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  • Guest Post — Diagnosing Patent Subject Matter Eligibility

    By John Wizeman* and Anthony D. Sabatelli** —

    Clarity on patent subject matter eligibility is still being sought five years after Mayo [1] and three years after Alice [2].  Further adding to the confusion is the fact that discoveries in diagnostics, despite their apparent importance to the biomedical sciences, have been repeatedly determined as ineligible subject matter under 35 USC § 101.  The two step Alice/Mayo test has increased the percentage of invalid patents, and the decision by the Supreme Court to deny certiorari in the case of Ariosa vs. Sequenom [3] in 2016 means we are unlikely to see a reversal of this trend in the near future.  Inventors are still finding it challenging to implement the current guidelines toward a successful diagnostics patent grant.  In this piece we provide perspective from a 2016 Federal Circuit decision that provides some over-looked hints for moving forward with inventions relating to diagnostics.

    Three high-profile cases have pushed inventors of clinical diagnostic tools into a more restricted path of subject matter eligibility:  the Supreme Court's Myriad [4] decision, and two cases out of the Federal Circuit, Sequenom and Genetics Technologies Ltd.[5]  All of these cases involved broad clinical diagnostic innovations, instead of focusing on the specific research methods they created.  The first of these, Myriad, was a landmark case that reversed contemporary policy on isolated gene patentability.  The Supreme Court not only decided that isolated genes were not patent eligible, but also that the comparison of an isolated gene to a control gene represented an abstract idea, and was therefore also ineligible.  The second decision restricting patent eligibility came from the Sequenom case, in which a "significant contribution to the medical field" which represented a truly novel discovery was dismissed as patent ineligible.  The discovery, that "cell-free, fetal DNA" (cffDNA) was present in maternal blood, represented a major advancement and clearly deviated from the prior art.  The merits of the discovery are still relevant in the use of diagnostic tests, as cffDNA is becoming a more reliable and common non-invasive early pregnancy procedure to diagnose genetic abnormalities.  However, the court held that no transformation of "the nature of the claim" into "a patent eligible application" was present, based on the concept that the discovery was simply harnessing an observable natural phenomenon and applying well known assays toward that discovery.  The third of these decisions, Genetics Technologies, dealt with a patent regarding coding DNA (protein-creating) and junk DNA (non-protein creating), which could be inherited together at higher than expected frequencies.  This finding could be used to selectively analyze junk DNA instead of coding DNA and provide the basis of diagnostic tests for genetic conditions.  The patent was deemed invalid due to this being a "law of nature".  These cases focused on the clinical impact, rather than on the specific breakthrough research methods involved.

    From an overly simplified view, diagnostic tools can be broken down into finding new methods to isolate pure samples (laws of nature), determining changes in those samples in pathological conditions (a natural phenomenon) and comparing the results to non-pathological samples (an abstract idea) — i.e. the three judicially created exceptions to patent subject matter eligibility.  By this rudimentary breakdown, there can be almost no new protected innovations in diagnostics.  However, a case tangentially related to diagnostics, Rapid Litigation Management Ltd., v. Cellzdirect, Inc.[6], offers significant insight into a clearer path toward patent eligibility.  Although it has been over a year since the Federal Circuit ruling, the guidance provided by this important case can have far reaching implications and provide a clearer path forward for diagnostics.

    The Federal Circuit Court of Appeals ruled in favor of the patentee, providing insight into eligible subject matter as it relates to the Alice/Mayo test.  The patentee claimed a new way of freezing down and preserving hepatocytes, liver cells that have a wide range of uses in research and clinical settings.  A key difference in the Rapid Litigation case is that the wording of the claim applies its discovery of a law of nature toward a laboratory technique.  The claim in this case referred to hepatocytes frozen down multiple times as a method for laboratory refinement and potential diagnostic testing.  In its most basic form, the claim describes a natural phenomenon — hepatocytes can survive multiple freeze-thaw cycles.  Given the decisions in the earlier cases, this claim alone would likely be enough to be deemed ineligible in the current environment.  However, the additional novel steps of purification and refreezing were not obvious given the prior art.  Similar to the Sequenom finding, the Rapid Litigation claim (1) directed to a "law of nature", (2) was non-obvious given the prior art, and (3) relied heavily on established methods.  The difference between the Sequenom finding and the finding in the Rapid Litigation case is the application toward which each invention was ultimately aimed.  Many diagnostic tests face similar hurdles which can require a new approach to ensure successful patent protection.  Although clinical impact may provide weight to the importance of an invention, focus on the underlying laboratory methodology can lead this new approach by focusing on the novelty and practical use.

    Although one path to better ensuring eligibility for diagnostic patent claims may be to include treatment options, this path could be restricted toward a single treatment paradigm and become quickly irrelevant as new treatments arise.  Summing up the lessons from the cases mentioned above, patents aimed toward new diagnostic tests should not:  (1) rely solely on genetic identification or pathology, (2) harness common assays to compare patient information to a standard, (3) rely on the discovery or levels of a pathologically correlated molecule, or (4) be based on any non-synthetic or simply observable method of detection, even if that method is novel.  Therefore, rather than examining treatment options, inventors should explore placing their inventions in the context of laboratory research methodology.  For instance, if the application of the Sequenom finding related their purification of cffDNA into a lab method for non-invasive preparation and storage of purified fetal DNA by freezing down maternal cells or plasma as a storage system, and then using that material for purification and later use, the novelty of separation from the maternal plasma may have been enough to qualify under the second step of the Alice/Mayo test.

    Although dramatic changes to the Alice/Mayo framework may still occur, inventors will need to live in the current eligibility environment for the time being.  Recent failures for diagnostic cases can be used as a guide for protecting new discoveries and inventions.  Unlike uncertain clinical treatments or new biomarkers, refined laboratory methods, as per Rapid Litigation, could provide a critical outlet for inventors.

    [1] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012)
    [2] Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014)
    [3] Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015)
    [4] Association for Molecular Pathology v. Myriad Genetics. Inc., 133 S.Ct. 2107 (2013)
    [5] Genetic Technologies Ltd. v. Merial L.L.C., 2015-1202, 2015-1203 (Fed. Cir. 2016)
    [6] Rapid Litigation Management Ltd. v. CellzDirect, Inc., 2015-1570 (Fed. Cir. 2016)

    * John Wizeman recently received his Ph.D. in biomedical sciences with a concentration in neuroscience from the University of Connecticut Health Center.  His research focused on retinal injury and repair in addition to several student leadership roles.  He then moved into a postdoctoral position researching cerebellar development.  He has published numerous papers in different specialties of neuroscience.  Currently, he focuses in neurodevelopment and teaches several Medical/Dental and Graduate courses at UConn Health.
    ** Dr. Sabatelli is a Partner with Dilworth IP

  • PTAB Decides Patent Infringement Lawsuit Waives Eleventh Amendment Sovereign Immunity to Inter Partes Review

    By Kevin E. Noonan –

    USPTO SealThe Patent Trial and Appeal Board was seemingly sufficiently vexed over the question of whether the St. Mohawk Indian Tribe was entitled to have the Board dismiss, on grounds of sovereign immunity, inter partes reviews on patents the Tribe licensed from Allergan (see "Mohawk Nation Exercises Sovereign Immunity in Inter Partes Review") to solicit amicus curiae briefs on the issue from "interested parties."  But today, an expanded panel of the Board, including Chief Judge David Ruschke, issued an order dismissing a sovereign immunity challenge by the State of Minnesota in Ericsson Inc. and Telefonaktiebolaget LM Ericsson v. Regents of the University of Minnesota.  The coincidence of these two decisions is curious, particularly because while the scope of sovereign immunity enjoyed by the various recognized Tribes of Native Americans is both uncertain and subject to Congressional abrogation (albeit only when express), a State's sovereignty is acknowledged and protected by the Eleventh Amendment.  Notwithstanding these considerations, the Board rendered its decision, and the legal rationale set forth in its Order provides some insight into not only how the Board may rule on the Tribe's motion but on how the Board (and the Patent Office) perceives its role and authority to make such decisions.

    The Director granted Ericsson's IPR petitions involving U.S. Patents Nos. 7,251,768; 8,718,185; 8,588,317; 8,774,309; and RE45,230.  In response to institution, the State of Minnesota filed a motion to dismiss based on its Eleventh Amendment sovereign immunity.  The unresolved question before the Board was whether this immunity was available to enable Minnesota to avoid inter partes review.  Despite earlier decisions by the Board that states could assert sovereign immunity in IPRs (see Covidien LP v. Univ. of Fla. Research Found., Inc., Case IPR2016-01274 (PTAB Jan. 25, 2017); NeoChord, Inc. v. Univ. of Md., Balt., Case IPR2016-00208 (PTAB May 23, 2017); and Reactive Surfaces Ltd., LLP v. Toyota Motor Corp., Case IPR2016-01914 (PTAB July 13, 2017)), and the panel's agreement that "IPR is an adjudicatory proceeding of a federal agency from which state entities are immune," the expanded panel decided that Minnesota had waived sovereign immunity because it had asserted the IPR-challenged patents in a patent infringement lawsuit in district court.

    The expanded panel, which comprised Deputy Chief Administrative Patent Judge Scott R. Boalick, Vice Chief Patent Judges Jacqueline Wright Bonilla and Scott C. Weidenfeller, and Administrative Patent Judges Jennifer S. Bisk, Robert J. Weinschenk, and Charles J. Boudreau in addition to the Chief Administrative Patent Judge, expressly set forth its reliance on the Chief Judge's authority under 35 U.S.C. § 6 to expand panels when issues before the Board are of exceptional importance or are "necessary to secure and maintain uniformity of the Board's decisions" (despite skepticism from reviewing courts, including the Federal Circuit and Supreme Court, about these practices, for example in Oil States Energy Services, LLC v. Greene's Energy Group, LLC).  The expanded panel's decision did not overturn or otherwise disturb the Board's earlier decisions that a State could assert its Eleventh Amendment sovereign immunity to have the Board dismiss an IPR proceeding against patents assigned to a state University as an arm of the state.  This is consistent with the Supreme Court's decision in Fed. Mar. Comm'n v. S.C. State Ports Auth., 535 U.S. 743 (2002), that administrative agency adjudications can be sufficiently similar to district court litigation for a State to assert sovereign immunity as applied to the Patent Office by the Federal Circuit in Vas-Cath, Inc. v. Curators of Univ. of Mo., 473 F.3d 1376 (Fed. Cir. 2007).  And in a footnote, the expanded panel states that the differences between civil litigation and IPR proceedings are not enough to evince a Congressional intent to "compel states to surrender their sovereign immunity" consistent with Fla. Prepaid Postsecondary Educ. Expense Bd. v. Coll. Sav. Bank, 527 U.S. 627 (1999).

    Nevertheless, the expanded panel decided that these determinations were not the end of the question before the Board.  Here, the State of Minnesota had filed a complaint against the Ericsson Petitioners, and this was enough for the Board to conclude that this action by the State in one forum (the Article III District Court) had waived its sovereign immunity before the Article I PTAB, a different forum both in kind and Constitutional origins.  The expanded panel acknowledged that "[a] State's waiver of Eleventh Amendment immunity in one action does not necessarily extend to a separate action, even if the separate action involves the same parties and the same subject matter," citing Biomedical Patent Mgmt. Corp. v. Cal., Dep't of Health Servs., 505 F.3d 1328, 1339 (Fed. Cir. 2007).  But the Board did not recognize this Federal Circuit decision to lay out a "bright-line rule" precluding waiver of sovereign immunity in one forum by actions in another forum on the same patents.  The expanded panel relied on Lapides v. Bd. of Regents of Univ. Sys. of Ga., 535 U.S. 613 (2002), for the principle that waiver depends on "the need to avoid unfairness and inconsistency, and to prevent a State from selectively using its immunity to achieve a litigation advantage" (illustrating the continuing conflation, when it serves their purpose, for the Board to analogize its proceedings with litigation).  The closest case on its facts to the waiver question before the expanded panel in its view is Regents of Univ. of New Mexico v. Knight, 321 F.3d 1111 (Fed. Cir. 2003), where the Federal Circuit found waiver of sovereign immunity by a State asserting its patents in district court with regard to compulsory counterclaims.  The grounds for this analogy is the nature of compulsory counterclaims in litigation (which must be asserted "or be forever barred from doing so"; emphasis in opinion) and the provisions of 35 U.S.C. § 315(b) that require a patent infringement defendant to file an IPR petition within one year of being sued "or be forever barred from doing so" (emphasis in opinion).  In each case, it is the State's affirmative filing of a patent infringement complaint that imposes the requirement for a defendant to react and this is enough, in the Board's view, for the State to have waived sovereign immunity in this case.

    With regard to Minnesota's argument that "any waiver of Eleventh Amendment immunity should be limited to the venue where Patent Owner filed its action," the expanded panel acknowledges that "waiver is generally limited in this way" in district court litigation; once again the Board does not understand this to be a "bright-line rule."  And the Board cites its opinion that recognizing a State's sovereign immunity under these circumstances "would result in substantial unfairness and inconsistency."

    One member of the expanded panel, APJ Bisk, wrote separately to enunciate her view that "a state university, having availed itself of Patent Office procedures to secure patent rights from the public, may not subsequently invoke sovereign immunity as a shield against reconsideration by the Patent Office in an inter partes review proceeding of whether the agency improvidently granted a patent monopoly in the first instance," her diction plainly reciting her prejudices in these matters.  Substantively, she notes the differences between district court litigation and the administrative nature of an IPR, and the factual and procedural distinctions between IPRs and the administrative activities in the Supreme Court's FMC precedent.  Citing MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1293 (Fed. Cir. 2015), the APJ also improvidently characterizes patent rights as "public rights" in advance of the Supreme Court's impending decision in Oil States on precisely that question, in a portion of her concurring opinion focused on the importance of IPR proceedings to protect the public from improperly granted patents.  No doubt aware of similar arguments by amici curiae solicited by the Board in the St. Regis Mohawk Tribe IPRs, the APJ also characterizes IPRs as being actions in rem to defeat claims of sovereign immunity, and cites the (until recently ephemeral) right for a patent owner to amend claims as another distinction between IPRs and litigation.

    The decision provides the avenue for the Board's judicial overseers to opine on the extent to which and under what circumstances the Eleventh Amendment shields a State from inter partes review.  However it raises the question of whether the Board, as the adjudicatory arm of an administrative agency, is empowered to render such a decision or whether the proper position would have been for the Board (expanded panel or not) to have recognized Minnesota's sovereign immunity and left it to the Federal Circuit (and, likely and ultimately, the Supreme Court) to make the determination that sovereign immunity does not apply or has been waived and on what basis.

    Before Chief Administrative Patent Judge David P. Ruschke, Deputy Chief Administrative Patent Judge Scott R. Boalick, Vice Chief Asministrative Patent Judges Jacqueline Wright Bonilla and Scott C. Weidenfeller, and Administrative Patent Judges Jennifer S. Bisk, Robert J. Weinschenk, and Charles J. Boudreau
    Order Denying Patent Ownwer's Motion to Dismiss by Chief Administrative Patent Judge Ruschke, concurring opinion by Administrative Patent Judge Bisk

  • Third Quarter Venture Funding Remains Strong

    By Donald Zuhn —

    PricewaterhouseCoopers (PWC)PricewaterhouseCoopers (PwC) and CB Insight recently released the results of its US MoneyTreeTM Report on U.S. venture funding for the third quarter of 2017.  The report indicates that venture capitalists invested $19.0 billion in 1,207 deals in the third quarter, with the number of dollars and deals remaining steady after $18.9 billion was invested in 1,208 deals in the second quarter.  The third quarter numbers constituted a 32% increase in dollars and a 6.1% decrease in deals as compared with the third quarter of 2016, when $14.4 billion was invested in 1,286 deals (see chart below, which shows total venture funding from the fourth quarter of 2015 through the third quarter of 2017; chart from MoneyTreeTM Report; click on chart to enlarge).  The increase in dollars in the third quarter of 2017 marked the fourth straight quarter in which invested dollars increased.

    Chart 1
    With respect to funding by sector, the internet sector captured the top spot among the sectors tracked in the report, collecting $7.9 billion in 574 deals in the first quarter of 2017.  The healthcare sector came in second, with $3.2 billion invested in 171 deals (see chart below, which shows venture funding for the internet, healthcare, mobile & telecommunications, software (non-internet/mobile), and industrial sectors; chart from MoneyTreeTM Report; click on chart to enlarge).

    Chart 2
    The report also includes separate analyses of funding in the areas of artificial intelligence, digital health, and auto tech, as well as funding by geographic region and a global regional comparison.

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

    • "First Quarter Venture Funding Bounces Back from Fourth Quarter Low," May 31, 2017
    • "Venture Funding Normalizes in 2016 After Strong First Half," February 8, 2017
    • " Second Quarter Venture Funding Increases 20% from First Quarter," October 11, 2016
    • "Venture Funding Reaches Highest Level in More Than a Decade," February 25, 2016
    • "Third Quarter Venture Funding Declines 27% from Second Quarter," October 22, 2014
    • "Software Sector Leads Pack in 2Q Venture Funding and Biotech Sector Finishes Second," July 20, 2014
    • "Software Sector Leads First Quarter Venture Funding to Thirteen Year High; Biotech Sector Finishes Second (Again)," April 30, 2014
    • "Biotech Venture Funding Rebounded in 2013 After Strong Fourth Quarter," January 26, 2014
    • "Biotech Venture Funding Sees Second Quarter Rebound," July 22, 2013
    • "Biotech Venture Funding Down 33% in First Quarter," April 30, 2013
    • "Annual Venture Funding Drops for First Time in Three Years," February 4, 2013
    • "Biotech Venture Funding Up 64% in Third Quarter," October 29, 2012
    • "Venture Funding in Life Sciences Sector Drops 9% in Second Quarter," July 22, 2012
    • "Biotech Venture Funding Drops 43% in First Quarter," May 3, 2012
    • "Venture Funding Increased 22% in 2011," February 2, 2012
    • "Life Sciences Venture Funding Drops in Third Quarter," October 27, 2011
    • "Life Sciences Venture Funding up 37% in Second Quarter," August 1, 2011
    • "VentureSource Reports 35% Increase in 1Q Venture Funding," April 26, 2011
    • "NVCA Reports Modest Gains in First Quarter Venture Funding," April 19, 2011

    • "NVCA Reports 31% Drop in Venture Funding for Third Quarter," October 17, 2010

    • "NVCA Reports 34% Increase in Venture Funding for Second Quarter," July 22, 2010

    • "NVCA Report Shows First Quarter Drop in Venture Funding," April 20, 2010

    • "Biotech/Pharma Financing Improving, R&D Spending Up," August 31, 2009
    • "NVCA Study Shows Increase in Third Quarter Venture Funding," October 23, 2009

    • "First Quarter Venture Capital Funding at 12-Year Low," April 23, 2009

    • "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009," February 16, 2009

  • Ni-Q, LLC v. Prolacta Bioscience, Inc. (D. Or. 2017)

    By Donald Zuhn —

    USdistrictOregonLast week, in Ni-Q, LLC v. Prolacta Bioscience, Inc., District Judge Michael H. Simon of the U.S. District Court for the District of Oregon denied a motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure filed by Plaintiff Ni-Q that the claims of U.S. Patent No. 8,628,921, which is assigned to Defendant Prolacta Bioscience ("Prolacta"), are invalid under 35 U.S.C. § 101 for failure to claim patent-eligible matter.  Ni-Q had initiated the dispute between the parties by filing a complaint for declaratory judgment of noninfringement and invalidity of the '921 patent, as well as alleging a violation of the Oregon Unlawful Trade Practices Act.

    The '921 patent, which is entitled "Methods for testing milk," is directed to methods for testing mammary fluid (including milk) to establish or confirm the identity of the donor of the mammary fluid.  Independent claims 1 and 13 recite:

    1.  A method for determining whether a donated mammary fluid was obtained from a specific subject, the method comprising: (a) testing a donated biological sample from the specific subject to obtain at least one reference identity marker profile for at least one marker; (b) testing a sample of the donated mammary fluid to obtain at least one identity marker profile for the at least one marker in step (a); (c) comparing the identity marker profiles, wherein a match between the identity marker profiles indicates that the mammary fluid was obtained from the specific subject; and (d) processing the donated mammary fluid whose identity marker profile has been matched with a reference identity marker profile, wherein the processed donated mammary fluid comprises a human protein constituent of 11-20 mg/mL; a human fat constituent of 35-55 mg/mL; and a human carbohydrate constituent of 70-120 mg/mL.

    13.  A method for processing a donated human breast milk obtained from a specific subject comprising: (a) testing a donated biological sample from the specific subject to obtain at least one reference identity marker profile for at least one marker; (b) testing a sample of the donated human breast milk to obtain at least one identity marker profile for the at least one marker in step (a); (c) comparing the identity marker profiles of steps (a) and (b), wherein a match between the identity marker profiles indicates that the donated human breast milk was obtained from the specific subject; (d) processing the donated human breast milk whose identity marker profile has been matched with a reference identity marker profile, wherein the processing comprises: (i) filtering the donated human breast milk; (ii) heat treating the donated human breast milk; (iii) separating the donated human breast milk into cream and skim; (iv) adding a portion of the cream to the skim to form a human milk composition; and (v) pasteurizing the human milk composition to produce a processed human breast milk composition; and wherein the processed donated human breast milk comprises a human protein constituent of 11-20 mg/mL; a human fat constituent of 35-55 mg/mL; and a human carbohydrate constituent of 70-120 mg/mL.

    Prolacta receives human milk from donors and processes it to make fortifier and other products for use in feeding premature and other medically fragile infants.  Ni-Q is also engaged in the procurement, production, and sale of human milk-based products for use in feeding premature infants.  In response to Ni-Q's declaratory judgment action, Prolacta alleged infringement of the '921 patent by Ni-Q.

    Ni-Q thereafter filed its Rule 12(c) motion for judgment on the pleadings, asserting that the claims of the '921 Patent are directed to the application of a natural phenomenon, namely, the identification of naturally occurring biological markers in the tissues of a milk donor and in the donor's milk.  Ni-Q also asserts that the claimed methods are implemented using previously known techniques, such as the analysis of DNA-, protein-, or antibody-based markers, and therefore add no inventive concept to save the patent from a finding of subject matter ineligibility.

    Prolacta opposed Ni-Q's motion, arguing that because claim construction had not yet occurred, the claims must be construed entirely in Prolacta's favor (citing BASCOM Global Internet Servs. v. AT&T Mobility LLC, 827 F.3d 1341, 1351-52 (Fed. Cir. 2016)).  Prolacta also argued that Ni-Q, in its motion, relied on prior art cited on the face of the '921 patent, and that if the District Court were to consider those references, then the Court should employ the summary judgment standard under Rule 56 (citing Cobra Fixations CIE Ltee-Cobra Anchors Co., Ltd. v. Newell Operating Co., 2011 WL 1399785, *1 (M.D. N.C. 2011)).  Prolacta further argued that any ambiguities, including what the '921 patent specification or prior art discloses, must be resolved in favor of Prolacta's pleading under Rule 12(c) (citing Walling v. Beverly Enters., 476 F.2d 393, 396 (9th Cir. 1973), and Mettler-Toledo, Inc. v. B-Tek Scales, LLC, 671 F.3d 1291, 1297 (Fed. Cir. 2012)).  Finally, Prolacta submitted two declarations in opposition to Ni-Q's motion.

    Ni-Q responded to Prolacta's opposition by arguing that the District Court should not adopt Prolacta's proffered claim construction because it was implausible (citing Atlas IP, LLC v. Exelon Corp., 189 F. Supp. 3d 768, 779 (N.D. Ill. May 17, 2016)).  Ni-Q also argued that if the District Court decided to adopt Prolacta's proffered claim construction, then Ni-Q should be entitled to judgment of infringement and the claims of the '921 patent should still be found to be directed to patent ineligible subject matter because the additional method steps relied upon by Prolacta would not save the claims under § 101.

    In denying Ni-Q's motion, Judge Simon determined that "[a]fter reviewing the parties' arguments and evidence, including Prolacta's proffered claim construction, . . . it is premature to resolve the substantive disputes presented."  The Court expressed the belief that "a sound[] analysis and resolution of the pending dispute will benefit from an orderly claim construction procedure."

    Ni-Q, LLC v. Prolacta Bioscience, Inc. (D. Or. 2017)
    Order by District Judge Simon

  • Conference & CLE Calendar

    CalendarDecember 12, 2017 – "Capitalizing on Changes in Patent Law" (Practising Law Institute) – 1:00 to 2:00 pm (Eastern)

    December 12, 2017 – "Written Description in the Life Sciences after Amgen v. Sanofi" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    December 13, 2017 – "Nuts & Bolts of the Federal Circuit's Rules" (Federal Circuit Bar Association) – 1:30 pm to 2:30 pm (EST)

    December 21, 2017 – "Drafting and Prosecuting Patent Applications to Withstand PTAB Scrutiny — Building Reasonable Claim Construction to Avoid Unpatentability and Using Declarations to Survive Post-Grant Proceedings" (Strafford) – 1:00 to 2:30 pm (EST)

    January 17, 2018 – "Top Patent Law Stories of 2017" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

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

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

    ***Patent Docs is a media partner of this conference or CLE

  • Webinar on Top Patent Law Stories of 2017

    MBHB Logo 2McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on the "Top Patent Law Stories of 2017" on January 17, 2018 from 10:00 am to 11:15 am (CT).  Since 2007, the Patent Docs weblog has presented an annual, end-of-the-year review of the top stories in patent law.  In this presentation, Patent Docs co-authors Donald Zuhn, Kevin Noonan, and Michael Borella will take a look back at the top patent stories of 2017, many of which will likely impact patent applicants and practitioners in the coming year.

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

  • Chisum Patent Academy Patent Law Seminar

    The Chisum Patent Academy will be offering the next sessions of its Advanced Patent Law Seminar on March 5-6, 2018 in Houston, TX and March 8-9, 2018 in Cincinnati, OH.  The seminar is co-taught by Donald Chisum, author of the treatise Chisum on Patents (LexisNexis), and Janice Mueller, who was a tenured full Professor at the University of Pittsburgh School of Law from 2004-2011.  The registration fee is $1,600 for the Houston seminar, and $1,500 for the Cincinnati seminar; a maximum of ten registrations will be accepted for the seminar.  Those interested in registering for either seminar can do so here.  Additional information regarding the Houston seminar can be obtained here, and information regarding the Cincinnati seminar can be found here, or those interested in attending either seminar can obtain additional information by e-mailing info@chisum.com.

    Chisum Patent Academy

  • Webcast on Drafting and Prosecuting Patent Applications to Withstand PTAB Scrutiny

    Strafford #1Strafford will be offering a webcast entitled "Drafting and Prosecuting Patent Applications to Withstand PTAB Scrutiny — Building Reasonable Claim Construction to Avoid Unpatentability and Using Declarations to Survive Post-Grant Proceedings" on December 21, 2017 from 1:00 to 2:30 pm (EST).  Thomas L. Irving, Anthony M. Gutowski, and John M. Mulcahy of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel for drafting and prosecuting U.S. patent applications to achieve the broadest claim interpretations that avoid unpatentability and provide a basis for proving infringement, and offer best practices to solidify novelty, non-obviousness, enablement, and written description positions, both for litigation and PTAB AIA post-grant proceedings.  The webinar will review the following issues:

    • How can practitioners draft and prosecute patent applications and claims to minimize the threat and/or efficacy of a third-party’s post-grant challenges?
    • How can patent owners obtain broad claims to keep competitors at bay while countering attempts to render those broad claims unpatentable under the broadest reasonable interpretation standard before the PTAB?
    • How can practitioners introduce strong grounds for patentability under §§ 102, 103 and 112 in the specification and prosecution history in the hopes that IPRs and PGRs are either denied or otherwise ineffective against the challenged instituted claims?

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

  • Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2017) — One Last Dance . . .

    By Andrew Williams —

    AmgenLast June, in Sandoz Inc. v. Amgen Inc., the Supreme Court handed down its interpretation of the Biologics Price Competition and Innovation Act ("BPCIA") for the approval of biosimilar drugs.  As we reported at the time, the Court held that the 180-day notice-of-commercial-marketing provision of the statute may be provided either before or after receiving FDA approval.  In addition, with respect to the so-called "Patent Dance," the Supreme Court held that a reference product sponsor ("RPS") cannot seek enforcement of the aBLA disclosure provision in 42 U.S.C. § 262(l)(2)(A) by injunction under federal law.  This ruling all but made the Patent Dance optional for biosimilar applicants.  Nevertheless, the Court left open a tiny ray of hope for patent owners by reversing and remanding the question whether the disclosure provision of the BPCIA was enforceable under state law.  In a decision that came out earlier today, the Federal Circuit extinguished any hope.  First, the Federal Circuit reasoned that it has discretion to address the preemption issue, and that it should exercise that discretion, notwithstanding the fact that the issue had not yet been addressed on the merits.  Second, it held that the BPCIA's comprehensive framework demonstrates the intent of Congress that federal law would exclusively occupy the field of biosimilar patent litigation.  And finally, the Federal Circuit held that any remedy provided for under state law would conflict with the careful balance struck by Congress in establishing the BPCIA.  As a result, the Court affirmed the District Court's initial dismissal of Amgen's state law claims.

    Sandoz #1We provide this background possibly for the last time — this case stemmed from the aBLA filing by Sandoz pursuant to the BPCIA to market a biosimilar version of Amgen's NEUPOGEN® (filgrastrim) biologic drug product.  In the interim, the FDA approved the biosimilar known as ZarxioTM in March of 2015, and Sandoz (a Novartis company) has been selling the drug in the U.S. since September 3, 2015.  However, despite availing itself of the BPCIA-abbreviated pathway for FDA approval, Sandoz refused to participate in the patent resolution component (the disclosure and information exchange provisions, also known affectionately as the "patent dance"), alleging that it was not a mandatory component.  Amgen responded by filing suit in the Northern District of California, requesting in part a preliminary injunction to prevent Sandoz from entering the market.  United States District Judge Seeborg of the Northern District of California denied Amgen's motion, the Federal Circuit (in a seriously fractured decision) essentially affirmed, and the case was taken up by the Supreme Court.  In ruling as indicated above, the Supreme Court noted that the previous Federal Circuit decision that interpreted California's unfair competition law to not provide a remedy was based on an incorrect interpretation of federal law.  With regard to whether Sandoz's failure to disclose its application and manufacturing information was "unlawful" under California's unfair competition law, the Supreme Court declined to resolve that dispute because it was not a question of federal law.  The Federal Circuit, therefore, erred in attempting to answer the state-law question by referring to the BPCIA alone (according to the Supreme Court).  Therefore, the Federal Circuit was charged with determining "whether California law would treat noncompliance with §262(l)(2)(A) as 'unlawful.'"

    If the answer is yes, then the court should proceed to determine whether the BPCIA pre-empts any additional remedy available under state law for an applicant's failure to comply with §262(l)(2)(A) (and whether Sandoz has forfeited any pre-emption defense, see 794 F. 3d, at 1360, n. 5).  The court is also of course free to address the pre-emption question first by assuming that a remedy under state law exists.

    Sandoz Inc. v. Amgen Inc. (2017).

    Waiver

    The Court first addressed the question whether Sandoz had waived the preemption defense.  Sandoz has raised preemption as a defense in its answer, although it had not yet been addressed by the District Court or the Federal Circuit.  As "'a general rule . . . a federal appellate court does not consider an issue not passed upon below.'"  Amgen Inc. v. Sandoz Inc. (citing Singleton v. Wulff, 428 U.S. 106, 120 (1976)).  Nevertheless, the Federal Circuit had previously articulated reasons to exercise discretion to address issues anyway.  Relevant to this case is when the issue presents significant questions of general impact or of great public concern, specifically here "whether state law claims may play a role in enforcing compliance with § 262(l)(2)(A)."  Moreover, because Sandoz had preserved its ability to assert preemption by including it as a defense in its answer, it could have raised it on remand, thereby lessening (or eliminating) any prejudice to Amgen.  Finally, the preemption issue had been fully briefed.  Of course, it didn't hurt the analysis that the Supreme Court had also directed the Federal Circuit to consider the issue on remand.

    Field Preemption

    The Supremacy Clause of the Constitution (U.S. Const. art. VI, cl. 2), provides that federal law "shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby . . . ."  Preemption can either be by express preemption, field preemption, or conflict preemption."  The BPCIA did not expressly preempt state law, so the Federal Circuit addressed the other two forms.

    Field preemption occurs when Congress intended the Federal Government to exclusively occupy a particular field.  There is, however, a presumption against preemption in a field in which states have historically legislated.  The Federal Circuit easily found no presumption against preemption for biosimilar patent litigation.  The Court then noted that patents are 'inherently federal in character' and that the FDA has exclusive authority to license biosimilars.  Moreover, the Court noted that the BPCIA is "comprehensive" and "'provide[s] a full set of standards governing' the exchange of information in biosimilar patent litigation, 'including the punishment for noncompliance.'"  Amgen Inc. v. Sandoz Inc. (citing Arizona v. United States, 567 U.S. 387, 401 (2012)).  Such a comprehensive and calibrated scheme makes the inference that Congress left no room for the States reasonable.  Finally, the Court noted that the relief Amgen was seeking from California law was not provided for by the BPCIA.  For example, Amgen was seeking an injunction that the Supreme Court made clear was unavailable under Federal law.  "This conflict in available remedies between federal and state law 'underscore[s] the reason for field preemption.'"  Id.

    Conflict Preemption

    If state law conflicts with federal law, it can also be preempted.  This "occurs 'where it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."  Amgen Inc. v. Sandoz Inc. (citing Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)).  The Federal Circuit found that Amgen's state law claims "clash" with the BPCIA, and that the differences in available and sought-after remedies supports the conclusion that the state law claims are preempted.  The Court reasoned that Congress acted intentionally when it did not provide for injunctive relief, and that if Amgen were able to seek such a remedy under state law, it "'would interfere with the careful balance struck by Congress.'"  Amgen Inc. v. Sandoz Inc. (citing Arizona, 567 U.S. at 405-06).  As the Court ultimately concluded on the issue:  "the preemption analysis here demonstrates that Amgen's state law claims conflict with the BPCIA and intrude upon a field, biosimilar patent litigation, that Congress reserved for the federal government."

    So will this be the last "Amgen v. Sandoz" case in this family?  The Federal Circuit affirmed the dismissal of Amgen's unfair competition and conversion claims because they were preempted on both field and conflict grounds.  Correspondingly, the case was not remanded back to the District Court.  Therefore, unless a petition for either panel rehearing or rehearing en banc is granted, or the Supreme Court grants another petition for cert., it is very possible that we have just seen the last dance of Amgen v. Sandoz.

  • More on Venue — Plexxikon v. Novartis Pharmaceutical Corp. (N.D. Cal. 2017)

    By Kevin E. Noonan –

    District Court for the Northern District of CaliforniaThe sequel to the original summer blockbuster movie, Jaws, had as a tagline "Just when you thought it was safe to go back in the water."  This sentiment can describe much of U.S. patent law over the last decade and a half, between the ill-fated USPTO "claims and continuation" rules, the Leahy-Smith America Invents Act, and the Supreme Court's various forays into numerous areas of the law.  The latest head-turner, the question of proper patent venue, has suffered the double whammy of changes enacted by Congress and the Supreme Court's interpretation of them (particularly in overturning the Federal Circuit's interpretation which had been in effect for decades).  The Federal Circuit has provided some limited guidance (see "In re Micron Technology, Inc. (Fed. Cir. 2017)" and "In re Cray Inc. (Fed. Cir. 2017)") and these decisions have provided some illustrative district court decisions showing how these lower courts have understood and adopted whatever rubrics their judicial superiors have enunciated (see "More Views on Venue — Federal Circuit Addresses In re Micron Fallout").

    The latest head-turning wrinkle in the venue question comes from a decision denying Defendant's venue-related motions by Judge Haywood S. Gilliam, Jr., U.S. District Court Judge for the Northern District of California, in Plexxikon Inc. v. Novartis Pharmaceuticals Corp.  Defendant put two venue-related motions before the District Court:  a motion to dismiss (or in the alternative transfer) under 28 U.S.C. § 1406 and a motion to transfer under 28 U.S.C. § 1400(b).  Citing the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514, 1519 (2017), the District Court's opinion acknowledges that venue is proper either "in the judicial district where the defendant resides," i.e., its state of incorporation (in this case, Delaware) or "where the defendant has committed acts of infringement and has a regular and established place of business."  Noting that for a motion to dismiss a Court must accept a plaintiff's allegations of infringement, the Court applies the "three general requirements" enunciated by the Federal Circuit in In re Cray:  1) that the defendant must have a physical place of business in the district (a "physical, geographical location in the district from which the business of the defendant is carried out"); 2) that it must be a "regular and established" place of business (that "operates in a steady, uniform, orderly, and methodical manner"); and 3) that "it must be the place of the defendant," i.e., where a defendant has an "establish[ed] or ratif[ied] place of business."

    Applying these requirements, the Court found that venue was properly in the Northern District of California.  While the facts underlying the Court's decision were straightforward, where the Court reached new ground was in the relationship between Defendant's "regular and established place of business" and the alleged acts of infringement.  It was undisputed that Defendant "'leases and operates two adjacent facilities in San Carlos,' California — a manufacturing facility and a research facility," but Defendant argued that there must be a nexus between the actions forming the basis for the complaint and the facts supporting proper venue.  The Court disagreed, finding that the plain meaning of the statute contained no such nexus requirement.  If followed by other district courts, this interpretation of the venue requirements could again expand the scope of judicial districts that support venue, particularly for large corporations having more than one business unit or divisions selling disparate products — wherever their commercial activities occur may be sufficient for finding proper venue even if the commercial activities have no relationship to the alleged infringing activities.

    With regard to transfer on convenience grounds under 28 U.S.C. § 1406, the Court found that the relative inconvenience of California or Delaware was equal for Defendant and Plaintiff and that the deference due plaintiff on choice of forum favored denying the transfer motion (being generally given "great weight").  Also relevant to the Court's decision was that "the technology at issue was designed and developed" in the California district, providing a "significant connection" to the forum.  Finally, in this case the Court also considered the congestion in the Delaware court (where two of the four district court judgeships were vacant), something appropriate due to these "unique circumstances" (and not simply because, inter alia, the District of Delaware's docket was particularly heavy).