Patent Docs

President and Fellows of Harvard College v. Lee (Fed. Cir. 2014)

October 29, 2014

By Kevin E. Noonan —

One of the most iconic inventions of the biotechnology era is the "Harvard Oncomouse" invented by Philip Leder and Timothy Stewart in the early 1980's. One of the first transgenic mice transformed with DNA encoding something other than a mammalian virus, these mice were susceptible to certain cancers due to the presence in their germline (and thus all somatic tissues) of an activated form of the c-myc oncogene.

Ultimately three patents arose from the disclosure of this invention, having the following representative claims:

• U.S. Patent No 4,736,866 (filed June 22, 1984, granted April 12, 1988, and expired on April 12, 2005):

1. A transgenic non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage.

(The perceptive will note the affirmative limitation that the transgenic animal must be a non-human animal, a limitation included in these and all transgenic animal claims under the mandate of the 13th Amendment.)

• U.S. Patent No. 5,087,571 (filed March, 22, 1988, granted February 11, 1992, and expired on April 12, 2005 as the result of a terminal disclaimer filed in this application, instead of February 11, 2009 which was 17 years from the issue date this application was filed as a "voluntary divisional" of the '866 patent, i.e. because there was no restriction requirement imposed by the Office during prosecution of the '866 patent):

1. A method of providing a cell culture comprising
(1) providing a transgenic non-human mammal, all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage; and
(2) culturing one or more of said somatic cells.

2. A cell derived from a somatic cell obtained from a transgenic non-human mammal, all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage which cell contains said recombinant activated oncogene sequence.

• U.S. Patent No. 5,925,803 (a continuation of the '571 patent, filed September 19, 1991, granted July 20, 1999; its expiry date is the subject of the Court's decision):

1. A method of testing a material suspected of being a carcinogen, comprising exposing a transgenic mouse to said material and detecting neoplasms as an indication of carcinogenicity, wherein the germ cells and somatic cells of said mouse contain an activated oncogene sequence introduced into said mouse, or an ancestor of said mouse, at an embryonic stage.

A Third Party Requestor filed an ex parte reexamination request against the '803 patent on the grounds that the '866 patent (in combination with one or several secondary references) rendered these claims invalid for obviousness-type double patenting (see "Re-examination Ordered on "Expired" Harvard Oncomouse Patent"). In the course of this reexamination the Examiner refused to enter seven additional claims on the grounds that the '803 patent had expired due to the terminal disclaimer filed in the '571 parent patent in response to an obviousness-type double patenting rejection asserted by the Examiner. Assignees Harvard and DuPont appealed to the Board of Patent Appeals and Interferences (now, the Patent Trial and Appeal Board) and then sued in district court, which granted summary judgment to the Patent and Trademark Office that the terminal disclaimer operated to cause the '803 patent to expire on April 12, 2005. This appeal followed.

The Federal Circuit affirmed, in an opinion by Judge Moore, joined by Judges Lourie and O'Malley. Applying the "arbitrary, capricious, contrary to law or abuse of discretion" standard under the Administrative Procedures Act, 5 U.S.C. § 706(2)(A), the panel held that this agency action fell within none of these invalidating standards. They rejected Harvard's contentions that there was no evidence of record that the fee required for a terminal disclaimer had ever been paid, and further that the '803 patent did not contain a Notice that the term of the patent was subject to a terminal disclaimer. One reason for rejecting these assertions was that the burden was on the patentee to establish that agency action was "arbitrary, capricious, contrary to law or abuse of discretion" and the only evidence presented was negative evidence that there was no affirmative evidence that, inter alia, the proper procedures were followed in 1988, based on affidavits from the prosecuting attorney and Controller of the firm that had prosecuted the patents. The Court also rejected arguments that the Patent Office's own record keeping provided no evidence that the terminal disclaimer had been properly entered in the '571 patent, in violation of procedures found in MPEP § 717.01 (5th ed. Rev. 6, Oct. 1987) (from the relevant time frame). Harvard even argued that the fact that the Examiner withdrew the obviousness-type double patenting rejection after the terminal disclaimer was not filed is not dispositive, because the Examiner noted in the record that she had withdrawn this rejection based on applicant argument and did not specifically cite the terminal disclaimer in this regard.

Judge Moore's opinion also relied on deference by the trial court to the PTO, saying that "[w]hile we might have reached a different result if we were weighing the evidence in the first instance, this we cannot do," citing Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Citing In re Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000), the opinion further noted that the "arbitrary and capricious" standard was the most deferential and would be satisfied only when "a reviewing court can conclude with 'definite and firm conviction' that a clear error of judgment or a mistake has been committed," citing PGBA, LLC v. United States, 389 F.3d 1219, 1231 (Fed. Cir. 2004).

The Court used a "rationality" test to come to its conclusion, explained in the opinion as those instances where "we must sustain an agency action evincing rational reasoning and consideration of relevant factors," ultimately based on the Supreme Court's dictates in Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974), and Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971). The Court found that the Patent Office's decision contained the required evidence of rationality based on 1) the plain meaning of the text in the terminal disclaimer, wherein Harvard purported to attest that the fees had been paid ("accompanying this disclaimer is the fee set forth in 37 C.F.R. § 1.20(d)"); 2) the Examiner's withdrawal of the obviousness-type double patenting rejection after Harvard filed the terminal disclaimer (noting that there was no other response to this rejection other than filing the terminal disclaimer); and 3) the evidence that the Patent Office had recorded the terminal disclaimer despite any other record keeping irregularities cited by patentee. "Collectively, this evidence provides a rational basis for the PTO's factual finding that the terminal disclaimer fee was filed" said the Court. Against that the Court assayed the declaration evidence from twenty years after the fact and these record-keeping irregularities, none of which provided the "overwhelming" evidence the panel stated was necessary to rise to a finding that the Patent Office's actions were arbitrary and capricious. What's more, the panel cited precedent directly contrary to Harvard's position: in Vectra Fitness, Inc. v. TWNK Corp., 162 F.3d 1379, 1381–82 (Fed. Cir. 1998), these same types of record keeping irregularities were held not to be enough to find that the terminal disclaimer in that case was without effect. Thus, "while the PTO may have procedurally mishandled the terminal disclaimer when placing it in the file, this does not render arbitrary and capricious the PTO's factual finding that the terminal disclaimer fee was nonetheless paid."

Thus ends the period of exclusivity for the Harvard Oncomouse patents.

"All things are artificial, for nature is the art of God." Sir Thomas Browne (Harvard patented mice).

TOLES © The Washington Post. Reprinted with permission of UNIVERSAL UCLICK. All rights reserved.

President and Fellows of Harvard College v. Lee (Fed. Cir. 2014)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Moore, and O'Malley
Opinion by Circuit Judge Moore
Examination of Myriad-Mayo Guidance Comments — University Community Joint Comment

October 28, 2014

By Donald Zuhn —

On March 4, the U.S. Patent and Trademark Office issued a guidance memorandum, entitled "Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products" (or "Myriad-Mayo Guidance"), to implement a new procedure for determining the subject matter eligibility of claims under 35 U.S.C. § 101 in view of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012). At a biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting in April, the Office announced that it would be hosting a public forum on the Guidance in May to receive public feedback on the Guidance, and at that forum encouraged shareholders to submit written comments on the Guidance. Since the forum, the Office has encouraged the patent community to provide further feedback regarding the Guidance (despite the Office's announced deadline of July 31 for submitting comments).

Comments regarding the Guidance, including at least three received after the July 31 deadline, have been posted on the USPTO website. The comments are divided into seven groups (with the number of submissions in each group also provided): Intellectual property organizations and other associations (21), government agencies (0), academic and research institutions (4), law firms (7), companies (8), individuals (43), and comments received after August 1, 2014 (3). Today, we examine the joint comment submitted on October 15, 2014 by the Association of American Universities (AAU), American Council on Education (ACE), Association of American Medical Colleges (AAMC), Association of Public and Land-grant Universities (APLU), Association of University Technology Managers (AUTM), and Council on Governmental Relations (COGR).

Four of the six (AUTM, COGR, AAU, and APLU) signatories to the October 15 letter had signed a comments letter submitted prior to the July 31 deadline (see "Examination of Myriad-Mayo Guidance Comments — AUTM, COGR, AAU, and APLU"). In that letter, the academic organizations noted that they were "deeply concerned about the PTO Guidance Memorandum and its unwarranted, as well as legally inconsistent broad changes in examination practice," and argued that "[t]he Guidance adversely and unnecessarily impacts our ability not only to license and commercialize future discoveries and inventions, but also the validity of many existing patents for products, particularly in life science areas which make up the majority of university patents." In particular, the groups suggested that the Guidance was flawed for "contravene[ing] the Supreme Court's own warning in Mayo against over-interpreting its holdings in a way that might stifle innovation" and for "emphasi[zing] structure rather than the functional characteristics of a product."

In their latest comments letter, those four organizations, joined by ACE and AAMC, indicate that they are "look[ing] forward to the final guidance that the U.S. Patent and Trademark Office (USPTO) will issue to address the subject matter eligibility of claims reciting or involving laws of nature, natural phenomena, and natural products." Noting that "USPTO officials have suggested during recent public events that elements of the March Guidance will be revised and included in the final Guidance," the groups "request the USPTO to re-issue the revised Guidance in draft form to allow the patent community and the public to comment on any significant proposed changes to the criteria used to determine patent eligibility or to the patent prosecution process."

The letter also "urge[s] the USPTO to consider carefully the effect that the revisions will have on applications that are currently in progress," and expresses the view that such applications "not be adversely impacted or penalized by the shifting rules." Similar to the BIO joint comments letter, the academic organizations argue that "Applicants who received a first rejection under the March Guidance should be allowed to respond to rejections under the revised Guidance as if they are responding to new grounds of rejection." The groups conclude their latest letter by expressing "hope that the USPTO will continue to reach out to the patent stakeholder community and the end users of new technologies so that the final Guidance will benefit from as much thoughtful input as possible and will be implemented in a way that ensures that the U.S. patent system continues to support the universities and industries that are essential to our nation’s health and economic vitality."

As USPTO representatives noted at the bicoastal biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting on September 17 and at the Biotechnology Industry Organization (BIO) IP & Diagnostics Symposium on September 26, the revised Guidance is expected to be issued by the end of this month or shortly thereafter.

For additional information regarding this topic, please see:

• "Examination of Myriad-Mayo Guidance Comments — BIO Joint Comment," October 23, 2014
• "Sherry Knowles Addresses Real World Impact of Myriad-Mayo Guidance at BIO Symposium," October 15, 2014
• "Guest Post: Myriad — A Direct and Unexceptional Approach," October 12, 2014
• "USPTO Outlines Changes to Myriad-Mayo Guidance at BIO Symposium," September 30, 2014
• "USPTO Expected to Issue Revised Myriad-Mayo Guidance in October," September 17, 2014
• "Guest Post: Myriad-Mayo Guidance — Consistency With International Harmonization and TRIPS," August 26, 2014
• "Examination of Myriad-Mayo Guidance Comments — AUTM, COGR, AAU, and APLU," August 21, 2014
• "Examination of Myriad-Mayo Guidance Comments — International Bioindustry Associations," August 11, 2014
• "Examination of Myriad-Mayo Guidance Comments — ACLU," August 5, 2014
• "Guest Post: Overview of First Published Comments on Myriad-Mayo Patent Eligibility Guidance," July 13, 2014
• "Guest Post: USPTO Public Forum on Patent Guidance: My Thoughts as a Speaker and Attendee," June 11, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part IV," May 22, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part III," May 15, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part II," May 14, 2014
• "Guest Post: How to Patent Grapefruit Juice — The New USPTO Guidance for Patent Eligible Subject Matter Is Both Sticky and Sour," May 13, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part I," May 12, 2014
• "USPTO Tries to Address Public Misunderstandings Regarding Myriad-Mayo Guidance," April 16, 2014
• "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products," March 4, 2014
PTAB Update — Is “Broadest Reasonable Interpretation” the Appropriate Standard?

October 27, 2014

By Andrew Williams —

One of the more controversial rules concerning PTAB trials promulgated by the USPTO in the wake of the America Invents Act was the adoption of the "broadest reasonable interpretation" ("BRI") claim construction standard for proceedings before the Board. It was no surprise, therefore, that when the Patent Office requested feedback on the rules concerning PTAB trial proceedings, one of the highlighted issues was: "Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction in light of the specification of the patent in which it appears?" In response to the request, this author, along with his colleagues Alison Baldwin, Grantland Drutchas, and Lisa Schoedel, submitted a comment advocating that the Board adopt the same standard for construing claim terms as used by federal courts as articulated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). The comment explained that the justifications used by the Office for implementing the BRI standard have either been rendered moot or proven to be incorrect.

First, the USPTO justified the use of the broadest reasonable interpretation standard as being allegedly consistent with the legislative history of the AIA. See 77 FR 48680, 48697-99 (Aug. 14, 2012) ("The adoption of the 'broadest reasonable interpretation' standard is further consistent with the legislative history of the Leahy-Smith America Invents Act, which indicates that Congress was aware of the 'broadest reasonable interpretation' standard and expected the Office to apply the standard to the new Leahy-Smith America Invents Act review proceedings."). The Patent Office concluded that neither "Congress [nor] the drafters of the legislation considered a different standard for [these proceedings]." Id. at 48697. The Office had to so justify because the AIA was silent as to what claim construction standard should apply to inter partes review ("IPR"), post-grant review ("PGR"), and covered business method patent review proceedings.

Nevertheless, even if the Patent Office was correct regarding the events leading to the passage of the AIA, subsequent actions have made explicit that that particular premise is no longer valid. As we have been reporting for over the past year, Congress is once again tackling the issue of patent reform. The House of Representative passed H.R. 3309 (the Innovation Act) by an overwhelming majority on December 5, 2013. The comparable bill, S. 1720 (the Patent Transparency and Improvements Act of 2013), stalled in the Senate. Sen. Leahy explained at the time that there were "repeated concerns" that the House's Innovation Act "went beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders who employ thousands of Americans."

This legislation also contained improvements and technical corrections to the AIA that were not so contentious. One of these improvements, found in both the House and Senate bills, clarified the intent of Congress for at least IPRs and PGRs: "each claim of a patent shall be construed as such claim would be in a civil action to invalidate a patent under section 282(b), including constructing each claim of the patent in accordance with the ordinary and customary meaning of such claim as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent . . . ." Moreover, with regard to concurrent actions at the Patent Office and federal court, the Act provided that "if a court has previously construed the claim or a claim term in a civil action in which the patent owner was a party, the Office shall consider such claim construction." In other words, even though these bills were not enacted because of opposition to unrelated provisions, Congress made its view explicit on this point – the Board should be using the same claim construction standard as used in federal court.

Interestingly, with regard to its impact on the BRI standard, the Electronic Frontier Foundation ("EFF") interpretation of the inability of Congress to pass to patent litigation reform was diametrically opposed to this. The EFF has been a strong critic of the patent system, and the views expressed in its submitted comment are no exception. It was not unexpected, therefore, that the EFF was in favor of maintaining the BRI claim construction standard for PTAB litigation proceedings. What was surprising was the EFF's reliance on the stalled attempt to pass patent reform as its justification for the use of this standard. According to the EFF, because "[s]ome proposed bills have included language to change" the use of the BRI standard, "moving away from [the standard] is more properly a decision for Congress." However, because the bill did not pass the Senate, the EFF concluded that there was no clear direction from Congress on the use of this standard. The EFF did not have such a dim view of the voice of Congress in its May 21, 2014 article entitled "Senator Leahy Kills Patent Reform (For Now)," authored in part by two of the signatories to EFF's submitted comment. This article placed the blame squarely with Sen. Leahy, not with Congress as a whole. The authors suggested at the time that the issues presented in the bills "cross[ed] both sides of the aisle," evidenced by the strong 325-91 vote for the Innovation Act, which included a majority of Republicans and Democrats. Of course, the EFF did not explain how Congress could be so clear when it comes to addressing the so-called patent troll problem, yet provide no clear direction when it comes to AIA improvements, especially when no one in Congress has been on record opposing this provision.

The Patent Office also partially justified its use of the broadest reasonable interpretation standard on the provision of the AIA that allows a patent owner to amend the claims at issue. See 77 FR at 48697. Of course, a patent owner's ability to amend claims is severely limited, as the AIA provided for only one opportunity to file a motion to amend. There remains the possibility of a subsequent request, but only if it is submitted jointly by both parties and only for the purpose of materially advancing settlement. In practice, however, the ability to substantively amend claims in these post-issuance proceedings turned out to be largely illusory. Only one motion to amend has been granted for an IPR proceedings, and that motion was unopposed by the petitioner. See International Flavors & Fragrances Inc. v. The United States of America, IPR2013-00124, Paper No. 12 (PTAB May 20, 2014). It also probably did not hurt that the patent owner was the United States. This vanishingly small possibility of amending the claims can no longer support the justification for this broad claim construction standard.

As a further justification, the Patent Office pointed to the use of the same standard in other patent office proceedings, such as reexaminations and reissue applications. See 77 FR at 48699. However, the Patent Office has been clear that the new post-issuance proceedings are more adjudicative in nature. It has been repeatedly explained that one of the reasons behind the low grant rate for claim amendments was that the Board does not conduct prior art searches. The burden, therefore, falls to the patent owner to demonstrate that the amended claims are patentable in view of the prior art – the opposite burden that exists during prosecution. And, as we have previously reported regarding federal litigation prosecution bars, a panel of the Board has concluded that "[a]n inter partes review is neither a patent examination nor a patent reexamination." See Google Inc. v. Jongerious Panoramic Techs., LLC, IPR2013-00191, Paper No. 50, at 4 (PTAB Feb. 13, 2014). Because an IPR is "a trial, adjudicatory in nature and constitutes litigation," this panel ruled that the prosecution bar would not prevent the attorney in question from participating in the proceeding. See id. With the Board's clear differentiation between these "litigation" proceedings and other patent office prosecution, the continued reliance on the claim construction standard used during prosecution appears misplaced.

This concern over the claim construction standard at the PTAB is more than an academic exercise – indeed it has real-world implications. Many of the IPRs currently pending before the Board have concurrent parallel patent infringement litigation in federal court. Requiring patentees to defend, from a prior art perspective, a patent scope before the Patent Office that they will not be able to use in parallel infringement litigation in federal court is manifestly unfair to the patent holder. It would be advantageous for federal courts to gain insight from the Patent Office's interpretation of claims, but this would only be possible if the Board applied the same interpretation standard. In many ways, patent holders are already in an uphill battle at the PTAB because of the lower invalidity burden in IPRs and other such Board adjudicative procedures. Applying this broad standard while at the same time curtailing the ability of the patentee to amend the claims effectively "stacks the deck" in favor of patent challengers and seriously impacts the value of issued U.S. patents.
Court Report

October 26, 2014

By Sherri Oslick —

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

AstraZeneca Pharmaceuticals LP et al. v. Pharmadax USA, Inc. et al.
8:14-cv-01710; filed October 23, 2014 in the Central District of California

• Plaintiffs: AstraZeneca Pharmaceuticals LP; AstraZeneca UK Ltd.
• Defendants: Pharmadax USA, Inc.; Pharmadax Inc.; Pharmadax Guangzhou Inc.

Infringement of U.S. Patent No. 5,948,437 ("Pharmaceutical Compositions Using Thiazepine," issued September 7, 1999) following a Paragraph IV certification as part of Pharmadax's filing of an ANDA to manufacture a generic version of AstraZeneca's Seroquel® XR (quetiapine fumarate, used to treat schizophrenia and bipolar disorder). View the complaint here.

Cephalon Inc. v. Wockhardt Bio Ltd. et al.
1:14-cv-01332; filed October 17, 2014 in the District Court of Delaware

• Plaintiff: Cephalon Inc.
• Defendants: Wockhardt Bio Ltd.; Wockhardt Ltd.; Wockhardt USA LLC

Infringement of U.S. Patent Nos. 8,445,524 ("Solid Forms of Bendamustine Hydrochloride," issued May 21, 2013), 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) following a Paragraph IV certification as part of Wockhardt'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 Inc. v. Sanofi et al.
1:14-cv-01317; filed October 17, 2014 in the District Court of Delaware

• Plaintiff: Amgen Inc.
• Defendants: Sanofi; Aventisub LLC; Regeneron Pharmaceuticals Inc.

Infringement of U.S. Patent Nos. 8,563,698 ("Antigen Binding Proteins to Proprotein Convertase Subtilisin Kexin Type 9," issued October 22, 2013), 8,829,165 (same title, issued September 9, 2014), and 8,859,741 (same title, issued October 14, 2014) based on defendants' current and/or imminent manufacture, use, sale, offer to sell, and/or importation into the U.S. of alirocumab, an anti-PCSK9 antibody (used to treat dyslipidemia and other cholesterol disorders). View the complaint here.

Noven Therapeutics, LLC v. Actavis Laboratories FL, Inc. et al.
2:14-cv-06414; filed October 16, 2014 in the District Court of New Jersey

• Plaintiff: Noven Therapeutics, LLC
• Defendants: Actavis Laboratories FL, Inc.; Actavis Pharma Inc.; Andrx Corp.; Actavis, Inc.

Infringement of U.S. Patent Nos. 5,874,447 ("4-Phenylpiperidine Compounds for Treating Depression," issued February 23, 1999), 7,598,271 ("Crystalline Paroxetine Methane Sulfonate," issued October 6, 2009), and 8,658,663 ("Method of Treating Thermoregulatory Dysfunction with Paroxetine," issued February 25, 2014) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Noven's Brisdelle® (paroxetine mesylate, used for the treatment of moderate to severe vasomotor symptoms (VMS) associated with menopause). View the complaint here.

Tris Pharma, Inc. v. Actavis Laboratories FL, Inc. et al.
2:14-cv-06425; filed October 16, 2014 in the District Court of New Jersey

• Plaintiff: Tris Pharma, Inc.
• Defendants: Actavis Laboratories FL, Inc.; Andrx Corp.; Actavis, Inc.; Actavis Pharma, Inc.

Infringement of U.S. Patent Nos. 8,465,765 ("Orally Effective Methylphenidate Extended Release Powder and Aqueous Suspension Product," issued June 18, 2013), 8,653,033 (same title, issued October 22, 2013), and 8,778,390 (same title, issued July 15, 2014) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Tris' Quillivant XR® (methylphenidate hydrochloride oral solution, used to treat attention deficit hyperactivity disorder, distributed by Pfizer). View the complaint here.

Otsuka Pharmaceutical Co. Ltd. v. Teva Pharmaceuticals USA, Inc. et al.
1:14-cv-06398; filed October 10, 2014 in the District Court of New Jersey

• Plaintiff: Otsuka Pharmaceutical Co. Ltd.
• Defendants: Teva Pharmaceuticals USA, Inc.; Teva Pharmaceutical Industries Ltd.

Infringement of U.S. Patent Nos. 8,580,796 (same title, issued November 12, 2013) and 8,642,760 (same title, issued February 4, 2014) following a Paragraph IV certification as part of Teva'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

October 26, 2014

October 23, 2014 – "Making Sense of New Patent Litigation Alternatives" (ShareVault) – 11:00 am to 12:00 pm (Pacific Daylight Time)

October 29, 2014 – "Demonstrating Patent Eligibility Post-Alice Corp. Decision — Navigating the Nuances and Leveraging Guidance From Federal Circuit and PTAB Opinions" (Strafford) – 1:00 to 2:30 pm (EDT)

October 29-30, 2014 - Congress on PIV Litigation (Momentum) – Philadelphia, PA

November 10-12, 2014 – 2014 Fall Intellectual Property Counsels Committee (IPCC) Conference (Biotechnology Industry Organization) – Nashville, TN

November 20, 2014 – "PTAB Invalidity Proceedings — Lessons Learned in the First Two Years" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

***Patent Docs is a media partner of this conference or CLE
Examination of Myriad-Mayo Guidance Comments — BIO Joint Comment

October 23, 2014

By Donald Zuhn —

On March 4, the U.S. Patent and Trademark Office issued a guidance memorandum, entitled "Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products" (or "Myriad-Mayo Guidance"), to implement a new procedure for determining the subject matter eligibility of claims under 35 U.S.C. § 101 in view of the Supreme Court's decisions in Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012). At a biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting in April, the Office announced that it would be hosting a public forum on the Guidance in May to receive public feedback on the Guidance, and at that forum encouraged shareholders to submit written comments on the Guidance. Since the forum, the Office has encouraged the patent community to provide further feedback regarding the Guidance (despite the Office's announced deadline of July 31 for submitting comments).

Comments regarding the Guidance, including at least three received after the July 31 deadline, have been posted on the USPTO website. The comments are divided into seven groups (with the number of submissions in each group also provided): Intellectual property organizations and other associations (21), government agencies (0), academic and research institutions (4), law firms (7), companies (8), individuals (43), and comments received after August 1, 2014 (3). Today, we examine the joint comment submitted on October 14, 2014 by the Biotechnology Industry Organization, the Coalition for 21st Century Medicine, five companies (GlaxoSmithKline, Novartis AG, Novo Nordisk Inc., PharmaMar S.A., and Verenium Corp.), and six individuals (Nancy J. Linck, Gladys H. Monroy, Kate H. Murashige, Kenneth H. Sonnenfeld, Suzannah K. Sundby, and Warren D. Woessner).

The BIO joint comment letter begins by "strongly recommend[ing] that the USPTO . . . publish its proposed revisions and provide an opportunity for public feedback before the Revised Guidance is finalized and implemented by examiners," stating that "[a]dditional opportunities for input by the interested public would at any rate be more likely to increase acceptance of such a Revised Guidance by the patent user community." The letter also suggests that "[o]nce the Revised Guidance is promulgated, claims that were first rejected under the March Guidance should not get a second action final rejection under the Revised Guidance."

The rest of the 9-page joint letter addresses seven substantive issues that the signatories argue would benefit from public comment before any Revised Guidance is finalized and implemented. Among these issues are the use of additional case law, a closer reading of Supreme Court and other case law, the use of "function" to demonstrate patent-eligibility, examiners' use of claim interpretation, the possibility of limiting § 101 analysis to claims "directed to" (as opposed to merely "reciting" or "incorporating") a judicial exception, the use of preemption, and the possibility of implementing a "unified" analysis.

With respect to the use of additional case law, the letter states that:

In framing the March Guidance, the USPTO seems to have focused only on selected Supreme Court cases and has not drawn on all available precedent. Despite being extensively briefed, the Supreme Court has not overruled or distinguished Parke-Davis, Merck v Olin Mathieson, In re Kratz, In re Bergstrom and other cases. To the extent these and other cases are not clearly inconsistent with recent Supreme Court decisions, they remain good law until the courts say otherwise, and it should not fall to the PTO to administratively abrogate them by giving them the "silent treatment."

The letter also states that "[a]dditional insight can be gleaned by a closer reading of those Supreme Court cases on which the USPTO has focused." In particular, the signatories suggest that "Supreme Court cases dealing with patentable subject matter are generally framed in broad conceptual brushes, but they are decided on the specific facts presented," and therefore "urge[s] the USPTO to closely scrutinize the particular claims at issue in each precedential case, and where necessary analyze the record to appreciate the scope of the claimed subject matter considered by the Supreme Court." By doing so, the letter contends that the Office will be able "to more accurately put the Court's decisions in context and properly apply the concepts they set forth."

As for the Office's suggestion that applicants will be able to establish patent eligibility using functional differences, the signatories note that they are "greatly intrigued by this concept and would much appreciate further clarification of what the USPTO means and how it expects such evidence is to be used in the analysis." Referring to the Guidance's amazonic acid example (Example B), the letter asks whether:

[T]he USPTO mean[s] by considering "function" that purifying amazonic acid allows skilled persons to formulate it into tablets, to administer it at a precise dose with a predictable pharmacokinetic and pharmacodynamic profile, and for the first time to treat human disease while avoiding side-effects, and that in this sense purifying it conferred a new "function" as disease-treating agent?

The letter then answers that question by expressing the signroties' belief that the conclusion is supported in the case law, and adding that:

Case law also supports the concept that even if a function is known for a natural substance, patent eligibility may be further buttressed by evidence that any "function" is enhanced by purification or enrichment, such as an IC50 that is greatly increased over raw preparations out of a bacterial fermentate, or the absence of impurities (specified or not) that would otherwise make cruder preparations unsuitable for human administration.

With respect to establishing patent eligibility using functional differences, the letter suggests that:

The Revised Guidance should emphasize that even absent chemical modifications, purification or enrichment can give rise to preparations that are every bit as "distinctive" in "name, character, or use," having characteristics "markedly different" from the natural state, or demonstrating an "enlargement in the range of . . . utility." We recommend that the USPTO seek inspiration in the case law when developing additional examples to illustrate this point. Good fodder for such examples can be found in Parke-Davis' remarkable distinctions between purified adrenaline salt vs. the older medicinal powders of shriveled adrenal glands, or in the great advantages of enriched preparations of pure vitamin B12 which the Merck court contrasted to the disgusting earlier raw beef liver extracts that had, up to that time, been the only treatment for pernicious anemia.

As for the Office's proposal to limit § 101 analysis to claims "directed to" a judicial exception (as opposed to merely "reciting" or "incorporating" that exception), the signatories indicate that "as communicated the concept still seems to be very much in flux, and is poorly understood at least by the patent user community." The letter suggests that problems with the above analysis may be overcome if examiners were "required, as a first step, to define precisely what they regard as the applicable judicial exclusion and where it is recited in the claim."

The BIO joint letter closes by focusing on the possible implementation by the Office of a "unified" analysis. The letter contends that:

Alice provides guidance as to how to analyze process claims based on abstract ideas. But, Alice set forth only "a" (not "the") framework for an eligibility analysis that was particularly suited for the kind of claimed subject matter at issue. Its mode of analysis does not necessarily apply in the same way to compositions or manufactures, which have their own line of case law. None of the cases dealing with compositions and manufactures — Myriad, J.E.M. Ag-Supply, Chakarabrty, Funk Bros. — has applied an "inventive concept/significantly more" analysis.

The letter also points out that:

The Supreme Court may have applied an "inventive concept" / "add enough" analysis when it discerned abstract ideas, laws of nature and natural phenomena in disembodied methods and processes. But when it encountered physical compositions and articles, it engaged in a less intrinsic, and more comparative analysis that queried whether the claimed thing has a "distinctive name, character or use" compared to the natural thing, has "markedly different characteristics," or enlarges its "range of utility."

The BIO joint letter concludes by reiterating that the issues discussed in the letter "would benefit from further public dialogue with the USPTO before the Revised Guidance is finalized." It will be interesting to see whether the Office follows the letter's suggestion to release the revised Guidance as a draft and to seek public comment on the draft before implementing the revised Guidance or proceeds to release and implement the revised Guidance first and collect public feedback later.

For additional information regarding this topic, please see:

• "USPTO Outlines Changes to Myriad-Mayo Guidance at BIO Symposium," September 30, 2014
• "USPTO Expected to Issue Revised Myriad-Mayo Guidance in October," September 17, 2014
• "Guest Post: Myriad-Mayo Guidance — Consistency With International Harmonization and TRIPS," August 26, 2014
• "Examination of Myriad-Mayo Guidance Comments — AUTM, COGR, AAU, and APLU," August 21, 2014
• "Examination of Myriad-Mayo Guidance Comments — International Bioindustry Associations," August 11, 2014
• "Examination of Myriad-Mayo Guidance Comments — ACLU," August 5, 2014
• "Guest Post: Overview of First Published Comments on Myriad-Mayo Patent Eligibility Guidance," July 13, 2014
• "Guest Post: USPTO Public Forum on Patent Guidance: My Thoughts as a Speaker and Attendee," June 11, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part IV," May 22, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part III," May 15, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part II," May 14, 2014
• "Guest Post: How to Patent Grapefruit Juice — The New USPTO Guidance for Patent Eligible Subject Matter Is Both Sticky and Sour," May 13, 2014
• "USPTO Holds Forum on Subject Matter Eligibility — Part I," May 12, 2014
• "USPTO Tries to Address Public Misunderstandings Regarding Myriad-Mayo Guidance," April 16, 2014
• "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products," March 4, 2014
GPhA Issues Statement Regarding Proposed IP Provisions of Trans-Pacific Partnership Agreement

October 23, 2014

By Kevin E. Noonan —

The Generic Pharmaceutical Association (GPhA) issued a statement today regarding ongoing talks between major Pacific Rim countries (including the U.S.) related to the proposed Trans-Pacific Partnership Agreement. This trade agreement, whose terms have not been disclosed but have been the subject of leaks by WikiLeaks and others, has been controversial for containing terms believed by some to increase intellectual property protection across a wide spectrum but particularly relating to patented drugs.

The GPhA's statement is as follows:

The generic drug industry is a true American success story. Over the past 30 years, generic utilization in the United States increased from just 20% in the mid-1980s to 86% today. According to the IMS Institute for Healthcare Informatics, in the past decade generic drugs have saved the U.S. health care system more than $1.46 trillion dollars.

Many countries have publicly declared policy objectives to increase utilization of generics. Unfortunately, the recently published version of the Trans-Pacific Partnership (TPP) intellectual property negotiating text would put those objectives in jeopardy.

The information disclosed last week confirms our concerns that the treaty would take an unbalanced approach to intellectual property protection that will impede access to safe and affordable medicines for hundreds of millions of the world's citizens. This would have grave consequences for patients, health systems and budgets worldwide.

Trade agreements should promote competition and allow U.S. generics companies to enter markets where there is great potential for growth. GPhA members manufacture the vast majority of all generic pharmaceuticals dispensed in the United States and fill nearly three billion prescriptions a year, while employing more than 50,000 people in 31 states. Using intellectual property protections to create new barriers to entry for generic medicines would threaten the growth of U.S. exports and jobs.

According to the press release, "GPhA represents the manufacturers and distributors of finished generic pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals, and suppliers of other goods and services to the generic industry. Generic pharmaceuticals fill 86 percent of the prescriptions dispensed in the U.S. but consume just 27 percent of the total drug spending. Additional information is available at http://www.gphaonline.org."
Third Quarter Venture Funding Declines 27% from Second Quarter

October 22, 2014

By Donald Zuhn —

Last week, the National Venture Capital Association (NVCA), a trade association representing the U.S. venture capital industry, released the results of its MoneyTree Report on venture funding for the third quarter of 2014. The report, which is prepared by the NVCA and PricewaterhouseCoopers LLP using data from Thomson Reuters, indicates that venture capitalists invested $9.9 billion in 1,023 deals in the third quarter, which constituted a 27% decrease in dollars and a 9% decrease in deals as compared with the second quarter of 2014, when nearly $13.5 billion was invested in 1,129 deals (see chart below, which shows total venture funding from the first quarter of 2011 through the third quarter of 2014; data from MoneyTree Reports; click on chart to expand). Despite the third quarter decline, total venture funding for 2014 ($33.0 billion) has already eclipsed total funding for all of 2013 ($30.0 billion).

Mirroring the drop in total funding, venture funding in the biotechnology sector dropped from $1.84 billion in the second quarter of 2014 to $1.1 billion in the third quarter of 2014 (see chart below, which shows venture funding for the biotech (blue), medical devices (red), and software (green) sectors since the first quarter of 2011; data from MoneyTree Reports; click on chart to expand). In addition to experiencing a 43% decrease in dollars, the biotech sector also saw a 10% decrease in deals, with 110 deals in the third quarter of 2014. Funding in the biotech sector, however, was up from the third quarter of 2013, when $984 million was invested.

The software sector once again captured the top spot among the seventeen sectors tracked by the NVCA, collecting $3.7 billion (down 39% from the $6.1 billion the industry picked up in the second quarter). The software sector has now captured the top spot for twenty straight quarters, with the biotech sector finishing second in all but three of those quarters (the industrial/energy sector knocked the biotech sector to third in the second quarter of 2010 and first quarter of 2011, and the media and entertainment sector knocked the biotech sector to third in the latest results). The software sector has also received more than $2 billion in funding for ten consecutive quarters.

Medical device and equipment investment decreased by 13% with respect to dollars in the third quarter, with $586 million being invested in 78 deals (the same number of deals as in the second quarter). As for the three sectors above, ten of the seventeen sectors tracked by the NVCA saw decreases in dollars invested in the third quarter.

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

• "Software Sector Leads Pack in 2Q Venture Funding and Biotech Sector Finishes Second," July 20, 2014
• "Software Sector Leads First Quarter Venture Funding to Thirteen Year High; Biotech Sector Finishes Second (Again)," April 30, 2014
• "Biotech Venture Funding Rebounded in 2013 After Strong Fourth Quarter," January 26, 2014
• "Biotech Venture Funding Sees Second Quarter Rebound," July 22, 2013
• "Biotech Venture Funding Down 33% in First Quarter," April 30, 2013
• "Annual Venture Funding Drops for First Time in Three Years," February 4, 2013
• "Biotech Venture Funding Up 64% in Third Quarter," October 29, 2012
• "Venture Funding in Life Sciences Sector Drops 9% in Second Quarter," July 22, 2012
• "Biotech Venture Funding Drops 43% in First Quarter," May 3, 2012
• "Venture Funding Increased 22% in 2011," February 2, 2012
• "Life Sciences Venture Funding Drops in Third Quarter," October 27, 2011
• "Life Sciences Venture Funding up 37% in Second Quarter," August 1, 2011
• "VentureSource Reports 35% Increase in 1Q Venture Funding," April 26, 2011
• "NVCA Reports Modest Gains in First Quarter Venture Funding," April 19, 2011 
• "NVCA Reports 31% Drop in Venture Funding for Third Quarter," October 17, 2010 
• "NVCA Reports 34% Increase in Venture Funding for Second Quarter," July 22, 2010 
• "NVCA Report Shows First Quarter Drop in Venture Funding," April 20, 2010 
• "Biotech/Pharma Financing Improving, R&D Spending Up," August 31, 2009
• "NVCA Study Shows Increase in Third Quarter Venture Funding," October 23, 2009 
• "First Quarter Venture Capital Funding at 12-Year Low," April 23, 2009 
• "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009," February 16, 2009
AntiCancer, Inc. v. Pfizer, Inc. (Fed. Cir. 2014)

October 21, 2014

By Andrew Williams —

Anyone that has been monitoring the outcome of district court cases recently will be aware of the perils of not including sufficient information, or not timely supplementing, preliminary infringement or invalidity contentions required by many local patent rules. The purpose of these contentions, which are often exchanged very early in a case, is to help identify potentially dispositive issues and to provide a framework for discovery. Therefore, the parties are required to articulate their theories of the case early in order to avoid the "shifting sands" approach to litigation. And, even though a party is not required to prove infringement at this stage, Courts have been reluctant to allow a party to shift their contentions, especially as the case moves closer to trial.

It is with this backdrop that the Federal Circuit decided the Anticancer, Inc. v. Pfizer, Inc. case on Monday, October 20, 2014. The Court held that a district court abused its discretion by imposing a fee-shifting sanction on AntiCancer as a requirement to amend its contentions (which the lower court found to be deficient). One problem was that, at the time, AntiCancer had not yet had the opportunity to take any discovery from Pfizer or its co-defendant. Nevertheless, the Federal Circuit's opinion rested almost entirely on the impropriety of the particular sanction as a condition for supplementation as a matter of Ninth Circuit jurisprudence. It is therefore unclear whether this opinion will have an impact beyond this Circuit. It is also unclear whether this case will be of help to all of the parties that have been barred from raising a theory of infringement or invalidity later in litigation due to the fact that it was not included in the preliminary contentions. A take away lesson might be that, even though a party might get bailed out because a sanction is beyond the inherent powers of the court, it is still a best practice to be as explicit as possible in the contentions.

The case had an interesting procedural history. AntiCancer filed a lawsuit against Pfizer in the United States District Court for the Southern District of California for breach of a license agreement, breach of the duty of good faith and fair dealing, and unjust enrichment. After that complaint was filed, AntiCancer discovered that scientists at Pfizer and Crown Bioscience, Inc. authored publications that allegedly infringed AntiCancer's patents. The court granted a motion to amend the complaint to add patent infringement counts and to add Crown Bioscience as a party. The problem was that according to the Case Management Conference Order, the preliminary infringement contentions were due 5 days later. AntiCancer's contentions were 22 pages, 18 of which were claim charts which drew primarily from the defendant's scientific publications. Pfizer ultimately filed a summary judgment motion on the infringement counts because it believed that the claim charts were defective. According to Pfizer, the charts were missing claim elements for every asserted claim. The lower court agreed as to three elements, but permitted AntiCancer to supplement under the condition that it pay defendants' attorney fees. Because AntiCancer objected to this condition, the summary judgment motion was granted. The parties resolved the other counts, and the case was dismissed with prejudice. AntiCancer appealed.

The Federal Circuit noted that even though summary judgment is reviewed without deference, the application of a local rule is reviewed for the abuse of discretion. The Court was also required to consider whether Federal Circuit or regional law applied. Even though the question whether contentions are deficient involves substantive patent law, the imposition of fee-shifting sanctions is a matter of discipline under the court's inherent authority, thereby implicating regional law. Under Ninth Circuit precedent, such sanctions are only permissible if the court makes an explicit finding that counsel's conduct "constituted or was tantamount to bad faith." Therefore, the Court concluded, the fee-shifting sanction would only have been proper if AntiCancer's actions were in bad faith.

To make this determination, the Court looked to what was required to be included in the preliminary infringement contentions by the local patent rules. Interestingly, many of the requirements are similar to those found in the new heightened pleading requirements found in the pending patent reform legislation. Important to this case, the local rules require "a chart identifying specifically where each element of each asserted claim is found within the Accused Instrumentality . . . ." The lower court found this identification to be deficient with respect to three claim elements, "promoter monitoring," "delivering cells," and "metastasis to a second site," even though AntiCancer argued that one skilled in the art would have understood that these elements were present, even if the identification didn't contain these specific words per se.

Therein is the problem for many patents in general, and those in the life sciences in particular. The ultimate audience for these contentions (the Judge) might not have the requisite understanding of the technology. Therefore, even if the attorneys involved believe that the identification of a claim limitation is clear in a reference, without an explanation to "connect the dots," the court might find the claim limitation to be missing. That was the case here. The technology involved was the use of green fluorescent protein linked to a gene promoter. Specifically, two representative claim were (1) a method of monitoring the ability a promoter to promote expression of a gene by delivering cells to an animal that contain a fluorophore operatively linked to a promoter and subsequently observing the fluorophore, and (2) a nude mouse model for progression of human neoplastic disease that, among other things, "has sufficient immune-deficiency to allow a transplanted neoplastic tissue to grow at said primary site and metastasize to said secondary tumor site . . . ."

For each of the three "missing" elements, AntiCancer alleged that they were present in the publications (and therefore by extension, in the contentions), and provided a detailed explanation of why and where they could be found. In addition, AntiCancer submitted a declaration from Dr. Robert M. Hoffman explaining the science involved. The district court noted that if AntiCancer had provided in its contentions this level of detail and explantion, there would have been no deficiencies. In fact, the court used AntiCancer's ability to explain the location of each limitation as evidence that discovery from defendants was unnecessary to satisfy AntiCancer's obligation at the time. AntiCancer took the position that such explication was not required by the local rules, and that it had identified each limitation on its claim charts.

As already noted, the Federal Circuit did not focus on whether the district court was correct in finding the contentions deficient. Indeed, it concluded that the Court "need not intrude upon the district court's authority to require supplementation of the Preliminary Infringement Contentions when such supplementation may assist the procedures at trial." Instead, the Court focused on whether the sanctions were appropriate. And, because Ninth Circuit law requires a finding of bad faith, and the lower court did not make such a finding, the Court vacated and remanded. Instead, the lower court found that the contentions were "woefully insufficient" and "vague," and that AntiCancer acted "unreasonable" and "disingenuous." These findings, according to the Federal Circuit, do not amount to "bad faith."

Another observation that can be discerned from this case is the mischief that could be caused by the heightened pleading standards found in the pending patent reform legislation. In this case, the Federal Circuit noted that AntiCancer's complaint complied with the Federal Rule of Civil Procedure. Instead, the defendants focused on the information required for the preliminary contentions by the local rules, alleging that they were deficient. If such information were required to be included in a complaint, defendants would routinely file motions to dismiss based on the sufficiency of the pleading. This would cause cases to be decided, and potentially dismissed, on procedural grounds (were all of the requirements met) before any substantive analysis of the allegations are made. Whereas requiring more detail than that found in Form 18 is probably a good idea, instituting the level of heightened pleading standards as can be found in the current proposed legislation is probably a bad idea. For all of the supporters of the legislation that argue that such concerns are unfounded, one need only look at Pfizer's summary judgment motion on the contentions as evidence that accused infringers will use any means to get a case dismissed.

AntiCancer, Inc. v. Pfizer, Inc. (Fed. Cir. 2014)
Panel: Circuit Judges Newman, Reyna, and Taranto
Opinion by Circuit Judge Newman
The Indefiniteness of What is “Routine, Well-understood and Conventional” in Assessing Patent Eligibility of Diagnostic Method Claims

October 20, 2014

By Kevin E. Noonan —

Castigating the Supreme Court, at least in patent circles, has become as prevalent as the Court's forays into patent law have been to overrule the Federal Circuit. While even those who give the Court the benefit of the doubt and appreciate the parsimony with which many of its decisions are written, the cultural and institutional differences between the way the Court addresses issues, and the higher certainty that those who rely on intellectual property protection need to justify the investment that turns innovation into commercialization, frustrate both.

These differences are illustrated in the standards the Court enunciated in its Mayo v. Prometheus regarding diagnostic method claims. In particular, the Court's reliance on what is "routine, conventional and well-understood" in deciding that the claims at issue were not patent eligible provide a focus for this analysis. In the Mayo case, the Supreme Court reversed the Federal Circuit's determination that the following claim recited patent-eligible subject matter:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising: 
    (a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and  
    (b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,  
    wherein the level of 6-thioguanine less than about 230 pmol per 8×10⁸ red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and  
    wherein the level of 6-thioguanine greater than about 400 pmol per 8×10⁸ red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

(U.S. Patent No. 6,355,623). In Justice Breyer's opinion for a unanimous Court, the "administering" step "simply refer[s] to the relevant [preexisting] audience, namely doctors who treat patients" with thiopurine drugs. The "determining" step provided non-limiting disclosure, encompassing all methods for determining drug or metabolite levels, and according to the Court the step embodied "well-understood, routine, conventional activity previously engaged in by scientists who work in the field." All that was left for these claims was the "wherein" clauses, which merely recite a law of nature regarding how a drug is metabolized (with it being unknown, of course, whether a new drug would lead to a different conclusion.)

Having set forth the general principles contained in its Mayo opinion, the Court as is its wont left it to lower courts to explicate the scope of the instances where a claim is not patent eligible. And this is where the mischief begins; while there are few instances where what is claimed includes administration of a new drug, in several instances district courts (and perhaps the Federal Circuit) have interpreted what is "routine, conventional and well-understood" far beyond the circumstances that gave rise to the Court's invalidation of the claims in Mayo.

The first instance is the Federal Circuit's decision in Perkin Elmer Inc. v. Intema Ltd. (Fed. Cir. 2012). The claims of the patent-at-issue, U.S. Patent No. 6,573,103 were directed to prenatal diagnostic testing for Down's syndrome, intended to avoid the need for invasive testing like chorionic villus sampling that incurs the risk of miscarriage:

1. A method of determining whether a pregnant woman is at an increased risk of having a fetus with Down's syndrome, the method comprising the steps of:
    measuring the level of at least one screening marker from a first trimester of pregnancy by:
        (i) assaying a sample . . . ; and/or
        (ii) measuring at least one first ultrasound screening marker from an ultrasound scan . . . ;
    measuring the level of at least one second screening marker from a second trimester of pregnancy, the at least one second screening marker from the second trimester of pregnancy being different from the at least one first screening marker from the first trimester of pregnancy, by:
        (i) assaying a sample . . . ; and/or
        (ii) measuring at least one second ultrasound screening marker from an ultrasound scan . . . ;
    and determining the risk of Down's syndrome by comparing the measured levels of both the at least one first screening marker from the first trimester of pregnancy and the at least one second screening marker from the second trimester of pregnancy with observed relative frequency distributions of marker levels in Down's syndrome pregnancies and in unaffected pregnancies.

In reversing the District Court, the Federal Circuit opined that In its view, the claimed methods do not contain an "inventive concept" (defined as in Mayo as "other elements or a combination of elements [] sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself") because these claims "contain[] nothing more than 'well-understood, routine, conventional activity previously engaged in by researchers in the field.'" The opinion states that the "measuring" steps are insufficient to supply the ineffable "something more" required by the Supreme Court, because (as in Mayo) the method steps encompass any and all methods for measuring the markers. The panel stated that "'[t]he individual measurements are obtained through known methods. . . ." and thus the panel characterized the measuring steps as encompassing "well-understood, routine, conventional activity previously engaged in by scientists who work in the field."

A similar result (albeit using a more logically strained and expansive analysis) was obtained in Ariosa v. Sequenom (N.D. Cal. 2013) over claims for identifying and characterizing paternal DNA in blood from a pregnant woman (and making diagnoses therefrom); claim 1 of U.S. Patent No. 6,258,540 is illustrative:

A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises
    amplifying a paternally inherited nucleic acid from the serum or plasma sample and
    detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

Here, the District Court's opinion frankly relied on the proposition that amplifying and detecting DNA from plasma or serum was well known at the time the invention was made and thus these were "routine, well-understood and conventional" methods that disqualified them from positively affecting the patent eligibility analysis under Mayo. The court further stated that:

Because the claimed processes at issue — apart from the natural phenomenon of paternally inherited cffDNA — involve no more than well-understood, routine, conventional activity, previously engaged in by those in the field, they are not drawn to patent eligible subject matter and are invalid under § 101.

(Of course, "the claimed process at issue" here differed in a major way from the processes in the claims at issue in Mayo: the process recited by the claim as a whole was not "routine, conventional and well-understood"; unlike in Mayo, the prior art did not teach detecting paternal DNA in maternal blood for any purpose.)

The Ariosa District Court also extended the requirements for what would not be "routine, well-understood and conventional" steps to be only those for which there were commercially available alternatives for practicing the invention at the time it was made:

In support of [the] argument [that the claims do not impermissibly preempt all methods for detecting paternal DNA (cffDNA) in maternal blood], Sequenom has presented the Court with scientific articles describing methods for detecting cffDNA. Ariosa argues that even if these articles disclose alternative methods of detecting cffDNA, Sequenom has failed to present any evidence showing that any of these alternative methods are practical and commercially viable. In response, Sequenom argues that it is only relevant that the alternative methods can be practiced, not that they are commercially viable alternatives. The Court disagrees. If the alternative methods are not commercially viable, then the effect of the patent in practice would be to preempt all uses of the natural phenomenon. It is important to note that the '540 patent does not merely claim uses or applications of cffDNA, it claims methods for detecting the natural phenomenon. Because generally one must be able to find a natural phenomenon to use it and apply it, claims covering the only commercially viable way of detecting that phenomenon do carry a substantial risk of preempting all practical uses of it. It is also important to note the age of the patent. The '540 patent was issued in July 2001. That twelve years have passed since the issuance of the patent but Sequenom does not present the Court with any evidence of a commercially viable alternative method of detecting cffDNA reflects the broad scope of the '540 patent's claims and the great risk that the patent could preempt the use of cffDNA. Indeed, Sequenom itself has acknowledged the preemptive effect of its patent. (albeit supported by some improvident statements by Sequenom in the record).

Thus, in addition to not being "routine, well-understood and conventional" the only method claims patent eligible in the District Court's opinion would be those that could be practiced without infringement on the day the patent application was filed.

Finally, in Genetic Technologies Ltd. v. LabCorp. (D. Del. 2014), the District Court adopted a magistrate judge's recommendation that the claims in U.S. Patent No. 7,615,342 were patent ineligible; claim 1 is representative:

1. A method to predict potential sprinting, strength, or power performance in a human comprising:
    a) analyzing a sample obtained from the human for the presence of one or more genetic variations in α-actinin-3 (ACTN3) gene;
    b) detecting the presence of two 577R alleles at the loci encoding amino acid number 577 of the α-actinin-3 (ACTN3) protein; and
    c) predicting the potential sprinting, strength, or power performance of the human, wherein the presence of two copies of the 577R allele is positively associated with potential sprinting, strength, or power performance.

The magistrate judge's reasoning was consistent with (and relied upon) the California District Court's Ariosa decision; what was unique in this case is that it was decided on the pleadings under Fed. R. Civ. Pro. 12(b)(6), denying the patentee of any opportunity to present the Court with evidence contrary to its prejudices and defendant's arguments.

Finally, similar sentiments were voiced by the panel at oral argument in Myriad Genetics v. Ambry Genetics (heard on October 6, 2014; discussed more fully in a later post).

There are several reasons that these decisions are a cause for deep concern. Despite occasional appearances to the contrary, it is unlikely that the Supreme Court has intended to do serious violence to well-established principles of patent law in Mayo, AMP v. Myriad Genetics, or any of the other cases decided in recent years. However, by making the decisions it has made, using "less than pellucid" language and by failing to recite examples of what the Court does not intend to do, the Court has permitted lower courts to do such violence (perhaps because these lower courts are no more versed in the minutiae of patent law than the Court itself). One example is the ease with which courts have ignored or eluded the principle that claims must be interpreted as a whole. (It is clear that the Supreme Court understands, or has come to understand this principle: the Court, albeit in a footnote, made this clear in its Alice v. CLS Bank opinion.) Perhaps lower courts will take this cue to address claims as a whole in performing their patent eligibility assessment.

Another reason that the current methods for determining patent ineligibility are disquieting is that it has always been the case that a new use for an old (or otherwise unpatentable) compound can be patentable (and thus patent eligible). In re Hack, 245 F.2d 246 (CCPA 1957). This is a qualified statement, because the mere recognition of a property or principle of an old compound, see, In re May, 574 F.2d 1082 (CCPA 1978), or the realization that the practice of a method has a particular effect, see, In re Tomlinson, 363 F.2d 928 (CCPA 1966), can defeat patentability (and eligibility) on principles of inherency. As the Federal Circuit stated in In Re William J. King, 801 F.2d 1324 (Fed. Cir 1986):

[T]he law is, and long has been, that "if a previously patented device, in its normal and usual operation, will perform the function which an appellant claims in a subsequent application for process patent, then such application for process patent will be considered to have been anticipated by the former patented device." In re Ackenbach, 45 F.2d 437, 439, 7 USPQ 268, 270 (CCPA 1930) (citing with approval Claude Neon Lights v. E. Machlett & Son, 27 F.2d 702, 707-08 (2d Cir.1928)). Accord In re Watson, 44 F.2d 868, 870, 7 USPQ 113, 115 (CCPA 1930); In re Ernst, 150 F.2d 133, 135, 66 USPQ 71, 73 (CCPA 1945) (citing with approval In re Ackenbach, supra). See generally Carnegie Steel Co. v. Cambria Iron Co., 185 U.S. 403, 22 S.Ct. 698, 46 L.Ed. 968 (1902) (prior art device anticipates later process if device carries out process in normal operation). Cf. In re Tarczy-Hornoch, 397 F.2d 856, 158 USPQ 141 (CCPA 1968) (a process claim, otherwise patentable, should not be rejected merely because the application of which it is part discloses apparatus which will inherently carry out the recited steps).

But that is not the situation in any of the cases discussed here. In each case, the claim as a whole was (undisputedly) novel, and the putative "routine, well-understood and conventional" methods were used in new, inventive ways. Only by taking a categorical approach for the individual steps recited in these claims are "routine, well-understood and conventional" have courts been able to come to the conclusion that the claims are not patent eligible.

It is the categorical approach, sanctioned generally by the Supreme Court in its preference for the "well settled" law of Section 101 of the Patent Statute (rather than the more objective and specific portions of the law such as Sections 102, 103 and 112), that encourages if not mandates the conclusions of the courts discussed above. Permitted to apply merely their subjective views of whether a claim recited "something more" than a judicial exception to patent eligibility (laws of nature, natural phenomena and abstract ideas) and detached from art or other reality-based considerations available in the §§ 102/103 analysis, it should not be surprising that courts have exercised their authority to strike down claims that they have been convinced should not be patent eligible. This subjectivity is of course the basis for the Court's apparent belief that its views on patent law should be superior to the Federal Circuit's, a view the Court did not espouse when the appellate court's opinions were penned by Judges Rich or Markey. And such subjectivity is perhaps required for a Court that believes that courts in general need to play Goldilocks for the patent system, making sure the amount of patents is "just right" to avoid the purported evils of too much or too little patenting. But as the cases discussed herein illustrate, what these subjective measures are certain to do is make the patent grant less reliable and patent protection less predictable, and this outcome will harm the economy, innovation, and American's quality of life, as investors leave the less predictable arts like medicine, pharma, and biotechnology to invest in the latest "iSomething." It is hard to believe that this is the outcome desired by the Court, but if its members are paying attention perhaps they will take the likelihood of these outcomes into consideration when next they deign to opine on patent law.

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