of infringing acts under § 271(a), because such a finding was unnecessary in light of our holding that all of the accused products infringed under § 271(f)(1). Now that our holding under § 271(f)(1) has been reversed by the Supreme Court, and in view of the waiver finding discussed, supra, the only way Promega could preserve the jury's damages verdict is by showing that the record supports a finding that all of Life's accused products that did not infringe under § 271(f)(1) infringed under § 271(a). Promega has failed to make this showing [citations omitted].

The opinion explains that "[t]his is a case where there was a finding of waiver that carried forward as law of the case to subsequent proceedings in the litigation," adding that "[t]he nature of the waiver under the circumstances of this case had the effect of limiting the trial evidence on damages to only the parties' stipulated worldwide sales figure." And "[b]ecause there was insufficient evidence to show that all worldwide sales infringed under § 271(a) or § 271(f)(1)," the Federal Circuit concluded that "there was no evidence to support a lost profits damages calculation under the narrow damages theory Promega crafted over the course of litigation." As a result, the panel affirmed the District Court's grant of JMOL to Life Technologies.

With respect to Promega's motion for a new trial, the Federal Circuit determined that "[u]nder the law of the case doctrine, the district court properly exercised its discretion by relying on its waiver finding from its JMOL ruling to support its decision to deny Promega's motion for a new trial." The panel explained that:

If Promega wanted to argue that the evidence at trial supported a damages calculation based on anything other than worldwide sales, it should have raised such an argument at trial and in response to Life's Rule 50(b) motion, which specifically attacked Promega's damages case on that very ground. Promega did not, choosing instead to continue to solely pursue an all-or-nothing damages strategy. Moreover, the district court afforded Promega a second opportunity to supplement the record and present evidence broken out by statutory subsection and quantity. Yet Promega declined to use this opportunity to prove any lesser damages amount [citations omitted].

The panel also noted that:

The only relevant law affecting the outcome in this case that was addressed by the Supreme Court was the "substantial portion" provision of § 271(f)(1). No law stood in the way of Promega's proving liability and damages separately under § 271(a), and Promega's reading of § 271(f)(1) was untested. Indeed, the district court itself ultimately rejected Promega's interpretation of § 271(f)(1), and so did the Supreme Court. And, from the time the district court gave Promega a second chance to put in evidence at trial to prove liability separately under § 271(a) and § 271(f)(1), Promega was on notice that its untested interpretation of § 271(f)(1) might not prevail. But Promega nonetheless declined to use its opportunity to establish entitlement to an alternative, smaller damages award.

The opinion conceded that "[t]his is an unusual case," noting that "[p]atent owners who prove infringement are typically awarded at least some amount of damages." However, in this case, Promega waived its right to a damages award "when it deliberately abandon[ed] valid theories of recovery in a singular pursuit of an ultimately invalid damages theory." The Federal Circuit therefore concluded that the District Court did not abuse its discretion by declining to give Promega "multiple chances to correct deficiencies in its arguments or the record." As a result, the panel also affirmed the District Court's denial of Promega's motion for a new trial.

Promega Corp. v. Life Technologies Corp. (Fed. Cir. 2017)
Panel: Chief Judge Prost and Circuit Judges Mayer and Chen
Opinion by Circuit Judge Chen
Comprehensive and Progressive Agreement for Trans-Pacific Partnership May Differ Significantly from TPP

March 7, 2018

By Kevin E. Noonan —

In the wake of President Trump's decision to withdraw from the Trans-Pacific Partnership (see "Why President Trump Is Wrong about Trans-Pacific Partnership Agreement"), the other countries involved in negotiations (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) agreed to continue to implement the treaty without U.S. involvement (see "Trans-Pacific Partnership Becoming a Reality").

But while it is likely that the treaty will come into effect among at least some countries, under the name the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP, the parties recently released the results of further negotiations that have in significant ways changed the agreement from what it was before the U.S. withdrew. For example, Article 5 provides that, "[a]fter the date of entry into force of this Agreement, any State or separate customs territory may accede to this Agreement, subject to such terms and conditions as may be agreed between the Parties and that State or separate customs territory," suggesting that the parties have contemplated other countries, such as China, may be interested in acceding to the treaties terms (and indeed this eventuality may be desired). And while Article 1 incorporates the terms of the TPP into this agreement, Article 2 provides that certain provisions of the agreement shall be suspended until such time as the signatories agree to end the suspension.

While there are many suspended provisions, certain of them relating to intellectual property of greater or lesser significance. For example, with regard to Article 18.8: National Treatment:

1. In respect of all categories of intellectual property covered in this Chapter 3 each Party shall accord to nationals of another Party treatment no less favourable than it accords to its own nationals with regard to the protection4 of intellectual property rights.

2. With respect to secondary uses of phonograms by means of analog communications and free over-the-air broadcasting, however, a Party may limit the rights of the performers and producers of another Party to the rights its persons are accorded within the jurisdiction of that other Party.

3. A Party may derogate from paragraph 1 in relation to its judicial and administrative procedures, including requiring a national of another Party to designate an address for service of process in its territory, or to appoint an agent in its territory, provided that such derogation is:
    (a) necessary to secure compliance with laws or regulations that are not inconsistent with this Chapter; and
    (b) not applied in a manner that would constitute a disguised restriction on trade.

4. Paragraph 1 does not apply to procedures provided in multilateral agreements concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.

________________

3 For greater certainty, with respect to copyrights and related rights that are not covered under Section H (Copyright and Related Rights), nothing in this Agreement limits a Party from taking an otherwise permissible derogation from national treatment with respect to those rights.

4 For the purposes of this paragraph, "protection" shall include matters affecting the availability, acquisition, scope, maintenance and enforcement of intellectual property rights as well as matters affecting the use of intellectual property rights specifically covered by this Chapter. Further, for the purposes of this paragraph, "protection" also includes the prohibition on the circumvention of effective technological measures set out in Article 18.68 (TPMs) and the provisions concerning rights management information set out in Article 18.69 (RMI). [For greater certainty, "matters affecting the use of intellectual property rights specifically covered by this Chapter" in respect of works, performances and phonograms, include any form of payment, such as licensing fees, royalties, equitable remuneration, or levies, in respect of uses that fall under the copyright and related rights in this Chapter. The preceding sentence is without prejudice to a Party's interpretation of "matters affecting the use of intellectual property rights" in footnote 3 of the TRIPS Agreement.]

only the last two sentences of Footnote 4 are suspended (denoted by brackets), whereas for Article 18.37: Patentable Subject Matter:

Article 18.37: Patentable Subject Matter

1. Subject to paragraphs 3 and 4, each Party shall make patents available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step and is capable of industrial application.³⁰

[2. Subject to paragraphs 3 and 4 and consistent with paragraph 1, each Party confirms that patents are available for inventions claimed as at least one of the following: new uses of a known product, new methods of using a known product, or new processes of using a known product. A Party may limit those new processes to those that do not claim the use of the product as such.]

3. A Party may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to nature or the environment, provided that such exclusion is not made merely because the exploitation is prohibited by its law. A Party may also exclude from patentability:
    (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
    (b) animals other than microorganisms, and essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes.

4. A Party may also exclude from patentability plants other than microorganisms. [However, consistent with paragraph 1 and subject to paragraph 3, each Party confirms that patents are available at least for inventions that are derived from plants.]

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30 For the purposes of this Section, a Party may deem the terms "inventive step" and "capable of industrial application" to be synonymous with the terms "non-obvious" and "useful", respectively. In determinations regarding inventive step, or non-obviousness, each Party shall consider whether the claimed invention would have been obvious to a person skilled, or having ordinary skill in the art, having regard to the prior art.

the entirety of Paragraph 2 (relating to new uses of prior art compounds) and the last sentence of Paragraph 4 (relating to inventions derived from plants) are suspended, consistent with concerns in several signatory countries regarding these types of claims. The entirety of Article 18.46: Patent Term Adjustment for Unreasonable Granting Authority Delays and Article 18.48: Patent Term Adjustment for Unreasonable Curtailment are suspended, thereby removing provisions akin to Patent Term Adjustment/Extension under U.S. law and in particular recognizing the importance of such delays for pharmaceutical products:

[Article 18.46: Patent Term Adjustment for Unreasonable Granting Authority Delays

1. Each Party shall make best efforts to process patent applications in an efficient and timely manner, with a view to avoiding unreasonable or unnecessary delays.

2. A Party may provide procedures for a patent applicant to request to expedite the examination of its patent application.

3. If there are unreasonable delays in a Party's issuance of patents, that Party shall provide the means to, and at the request of the patent owner shall, adjust the term of the patent to compensate for such delays.³⁶

4. For the purposes of this Article, an unreasonable delay at least shall include a delay in the issuance of a patent of more than five years from the date of filing of the application in the territory of the Party, or three years after a request for examination of the application has been made, whichever is later. A Party may exclude, from the determination of such delays, periods of time that do not occur during the processing³⁷ of, or the examination of, the patent application by the granting authority; periods of time that are not directly attributable³⁸ to the granting authority; as well as periods of time that are attributable to the patent applicant.³⁹]

36 Annex 18-D applies to this paragraph.

37 For the purposes of this paragraph, a Party may interpret processing to mean initial administrative processing and administrative processing at the time of grant.

38 A Party may treat delays "that are not directly attributable to the granting authority" as delays that are outside the direction or control of the granting authority.

39 Notwithstanding Article 18.10 (Application of Chapter to Existing Subject Matter and Prior Acts), this Article shall apply to all patent applications filed after the date of entry into force of this Agreement for that Party, or the date two years after the signing of this Agreement, whichever is later for that Party.

[Article 18.48: Patent Term Adjustment for Unreasonable Curtailment

1. Each Party shall make best efforts to process applications for marketing approval of pharmaceutical products in an efficient and timely manner, with a view to avoiding unreasonable or unnecessary delays.

2. With respect to a pharmaceutical product⁴⁵ that is subject to a patent, each Party shall make available an adjustment⁴⁶ of the patent term to compensate the patent owner for unreasonable curtailment of the effective patent term as a result of the marketing approval process.^47,48

3. For greater certainty, in implementing the obligations of this Article, each Party may provide for conditions and limitations, provided that the Party continues to give effect to this Article.

4. With the objective of avoiding unreasonable curtailment of the effective patent term, a Party may adopt or maintain procedures that expedite the processing of marketing approval applications.]

46 For greater certainty, a Party may alternatively make available a period of additional sui generis protection to compensate for unreasonable curtailment of the effective patent term as a result of the marketing approval process. The sui generis protection shall confer the rights conferred by the patent, subject to any conditions and limitations pursuant to paragraph 3.

47 Notwithstanding Article 18.10 (Application of Chapter to Existing Subject Matter and Prior Acts), this Article shall apply to all applications for marketing approval filed after the date of entry into force of this Article for that Party.

48 Annex 18-D applies to this paragraph.

Similarly, all of Article 18.50: Protection of Undisclosed Test or Other Data and Article 18.52: Biologics are suspended:

Article 18.50: Protection of Undisclosed Test or Other Data⁵⁰

1. (a) If a Party requires, as a condition for granting marketing approval for a new pharmaceutical product, the submission of undisclosed test or other data concerning the safety and efficacy of the product,⁵¹ that Party shall not permit third persons, without the consent of the person that previously submitted such information, to market the same or a similar⁵² product on the basis of:
        (i) that information; or
        (ii) the marketing approval granted to the person that submitted such information, for at least five years⁵³ from the date of marketing approval of the new pharmaceutical product in the territory of the Party.
    (b) If a Party permits, as a condition of granting marketing approval for a new pharmaceutical product, the submission of evidence of prior marketing approval of the product in another territory, that Party shall not permit third persons, without the consent of a person that previously submitted such information concerning the safety and efficacy of the product, to market a same or a similar product based on evidence relating to prior marketing approval in the other territory for at least five years from the date of marketing approval of the new pharmaceutical product in the territory of that Party.⁵⁴

2. Each Party shall:⁵⁵(a) apply paragraph 1, mutatis mutandis, for a period of at least three years with respect to new clinical information submitted as required in support of a marketing approval of a previously approved pharmaceutical product covering a new indication, new formulation or new method of administration; or, alternatively,
    (b) apply paragraph 1, mutatis mutandis, for a period of at least five years to new pharmaceutical products that contain a chemical entity that has not been previously approved in that Party.⁵⁶

3. Notwithstanding paragraphs 1 and 2 and Article 18.52 (Biologics), a Party may take measures to protect public health in accordance with:
    (a) the Declaration on TRIPS and Public Health;
    (b) any waiver of any provision of the TRIPS Agreement granted by WTO Members in accordance with the WTO Agreement to implement the Declaration on TRIPS and Public Health and that is in force between the Parties; or
    (c) any amendment of the TRIPS Agreement to implement the Declaration on TRIPS and Public Health that enters into force with respect to the Parties.

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⁵⁰ Annex 18-B and Annex 18-C apply to paragraphs 1 and 2 of this Article.

⁵¹ Each Party confirms that the obligations of this Article, and Article 18.52 (Biologics) apply to cases in which the Party requires the submission of undisclosed test or other data concerning: (a) only the safety of the product, (b) only the efficacy of the product or (c) both.

⁵² For greater certainty, for the purposes of this Section, a pharmaceutical product is "similar" to a previously approved pharmaceutical product if the marketing approval, or, in the alternative, the applicant's request for such approval, of that similar pharmaceutical product is based upon the

undisclosed test or other data concerning the safety and efficacy of the previously approved pharmaceutical product, or the prior approval of that previously approved product.

⁵³ For greater certainty, a Party may limit the period of protection under paragraph 1 to five years, and the period of protection under Article 18.52.1(a) (Biologics) to eight years.

⁵⁴ Annex 18-D applies to this subparagraph.

⁵⁵ A Party that provides a period of at least eight years of protection pursuant to paragraph 1 is not required to apply paragraph 2.

⁵⁶ For the purposes of Article 18.50.2(b) (Protection of Undisclosed Test or Other Data), a Party may choose to protect only the undisclosed test or other data concerning the safety and efficacy relating to the chemical entity that has not been previously approved.

Article 18.52: Biologics⁵⁹

1. With regard to protecting new biologics, a Party shall either:
    (a) with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic,^60,61provide effective market protection through the implementation of Article 18.50.1 (Protection of Undisclosed Test or Other Data) and Article 18.50.3, mutatis mutandis, for a period of at least eight years from the date of first marketing approval of that product in that Party; or, alternatively,
    (b) with respect to the first marketing approval in a Party of a new pharmaceutical product that is or contains a biologic, provide effective market protection:
        (i) through the implementation of Article 18.50.1 (Protection of Undisclosed Test or Other Data) and Article 18.50.3, mutatismutandis, for a period of at least five years from the date of first marketing approval of that product in that Party,
        (ii) through other measures, and
        (iii) recognising that market circumstances also contribute to effective market protection.

2. For the purposes of this Section, each Party shall apply this Article to, at a minimum, a product that is, or, alternatively, contains, a protein produced using biotechnology processes, for use in human beings for the prevention, treatment, or cure of a disease or condition.

3. Recognising that international and domestic regulation of new pharmaceutical products that are or contain a biologic is in a formative stage and that market circumstances may evolve over time, the Parties shall consult after 10 years from the date of entry into force of this Agreement, or as otherwise decided by the Commission, to review the period of exclusivity provided in paragraph 1 and the scope of application provided in paragraph 2, with a view to providing effective incentives for the development of new pharmaceutical products that are or contain a biologic, as well as with a view to facilitating the timely availability of follow-on biosimilars, and to ensuring that the scope of application remains consistent with international developments regarding approval of additional categories of new pharmaceutical products that are or contain a biologic.

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⁵⁹ Annex 18-B, Annex 18-C and Annex 18-D apply to this Article.

⁶⁰ Nothing requires a Party to extend the protection of this paragraph to:

(a) any second or subsequent marketing approval of such a pharmaceutical product; or

(b) a pharmaceutical product that is or contains a previously approved biologic.

⁶¹ Each Party may provide that an applicant may request approval of a pharmaceutical product that is or contains a biologic under the procedures set forth in Article 18.50.1(a) and Article 18.50.1(b) (Protection of Undisclosed Test or Other Data) within five years of the date of entry into force of this Agreement for that Party, provided that other pharmaceutical products in the same class of products have been approved by that Party under the procedures set forth in Article 18.50.1(a) and Article 18.50.1(b) before the date of entry into force of this Agreement for that Party.

Suspension of these provisions removes many of the benefits for biotechnological and pharmaceutical inventions that were part of, and part of the attractiveness of, the TPP as negotiated by the Obama administration. While in many ways far less (and in others, for our technological and global age far more) significant than America's withdrawal from the League of Nations after World War I, these alterations of the TPP are the consequence of an abdication of American leadership on intellectual property rights that (despite occasional anomalous decisions by the Supreme Court) have been a consistent part of U.S. innovation policy for over a generation (and arguably throughout our history). Regardless of the current inclination of the present administration to espouse nationalistic rhetoric and policies, U.S. biotechnology and pharmaceutical companies live in the global community and their ability to compete in foreign markets has not been improved by suspension of these provisions of the CPTPP.
News from Abroad — Australia Remains a Gene-Patent Friendly Jurisdiction

March 5, 2018

By Grant Shoebridge* —

When the Australian High Court ruled against the patentability of isolated naturally occurring genes in the Myriad decision, a number of commentators believed that the decision would ultimately invalidate claims directed to methods involving the practical application of genes. A recent Federal Court decision, however, has confirmed that claims directed to methods involving the correlation of gene sequences to a particular trait in cattle are patent eligible subject matter in Australia.

Background

This case concerns an appeal of an unsuccessful Patent Office opposition, by Meat & Livestock Australia Limited (MLA) and Dairy Australia Limited against Australian patent application 20102022253 (the 253 Application), in the name of Branhaven LLC and Cargill, Inc., directed to animal genomics and the genetic improvement of livestock. The claims relate to methods of identifying beneficial traits in cattle using gene sequence analysis, and specifically the identification of single nucleotide polymorphisms (SNPs).

Gene-based patentable subject matter

The principal attack on the 253 Application involved arguments and evidence that the claims did not define patent eligible subject matter. At the outset, the Judge, Beach J., made it clear that the case did not merely involve the discovery of a correlation between genotype and phenotype. Rather, the Court considered this to be the starting point for the analysis rather than the finishing point in relation to determining patentability.

The submissions made by MLA relied heavily on the findings of the High Court in the Myriad decision. The Court, however, ultimately found these submissions unpersuasive on the basis that the Myriad decision centred on the patentability of claims defining isolated naturally occurring gene sequences per se rather than methods of using gene sequences. The Court therefore concluded that the reasoning of the Myriad decision did not assist MLA. In support of this conclusion, Beach J. indicated that there was no suggestion in the Myriad decision that claims to methods involving the practical application of gene sequences could be dismissed as being, in substance, patent ineligible naturally occurring genetic information.

Patent eligible subject matter under Australian law is required to be an artificially created state of affairs having economic significance. As the claims of the 253 Application cover practical applications of identifying SNPs from a bovine nucleic acid sample and their association with a trait of interest, the Court found that the claims were directed to artificial subject matter resulting from human action, rather than something that exists in nature per se. The decision also makes it clear that it is inappropriate to focus on individual elements of claims, such as SNPs and their association with a particular trait — these being naturally occurring phenomena. For these reasons the claims were found to be "within the plain vanilla concept" of patentable subject matter.

Chilling effect on innovation

MLA further submitted that the claims if granted would have a chilling effect on future research in the livestock industry in Australia contrary to the interests of the Australian public. The "chilling effect" on innovation was one of a number of "other factors" considered by the High Court in the Myriad decision as being important considerations in determining patent eligible subject matter.

In rebutting MLA's arguments, the Judge identified an Australian granted patent, listing MLA's experts as the inventors (the AV/Goddard patent) and stated that "if MLA's chilling effect point was good, then the AV/Goddard patent would be an example par excellence".

The Judge also clarified that the breadth of claims per se is not indicative of a lack of patentable subject matter. A complaint about the breadth of claims is something that arises under other grounds of invalidity, such as a lack of clarity or a failure to define the invention. The Court concluded that none of the "other factors", point against patentability — they all consistently point in one direction, namely patentability.

The misaligned Australia/US position on gene-based patentable subject matter

MLA also submitted that as a matter of coherency with US law, the claims should be held to be invalid based on a lack of patentable subject matter having regard to decisions in the US, which have rejected claims to methods of diagnosis based on discoveries or principles of nature; for example, Mayo Collaborative Services v Prometheus Laboratories, Inc. 566 U.S. 66 (2012), and Ariosa Diagnostics Inc. v Sequenom, Inc. 788 F.3d 1371 (3d Cir. 2015). These submissions were rejected by the Court for three reasons. Firstly, the Judge found that he could not determine coherency with foreign law generally by only considering cherry-picked jurisprudence from one jurisdiction. Thus, consistency with one foreign jurisdiction might produce inconsistency with another foreign jurisdiction. Secondly, the Court found it necessary to apply an evolving concept of patent eligible subject matter in the context of Australian legislation and Australian conditions, not any foreign law approach. Thirdly, the Judge pointed out that the US approach accepts that a method involving the application of a "law of nature" may be patent eligible.

Notable, Beech J said nothing in relation to the US Ariosa Diagnostics Inc. v Sequenom, Inc. decision as the corresponding Australian case has been set down before him for August 2018.

Conclusions

Ultimately, the single ground upon which MLA succeeded was that of lack of clarity. The Judge, however, provided a specific indication as to how claim 1 and analogous claims could be amended to render the claims valid. This strongly suggests that the amendments will be allowed, and the patent application granted.

The significance of this Federal Court decision is twofold. Firstly, given the nature of the claims, the 253 Application, once it is granted, may significantly impact the use of genomic analysis in the Australian livestock breeding industry. Secondly, and perhaps more importantly, the decision provides certainty in relation to the patentability of claims defining practical applications of gene sequences, including methods of genetic screening. In this regard, the decision potentially foreshadows the outcome of the Sequenom and Ariosa case, concerning the patentability of genetic testing methods.

* Grant Shoebridge, Principal, Shelston IP
American Axle & Manufacturing, Inc. v. Neapco Holdings LLC (D. Del. 2018)

March 4, 2018

Claims Directed to Attenuating Driveline Vibrations Fall Victim to Law of Nature Challenge

By James Korenchan —

In a striking recent decision from the U.S. District Court for the District of Delaware, claims of a vibration attenuation patent were deemed patent ineligible as being directed to laws of nature under 35 U.S.C. § 101 — namely, both Hooke's law and friction damping.

The Plaintiff, American Axle & Manufacturing, Inc. (AAM), charged Neapco with infringement of three of its patents. The parties filed cross-motions for summary judgment on the issue of patent eligibility under § 101 with regard to one of those patents: U.S. Patent No. 7,774,911 (the '911 patent), entitled "Method for attenuating driveline vibrations." The District Court, addressing both motions together, granted Neapco's motion.

As the title reflects, the claimed invention involves reducing vibrations transmitted through a shaft assembly of a driveline (e.g., a drivetrain of a motor vehicle), and each independent claim recites "[a] method for manufacturing" such an assembly. Examples of such vibrations include (i) bending mode vibration, which transmits energy longitudinally along the shaft and causes the shaft to bend, (ii) torsion mode vibration, which transmits energy tangentially through the shaft and causes the shaft to twist, and (iii) shell mode vibration, which transmits a standing wave circumferentially around the shaft and causes the cross-section of the shaft to deflect or bend. The '911 patent states a need in the art for a method of damping these vibrations, as they can result in tonal noise that can be heard by occupants in a vehicle. The invention thus aims to serve as the desired improvement with regard to shell mode vibrations, and also to one or both of bending mode vibrations and shell mode vibrations.

To address these vibrations, the '911 patent proposes tuning the mass and stiffness of at least one liner included in the shaft assembly. Such a liner — which could be made of cardboard, fiberglass, carbon fiber, metal, and/or other materials, and can include both a "structural portion" and "resilient member(s)" — is sized so that, when the liner is inserted into a hollow shaft member, the liner frictionally engages the inner diameter of the shaft member. The liner(s) can then be tuned in a way that causes the liner(s) to act as a tuned resistive absorber for attenuating bending mode vibrations, and also causes the liner(s) to act as a tuned reactive absorber for attenuating bending mode and/or torsion mode vibrations.

As a representative example of the asserted claims, claim 22 is reproduced below:

22. A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
    providing a hollow shaft member;
    tuning a mass and a stiffness of at least one liner; and
    inserting the at least one liner into the shaft member;
    wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.

Reviewing the cross-motions for summary judgment, the District Court applied the two-step Alice test for determining eligibility of the claims.

Regarding step 1, the laws of nature at issue were Hooke's law and friction damping. AAM did not dispute the definition of Hooke's law (F = kx), particularly, that the force (F) needed to extend or compress a spring having stiffness (k) is linearly related to a displacement (x) of the spring. Nor did AAM dispute that the frequency of vibration of an object is affected by changes in mass or stiffness of the object. And AAM's expert stated that friction damping "is a property of physics experienced by any two surfaces in contact."

Given this, Neapco insisted — and the District Court agreed — that, in order to tune the liner(s) as recited in the asserted claims, one only needs to apply Hooke's law, adjust the mass and stiffness of the liner(s), and then measure how much damping results to the frequency of vibration. As one might expect, AAM argued in response that the asserted claims are not directed to a law of nature, but rather to an industrial process for manufacturing parts of a motor vehicle. But the District Court was not convinced, and concluded that, when considered as a whole, the asserted claims "are applications of Hooke's law with the result of friction damping," and "fail to instruct how to design the tuned liners or manufacture the driveline system to attenuate vibrations."

While these principles of physics are of course well-known, it is troubling here that this conclusion does not appear to give proper consideration to what the asserted claims are "directed to" in accordance with § 101. Viewed as a whole, the claims do not appear to risk preempting others from using Hooke's law and friction damping, and AAM does not appear to be attempting to patent these principles. On the other hand, it would seem overly optimistic to assume that the presence of various driveline components would side against preemption and elevate the claims as a whole to a level of patent eligibility.

But as we've seen before from other courts, the District Court's analysis obfuscates the considerations needed to determine whether claims survive step 1 and the Alice framework as a whole. The District Court addressed the issue of preemption in a section separate from step 1 and, in line with the Federal Circuit's view in Ariosa, deemed the issue to be moot based on the conclusion that the claims only disclose patent ineligible subject matter. And despite concluding at step 1 that the claims are "applications" of known laws of nature, the District Court reached the ultimate conclusion under § 101 that the claims are "directed to" those laws of nature.

Turning to step 2, the District Court began by setting out the groundwork laid by the past decisions in Diehr, Mayo, Flook, and Ariosa. The District Court was then quick to note the recent Federal Circuit standard in Berkheimer v. HP Inc. (Fed. Cir. 2018) — namely, that the patent eligibility inquiry, which is a question of law, may also involve issues of fact, and that a factual dispute regarding whether the invention describes well-understood, routine, and conventional activities can preclude summary judgment on the issue of § 101. Building off this point, the District Court went on to state, in a conclusory fashion:

But here the record reveals no genuine disputes of material fact. The parties here do not dispute that the non-tuning claim limitations are well-understood, routine, and conventional. Nor is there any genuine dispute of material fact that the tuning limitations are non-inventive applications of Hooke's law. Thus, "this issue can be decided on summary judgment as a matter of law." [citation omitted]

In an attempt to distinguish from Mayo, AAM asserted that two of the elements recited in its claim are new and inventive. The District Court was not convinced.

The first of these elements is the concept of tuning the mass and stiffness of a liner, which was construed as "controlling a mass and stiffness . . . to configure the liner to match a relevant frequency or frequencies." AAM insisted that nowhere in the prior art were there attempts to tune liners in drive shafts to target certain frequencies/modes in the way this element suggests, but the District Court agreed with Neapco that controlling these liner characteristics amounted to nothing more than an inherent design choice of applying Hooke's law.

The second element AAM argued to be inventive is the concept of having the liner(s) tuned specifically to target shell mode and bending mode vibrations. The District Court dismissed this argument as well, stating that this element merely recites "the result that is achieved from performing the method rather than an active step in the method." (However, the remainder of the District Court's reasoning under the Alice test suggests that it would have struck down the claims regardless of whether such an active step was present.)

The District Court went on to again refer to the "non-tuning" claim limitations (i.e., inserting liners into propshafts) in comparing the asserted claims with Mayo:

In sum, as in Mayo, 566 U.S. at 79-80, the Asserted Claims "inform a relevant audience [NVH engineers] about certain laws of nature [Hooke's law and friction damping]; any additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community [inserting liners with certain characteristics into propshafts to attenuate driveline vibrations]; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately [having the same, but potentially slightly improved, effect of attenuating certain frequencies and modes of driveline vibrations]." Hence, as in Mayo, the Asserted Claims here are not patent-eligible.

The District Court then wrapped up its step 2 discussion with reasoning reminiscent of its reasoning under step 1. In particular, the District Court agreed with Neapco that the claims did not include any discrete liner or shaft design, and instead merely instruct one to apply the laws of physics to solve a problem.

Before stating its final conclusion, the District Court in two short sections quickly addressed preemption as stated above and dismissed the notion that the claims were eligible under the machine-or-transformation test.

The asserted claims may have been problematic and susceptible to failure, but not necessarily for the reasons stated by the District Court. Notwithstanding the question of whether these claims should have survived USPTO examination under 35 U.S.C. § 103, the District Court's analysis here is more of the same line-blurring between § 101 and § 103 that has seemingly become commonplace, yet it suggests that the Berkheimer panel might have been on to something. Courts continue to muddy the considerations required under the Alice test. In any event, the decision here further demonstrates the proclivity by courts to rely on § 101 to strike down claims. In addition, this decision is also a post-Berkheimer example of how patents can be invalidated at the summary judgment stage.

American Axle & Manufacturing, Inc. v. Neapco Holdings LLC (D. Del. 2018)
Memorandum Opinion by District Judge Stark
Conference & CLE Calendar

March 4, 2018

March 5-6, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Houston, TX

March 7, 2018 – "Inside the European Patent Office: Questions & Answers" (Intellectual Property Law Association of Chicago Patents-International Committee) – 11:45 am to 1:00 pm (CT), Chicago, IL

March 8, 2018 – "Patent Exclusivity Health Checks for Small Molecules: Are Your U.S. Patents Ready to Maximize ROI? — Phase II Efficacy Trials, Phase III Clinical Trials, NDA Submission, Approval and Marketing" (Strafford) – 1:00 to 2:30 pm (EST)

March 8-9, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH

March 13, 2018 – "Top Stories at the PTAB: What You Need to Know" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

March 13, 2018 – "Subject Matter Eligibility: Guidance & Examination Resources" (U.S. Patent and Trademark Office) – 12:00 to 1:00 pm (ET)

March 14, 2018 – Patent Litigation Seminar (New Jersey Intellectual Property Law Association) – 12:00 to 5:00 pm, Iselin, NJ

March 15, 2018 – "On Sale and Public Use Bars to Patentability: Minimizing the Risk of Patent Ineligibility or Invalidation" (Strafford) – 1:00 to 2:30 pm (EDT)

March 15, 2018 – 2018 Business Methods Partnership Meeting (U.S. Patent and Trademark Office) – 1:00 to 4:00 pm (ET), Alexandria, VA

March 15, 2018 – Patent Administrative Law Conference (American University, the Federal Circuit Bar Association, and Unified Patents) – 12:00 to 6:00 pm (EDT), Washington, DC

March 20, 2018 – "How to Secure and Exploit Patents for Combination Therapies" (J A Kemp) – 3:30 to 4:30 pm (GMT)

March 20, 2018 – Technology Center 1700 Customer Partnership meeting (U.S. Patent and Trademark Office) – 12:00 to 2:00 pm (ET), Alexandria, VA

March 20, 2018 – "USPTO Examiner Interview Strategies: Preparing for and Conducting Interviews to Advance Patent Prosecution" (Strafford) – 1:00 to 2:30 pm (EDT)

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