Patent Docs

Teva Pharmaceuticals USA, Inc. v. Sandoz Inc. — “Evidentiary Underpinnings” of Claim Construction: Supreme Court Holds Findings of Fact Require Deference

January 20, 2015

By Andrew Williams —

In a 7-2 decision authored by Justice Breyer, the Supreme Court held today that an "appellate court must apply a 'clear error,' not de novo, standard of review" to the evidentiary underpinnings of a district court's claim construction determination. Teva Pharmaceuticals USA, Inc. v. Sandoz Inc., No. 13-854, slip op. at 1-2 (U.S. Jan. 20, 2015). But what are those evidentiary underpinnings? Apparently everyone was in agreement that "when the district court reviews only evidence intrinsic to the patent (the patent claims and specification, along with the patent's prosecution history), the judge's determination will amount solely to a determination of law, and the Court of Appeals will review that construction de novo." Id. at 11-12. In contrast, when a district court consults extrinsic evidence, it "will need to make subsidiary factual findings about that extrinsic evidence." Id. at 12. It is this fact finding that is entitled to deference under Federal Rule of Civil Procedure 52(a)(6). Nevertheless, the Court was clear that "the ultimate question of construction will remain a legal question." Id. at 13. Therefore, "[f]or example, if a district court resolves a dispute between experts and makes a factual finding that, in general, a certain term of art had a particular meaning to a person of ordinary skill in the art at the time of the invention, the district court must then conduct a legal analysis: whether a skilled artisan would ascribe that same meaning to that term in the context of the specific patent claim under review." Id. at 12. Using the present case as illustrative, when the District Court credited the explanation of Teva's expert regarding how a skilled artisan would use a patent figure to determine what a potentially ambiguous claim term meant ("molecular weight"), it resolved a subsidiary factual issue. And because the Federal Circuit did not afford any deference to this finding on review, the appellate court's judgment was vacated, and the case was remanded for further processing consistent with the Supreme Court's opinion.

Justice Thomas, joined by Justice Alito, dissented. He framed the question as "whether claim construction involves findings of fact," and would have held that it does not. Teva Pharm., No. 13-854, slip op. at 1 (U.S. Jan. 20, 2015) (Thomas, J., dissenting). Patent claim construction is most closely analogized to statutory interpretation, according to the dissent, "[b]ecause they are governmental dispositions and provide rules that bind the public at large . . . ." Id. at 7. The dissent warned that "today's decision will result in fewer claim construction decisions receiving precedential effect, thereby injecting uncertainty into the world of invention and innovation." Id. at 15. Interestingly, this was a concern expressed by several companies that will be directly impacted by this decision. Only three amicus briefs were submitted by operating companies (representing 20 companies in total), but each of these urged maintaining the de novo standard of review because of the impact any change will have on their respective businesses. See "Teva v. Sandoz — Is Deferential Review a Boon for Patent Trolls?"

Patent Docs will provide additional analysis of this opinion in subsequent posts.
Ultramercial Requests En Banc Review

January 19, 2015

By Michael Borella —

Two months ago, in a long-awaited decision, the Federal Circuit invalided Ultramercial's U.S. Patent No. 7,346,545, directed to online video advertisements, as lacking patent-eligibility under 35 U.S.C. § 101. The Court indicated that the claims were directed to an "ordered combination of steps recit[ing] an abstraction — an idea, having no particular concrete or tangible form." Despite explicitly reciting that the advertisements were delivered over the Internet, these limitations, in the Court's view, were merely "conventional steps, specified at a high level of generality." Thus, the claims failed the two-prong patent-eligibility test set forth by the Supreme Court in Alice Corp. v. CLS Bank Int'l.

Ultramercial has petitioned the Federal Circuit for en banc review on the grounds that this decision goes far beyond the limits of § 101 the Supreme Court staked out in Alice, and when combined with the Federal Circuit's subsequent decision in DDR Holdings, LLC v. Hotels.com, leaves § 101 in a state of disarray.

Background

Ultramercial sued Hulu, YouTube, and WildTangent for infringement. Hulu and YouTube were eventually dismissed from the case. On a 12(b)(6) motion, and without construing the claims, the District Court 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. However, that decision was vacated by the Supreme Court. Back in the Federal Circuit again, a unanimous panel of Chief Judge Rader, Judge O'Malley, and Judge Lourie once more reversed the District Court, finding that the claims did indeed address patent-eligible subject matter.

WildTangent petitioned for Supreme Court review. On June 30, 2014, the Court granted the petition, vacated the Federal Circuit's judgment, and remanded the case back to the Federal Circuit for further consideration in view of the Alice decision. Since Chief Judge Rader had stepped down in the interim, Judge Mayer was appointed to take his place. On remand, Judges Lourie, Mayer, and O'Malley ruled against Ultramercial, as noted above. About three weeks later, the Federal Circuit found claims directed to a modification of web page hyperlinking in DDR to be patent-eligible.

The Petition

Ultramercial attempts to establish that any clarity brought to § 101 jurisprudence after Alice has been shattered by this recent pair of decisions. Ultramercial characterizes its claims as pertaining to "a computer-implemented invention for preventing users from accessing online copyrighted content without first viewing paid advertisements electronically paired to the content," while characterizing those of DDR as "a computer-implemented invention for keeping users on a host website by retrieving data from other websites and displaying the data with the same 'look and feel' as the host site." This, according to Ultramercial, indicates that the Federal Circuit is just as divided as it was pre-Alice, resulting in confusion in the district courts when reviewing § 101 challenges. Ultramercial writes that finding its patent invalid is "irreconcilable with DDR," and that "[c]omparing Ultramercial's claim 1 to DDR's claim 1 reveals no articulable basis for finding one claim eligible and the other abstract."

Further, Ultramercial contends that Alice stood for the principle that inventions directed to "performing, on a computer, well-known, conventional rules or fundamental, routine economic practices, and lack[ing] any innovation beyond applying those known ideas to a stand-alone or networked computer," were patent-ineligible. Ultramercial distinguishes its claims by noting they cover a procedure that "sharply departed from conventional advertising in the brick-and-mortar context," and "offered a solution unique to the technological environment of networked computers." Thus, Ultramercial's invention was counter-conventional and new.

In addition, Ultramercial points out that the first time the Federal Circuit reviewed its patent, the Court found that "the claims recite more than the age-old idea that advertising can serve as currency, but instead disclose a practical application of this idea" that was "an improvement to prior art technology." The Court came to a similar conclusion the second time it reviewed the patent, writing that the "recited steps are neither highly generalized nor inherent in the idea of monetizing advertising." Particularly, Ultramercial points to Judge Lourie's concurrence in the second decision, noting that "Judge Lourie found the claims patent-eligible because the added limitations in these claims represent significantly more than the underlying abstract idea of using advertising as an exchange or currency and, as a consequence, do not preempt the use of that idea in all fields." But in the post-Alice review, and in contrast to its prior analysis, the Court wrote that "the claimed sequence of steps comprises only conventional steps, specified at a high level of generality, and tied only to a general purpose computer." In the third decision, the Court also rejected the notion that the reasoning of Alice only applied to known, fundamental, and routine economic or commercial practices implemented on a generic computer.

Analysis

With such a storied history involving its patent, it is not surprising to that Ultramercial is not ready to give up just yet. Ultramercial's position that the dispositions of its claims and those of DDR are incompatible may be enough to convince the Federal Circuit judges to meet en banc, but ultimately may not win the day. The Court may instead take the opportunity to synthesize these cases, and could point out that Ultramercial merely added use of the Internet to an otherwise disembodied transaction, while DDR fundamentally changed how an aspect of the Internet operates.

But, given the gray area at issue, the Federal Circuit 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 Court that has found claims to be patent-eligible, it is a currently 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.

Ultramercial's argument that Alice does not apply to inventions that are not known, fundamental, or routine seems risky. While this logic is implicitly supported by the Alice and Mayo v. Prometheus cases, the Supreme Court never stated as much. The argument also seems to be in conflict with the "mental process" doctrine, which proclaims inventions that could be carried out in the human brain or using pencil and paper are abstract ideas. When combined with the holding of Alice, one could conclude that performing such a process, even an objectively new one, on a generic computer would still fail to meet the requirements of § 101.

Perhaps Ultramercial's best position is that the Federal Circuit panel that carried out the third review of its patent took the Alice decision too far by equating the Internet with a generic computer. As a result, the § 101 exceptions threaten to "swallow all of patent law."
Court Report

January 18, 2015

By Sherri Oslick —

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

Sanofi-Aventis U.S. LLC et al. v. Breckenridge Pharmaceutical, Inc.
9:15-cv-80056; filed January 15, 2015 in the Southern District of Florida

• Plaintiffs: Sanofi-Aventis U.S. LLC; Aventis Pharma S.A.; Sanofi
• Defendant: Breckenridge Pharmaceutical, Inc.

Sanofi-Aventis U.S. LLC et al. v. Apotex Corp. et al.
3:15-cv-00287; filed January 14, 2015 in the District Court of New Jersey

• Plaintiffs: Sanofi-Aventis U.S. LLC; Aventis Pharma S.A.; Sanofi
• Defendants: Apotex Corp.; Apotex Inc.

Sanofi-Aventis U.S. LLC et al. v. Breckenridge Pharmaceutical, Inc.
3:15-cv-00289; filed January 14, 2015 in the District Court of New Jersey

• Plaintiffs: Sanofi-Aventis U.S. LLC; Aventis Pharma S.A.; Sanofi
• Defendant: Breckenridge Pharmaceutical, Inc.

Sanofi-Aventis U.S. LLC et al. v. Onco Therapies Ltd.
3:15-cv-00290; filed January 14, 2015 in the District Court of New Jersey

• Plaintiffs: Sanofi-Aventis U.S. LLC; Aventis Pharma S.A.; Sanofi
• Defendant: Onco Therapies Ltd.

The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. 5,847,170 ("Taxoids, Their Preparation and Pharmaceutical Compositions Containing Them" issued December 8, 1998) and 7,241,907 ("Acetone Solvate of Dimethoxy Docetaxel and its Process of Preparation" issued July 10, 2007) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Sanofi's Jevtana® (cabazitaxel injection, used in combination with prednisone for the treatment of patients with hormonerefractory metastatic prostate cancer previously treated with a docetaxel-containing treatment regimen). View the Apotex complaint here.

Millennium Pharmaceuticals Inc. v. Hetero Labs Ltd. et al.
1:15-cv-00039; filed January 14, 2015 in the District Court of Delaware

• Plaintiff: Millennium Pharmaceuticals Inc.
• Defendants: Hetero Labs Ltd.; Hetero USA Inc.

Millennium Pharmaceuticals Inc. v. Onco Therapies Ltd., et al.
1:15-cv-00040; filed January 14, 2015 in the District Court of Delaware

• Plaintiff: Millennium Pharmaceuticals Inc.
• Defendants: Onco Therapies Ltd.; Agila Specialties Inc.

The complaints in these cases are substantially identical. Infringement of U.S. Patent Nos. 6,713,446 ("Formulation of Boronic Acid Compounds," issued March 30, 2004) and 6,958,319 (same title, issued October 25, 2005), licensed exclusively to Millennium, following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Millenium's Velcade® (bortezomib, used to treat multiple myeloma). View the Hetero complaint here.

Horizon Pharma Ireland Ltd. et al. v. Paddock Laboratories LLC et al.
1:15-cv-00043; filed January 14, 2015 in the District Court of Delaware

• Plaintiffs: Horizon Pharma Ireland Ltd.; HZNP Ltd.; Horizon Pharma USA Inc.
• Defendants: Paddock Laboratories LLC; Perrigo Co.

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 Paddock'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.

C T E Global, Inc. v. Novozymes A/S et al.
1:15-cv-00181; filed January 9, 2015 in the Northern District of Illinois

• Plaintiff: C T E Global, Inc.
• Defendants: Novozymes A/S; Novozymes North America, Inc.

Declaratory judgment of invalidity and noninfringement of U.S. Patent Nos. 6,255,084 ("Thermostable Glucoamylase," issued July 3, 2001) and 7,060,468 (same title, issued June 13, 2006) based on CTE's manufacture and sale of certain glucoamylase enzyme products. View the complaint here.

Pfizer Inc. et al. v. Mylan Inc. et al.
1:15-cv-00004; filed January 9, 2014 in the Northern District of West Virginia

• Plaintiffs: Pfizer Inc.; Wyeth LLC; Pfizer Pharmaceuticals LLC; PF Prism C.V.; Pfizer Manufacturing Holdings LLC
• Defendants: Mylan Inc.; Agila Specialties Private Ltd.; Mylan Pharmaceuticals Inc.

Infringement of U.S. Patent Nos. 7,879,828 ("Tigecycline Compositions and Methods of Preparation," issued February 1, 2011) and 8,372,995 ("Crystalline Solid Forms of Trigecycline and Methods of Preparing Same," issued February 12, 2013), licensed to Pfizer, following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Pfizer's Tygacil® (tigecycline injectible, used for the treatment of complicated skin and skin structure infections, complicated intra-abdominal infections, and community-acquired bacterial pneumonia). View the complaint here.

Jazz Pharmaceuticals, Inc. v. Ranbaxy Laboratories Ltd. et al.
2:15-cv-00187; filed January 9, 2015 in the District Court of New Jersey

• Plaintiff: Jazz Pharmaceuticals, Inc.
• Defendants: Ranbaxy Laboratories Ltd.; Ranbaxy Inc.

Jazz Pharmaceuticals, Inc. v. Par Pharmaceutical, Inc.
2:15-cv-00173; filed January 8, 2015 in the District Court of New Jersey

The complaints in these cases are substantially identical. Infringement of U.S. Patent No. 8,859,619 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued October 14, 2014) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Jazz's Xyrem® (sodium oxybate, used to treat narcolepsy). View the Par complaint here.

Salix Pharmaceuticals Inc. et al. v. Novel Laboratories Inc.
1:15-cv-00027; filed January 8, 2015 in the District Court of Delaware

• Plaintiffs: Salix Pharmaceuticals Inc.; Dr. Falk Pharma GmbH
• Defendant: Novel Laboratories Inc.

Infringement of U.S. Patent No. 8,865,688 ("Compositions and Methods For Treatment of Bowel Diseases With Granulated Mesalamine," issued October 21, 2014) following a paragraph IV certification as part of Novel's amendment of its ANDA to manufacture a generic version of Salix's Apriso® (mesalamine, used for the maintenance of remission of ulcerative colitis in adults). View the complaint here.

Otsuka Pharmaceutical Co., Ltd. v. Hetero Drugs Limited et al.
1:15-cv-00161; filed January 8, 2015 in the District Court of New Jersey

• Plaintiff: Otsuka Pharmaceutical Co., Ltd.
• Defendants: Hetero Drugs Limited; Hetero Labs Limited; Hetero USA, Inc.

Infringement of U.S. Patent Nos. 8,580,796 ("Low Hygroscopic Aripiprazole Drug Substance and Processes for the Preparation Thereof," issued November 12, 2013), 8,642,760 (same title, issued February 4, 2014), and 8,759,350 ("Carbostyril Derivatives and Serotonin Reuptake Inhibitors for Treatment of Mood Disorders," issued June 24, 2014) following a Paragraph IV certification as part of Hetero's filing of an ANDA to manufacture a generic version of Otsuka's Abilify® (aripiprazole, used to treat bipolar disorder and schizophrenia). View the complaint here.
Conference & CLE Calendar

January 18, 2015

January 20, 2014 – "Top Patent Law Stories of 2014" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

January 22, 2015 – "Preparing for and Navigating PTAB Appeals Before the Federal Circuit — Conducting PTAB Trials With Eye to Appeal, Determining Errors for Appeal, Understanding PTO Practice and Federal Circuit Law" (Strafford) – 1:00 to 2:30 pm (EST)

January 29, 2015 – "IPR Defense: An Overview of Strategic Considerations and Potential Pitfalls From the Patent Owner's Perspective" (American Bar Association Center for Professional Development and Section of Intellectual Property Law) – 1:00 to 2:30 pm (ET)

January 29, 2015 – "Combating Patent Trolls: Third-Party Solutions and Defense Strategies in Post-Grant and Litigation — Leveraging Counterclaim, Summary Judgment and Other Tactics; Utilizing Legislative, Insurance and Third-Party Tools" (Strafford) – 1:00 to 2:30 pm (EST)

February 5, 2015 – "On Sale and Public Use Bars to Patentability After AIA — Minimizing the Risk of Patent Ineligibility or Invalidation" (Strafford) – 1:00 to 2:30 pm (EST)

February 12, 2015 – "USPTO Section 101 Guidelines: Part 1" (American Intellectual Property Law Association) – 12:30 – 2:15 pm (Eastern)

February 19, 2015 - "Readjusting the USPTO 101 Guidance for Life Science Inventions to Alice and Public Input: Are We There Yet?" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

February 24-25, 2015 – Professional Responsibility and Legal Ethics for Life Sciences Attorneys (American Conference Institute) – Philadelphia, PA

February 25, 2015 – "Prevailing Before the PTAB 'Death Squad': Practical Considerations for Petitioners and Patent Holders" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

March 4-5, 2015 – Medical Device Patents (American Conference Institute) – Chicago, IL

March 5-6, 2015 – Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH

***Patent Docs is a media partner of this conference or CLE
ACI Conference on Medical Device Patents

January 17, 2015

American Conference Institute (ACI) will be holding its 5th Advanced Summit on Medical Device Patents on March 4-5, 2015 in Chicago, IL. Topics for discussion at the conference will include:

• What qualifies as obvious in the wake of KSR and Gilead?
• The best methods for using IPRs in parallel to district court litigation;
• Understanding the confines of joint infringement and claim drafting techniques to avoid future claims;
• Calculating and proving damages;
• Being mindful of ethical standards and the doctrine of inequitable conduct; and
• Advanced prosecution techniques in light of Supreme Court cases and changes wrought by the AIA.

In particular, ACI's faculty will offer presentations on the following topics:

• PTO Keynote Address — Janet Gongola, Associate Commissioner for Patent Examination Policy, U.S. Patent and Trademark Office
• Prosecutor and Litigator Roundtable — Adapting to the New Landscape of Patentable Subject Matter, Indefiniteness, and Willfulness
• An Obvious Spotlight — Exploring the Effects of KSR and Gilead
• Exploring the Parallel World of IPR Proceedings
• PTAB Keynote — Hon. James D. Smith, Chief Administrative Patent Judge, Patent Trial and Appeal Board, U.S. Patent and Trademark Office
• Joint and Divided Infringement Post-Akamai — Adjusting Claim Drafting and Litigation Techniques
• Balancing the Costs and Benefits of Patent Litigation from Injunctions to Damages
• Views from the Benches — Insights from Multiple Judicial Venues on the Effects of Parallel Proceedings, Managing Discovery, Construing Claims, Assessing Damages, and More
• In-House Perspective — Managing Patent Prosecution and Litigation Costs and Budgets; Adapting to the Post-AIA World; Streamlining Discovery; and More
• Testing the NPE Waters — Evaluating Whether "Trolls" Are Targeting the Medical Device Space; Discussing Choice of Venue Issues
• ETHICS and Medical Devices IP: Inequitable Conduct and New PTO Ethical Rules

In addition, a pre-conference workshop entitled "Patent Prosecution Master Class — Best Practices for Drafting Claims and Prosecuting Medical Device Patents in the Post-AIA Landscape" will be offered from 9:00 am to 12:00 pm on March 4, 2015, and a post-conference workshop entitled "Act Locally, Think Globally — Being Mindful of International Forums While Prosecuting Patents in the United States or Considering How to Bring an Infringement Challenge" will be offered from 9:00 am to 12:00 pm on March 6, 2015.

The agenda for the Medical Device Patents conference can be found here, and the agenda for the pre-conference and post-conference workshops can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference is $2,195 (conference alone), $2,795 (conference and one workshop), or $3,295 (conference and both workshops). Those registering by January 23, 2015 will receive a $100 discount. Patent Docs readers who reference the discount code "PD200" will receive $200 off the current price tier when registering. Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs is a media partner of ACI's Medical Device Patents conference.
AIPLA Webinars on Section 101 Guidelines

January 17, 2015

The American Intellectual Property Law Association (AIPLA) will be offering two webinars on the USPTO's Section 101 Guidelines.

The first webinar, entitled "USPTO Section 101 Guidelines: Part 1," will be held from 12:30 – 2:15 pm (Eastern) on February 12, 2015. June E. Cohan, Legal Advisor – Office of Patent Legal Administration, U.S. Patent & Trademark Office will discuss the changes from the Mayo/Myriad March 4, 2014 Guidance and the June 25, 2014 Preliminary Examination Instructions and provide various examples. A panel consisting of Sarah J. Knight of Talem IP Law; Donna M. Meuth, Associate General Counsel – Intellectual Property for Eisai, Inc.; and Michael Stein of Baker Hostetler will share their experience with 101 rejections and discuss the implications the Revised Guidance will have on patent practice involving software, business methods, and biotech inventions.

The registration fee for the above webinar is $145 (AIPLA member rate) or $175 (non-member rate). Those interested in registering for this webinar, can do so here.

The second, entitled "Readjusting the USPTO 101 Guidance for Life Science Inventions to Alice and Public Input: Are We There Yet?" will be held from 12:30 – 2:00 pm (Eastern) on February 19, 2015. June E. Cohan, Legal Advisor – Office of Patent Legal Administration, U.S. Patent & Trademark Office will explain how the revised procedure works for the Examining Corps and how it conforms to subject matter eligibility precedent. Courtenay C. Brinckerhoff of Foley & Lardner, LLP will moderate a panel consisting of Dr. Leslie Fischer, Senior Patent Attorney, Specialty Care Patent Group, Novartis Pharmaceuticals Corp. and Anthony C. Tridico of Finnegan Henderson Farabow Garrett & Dunner, which will discuss how well the revised procedure aligns with the case law and prosecution practice experiences and needs in the life sciences field.

The registration fee for the above webinar is $95 (AIPLA member rate) or $135 (non-member rate). Those interested in registering for this webinar, can do so here.
Webinar on Prevailing Before the PTAB

January 16, 2015

McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on "Prevailing Before the PTAB 'Death Squad': Practical Considerations for Petitioners and Patent Holders" on February 25, 2015 from 10:00 am to 11:15 am (CT). In this presentation, Patent Docs co-author and MBHB attorney Andrew W. Williams and MBHB attorney John M. Schafer will explore some of the strategic decisions that both petitioners and patentees must make during the different stages of post-issuance reviews, focusing primarily on IPRs.

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.
PTAB Update — No Institution of CBM Patent Review for Jazz’s Orange-Book Listed Patents

January 15, 2015

By Andrew Williams —

On January 13, 2015, the Patent Trial and Appeal Board ("PTAB" or "Board") denied institution of four covered business method ("CBM") patent review petitions filed by Par Pharmaceutical, Inc. ("Par"), Roxane Laboratories, Inc. ("Roxane"), and Amneal Pharmaceutical, LLC ("Amneal") (together, "petitioners") against patents owned by Jazz Pharmaceutical, Inc. All of these patents are listed in the Orange Book as covering XYREM^® (sodium oxybate, or the sodium salt of gamma hydroxyl butyrate ("GHB")), indicated for the treatment of excessive daytime sleepiness and cataplexy in patients with narcolepsy. Before jumping to the conclusion that this author has confused CBMs with inter partes reviews ("IPRs"), petitioner did indeed file CBM petitions against these patents, alleging that they contain a method for the use "in the practice, administration, or management of a financial product or service." These four patents contain "Risk Evaluation and Mitigation Strategies" ("REMS")-style claims. REMS was a program initiated by the FDA in 2007 to "ensure that the benefits of a drug or biological product outweigh its risks." Nevertheless, even though these patents do not contain typical composition-of-matter or method-of-use claims (which certainly would not be subject to CBM review), the PTAB disagreed with petitioner, determining that these patents do not claim a financial product or service.

The four patents at issue in this case were U.S. Patent Nos. 7,668,730 ("the '730 patent") (CBM2014-00151), 7,895,059 (CBM2014-00149), 8,457,988 (CBM2014-00150), and 8,589,182 (CBM2014-00153). The Board focused on the '730 patent as illustrative. This patent explains that "[c]ertain agents, such a gamma hydroxyl buterate (GHB) are also abused, yet also are effective for therapeutic purposes," and therefore, a need exists "for a distribution system and method that directly addressed these abuses." '730 patent, col. 1, ll. 21-31. Claim 1 is an example of the method developed to address this problem:

1. A computerized method of distributing a prescription drug under exclusive control of an exclusive central pharmacy, the method comprising:
    receiving in a computer processor all prescription requests, for any and all patients being prescribed the prescription drug, only at the exclusive central pharmacy from any and all medical doctors allowed to prescribe the prescription drug, the prescription requests containing information identifying patients, the prescription drug, and various credentials of the any and all medical doctors;
    requiring entering of the information into an exclusive computer database associated with the exclusive central pharmacy for analysis of potential abuse situations, such that all prescriptions for the prescription drug are processed only by the exclusive central pharmacy using only the exclusive computer database;
    checking with the computer processor the credentials of the any and all doctors to determine the eligibility of the doctors to prescribe the prescription drug;
    confirming with a patient that educational material has been read prior to shipping the prescription drug;
    checking the exclusive computer database for potential abuse of the prescription drug;
    mailing the prescription drug to the patient only if no potential abuse is found by the patient to whom the prescription drug is prescribed and the doctor prescribing the prescription drug;
    confirming receipt by the patient of the prescription drug; and
    generating with the computer processor periodic reports via the exclusive computer database to evaluate potential diversion patterns.

Put simply, the claimed method requires using an exclusive computer database associated with an exclusive central pharmacy to ensure that use of the prescription drug is not abused through the withholding of the drug if potential abuse is found. The patent also contains claims drawn specifically to the prevention of abuse of gamma hydroxyl buterate.

As background on CBM patent review, the America Invents Act ("AIA") provided for this transitional program, but limited the program to patents claiming "a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions." AIA § 18(d)(1). How could petitioners have thought that such a definition would apply to the above-reproduced claim? The answer lies in the PTAB's expansive view of the definition for "financial product or service." In its responses to comments when promulgating the final CBM rules, the Board explained that the legislative history provides for review of "patents 'claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.'"   77 Fed. Reg. 48,734, 48,735 (Aug. 14, 2012). And, in practice, the Board has taken an expansive view of the patents that fall within the scope of this definition when instituting these procedures.

Interestingly, in denying institution in this case, the PTAB did not state that REMS-style patents could never be subject to CBM patent review. In fact, the Board suggested that claims "recit[ing] or require[ing] (i) the sale of a prescription drug, (ii) processing of payments, benefits, or insurance claims related to the sale of a prescription drug, (iii) a method of insuring a patient or determining the cost of insurance, (iv) a method of determining the cost of prescription benefits, (v) a method of facilitating payment of health care benefits, or (vi) the extension of credit for the purchase of a prescription drug" might be susceptible to such review. In this case, however, the Board concluded that petitioners had not met their burden of demonstrating Jazz's patents were "covered business method patents" under the AIA.

Petitioners had argued that claim 1 of the'730 patent was CBM-eligible because the method would be used in commerce. They emphasized the steps for verifying either insurance coverage or a patient's ability to pay. Moreover, they noted that the method is directed to the very business of running a mail-order pharmacy. The Board disagreed, however, finding the petitioners' arguments to be conclusory. According to the Board, none of the claim limitations identified ("distributing a prescription drug," "receiving all prescription requests," "checking the credentials of any and all doctors," "mailing," or "providing" the drug to a patient) "recite or require an activity involving the movement of money or extension of credit in connection with the sale of a prescription drug." Moreover, the Board found that "[t]he claims also do not recite a product or service particular to or characteristic of financial institutions such as banks, insurance companies, and investment houses." As such, it was unpersuaded that claim 1 of the'730 patent (and correspondingly all other claims at issue) was directed to "the practice, administration, or management of a financial product or service."

Perhaps in anticipation of this impending institution denial, Par (either alone or together with Amneal) filed separate IPR petitions against all four of these patents on January 8, 2015. We will monitor these petitions and provide any updates as warranted.
“No Clinically Meaningful Differences”: The First Accepted Biosimilar Application Has Been Recommend for FDA Approval

January 14, 2015

By Andrew Williams —

Last week, at their January 7, 2015 meeting, the FDA's Oncologic Drugs Advisory Committee ("ODAC") recommended the approval of Sandoz's biosimilar filgrastim application to market a version of Amgen's NEUPOGEN^® biologic drug. As we previously reported, the Sandoz application is believed to be the first application accepted under the new biosimilar pathway created by the Biologics Price Competition and Innovation (BPCI) Act. Moreover, the recommendation was to approve the application for use for all five requested indications. The FDA has been slow to issue guidance of what is required to demonstrate biosimilarity. 42 U.S.C. § 262(i)(2) defines the terms "biosimilar" and "biosimilarity" to mean "(A) that the biological product is highly similar to the reference product notwithstanding minor differences in clinically inactive components; and (B) there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product." (42 U.S.C. § 262 is also referred to as section 351 of the Public Health Service Act, and correspondingly, biosimilar application are often referred to as "351(k) applications."). Therefore, this case can provide insight into what regulatory hurdles other 351(k) applicants might face. This case has also been of interest to the biotech and pharmaceutical industry because Sandoz refused to abide by the other provisions of the section 351(k), namely providing Amgen with a copy of the application submitted to the FDA 20 days after it received notification of acceptance by the FDA. Amgen filed suit in the Northern District of California requesting, among other things, an injunction preventing Sandoz from marketing its biosimilar product (see "Court Report," November 2, 2014).

NEUPOGEN® is a 175 amino acid recombinant methionyl human granulocyte colony-stimulating factor (r-metHuG-CSF), which has been reported to be identical to the predicted natural DNA sequence of G-CSF from humans, except for the N-terminal methionine required to grow in E. coli. Of course, because NEUPOGEN® is produced in E. coli, it also differs from human G-CSF in that it is not glycosylated. G-CSFs act by binding to specific cell-surface receptors, thereby acting on hematopoietic cells to stimulate proliferation, differentiation commitment, and some end-cell functional activation. Endogenous G-CSF is produced by monocytes, fibroblasts, and endothelial cells and regulates the production of neutrophils within the bone marrow. NEUPOGEN® is often prescribed for cancer patients on chemotherapy at times when they are at most risk of infection because their white blood cell count is low. The five indications found in Amgen's package insert, and requested by Sandoz, include "to decrease the incidence of infection, as manifested by febrile neutropenia, in patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with a significant incidence of severe neutropenia with fever"; "for reducing the time to neutrophil recovery and the duration of fever, following induction or consolidation chemotherapy treatment of adults with AML"; "to reduce the duration of neutropenia and neutropenia-related clinical sequelae‚ e.g.‚ febrile neutropenia in patients with nonmyeloid malignancies undergoing myeloablative chemotherapy followed by marrow transplantation"; "for the mobilization of hematopoietic progenitor cells into the peripheral blood for collection by leukapheresis"; and "for chronic administration to reduce the incidence and duration of sequelae of neutropenia (eg‚ fever‚ infections‚ oropharyngeal ulcers) in symptomatic patients with congenital neutropenia‚ cyclic neutropenia‚ or idiopathic neutropenia."

So what does it mean to have no clinically meaningful differences? As the FDA explained in its Briefing Document for the January 7, 2015 ODAC meeting, it recommends the use of "a stepwise approach to developing the data and information needed." This approach "should start with extensive structural and functional characterization of both the proposed biosimilar product and the reference product . . . ." The level of "residual uncertainty" "drives both the type and amount of data needed" from the nonclinical and clinical studies. Sandoz's product was referred to as EP2006 because the FDA was still considering its approach to nonproprietary naming of biosimilars. Otherwise, Sandoz sought the name "Zarxio," which is similar to the version it already sells in markets outside the U.S. — "Zarzio." The analytical data for EP2006 satisfied the committee that it is "highly similar to US-licensed Neupogen with the exception of protein content, which was slightly lower than that of US-licensed Neupogen." However, Sandoz provided additional data and statistical analysis found in an addendum ODAC briefing document that addressed this low protein content, thereby alleviating the FDA's concerns. The clinical studies included comparative PK and PD studies in normal human healthy subjects, and comparative studies "which enrolled patients with breast cancer receiving TAC chemotherapy who were randomized to receive either EP2006 or US-licensed Neupogen." In total, Sandoz conducted five PK and PD studies and two efficacy studies to demonstrate that its drug product was safe, pure, and potent, and thereby "no clinically meaningful difference" exists. Interestingly, Sandoz used the European Union-approved Neupogen in some of its clinical trials. Sandoz was therefore required to "scientifically justify" the relevance of that data to US-licensed reference product. After reviewing the justification, the FDA agreed that the data supports "a demonstration that EP2006 is biosimilar to US licensed Neupogen."

Of course, if the FDA accepts this recommendation, and there is no reason to assume that it will not, it is still possible that Sandoz will be enjoined before it is able to launch. As alluded to above, Amgen has filed an action in the U.S. District Court for the Northern District of California based on the failure of Sandoz to follow the disclosure procedures set out in the statute. Specifically, when the FDA accepted Sandoz's application last July, Sandoz was supposed to provide Amgen "a copy of the application submitted to the" FDA, and "such other information that describes the process or processes used to manufacture the biological product that is subject of such application" within 20 days. 42 U.S.C. § 262(l)(2) ("the . . . applicant . . . shall provide . . . ."). Sandoz chose not to do so because it did not want to share its BLA or manufacturing process with a future competitor, notwithstanding the statute's confidentiality provisions and the limitations on disclosure placed on recipients as found in the statute. Moreover, as Sandoz alleged in paragraph 52 of its answer to Amgen's complaint, "[p]roviding the biosimilar application to the reference product sponsor is an option, not a requirement." The basis for its position is the statutorily mandated "penalty" for not complying with the disclosure requirements:

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). If the disclosure was mandatory, according to Sandoz, this section would be superfluous. Of course, this comes on the heels of Sandoz's failed declaratory judgment action against Amgen, attempting to obtain patent certainty before filing an application to market a biosimilar version of Enbrel^®. As we recently reported, the District Court for the Northern District of California dismissed the case on jurisdictional grounds as essentially premature, and the Federal Circuit affirmed. Of course, members of the biotech patent community viewed this as another attempt by Sandoz to sidestep the requirements of the BPCIA. This present case is still in the early stages, but we will continue to monitor it and the impact that it will have on Sandoz's application.
Promega Corp. v. Life Technologies Corp. (Fed. Cir. 2014)

January 13, 2015

By Donald Zuhn —

Last month, in Promega Corp. v. Life Technologies Corp., the Federal Circuit determined that U.S. Patent Nos. 5,843,660; 6,221,598; 6,479,235; and 7,008,771, which are owned by Promega Corp., are invalid under 35 U.S.C. § 112, first paragraph, for lack of enablement, and therefore reversed the District Court's denial of a motion for summary judgment by Life Technologies Corp., Invitrogen IP Holdings, Inc., and Applied Biosystems, LLC ("LifeTech"). The Federal Circuit also determined that substantial evidence supported the jury's finding that LifeTech infringed U.S. Patent No. RE37,984 ("the Tautz patent") under both 35 U.S.C. §§ 271(a) and 271(f)(1), and therefore reversed the District Court's grant of judgment as a matter of law (JMOL) of noninfringement. In addition, the Federal Circuit affirmed the District Court's determination that certain sales of LifeTech's accused products are not covered by a license agreement between Promega and LifeTech. Finally, finding four of the five asserted patents to be invalid, the Federal Circuit vacated the jury's damages award and remanded the case back to the District Court to determine damages for LifeTech's infringement of the Tautz patent.

The case involves five patents that relate to multiplex amplification of short tandem repeat (STR) loci (i.e., amplification of multiple STR loci in a single reaction). In construing the asserted claims of the four patents owned by Promega, the District Court determined that a given claim recited either a "closed loci set," in which the claim was limited to only the loci listed in the claim, or an "open loci set," in which the claim was not limited to only the loci listed in the claim but rather encompassed any other loci combination that included at least the loci listed in the claim. An example of a claim reciting a closed loci set is claim 25 of the '660 patent:

25. A kit for simultaneously analyzing short tandem repeat sequences in at least three loci, comprising a container which has oligonucleotide primers for co-amplifying a set of at least three short tandem repeat loci, wherein the set of loci are selected from the sets of loci consisting of: [STR loci sets].

An example of a claim reciting an open loci set is claim 23 of the '598 patent:

23. A kit for simultaneously analyzing short tandem repeat sequences in a set of short tandem repeat loci from one or more DNA samples, comprising:
A single container containing oligonucleotide primers for each locus in a set of short tandem repeat loci which can be co-amplified, comprising HUMCSF1PO, HUMTPOX, and HUMTH01.

The District Court's construction turned on whether the claim recited "a set of . . . loci . . . consisting of . . ." or "a set of . . . loci . . . comprising . . . ." The distinction between the two types of claims is significant because developing a successful multiplex amplification reaction is more complicated than performing a series of separate amplification reactions.

The Tautz patent, which is owned by Max-Planck-Gesellschaft zur Förderung der Wissenschaften E.V. and is exclusively licensed to Promega, claims a kit for testing at least one STR locus that contains: (1) a mixture of primers; (2) a polymerizing enzyme such as Taq polymerase; (3) nucleotides for forming replicated strands of DNA; (4) a buffer solution for the amplification; and (5) control DNA.

LifeTech manufactures genetic testing kits that provide components for carrying out a multiplex amplification of STR loci from DNA samples, wherein the kits contain (1) a primer mix; (2) Taq polymerase; (3) PCR reaction mix including nucleotides; (4) a buffer solution; and (5) control DNA.

In 2010, Promega sued LifeTech for infringement of the four Promega patents and the Tautz patent, alleging that LifeTech had sold kits that were not covered by the license agreement between the parties (the license agreement limited Lifetech's use of the patents-in-suit to activities related to legal proceedings, i.e., live forensic investigations conducted by police officers). The parties moved for summary judgment on infringement and invalidity, with the District Court denying Lifetech's enablement challenge to the Promega patents and determining that LifeTech's sales outside the license agreement's field of use were infringing. Following trial, the jury returned a verdict of willful infringement. LifeTech then moved for JMOL and the District Court granted the motion, finding that Promega had failed to present sufficient evidence to sustain a jury verdict under §§ 271(a) and 271(f)(1), and vacated the finding of infringement.

In an opinion by Judge Chen, joined by Judge Mayer, with Chief Judge Prost dissenting as to the majority's finding of infringement under § 271(f)(1), the Federal Circuit reversed the District Court's denial of LifeTech's motion for summary judgment of invalidity, reversed the District Court's grant of JMOL of noninfringement, affirmed the District Court's determination that certain LifeTech sales were not covered by the parties' license agreement, vacated the jury's damages award, and remanded the case back to the District Court to determine damages for LifeTech's infringement of the Tautz patent.

With respect to the issue of enablement, the Federal Circuit disagreed with Promega's characterization of unrecited STR loci in the open loci set claims as merely unrecited elements, noting that "[i]n this field of technology, introducing even a single STR locus to an existing loci multiplex significantly alters the chemistry of, and has an unpredictable effect on, whether the resulting multiplex will successfully co-amplify." The Court indicated that "[t]here is no genuine dispute that identifying STR loci multiplexes that will successfully co-amplify is a complex and unpredictable challenge, and as a result, undue experimentation may be required to identify a successfully co-amplifying multiplex that adds even a single new locus to an existing loci combination."

The Court found support for its determination in both its MagSil Corp. v. Hitachi Global Storage Techs., Inc., 687 F.3d 1377, 1381 (Fed. Cir. 2012), and Wyeth & Cordis Corp. v. Abbott Labs., 720 F.3d 1380 (Fed. Cir. 2013), decisions. With regard to MagSil, the Federal Circuit states that:

[W]e need not delineate the precise boundary at which Promega's claims are no longer enabled. It is sufficient to conclude, based on Promega's own statements, that the teachings of Promega's patents would not have enabled a skilled artisan at the time of filing to identify significantly more complicated sets of STR loci combinations that would successfully coamplify — such as those found in LifeTech's STR kits — without undue experimentation. Thus, like the patentee in MagSil, Promega's "difficulty in enabling the asserted claims is a problem of its own making." 687 F.3d at 1384.

As for its Wyeth decision, the Court noted that "[w]hile the claims of the Promega patents are not directed to a genus of compounds as in Wyeth, the claims at issue here similarly cover potentially thousands of undisclosed embodiments in an unpredictable field."

With respect to the issue of infringement under § 271(f)(1), the Federal Circuit began by noting that the District Court had determined that § 271(f)(1) requires (1) the involvement of another, unrelated party to "actively induce the combination of . . . components," and (2) that at least two components be supplied from the United States to satisfy the "substantial portion of the components" language of the statute. In the instant case, the District Court determined that no other party was involved in LifeTech's assembly of the accused kits, and that Lifetech supplied only a single component from the U.S. (i.e., LifeTech manufactured the Taq polymerase component of its kits in the U.S. and shipped this component to its facility in the U.K. for incorporation into the kits).

In determining that the District Court erred in granting LifeTech's motion for JMOL, the Federal Circuit first concluded that "to actively induce the combination" does not require the involvement of a third party, noting that:

Had Congress wanted to limit "induce" to actions completed by two separate parties, it could easily have done so by assigning liability only where one party actively induced another "to combine the [patented] components." Yet, "another" is absent from § 271(f)(1). Instead, the focus of the statute is to induce "the combination of the components of the patented invention."

The Court also noted that:

Given Congress' choice of broadening language — which focuses solely on the activity abroad ("the combination") rather than the actor performing the combination — and acknowledgment of "the need for a legislative solution to close a loophole" identified in Deepsouth [Packing Co. v. Laitram Corp., 406 U.S. 518 (1972)], it is unlikely that Congress intended § 271(f)(1) to hold companies liable for shipping components overseas to third parties, but not for shipping those same components overseas to themselves or their foreign subsidiaries [citation omitted].

As for the issue of whether infringement under § 271(f)(1) requires that at least two components be supplied from the U.S., the Court stated that:

We hold that there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States. And based on the facts of this particular case, we conclude that substantial evidence supports the jury's verdict that LifeTech is liable for infringement under § 271(f)(1) for shipping the Taq polymerase component of its accused genetic testing kits to its United Kingdom facility.

In so holding, the Court explained that "[n]othing in the ordinary meaning of 'portion' suggests that it necessarily requires a certain quantity or that a single component cannot be a 'portion' of a multi-component invention."

In dissenting from the majority's finding of infringement under § 271(f)(1), Chief Judge Prost indicated that she "read § 271(f)(1) and its requirement of active inducement to necessarily mean inducement of another" (emphasis in original), adding that "[i]ndeed, we have never before held — in the context of either § 271(f) or § 271(b) — that a party can induce itself to infringe." The Chief Judge noted that "[t]wice the Supreme Court has held that inducement liability requires a third party," citing Global-Tech Appliances, Inc. v. SEB SA, 131 S. Ct. 2060 (2011), and Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (an analogous copyright case), and countered that "[t]he majority cannot point to a single case — from the Supreme Court or other wise — that supports its contrary interpretation of inducement."

Promega Corp. v. Life Technologies Corp. (Fed. Cir. 2014)
Panel: Chief Judge Prost and Circuit Judges Mayer and Chen
Opinion by Circuit Judge Chen; dissenting-in-part opinion by Chief Judge Prost

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