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  • Court Report

            By Sherri Oslick —

    Gavel About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

    Idenix Pharmaceuticals LLC et al. v. Gilead Pharmasset LLC
    1:15-cv-00416; filed May 21, 2015 in the District Court of Delaware

    • Plaintiffs:  Idenix Pharmaceuticals LLC; Universita Degli Studi di Cagliari; Centre National de la Recherche Scientifique; Universite de Montpellier
    • Defendant:  Gilead Pharmasset LLC

    Review of the decision of the Patent Trial and Appeal Board awarding priority of invention to Gilead between U.S. Patent Application Serial No. 11/854,218 ("Modified Fluorinated Nucleoside Analogues," filed September 12, 2007), assigned to Gilead, and U.S. Patent No. 7,608,600 ("Modified 2' and 3'-Nucleoside Prodrugs for Treating Flaviviridae Infections," issued October 27, 2009), assigned to plaintiffs.  View the complaint here.

    Sanofi et al. v. Lupin Atlantis Holdings SA et al.
    1:15-cv-00415; filed May 21, 2015 in the District Court of Delaware

    • Plaintiffs:  Sanofi; Sanofi-Aventis US LLC
    • Defendants:  Lupin Atlantis Holdings SA; Lupin Ltd.; Lupin Pharmaceuticals Inc.

    Infringement of U.S. Patent Nos. 8,318,800 ("Solid Pharmaceutical Compositions Containing Benzofuran Derivatives," issued November 27, 2012) and 8,410,167 ("Use of Dronedarone for the Preparation of a Medicament for Use in the Prevention of Cardiovascular Hospitalization or of Mortality," issued April 2, 2013) following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of Sanofi's Multaq® (dronedarone, used to reduce the risk of hospitalization for atrial fibrillation in patients in sinus rhythm with a history of paroxysmal or persistent atrial fibrillation).  View the complaint here.

    Horizon Pharma Ireland Ltd. et al. v. IGI Laboratories, Inc.
    1:15-cv-03508; filed May 21, 2015 in the District Court of New Jersey

    • Plaintiffs:  Horizon Pharma Ireland Ltd.; HZNP Ltd.; Horizon Pharma USA, Inc.
    • Defendant:  IGI Laboratories, Inc.

    Infringement of U.S. Patent Nos. 8,217,078 ("Treatment of Pain with Topical Diclofenac," issued July 10, 2012), 8,252,838 ("Diclofenac Topical Formulation," issued August 28, 2012), 8,546,450 ("Treatment of Pain with Topical Diclofenac," issued October 1, 2013), 8,563,613 ("Diclofenac Topical Formulation," issued October 22, 2013), 8,618,164 ("Treatment of Pain with Topical Diclofenac," issued December 31, 2013), and 8,871,809 ("Diclofenac Topical Formulation," issued October 28, 2014) following a Paragraph IV certification as part of IGI's filing of an ANDA to manufacture a generic version of Horizon's Pennsaid® (diclofenac sodium topical solution, used for the treatment of signs and symptoms of osteoarthritis of the knee(s)).  View the complaint here.

    Kowa Co., Ltd. et al. v. Lupin Ltd. et al.
    1:15-cv-03935; filed May 21, 2015 in the Southern District of New York

    • Plaintiffs:  Kowa Co., Ltd.; Kowa Pharmaceuticals America, Inc.; Nissan Chemical Industries, Ltd.
    • Defendants:  Lupin Ltd.; Lupin Pharmaceuticals, Inc.

    Infringement of U.S. Patent No. 8,557,993 ("Crystalline Forms of Pitavastatin Calcium," issued October 15, 2013) following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of Kowa's Livalo® (pitavastatin, used as an adjunctive therapy to diet to reduce elevated total cholesterol, lowdensity lipoprotein cholesterol, apolipoprotein B, triglycerides, and to increase high-density lipoprotein cholesterol).  View the complaint here.

    Merck & CIE et al. v. Lupin Ltd. et al.
    1:15-cv-01472; filed May 21, 2015 in the District Court of Maryland

    • Plaintiffs:  Merck & Cie; Bayer Pharma AG; Bayer HealthCare Pharmaceuticals Inc.
    • Defendants:  Lupin Ltd.; Lupin Pharmaceuticals, Inc.

    Merck & Cie et al. v. Lupin Ltd. et al.
    1:15-cv-00407; filed May 20, 2015 in the District Court of Delaware

    • Plaintiffs:  Merck & Cie; Bayer Pharma AG; Bayer HealthCare Pharmaceuticals Inc.
    • Defendants:  Lupin Ltd.; Lupin Pharmaceuticals, Inc.

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 6,441,168 ("Stable Crystalline Salts of 5-methyltetrahydrofolic Acid," issued August 27, 2002), licensed to Bayer, following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of Bayer's Safyral® (drospirenone, 17α-ethinyl estradiol, and levomefolate calcium, used for oral contraception).  View the Delaware complaint here.

    Eli Lilly and Company et al. v. HEC Pharm USA, Inc. et al.
    1:15-cv-00792; filed May 20, 2014 in the Southern District of Indiana

    • Plaintiffs:  Eli Lilly and Company; Daiichi Sankyo Co., Ltd.; Daiichi Sankyo, Inc.; Ube Industries, Ltd.
    • Defendants:  HEC Pharm USA, INC.; HEC Pharm Co., Ltd.

    Infringement of certain of U.S. Patent Nos. 8,404,703 ("Medicinal Compositions Containing Aspirin," issued March 26, 2013) and 8,569,325 ("Method of Treatment with Coadministration of Aspirin and Prasugrel," issued October 29, 2013) following a Paragraph IV certification as part of HEC's filing of an ANDA to manufacture a generic version of Lilly's Effient® (prasugrel hydrochloride, to be used in combination with aspirin for the reduction of thrombotic cardiovascular events in certain patients with acute coronary syndrome (ACS) who are to be managed with percutaneous coronary intervention).  View the complaint here.

    Gilead Sciences Inc. et al. v. AbbVie Inc.
    1:15-cv-00399; filed May 19, 2015 in the District Court of Delaware

    • Plaintiffs:  Gilead Sciences Inc.; Gilead Sciences Ireland Unlimited Co.
    • Defendant:  AbbVie Inc.

    Declaratory judgment of invalidity of U.S. Patent No. 9,034,832 ("Solid Compositions," issued May 19, 2015), allegedly covering Gilead's formulation and use of its Harvoni® product (Sofosbuvir and Sofosbuvir, used to treat Hepatitis C Virus).  View the complaint here.


    Cephalon Inc. v. Apotex Inc. et al.
    1:15-cv-00404; filed May 19, 2015 in the District Court of Delaware

    • Plaintiff:  Cephalon Inc.
    • Defendants:  Apotex Inc.; Apotex Corp.

    Infringement of U.S. Patent Nos. 8,445,524 ("Solid Forms of Bendamustine Hydrochloride," issued May 21, 2013) and 8,436,190 ("Bendamustine Pharmaceutical Compositions," issued May 7, 2013), 8,609,863 (same title, issued December 17, 2013), and 8,791,270 (same title, issued July 29, 2014), 8,669,279 ("Solid Forms of Bendamustine Hydrochloride," issued March 11, 2014), 8,883,836 (same title, issued November 11, 2014), and 8,895,756 ("Bendamustine Pharmaceutical Compositions," issued November 25, 2014) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Cephalon's Treanda® (bendamustine hydrochloride, used to treat chronic lymphocytic leukemia and non-Hodgkin's lymphoma).  View the complaint here.

  • Amgen v. Sandoz — Federal Circuit Oral Argument

    By Andrew Williams —

    Federal Circuit SealThe Federal Circuit heard oral arguments in the Amgen v. Sandoz case on Wednesday, June 3, 2015.  The three judges on the panel were Judge Newman, Judge Lourie, and Judge Chen.  This case is on appeal from the U.S. District Court for the Northern District of California, where Judge Seeborg denied Amgen's motion for a partial judgement on the pleadings and for a preliminary injunction.

    One of the main issues on appeal was whether the disclosure and patent exchange provisions (the so-called "patent dance") of the Biologics Price Competition and Innovation Act ("BPCIA") is mandatory or whether either party can opt out of the requirements and settle for the remedy specified in the statute.  As a reminder, the patent dance kicks off with the disclosure of the biosimilar application, as well as the process of manufacture, by the subsection (k) applicant.  The statute at subsection (l)(2) reads:

    (2) SUBSECTION (k) APPLICATION INFORMATION.—Not later than 20 days after the Secretary notifies the subsection (k) [biosimilar] applicant that the application has been accepted for review, the subsection (k) applicant—
        (A) shall provide to the reference product sponsor a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application; and
        (B) may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor. [emphasis added]

    42 U.S.C. § 262(l)(2).  The panel wasted no time in cutting to the chase, when Judge Lourie interrupted counsel for Amgen almost at the outset, noting "[w]hat you are going to tell us . . . is that 'shall' means 'shall' — in fact it means 'must.'"  This has, of course, been Amgen's position since it was first notified that Sandoz did not intend to participate in this disclosure process.

    Sandoz, for its part, has maintained that the use of the term "shall" does not mean that a biosimilar applicant must provide a copy of its application in every instance, but only if it wishes to partake in the benefits of the patent dance.  Judge Newman has a different take on that question — it was not whether to partake in this particular subpart of the BPCIA, but rather whether to partake in the entirety of the BPCIA process — including the abbreviated approval process:

    If you want my data — if you want to be a (k) applicant, which I gather Sandoz has done, right — has used the data, hasn't gone through their own clinical trials or all the rest of it — then this is what you "shall" do.  You don't have to use the Amgen data, you can create your own, then you are home free.

    While counsel for Sandoz disagreed, Judge Newman continued:

    But why isn't it the question — if you have a statute, this integrated statute, there were — from the record it looks as if there were extensive hearings, tradeoffs, debates, connections with the pros and cons of Hatch Waxman for biosimilars — and here we have a complicated statute and you say only some of it counts.

    Of course, it is unfortunately not as simple as saying that this is an "integrated statute."  Instead, once you start looking at the entirety of the statute, it gets a lot more complicated.  As Judge Lourie noted — the BPCIA should win the "Pulitzer prize for complexity or uncertainty."  The patent dance is outlined in subsection (l)(2)-(6) of the statute, whereas subsection (l)(9)(c) purports to provide a remedy should the biosimilar applicant not disclose the requisite information:

    If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of Title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.

    42 U.S.C. § 262(l)(9)(C).  Sandoz has maintained that because the remedy is already provided for in the statute, the subsection (k) applicant is free to disregard the seemingly mandatory disclosure provision, provided it is willing to accept the consequences.

    Judge Chen clearly struggled with trying to reconcile the statute as a whole.  On the one hand, he had one of the most quoted lines of the hearing:  "I don't see through the language or the structure of (l) where there's a hint that it's a 'choose-your-own-adventure' situation for the (k) applicant."  However, Judge Chen ran that thought to its logical conclusion, noting that even if the provision is determined to be mandatory, you might end up in the same situation — with the patent infringement remedy outlined by the statute.

    To this point, Amgen presented a compelling, yet somewhat buried, response.  If § 262(l)(9)(C) were meant to be the exclusive remedy for non-compliance with the disclosure provision, the biosimilar applicant would be put into a much better position than it would have been otherwise.  The statute envisions and anticipates patent litigation with regard to methods of manufacturing the biosimilar drug product — indeed it is one of the specified types of information that must be disclosed by the subsection (k) applicant.  However, if the biosimilar applicant refuses to "dance," § 262(l)(9)(C) only allows for a DJ action with respect to patents covering the biological product or the uses thereof (apparently in a nod to the Hatch Waxman statute).  And this is to say nothing of the problem that, without the disclosure of the recited information, the reference product sponsor will have difficulty knowing with certainty just which patents are being infringed.  With the biosimilar applicant facing such overwhelming incentives, it will likely be the rare situation where it will choose to make the appropriate disclosures and initiate the patent dance.

    Part of the problem, as Judge Chen noted, is that there is really nothing tying subsection (l) to subsection (k).  Instead, activities involving the FDA fall under subsection (k), while matters involving the resolution of patent infringement claims fall under subsection (l).  Congress could have done a better job ensuring that progress of the application before the FDA could not continue (or at least be substantially delayed) unless the subsection (k) applicant participated in the patent dance.  Indeed, Amgen was rebuffed when it requested that the FDA require biosimilar applicants to "certify" compliance with the subsection (l) disclosure requirements (see "Amgen Receives No Help from the FDA — A Biosimilar Update").  A possible solution would be for the Federal Circuit to fashion some remedy that would leave the statute intact, but provide for the ability of district courts to enjoin the FDA if biosimilar applicants are non-compliant.

    The other main issue argued before the Court was whether Sandoz's Notice of Commercial Marketing was effective when it was made shortly after the application was accepted, as opposed to making it after the application was approved.  The questioning from the three judges seemed to suggest that the statute did not make sense unless the Notice was provided after the latter, or post-approval notice.  For example Judge Chen suggested that:  "it sounds a little nonsensical to say that that is an appropriate form of Notice of Commercial Marketing when you don't have any clue on whether your application will ever get approved," much less when.  He used the term "aspirational" to refer to such notice just after acceptance.  Nevertheless, the question was raised by the Court whether setting the "Notice" date after application approval would inappropriately extend the exclusivity period of the reference product sponsor — at least in situations like this for Amgen.

    The Court did ask what remedy Amgen was seeking on appeal.  It is important to note that this is a somewhat atypical case, in which Amgen's composition-of-matter patent has already expired, and the data exclusivity period is well beyond the 14 years contemplated by the statute.  Nevertheless, everyone appeared to be in agreement that any decision needed to be applicable not only to this case, but to all more "typical" cases that might arise.  Amgen asked that it be put back in the position it would have been if Sandoz had complied with the statute at the outset.  It also stressed that it did not want a "windfall."  However, as for the particulars, it simply asked the Court to rule in Amgen's favor and remand to the District Court to fashion the appropriate remedy.

    There was one particularly troubling tangential comment by Judge Newman, at least from the perspective of Hatch Waxman litigation.  While discussing the artificial act of infringement related to the BPCIA, or 35 U.S.C. § 271(e)(2)(c)(ii), Judge Newman inquired whether it was correct that the comparable provision for Hatch Waxman, 35 U.S.C. § 271(e)(2)(a), set the act of infringement as the certification pursuant to paragraph IV.  Counsel for Amgen correctly noted that the statute only mentions the submission of the ANDA application, and is silent as to the paragraph IV certification.  However, this issue has already been addressed by the Federal Circuit in the Astra Zeneca v. Apotex case, where it concluded that, in order to establish subject matter jurisdiction pursuant to § 1338(a), nothing more than alleging infringement by the filing of an ANDA was required (see "AstraZeneca Pharmaceuticals LP v. Apotex Corp. (Fed. Cir. 2012)").  Moreover, almost every jurisdiction that has now considered this question has determined that a paragraph IV certification is not a prerequisite for jurisdiction under 271(e)(2).  In fact, at least two jurisdictions that at one point had come to the opposite conclusion (the Northern District of Illinois and the District of New Jersey), have since conformed to this majority position.  We can only hope that this case does not include some dicta on the subject that could create uncertainty moving forward.

    We will continue to monitor this case for any unusual development, and we will of course report on the outcome of this appeal in due course.

  • Conference & CLE Calendar

    CalendarJune 4, 2015 – "Litigating Inducement and Willfulness after Commil and Akamai" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    June 9, 2015 – "Claim Construction Caselaw Update: Mechanical & Chemical Arts" (American Intellectual Property Law Association) – 12:30 to 2:00 pm (Eastern)

    June 9, 2015 – Patent Quality Chat webinar series — Clarity of the Record – noon to 1:00 pm (EDT)

    June 9, 2015 – European biotech patent law update (D Young & Co) – 4:00 am, 7:00 am, and 12:00 pm (EDT)

    June 9-10, 2015 – Due Diligence Summit for Life Sciences*** (ExL Events) – Boston, MA

    June 10, 2015 – "Past, Present, and Future of Post-Grant Proceedings at the PTAB" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    June 15-17, 2015 – Fundamentals of Patent Prosecution 2015: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY

    June 15-18, 2015 – BIO International Convention (Biotechnology Industry Organization) – Philadelphia, PA

    June 18, 2015 – "Patent Infringement Letters: Considerations and Best Practices for Senders and Recipients — Patent Holder Strategies for Leveraging Letters and Avoiding DJ Actions; Defense and Response Strategies for Alleged Infringers" (Strafford) – 1:00 to 2:30 pm (EDT)

    June 23, 2015 – "Practical Patent Prosecution Strategies and Considerations" (American Bar Association (ABA) Center for Professional Development, Section of Intellectual Property Law, and Young Lawyers Division) – 1:00 to 2:30 pm (ET)

    June 25, 2015 – "Patent Inventorship: Best Practices for Determination and Correction" (Strafford) – 1:00 to 2:30 pm (EDT)

    July 8-10, 2015 – Fundamentals of Patent Prosecution 2015: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    July 14, 2015 – Patent Quality Chat webinar series – Face-to-face Examiner Interviews: A Demonstration of USPTO Tools – noon to 1:00 pm (EDT)

    August 11, 2015 – Patent Quality Chat webinar series – Measuring Patent Quality – noon to 1:00 pm (EDT)

    August 12-14, 2015 – Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

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

  • IPO Webinar on Litigating Inducement and Willfulness

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Litigating Inducement and Willfulness after Commil and Akamai" on June 4, 2015 from 2:00 to 3:00 pm (ET).  Paul Berghoff of McDonnell Boehnen Hulbert & Berghoff LLP, Steven Moore of Kilpatrick Townsend & Stockton, and Frank Nuzzi of Siemens Corporation will consider where the law surrounding the inducement of patent infringement stands now and give their thoughts on questions such as:

    • Does Commil increase the value of opinions of counsel for non-infringement?  The opinion states that a "reasonable" reading of the patent that results in non-infringement can be a defense to inducement.
    • How will Commil be used in cases involving willfulness?
    • Will patentees succeed in arguing that a good-faith belief in invalidity should not be a defense to willfulness?
    • Is the next step for the issue of divided infringement at the Federal Circuit or at the U.S. Supreme Court?
    • What strategy should litigants or potential litigants follow in the meantime?

    The registration fee for the webinar is $130 (government and academic rates are available upon request).  Those interested in registering for the webinar can do so here.

  • European Biotech Patent Law Webinar

    D Young & CoD Young & Co will be offering its next European biotech patent law update on June 9, 2015.  The 45-minute webinar will be offered at three times: 4:00 am, 7:00 am, and 12:00 pm (EDT).  D Young & Co European Patent Attorney Simon O'Brien will provide an essential update and live Q&A on EPO biotechnology case law.

    While there is no fee to participate, attendees must register in advance.  Those wishing to register can do so here.

  • Webinar on Patent Inventorship

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Patent Inventorship: Best Practices for Determination and Correction" on June 25, 2015 from 1:00 to 2:30 pm (EDT).  Jill K. MacAlpine, Ph.D. of Finnegan Henderson Farabow Garrett & Dunner and Lauren L. Stevens of Global Patent Group will provide guidance for patent counsel on identifying and determining inventorship, offer best practices for correcting errors regarding inventorship, offer perspectives gained from working with the AIA since it was passed, and outline lessons from recent court decisions.  The webinar will review the following questions:

    • What key information does counsel need to determine inventorship?
    • What are the steps for counsel when inventorship must be corrected?
    • What is the AIA's impact on an inventorship determination?

    The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those interested in registering for the webinar, can do so here.

  • Chisum Patent Academy Patent Law Seminar

    The Chisum Patent Academy will be offering its next Advanced Patent Law Seminar on August 12-14, 2015 in Seattle, WA.  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 for the seminar is $2,000; a maximum of ten registrations will be accepted for the seminar.  Those interested in registering for the seminar can do so here.  Additional information regarding the seminar can be obtained here or by e-mailing info@chisum.com.

    Chisum Patent Academy

  • Senate Judiciary Committee Passes PATENT Act

    By Kevin E. Noonan —

    Senate SealThe Senate Judiciary Committee passed the Protecting American Talent and Entrepreneurship Act (S. 1137, otherwise known as the PATENT Act) yesterday on a vote of 12-4, with Senators Grassley (R-IA), Hatch (R-UT), Sessions (R-AL), Graham (R-SC), Cornyn (R-TX), Lee (R-UT), Flake (R-AZ), Perdue (R-GA), Tillis (R-NC), Leahy (D-VT), Feinstein (D-CA), Schumer (D-NY), Whitehouse (D-RI), Klobuchar (D-MN), Franken (D-MN), and Blumenthal (D-CT) voting Aye and Senators Cruz (R-TX), Vitter (R-LA), Durbin (D-IL), and Coons (D-DE) voting Nay.

    This bill is the counterpart of Representative Goodlatte's "Innovation Act" (H.R. 9) (see "Rep. Goodlatte Introduces His Patent Reform Bill (Again)" and "Rep. Goodlatte Introduces His Patent Reform Bill (Again) — Part II") but is not identical and the differences (if the bill passes both Houses of Congress) will be subject to a conference to be ironed out.  Senator Grassley introduced a Managers Amendment that serves as the reference for all amendments and can be found here.

    The Committee passed several amendments introduced by members and rejected others, including the following:

    Passed:

    • Grassley ALB15850 (unavailable on committee website)

    • Feinstein ALB15869 (unavailable on committee website)

    • Cornyn ALB15853 (defining the entities falling within the scope of the university exception to provisions entitling prevailing parties to attorneys fees, and striking the extension of the Office's fee-setting authority from seven years to fourteen years)

    Failed:

    • Durbin OLL15550 (extending the exemption for attorneys' fees where the non-prevailing party is a university or non-profit technology transfer organization to include their licensees, provided that the licensee's primary business is not the assertion and enforcement of patents or the licensing resulting therefrom)

    • Coons OLL15547 (striking pages 2-10 of the bill, including Sections 3-6)

    • Vitter OLL15548 (extending the exemption for ANDA cases to include cases where "the party is a small business concern, independent inventor, or nonprofit organization described in section 41(h)(1)")

    • Coons OLL15542 (extending the exemption for heightened pleadings to include cases where the plaintiff patentee certifies having a good faith basis that permitting infringement "would result[] in the loss of at least 20 full-time manufacturing or research jobs.")

    • Coons OLL 15543 (extending the exemption from the discovery limits set forth in the bill to include ANDA cases and any action where the patentee plaintiff certifies to having a good faith basis for believing it had "created at least 20 direct, full-time manufacturing or research-related jobs during the preceding 3-year period")

    Senator Coons also withdrew his proposed amendments OLL15551 (which would have imposed different burdens on the petitioner in both inter partes review and post-grant review for invalidating a previously granted claim (clear and convincing evidence) and newly proposed claims (preponderance)) and OLL15552 (which would have imposed a standing requirement for a petitioner in both inter partes review and post-grant review).

    For now, subject to these amendments the bill contains the following sections (set forth in parallel with the sections of the Goodlatte bill for comparison):

    PATENT Act (S. 1137)

    Innovation Act (H.R. 9)

    Sec. 1. Short title; table of contents.
    Sec. 2. Definitions.
    Sec. 3. Pleading requirements for patent infringement actions.

    Sec. 4. Customer-suit exception.

    Sec. 5. Discovery limits.
    Sec. 6. Procedures and practices to implement recommendations of the Judicial Conference.

    Sec. 7. Fees and other expenses.
    Sec. 8. Requirement of clarity and specificity in demand letters.
    Sec. 9. Abusive demand letters.
    Sec. 10. Transparency of patent transfer.
    Sec. 11. Inter partes review and post-grant proceedings.
    Sec. 12. Protection of intellectual property licenses in bankruptcy.
    Sec. 13. Small business education, outreach, and information access.
    Sec. 14. Studies on patent transactions, quality, and examination.
    Sec. 15. Technical corrections to the Leahy-Smith America Invents Act and other improvements.

    Sec. 16. Effective date.

    Sec. 17. Severability.

    Sec. 1. Short title; table of contents.

    Sec. 2. Definitions.

    Sec. 3. Patent infringement actions.

    Sec. 4. Transparency of patent ownership.

    Sec. 5. Customer-suit exception.

    Sec. 6. Procedures and practices to implement recommendations of the Judicial Conference.

    Sec. 7. Small business education, outreach, and information access.

    Sec. 8. Studies on patent transactions, quality, and examination.

    Sec. 9. Improvements and technical corrections to the Leahy-Smith America Invents Act.

    Sec. 10. Effective date.

    Compared with the bill submitted earlier this year, this version contains provisions directed to inter partes review and the estoppel effects thereof that bring it more in line with the Goodlatte bill.  This version also eliminates many of specific effective dates for various provisions in favor of a uniform effective date provision set forth in Section 16 of the bill.

    The PATENT Act has as its first substantive provisions changes in pleadings requirements in patent cases, directing the Supreme Court to eliminate Form 18 (Complaint for Patent Infringement) from the Appendix to the Federal Rules of Civil Procedure (§ 3(a)).  The bill (§ 3(b)) then amends 35 U.S.C. § 281 by adding new § 281A to require a plaintiff in a patent infringement case to:

    1. Identify each patent allegedly infringed;

    2. Identify each claim in each patent alleged to be infringed;

    3. Identify the accused process, machine, manufacture or composition of matter (termed the "accused instrumentality" in the Act) that is alleged to infringe;

    4. Identify for each accused instrumentality either the make or model number of a representative accused infringing embodiment or provide a description thereof;

    5. Identify for each of the accused instrumentalities which claims are infringed and the elements thereof that are infringing;

    6. (for indirect infringement) identify the acts that would contribute to or induce literal infringement.

    (§ 281A(a)).  Amended § 281A(b) provides that a complaint that does not comply with these provisions can be subject to a motion to dismiss unless a party "states a plausible claim for relief sufficient under the Federal Rules of Civil Procedure" under conditions where the required information is not accessible (§ 281A(c)) (provided that the party performs a Rule 11-compliant investigation).  Section 281A(d) confirms that these heightened pleadings requirements "shall not be construed to affect a party's leave to amend [its] pleadings" and that should any such information be confidential the pleadings can be filed under seal on motion to the court (§ 281A(e)).  Finally, proceedings under § 271(e) (i.e., ANDA cases under the Hatch-Waxman Act) are exempt from these pleadings requirements (§ 281A(f)).

    The bill also provides for another amendment to § 281, § 281B, that requires "early disclosure" of financial and ownership interests in each asserted patent; these disclosures are required within 14 days of serving or filing a complaint.  In addition, this portion of the bill imposes a requirement that for each asserted patent the plaintiff provide a list of "each complaint, counterclaim, or cross-claim filed by the patentee or an affiliate thereof in the United States during the 3-year period preceding the date of the filing of the action" (or any other action involving each patent), with the bill specifying what must be disclosed (including the caption, the civil action number, and the court where the complaint was filed or transferred) (§ 281B(b)).  Also required is a statement regarding whether any of the asserted patents have been "subject to an assurance made by the party to a standards development organization to license others" (reflecting the interests of the high-tech constituency that has funded these bills).  All this information must be provided to the Patent and Trademark Office within one month of when the disclosures are made to the defendant in the civil action (§ 281B(d)).  Finally, these disclosures are also subject to confidentiality provisions, the bill expressly defining an individual's home address as being confidential (§ 281B(e)).  As with other amendments to § 281 these provisions do not apply in ANDA litigation.

    Section 4 of the bill is directed to customer suits (wherein customers of an accused infringer are threatened with legal action) by introducing a "customer stay" (amended 35 U.S.C. § 299A) wherein a "covered customer" can move for a stay which the court "shall grant" provided that there is in the action or a separate action an allegation of infringement against the "covered manufacturer" relating to the same subject matter, and the covered customer agrees to be bound by the judgment of the court in that action against the covered manufacturer and gives up her right to be giving a "full and fair opportunity to separately litigation" on any issue where the requirements of issue preclusion are satisfied.  Such a motion must be filed no later than 90 days after service of the first pleading or the date on which the first scheduling order in the case is entered (§ 299A(b)).  The stay requires agreement by the covered manufacturer when the manufacturer has been made a party on motion by the customer (§ 299A(c)) and the stay will be lifted in cases of unreasonable prejudice (against the patentee) or action against the manufacturer will not resolve the issues against the covered customer (§ 299A(d)).  The customer is protected from the manufacturer filing a nonsuit or otherwise settling its case against the patentee by waiver of the estoppel effect if the covered customer can show unreasonable prejudice or manifest injustice (§ 299A(e)).

    Section 5 concerns limits on discovery, amending § 299 by creating new § 299B which stays discovery upon motion to dismiss, motion to transfer venue or motion to sever accused infringers (§ 299B(1)), the court retaining the authority to grant limited discovery related to such motions.  These provisions also do not apply in ANDA cases.

    This version of the bill also contains directives to the Judicial Conference for "Rules and procedures to be considered (Sec. 6(a)(1) and (2)) with regard to the extent to which "core documentary evidence" must be supplied and who bears the cost, and similar questions relating to "noncore documentary evidence" (Sec. 6(a)(2)(A)); electronic evidence (communications) (Sec. 6(a)(2)(B)) and "additional" discovery (Sec. 6(a)(2)(C)), the latter of which requests being limited to reasonable costs, including attorneys' fees, associated with such production (with the provisions that the party seeking such discovery be required to post a bond for the cost thereof (unless the parties agree otherwise).  (Section 6 leaves it to the Judicial Conference to define terns such as "core" and "noncore" documentary evidence.)  These matters are contemplated to be the subject of the initial Rule 26(f) conference.  All of these actions are to be undertaken "using existing resources, indicating an unwillingness for Congress to provide additional funds for these activities.

    Section 7 contains provisions demonstrating the "sense of the Congress" that attorneys' fees and costs should be paid to a prevailing party when the non-prevailing party's litigation actions are not "objectively reasonable" (making it clear that hindsight reconsideration of the non-prevailing party's actions will be one basis for such determinations).  The bill seeks to "strike a balance" between patent holders' rights and abuses of those rights, analogizing (somewhat disingenuously) to the provisions of 28 U.S.C. § 1447 (provisions involving fee-shifting in cases where it is found that a state court action was improperly removed to Federal court, situations that can be expected to occur much less frequently and involve much lower fees and costs that patent litigation).  These provisions are involve amending 35 U.S.C. § 285 as follows:

    (a) Award.—In connection with a civil action in which any party asserts a claim for relief arising under any Act of Congress relating to patents, upon motion by a prevailing party, the court shall determine whether the position of the non-prevailing party was objectively reasonable in law and fact, and whether the conduct of the non-prevailing party was objectively reasonable. If the court finds that the position of the non-prevailing party was not objectively reasonable in law or fact or that the conduct of the non-prevailing party was not objectively reasonable, the court shall award reasonable attorney fees to the prevailing party unless special circumstances, such as undue economic hardship to a named inventor or an institution of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))),would make an award unjust. The prevailing party shall bear the burden of demonstrating that the prevailing party is entitled to an award.

    (b) Covenant Not To Sue.—A party to a civil action who asserts a claim for relief arising under any Act of Congress relating to patents against another party, and who subsequently unilaterally (i) seeks dismissal of the action without consent of the other party and (ii) extends to such other party a covenant not to sue for infringement with respect to the patent or patents at issue, may be the subject of a motion for attorney fees under subsection (a) as if it were a non-prevailing party, unless the party asserting such claim would have been entitled, at the time that such covenant was extended, to dismiss voluntarily the action without a court order under rule 41 of the Federal Rules of Civil Procedure, or the interests of justice require otherwise.

    Note that these provisions permit (but do not require) the court to exempt sole inventors and institutions of higher education from attorneys' fees and costs sanctions, and put the burden on the prevailing party to show she is entitled to the award.  This Section of the bill also contains the "anti-troll" provisions wherein a defendant can certify that upon a good faith belief the patent plaintiff is in the "primary business [of] assert[ing] and enforce[ing] patents [or patent licenses]" (Sec. 7(c)).  Such a certification triggers a requirement that the alleged troll has "sufficient funds available" to satisfy an attorneys' fees award or that it is not a troll (these are on-going obligations throughout the action).  The party making the certification that the patent plaintiff is a troll is under an affirmative obligation to give actual notice to all "interested parties" sufficient that jurisdiction of the court will attach and permit recovery of any such award.  Universities and other "institutions of higher learning" as well as non-profit technology transfer organizations can exempt itself (presumably upon receiving notice from the defendant) by certifying its status as a university or institution of higher learning or a non-profit technology transfer organization (Sec. 7(c)(1)(F)).  Once again, ANDA litigation is exempt from these provisions, except insofar as such litigation falls within the scope of the "exceptional case" standard set forth under current law.

    The remaining Sections of the bill will be discussed in a separate post.  How its sponsors see the provisions of the bill can be found here.

  • Ultramercial v. WildTangent — Petition for Writ of Certiorari

    By Michael Borella —

    UltramercialThe Ultramercial story is not over.  In the latest step of a controversial case involving 35 U.S.C. § 101 that has been ongoing since 2009, patentee Ultramercial has petitioned the Supreme Court for a writ of certiorari.  The parties' first two attempts to obtain high court review of currently-invalidated U.S. Patent No. 7,346,545 were granted, vacated, and remanded to the Federal Circuit.  But, as the cliché goes, perhaps the third time will be the charm.

    In its petition, Ultramercial focuses on the Federal Circuit's interpretation of the Alice Corp. v. CLS Bank decision, argues that the appeals court is suffering from an intra-circuit split over § 101, and points out the importance of software patents to the economy as a whole.

    But let's start at the beginning.  Ultramercial sued Hulu, YouTube, and WildTangent for infringement of the '545 patent.  Hulu and YouTube were eventually dismissed from the case.  On a 12(b)(6) motion, and without construing the claims, the District Court applied the "machine or transformation" test from Bilski v. Kappos, and held that the '545 patent does not claim patent-eligible subject matter under 35 U.S.C. § 101.  On appeal, the Federal Circuit reversed and remanded.

    WildTangent petitioned for Supreme Court review.  The Court, however, granted, vacated, and remanded the case for consideration in light of its intervening decision in Mayo Collaborative Servs. v. Prometheus Labs, Inc.  Back in the Federal Circuit again, a unanimous panel of Chief Judge Rader, Judge O'Malley, and Judge Lourie once again reversed the District Court, finding that the claims did indeed address patent-eligible subject matter.

    WildTangent again sought review from the Supreme Court.  In June 2014, the Court once more granted, vacated, and remanded the case back to the Federal Circuit for further consideration in view of its Alice Corp. v. CLS Bank decision.  In November 2014, the Federal Circuit reversed course from its two previous decisions regarding the '545 patent, and found the claims invalid after applying the Alice test.

    Ultramercial yet again seeks the Court's assessment of the patent.

    Claim 1 of the '545 patent recites:

    A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:
        a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;
        a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;
        a third step of providing the media product for sale at an Internet website;
        a fourth step of restricting general public access to said media product;
        a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;
        a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;
        a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;
        an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;
        a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and allowing said consumer access to said media product after receiving a response to said at least one query;
        a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and
        an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

    The invention has been characterized by the Federal Circuit as "a method for distributing copyrighted media products over the Internet where the consumer receives a copyrighted media product at no cost in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content."  In plain English, this is what happens when you go to one of many online video streaming sites, YouTube for example.  Prior to watching the video that you seek, you must first watch about 15 or 30 seconds of an advertisement.  Ultimately, the Federal Circuit affirmed that the claims were directed nothing more than the abstract idea of using advertising as currency.

    Ultramercial begins its petition by contending that the Federal Circuit's invalidation of the '545 patent expands the abstract idea exception to § 101 beyond what the Court had set forth in Alice.  The latter case introduced a two-prong subject-matter eligibility test.  The first prong is to determine whether the claims are directed to a patent-ineligible law of nature, natural phenomenon, or abstract idea.  If so, the second prong is to determine whether any additional claim elements transform the claim into a patent-eligible application that amounts to significantly more than the ineligible concept itself.

    Ultramercial views Alice and Bilski as having a key characteristic in common.  That is, "the claim elements (alone or in combination) covered performing, on a computer, well-known, conventional rules or fundamental, routine economic practices, and lacked any innovation beyond applying those known ideas to a stand-alone or networked computer."  But, as Ultramercial points out, the claims of the '545 patent were found twice by the Federal Circuit to recite more than just advertising as currency, and the invention therein "sharply departed from conventional advertising in the brick-and-mortar context," because it "offered a solution unique to the technological environment of networked computers."

    Ultramercial's position is that the claimed invention was a dramatic improvement over the prior art, and cannot be categorized as well-understood, routine, or conventional.  As a consequence, the '545 patent is clearly distinguishable from those of Alice and Bilski.

    In its November 2014 decision, The Federal Circuit wrote that even though some steps of the claim "were not previously employed in this art [that] is not enough — standing alone — to confer patent eligibility upon the claims at issue."  As a result, patentees and applicants found themselves in an odd position — their claims can be deemed abstract if the claims incorporate fundamental, long-standing procedures. But, they are not able to rebut this notion by attempting to establish that some of these procedures (or the claim as a whole) was novel at the time of the invention.  If successful, Ultramercial will provide a way to fight back against contentions that one's claims are abstract due to their being directed to known prior art (e.g., a mere automation of previously-known manual processes).

    Ultramercial argues further that the Federal Circuit is irreconcilably split over § 101 given its decision to invalidate Ultramercial's claims, but find validity in those from DDR Holdings, LLC v. Hotels.com, L.P.  Ultramercial writes that "[c]omparing Ultramercial's claims to DDR Holding's claims reveals no articulable basis for finding one claim patent-eligible and the other abstract."  Particularly, "[b]oth recite a method requiring the use of a web server connected to the Internet . . . contain steps for accessing web-based content," and "[b]oth transmit and display content upon user-activation of web-based commands."

    Ultramercial also takes issue with how the two decisions differ in their view of computer programming.  "[T]he Ultramercial decision found no patentable substance in the patent's programming-centric third and fourth steps…as insignificant pre-solution activity," while "DDR Holdings cited programming-based steps as specifying how interactions with the Internet are manipulated to yield a desired result — a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink."

    Without Supreme Court review, purports Ultramercial, these two decisions will "continue generating confusion for both lower courts and the public."  Notably, Ultramercial does not attempt to rebut the DDR panel's lengthy synthesis of that case and Ultramercial, nor the simple notion that while Ultramercial merely added use of the Internet to an otherwise disembodied transaction, while DDR fundamentally changed how an aspect of the Internet operates.

    Finally, Ultramercial plies a policy argument, stating that there is need for clear rules governing the patent-eligibility of software inventions, and that the Alice decision left us with an unworkable standard for the determination thereof.  Quoting an article from the Techcrunch website, Ultramercial points out that "Uber, the world's largest taxi company, owns no vehicles.  Facebook, the world's most popular media owner, creates no content.  Alibaba, the most valuable retailer, has no inventory.  And Airbnb, the world's largest accommodation provider, owns no real estate."  The value of these companies is not in tangible products, but in software that allows users to interact with a virtual marketplace on the Internet, and patent protection should be available for their innovations.

    Additionally, Ultramercial takes the position that software is concrete and not abstract.  Indeed, "[t]he act of programming is translating real-world tasks into computer-executable form," the difficult part of which is the "mapping of real-world tasks onto computer-executable models [by way of] programming languages and tools."  Without appreciation for these physical aspects of software, innovation in computing, as well as new business models will suffer.  Ultramercial points to the "75% of all computer-implemented and software-based patents challenged under § 101" being invalidated by district courts and the Federal Circuit.

    This dispute is batting zero so far at the Supreme Court, and it is questionable whether the Court will take it up on the third opportunity to do so.  Ultramercial's two main arguments — that the abstract idea exception is limited to well-known, fundamental, or routine concepts, and that the DDR case has created a Federal Circuit split — could both be easily dismissed.  And while the Court's rulings that address the nexus of § 101 and software have created confusion and are erecting barriers to innovation, the current set of nine justices seems fine with that outcome.

    In this light, it is likely that the Court will deny certiorari.  On the other hand, if the Court does review this case, software patentees may become uneasy.  For instance, the Court might decide that the claims of Ultramercial and DDR rise or fall together.  As DDR is the only post-Alice § 101 case reviewed by the Federal Circuit that has found claims to be patent-eligible, it is a valuable data point for applicants and patentees.  Losing this data point would deepen the mystery of what claims incorporating an abstract idea need to recite in order to be patentable.

  • BIO International Convention 2015 Preview

    BIO and Biosimilars

    By Andrew Williams —

    BIO International Convention_shortThe 2015 BIO International Convention begins in two weeks in Philadelphia.  For the past few years, we have provided a series of previews with the goal of making the large amount of information and opportunities available at BIO less daunting for our readers.  This year is no exception, so over the next two weeks, Patent Docs will be highlighting a few sessions or other opportunities, in thematic fashion, to help you navigate your way through the convention.  Of course, Patent Docs authors and contributors will be present at BIO as part of the MBHB contingent, and Patent Docs readers are encouraged to stop by the MBHB booth (#3226) to discuss these sessions (or whatever other topic is of interest to you).

    One topic that is sure to be on the minds of many of the patent practitioners in the biotech and pharmaceutical space is that the new biosimilar pathway of the Biologics Price Competition and Innovation Act ("BPCIA") was first utilized this year.  Of course, the first such application was filed by Sandoz to market a biosimilar version of Amgen's NEUPOGEN® (filgrastrim) biologic drug product.  And, in a somewhat unexpected twist, Sandoz refused to participate in the disclosure and patent exchange provision of the BPCIA, the so-called "Patent Dance."  In fact, this case is particularly timely because the Federal Circuit is going to hear oral arguments in the Amgen v. Sandoz case tomorrow, June 3, 2015.  The Court is being asked to determine whether the "Patent Dance" provisions of the BPCIA are mandatory when a biosimilar application is filed, or whether they are optional as the Northern District of California Court determined them to be.  The Federal Circuit may also ultimately provide guidance for determining when a preliminary injunction is warranted.

    Interestingly, the Intellectual Property track at the BIO convention will not contain a session focused directly on the BPCIA and the biosimilar pathway.  This is perhaps not surprising in view of the fact that there has been a devoted session to this pathway almost every year since the BPCIA was enacted.  And with no party yet utilizing this pathway, there was less to discuss about it with every passing year.  Nevertheless, it is widely believed that the Patent Trial and Appeal Board ("PTAB") may become a major battleground for many biosimilar patent challenges.  Therefore, it is possible that biosimilars will be discussed at an Intellectual Property track session entitled "The Impact of USPTO Inter Partes Review Proceedings on (Bio)Pharma."  The description of the session indicates that "[t]his session will focus on the fairness of IPRs and how generic, brand and non-practicing entities are using IPRs strategically to force settlements, achieve licensing objectives and secure freedom to operate."  The session also promises to discuss how IPRs are impacting raising capital, partnering and developing patent portfolios.  This session will take place on Tuesday, June 16, from 2:00 PM – 3:15 PM.  The speakers will be Administrative Patent Judge Jacqueline Wright-Bonilla; Paul Golian, Vice President & Assistant General Counsel, Intellectual Property at Bristol-Myers Squibb Company; Joseph Kenny, Chief Patent Counsel at ImmunoGen, Inc.; and Gary Margolis, Principal, General Counsel & COO at DRI Capital.  The session will be moderated by Eric Steffe of Sterne Kessler, Goldstein & Fox PLLC.

    The introduction of biosimilars and interchangeable biologic products will not only have an impact on the Federal level, but still affect the individual states as well.  The BIO convention will correspondingly have a special program on Tuesday, June 16, from 2:00 PM – 3:15 PM entitled "The Impact Biosimilars Will Have on States."  The description suggests that the panel will explore what state policy makers will do to ensure that patients have access to these new medicines.  The speakers include Pam Lampitt, Assemblywoman of the State of New Jersey; Javier Coindreau, Vice President, Global Medical Affairs for Pfizer Biosimilars; Earl Dye, Director, Technical Regulatory Policy & Strategy in Genentech's Washington, DC Regulatory Affairs Office; Angela Lively, Senior Vice President at ADVI; and Kipp Snider, Director, State Government Affairs, Amgen.  This special program will be moderated by Topper Ray, President of Communications, Bravo Group.

    Of course, the U.S. is not the only country address the issue of follow-on biologics.  As a final example of a session aimed at biosimilars, the Regulatory Science track will offer "Global Regulatory Trends for Biosimilars and Biotherapeutics" on Wednesday, June 17, from 10:15 AM to 11:30 AM.  This session promises to "look at the establishment of guideline and implementation of regulatory approval in emerging markets, developing markets and multilateral forums such as APEC and WHO."  The panel will focus on risk assessment for non-comparable biologics, clinical and non-clinical considerations, naming, interchangeability, and labelling.  The confirmed speakers are Ivana Knezevic, Scientist, Technologies, Standards and Norms Team – Department of Essential Medicines and Health Products with the World Health Organization ("WHO"); and Matthew Frankel, Ph.D., U.S. Head, Medical Affairs at Sandoz Biopharmaceuticals.  The session will be moderated by Elizabeth Krutoholow, Companies Analyst for Bloomberg Intelligence.

    Be on the look-out for the next installment of BIO 2015 previews next week.  In the meantime, with biosimilars on your mind, please check back for our analysis of the Amgen v. Sandoz oral hearing in the next few days.