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  • USPTO Provides Update on Status of Revised Myriad-Mayo Guidance

    By Donald Zuhn —

    Biotechnology Industry Organization (BIO)During a session of the Biotechnology Industry Organization (BIO) Intellectual Property Counsels Committee (IPCC) fall conference, which took place this week in Nashville, TN, the U.S. Patent and Trademark Office provided a status update regarding forthcoming revisions to the Myriad-Mayo Guidance.  Once again representing the Office was June Cohan, Legal Advisor with the USPTO's Office of Patent Legal Administration.  Ms. Cohan's latest presentation marked the fourth time in the past eight months that she has addressed the Guidance at a BIO event (she previously presented on the Guidance in April at the BIO IPCC spring conference in Palm Springs, CA, in June at the BIO International Convention in San Diego, CA, and in September at the BIO IP & Diagnostics symposium in Alexandria, VA).  Also participating in the session on "Protecting Products of Nature," were Dr. Fangli Chen of Choate Hall & Stewart LLP (who moderated the session); Henry Gu, Director, Intellectual Counsel for Cubist Pharmaceuticals; Dr. Steve Bossone, Vice-President of Intellectual Property for Alnylam Pharmaceuticals; and Hugh Goodfellow of Carpmaels & Ransford LLP.

    Dr. Chen began the session by providing an overview of patent eligibility for biotechnological subject matter, including the origins of the gene patenting debate, the procedural history of the AMP v. Myriad Genetics suit, and the Supreme Court's decision in that case.  With respect to the origins of the gene patenting debate, Dr. Chen pointed to a Parade magazine article from November of 2006 (which was first addressed in this space in December of 2006).

    USPTO SealDr. Chen then turned the session over to Ms. Cohan, who began her presentation by indicating that while the revised Myriad-Mayo Guidance had to comport with four Supreme Court decisions on patent eligibility (Bilski v. Kappos (2010), Mayo Collaborative Services v. Prometheus Laboratories, Inc. (2012), Association for Molecular Pathology v. Myriad Genetics, Inc. (2013), and Alice Corp. v. CLS Bank International (2014)), the Office had "a lot of room to maneuver."  She pointed out that the Office currently has two sets of eligibility guidance in place:  the Preliminary Examination Instructions that were issued in June of 2014 in response to the Alice Corp. decision (see "USPTO Issues Preliminary Examination Instructions Regarding Alice Corp. v. CLS Bank International"), and the Myriad-Mayo Guidance that the Office issued in March (see "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products").  While Ms. Cohan noted that the Alice guidance had been favorably received by the patent community, she acknowledged that response to the Myriad-Mayo Guidance had been "unfavorable."

    Regarding the public feedback on the Myriad-Mayo Guidance, Ms. Cohan addressed four issues:  the breadth of the Guidance, the patent eligibility of discoveries, the impact of examining claims that are directed to a judicial exception rather than those that merely recite or involve a judicial exception, and the Guidance's "significantly different" standard.  With respect to breadth of the Guidance, Ms. Cohan noted that the Myriad-Mayo Guidance addresses Myriad in the context of other Supreme Court decisions.  To those who have asked why the Office, in issuing the Guidance, went beyond Myriad, Ms. Cohan replied that "Myriad is not a case that stands alone," but rather "relies on earlier Supreme Court precedent including Chakrabarty, Funk Brothers, and Mayo."

    As for criticism that the Guidance relegates discoveries to second-class status despite the express language of 35 U.S.C. § 101 that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent therefor. . ." (emphasis added), Ms. Cohan countered that the Supreme Court had explained in a number of decisions over the past 65 years that "a mere discovery of nature's handiwork" is not patent eligible.  Although the Court has also indicated that a discovery may be patent eligible when practically applied, she conceded that the distinction between patent eligible and patent ineligible discoveries can be somewhat confusing.

    Turning to the difference between claims that are directed to a judicial exception and those that merely recite or involve a judicial exception, Ms. Cohan noted that the original Guidance required examiners to analyze claims that recite or involve a judicial exception rather than claims that are directed to a judicial exception.  She explained that critics of this approach complained that way too many claims had to go through the three-step examination process implemented by the Guidance.  Ms. Cohan indicated that consistent with the Alice Corp. decision, which was issued by the Court almost four months after the Office issued the Myriad-Mayo Guidance, the revised Guidance would focus on the (allegedly) narrower category of claims that are directed to a judicial exception.

    The final issue addressed by Ms. Cohan was the Guidance's creation of the "significantly different" standard, which "brings together the outcomes of both Myriad and Mayo" by merging the "marked difference" standard of Chakrabarty, which was applied in Myriad, with the "significantly more" standard of Mayo, which was applied in Alice Corp.  Ms. Cohan argued that the Office did not intend to merge the two tests, and that the Guidance's standard was only intended to be a teaching tool for examiners.  Nevertheless, she reiterated that the phrase "significantly different" would not appear in the revised Guidance, and that the Office would be "sticking closer to the cases."  This suggests that the revised Guidance may focus on one or both of the tests from Chakrabarty/Myriad and Mayo/Alice Corp.

    In addition to the above issues, Ms. Cohan indicated that the revised Guidance would allow applicants to demonstrate that the claimed subject matter is markedly different from a natural product by showing differences in function or utility.  Referring to the controversy surrounding the Guidance's fireworks example and the Office's observation that simple gunpowder, which is a combination of three naturally occurring products, would not be patent eligible due to a lack of structural differences (despite the obvious functional difference between the individual components and the combination), Ms. Cohan explained that the Office had "found a way for gunpowder to be eligible."  She also noted that the complex, twelve-factor test of the original Guidance would not appear in the revised Guidance.

    Given that Ms. Cohan's presentation did not appear to till any new ground, the question on everyone's mind was when the revised Guidance would be issued.  Ms. Cohan indicated that the new Guidance would be issued "very soon," adding that she "was hoping to have it by now," but that it was "not quite ready."  Towards the end of the session, Ms. Cohan did sound one (possibly) worrisome note when she indicated, without elaboration, that the revised Guidance "had to pass a few more checkpoints" before it could be issued.  For those who recall Ms. Cohan's prediction at the BIO IP & Diagnostics symposium that the revised Guidance would be issued in October (see "USPTO Expected to Issue Revised Myriad-Mayo Guidance in October"), her remark about "checkpoints" likely gave skeptics in the audience pause.

    Patent Docs will discuss the session's other presentations in a subsequent post.

  • Ariosa v. Sequenom — Ariosa’s Responsive Brief

    By Kevin E. Noonan —

    Ariosa DiagnosticsThe Federal Circuit heard oral argument in the Ariosa v. Sequenom case last Friday, and a discussion of that argument will be posted in due course.  Having posted on Sequenom's opening brief and the amicus brief filed by BIO, completeness requires a post on Ariosa's responsive brief and the amicus brief by Invitae, one of the defendants in the consolidated Myriad cases pending before the District Court for the District of Utah.

    If Sequenom's brief focused on the lack of undue preclusive effect of their claims to a method for detecting paternal cell-free fetal-derived DNA (cffDNA) in maternal blood, Ariosa directs its arguments to the purported lack of "inventive concept" in Sequenom's claims.  This makes sense, because inventive concept is a patent feature even more standardless than undue preemption.  As a reminder, claim 1 of U.S. Patent No. 6,258,540 recites:

    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.

    The argument Ariosa asserts is as follows.  First, the "discovery" of cffDNA is a natural phenomenon that is not itself patent eligible.  Ignoring the inconvenient fact that Isis, Sequenom's licensor, did not claim the isolated cffDNA per se, it may not even be the case that amplified cffDNA itself is not patent eligible, depending inter alia on whether the DNA is modified during amplification (see Section III of the Myriad opinion, where Justice Thomas specifically allows for that eventuality).  These considerations are important, because Ariosa then argues that Supreme Court authority (the Court's Mayo decision) "requires" method claims that "focus on the use of a natural phenomenon" to also set forth an inventive concept "apart from the natural phenomenon" in order to be patent eligible.  This argument follows the District Court's decision to treat all the judicial exceptions as equivalents, so that the Supreme Court's teachings regarding what is required to convert a natural law into a method reciting an inventive concept is equally applicable to natural phenomenon.  The propriety of treating the judicial exceptions as equivalents is not discussed but rather is accepted as a given, but it is not difficult to apprehend that method claims relying on the existence of a natural phenomenon may not be the same as such claims relying on a natural law; in any event this provides an unaddressed question at the heart of Ariosa's argument.

    Next, Ariosa asserts that this inventive concept requirement cannot be satisfied by combining the natural phenomenon (sic) by combining it with "well-understood, routine and conventional activity."  The brief then sets forth the evidence that all the steps in the claim (the fractionating step, the amplifying step and the detecting step) were "well-understood, routine and conventional.  Thus, according to Ariosa, the '540 patent claims are invalid for failing to recite an inventive concept because the claims combine the natural phenomenon of cffDNA with such "well-understood, routine and conventional" method steps.  This portion of the brief addresses the key question posed by the Ariosa case:  should the law assess what is "routine, well-understood and conventional" per se, that is, outside the context of the claims as a whole, or is the proper question whether what is "well-understood, routine and conventional" is the claim as a whole, i.e., detecting cffDNA in maternal blood (consistent with the claims the Court analyzed in Mayo).  (This question is considered at greater length in "The Indefiniteness of What is 'Routine, Well-understood and Conventional' in Assessing Patent Eligibility of Diagnostic Method Claims.")

    The brief also sets forth an argument that the Supreme Court's decision in Myriad is consistent with the District Court's decision that the '540 patent claims should not be patent eligible.  This argument reiterates Ariosa's earlier claims that cffDNA is a natural phenomenon.  Specifically, Ariosa argues that Myriad renders isolation of "newly discovered genetic material through conventional means" as not patent eligible; again, isolation is not the subject of these patent claims.  Ariosa then argues that Myriad can be distinguished from this case because here, the claims do not require creation of novel, man-made DNA, and that the '540 patent claims cannot be analogized to claim 21 of Myriad's U.S. Patent 5,753,441 because this claim has not been considered by any court (being among the overwhelming number of Myriad's claims not challenged by the ACLU and their plaintiffs in the Myriad case).

    Ariosa addresses Sequenom's preemption argument by stating it conflicts with Supreme Court and Federal Circuit precedent, specifically with regard to the inventive concept question.  Finally, at the end of the brief, Ariosa deals with the three references asserted by Sequenom to show lack of undue preemption.  In this argument, Ariosa agrees with the District Court that the references are not relevant because they post-date the time the patent application that granted as the '540 patent was filed, and also asserts that the references failed to disclose a "substantial practical application" of alternatives to the claimed method, directing this portion of its argument on purported failures of the references to be able to detect cffDNA in maternal blood.  Tellingly, Ariosa does not address the District Court's standard that the only patent-eligible method claim would be one where there was a commercially practicable, non-infringing method available at the time a patent application claiming such a method was filed.

    InvitaeInvitae's amicus brief, filed to "rebut" BIO's brief, is itself rather short and consists of but a few propositions.  The first is that "following" what Ariosa and Invitae argue is "controlling precedent" from Mayo will not harm innovation in the genetic diagnostics industry because it has not happened yet, and there are those (mostly academics) who believe that patents are not necessary for the development of this industry.  Invitae further argues that preventing patents for genetic diagnostic methods will not result in data suppression, again based on unsupported predictions on how the industry will develop.  This amicus also argues that patents will prevent the development of the industry by "broadly preempting [the] application of natural laws" and that affirming the District Court will not constitute a "ban" on diagnostic patents.  Support for these assertions include the falling costs of genetic sequencing, which Invitae alleges will reduce costs and make genetic diagnostic testing available without needing patent exclusivity.  This argument misplaces the focus on the costs of the testing (which is only partly tied to sequencing costs) and ignores the costs associated with bringing such a test to market.  Failing to find any examples of diagnostic testing to support their "patents are not necessary" argument, the brief cites "the open source software movement for an illustration of a vibrant culture of innovation persisting in the absence of patent protection";  even here, the brief relies on an assessment of the "vibrant culture" from 2003.  And the brief raises the specter of a "patent thicket" that does not now and is unlikely to ever exist; indeed such fears have been raised since the days of the Human Genome Project as part of the "tragedy of the anticommons," another mythical beast never shown to exist.

    The case is now in the hands of the Federal Circuit panel, with a decision expected in the next few months.

  • In re Cuozzo Speed Technologies LLC Federal Circuit Argument — The Patent Office Asks to Have Its Cake and Eat It Too

    By Andrew Williams —

    Federal Circuit SealLast week, the Federal Circuit heard the first oral argument for the first appeal of an inter partes review ("IPR") final written decision for the first IPR ever filed (IPR2012-00001).  The IPR case caption was Garmin USA, Inc. (Petitioner) v. Cuozzo Speed Technologies LLC (Patent Owner), but the appeal was fashioned as "In re Cuozzo Speed Technologies LLC" because Garmin withdrew from the appeal.  As a result, the Patent Office intervened to oppose Cuozzo's appeal.  Of course, the specific facts and argument of this case are of the utmost importance to the patent owner.  However, it is the positions advocated by USPTO Solicitor that can be of the most use to any other party finding itself in this position.

    USPTO SealThe Office advanced three arguments at the hearing.  First, the Patent Office asserted that the decision to institute is both unappealable and unreviewable — even if that decision goes beyond the boundaries set by Congress.  Second, the Patent Office defended its use of the broadest reasonable interpretation (BRI) standard as consistent with the legislative history and prior Federal Circuit case law.  Finally, the Patent Office explained why the denial of virtually every motion to amend has been proper, even though the patent owner's ability to do so was anticipated by Congress.

    With regard to these last two arguments, to quote Judge Dyk (albeit with respect to a different argument), the Patent Office attempted to have its cake and eat it too.  During the argument, the Solicitor made two seemingly incongruent statements in back to back sentences.  This stark contrast reveals why the justification for the BRI standard cannot rest on the supposed ability of a patent owner to amend its claims.  First, in response to a question about the claim construction standard, the Solicitor said:  "The principle difference between these types of trials and a trial in a district court is that patentees can amend their claims, that is in the statute itself."  Then, when Judge Newman commented that amending claims is not so easy, the Solicitor said:

    It is not so easy, your honor, and it should not be so easy because having a motion to amend granted by the Board means that's a claim in an issued patent.  There is no further examination.  There is no search of the prior art.  So the Board has done something that is entirely reasonable and has put the public on notice.  They have told the patentees — "if you want to amend your claims, tell us why your new claim is patentable over what you know to be in the prior art."  Now, we don't think that's asking too much, particularly where if we were to grant that motion, the claim would become a claim in a U.S. patent.

    The fact that these two positions could be expressed in almost the same breath demonstrates the apparent disconnect that the Office has with regard to these concepts.  Even though many of us commenting on these types of proceedings have already pointed out this apparent inconsistency, it was somewhat surprising to hear them both advanced in such quick succession.

    It appeared that at least Judge Newman also recognized this inconsistency.  Moreover, she asked the question that has been on a lot of minds since the promulgation of the patent office rules — if these proceedings are supposed to be a substitute for litigation (but easier, cheaper, and quicker), why should the construction of claims be any different in the two proceedings.  The Office responded to this concern by pointing out that the Federal Circuit has already decided that BRI is the correct standard.  The problem was that those prior cases dealt with other patent office proceedings, and not those established by the America Invents Act.

    In trying to ascertain what the Court might do with respect to the claim construction standard, it may prove useful to pay attention to Judge Clevenger's line of questioning of Cuozzo's counsel.  He noted that the Patent Office established that standard based on its rule-making authority provided for in the AIA.  Even though Counsel pointed out that the claim construction standard was not one of the regulations enumerated in statute for which the Patent Office had authority, Judge Clevenger responded by asking whether the Office had authority to establish rules to determine whether there is a likelihood of showing that one or more claims are valid.  "Wouldn't you have to construe the claims before you could reach that decision," he asked.  Even though there is a distinction between the procedural requirements for the Patent Office to make a showing and the more substantive question of what standard to use to construe the claims, the Court may, unfortunately, just defer to the Patent Office on this question.

    Decision to Institute

    Most of the hearing was spent considering whether the Federal Circuit could review the PTAB's decision to institute the trial.  The Patent Office tried to suggest that this question was already settled.  However, as Judge Dyk pointed out, the prior opinions involved the review of the decision by the PTAB not to institute trial.  And, contrary to the Patent Office's position, it does not follow that the decision to institute is equally not reviewable.

    Specifically, the issue on appeal was "whether the PTAB lacked authority to institute IPR for claims 10 and 14 on grounds of unpatentability not identified in the Petition."  Garmin's petition contained several grounds of unpatentability, including a 103 challenge of claim 17 in view of various prior art references.  Even though the petition did not also challenge claims 10 and 14 on these grounds, the Board instituted trial on these claims in view of this combination because claim 17 depended from both of these claims.  In other words, the prior art references were specifically identified in the petition in the specific combination, just not with respect to claims 10 and 14.

    Cuozzo and the Patent Office relied on two different sections of 35 U.S.C. § 314 to defend their respective positions.  First, Cuozzo argued that 35 U.S.C. § 314(a) prohibits the Board from such action: "THRESHOLD.–The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition."  However, the Office pointed to 35 U.S.C. § 314(d) as prohibiting appeals as to the grounds of institution: "NO APPEAL.–The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable."

    There was some discussion about whether § 314(d) merely prevented interlocutory appeal of decisions to institute (because in this case, Cuozzo did wait until after the Final Written Decision before appealing the decision to institute).  There was also some discussion about whether this section was only meant to apply to the decision not to institute (which is already settled law).  The more interesting observation, however, was the increasingly absurd hypotheticals that the Patent Office was required to claim as unreviewable in order to maintain a consistent stance.  In fact, the details of this case were rather simple — the specific claims at issue were all challenged (albeit on different grounds) and the specific combinations of references were identified in the petition (albeit not for claims 10 and 14).  Judge Clevenger began by asking whether a decision to institute with respect to a completely different claim set not identified at all in the petition would be reviewable.  The Patent Office answered no — such a decision would be unreviewable and unappealable.  This was the same answer given for every fact situation, even those contrary to the statute itself.  For example, the Patent Office believed that if it had instituted a Post-Grant Review (PGR) ten years after a patent issued, it would also be unreviewable (even though the statute requires that such a petition be filed within nine months).

    The key to the Patent Office's thinking on this point came when the Solicitor was asked what the harm would be if the Federal Circuit reviewed these decisions to institute.  In response, it was made clear that, regardless of what happened during the institution decision, the Patent Office subsequently made a determination that the claims should never have issued.  If the patent holder is therefore able to escape cancellation on "procedural" grounds, the entire year would have been for naught, according to the Office.  This may sway the judges for the question presented here, but it does not explain the "slippery-slope" hypotheticals presented by the Court.  Based on the questioning, it may well be that a majority of this Court will let the decision to institute stand in this case.  However, they may reserve for the future how to resolve the harder questions, if and/or when they are raised.

  • Court Report

            By Sherri Oslick —

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

    Teijin Ltd. et al. v. Unimark Remedies Ltd.
    1:14-cv-01356; filed November 4, 2014 in the District Court of Delaware

    • Plaintiffs:  Teijin Ltd.; Teijin Pharma Ltd.; Takeda Pharmaceuticals USA Inc.
    • Defendant:  Unimark Remedies Ltd.

    Infringement of U.S. Patent No. 7,361,676 ("Solid Preparation Containing Single Crystal Form," issued April 22, 2008) following a Paragraph IV certification as part of Unimark's filing of an ANDA to manufacture a generic version of Takeda's Uloric® (febuxostat, used for the chronic management of hyperuricemia in patients with gout).  View the complaint here.

    Senju Pharmaceutical Co., Ltd. et al. v. Innopharma Licensing, Inc. et al.
    1:14-cv-06893; filed November 3, 2014 in the District Court of New Jersey

    • Plaintiffs:  Senju Pharmaceutical Co., Ltd.; Bausch & Lomb, Inc.; Bausch & Lomb Pharma Holdings Corp.
    • Defendants:  Innopharma Licensing, Inc.; Innopharma Licensing, LLC; Innopharma, Inc.; Innopharma, LLC

    Infringement of U.S. Patent Nos. 8,129,431 ("Aqueous Liquid Preparation Containing 2-amino-3-(4-bromobenzoyl)phenylacetic acid," issued March 6, 2012), 8,669,290 (same title, issued March 1, 2014), 8,754,131 (same title, issued June 17, 2014), and 8,871,813 (same title, issued October 28, 2014) following a Paragraph IV certification as part of Innopharma's filing of an ANDA to manufacture a generic version of B&L's Prolensa® (bromfenac ophthalmic solution, used to treat postoperative inflammation and reduction of ocular pain in patients who have undergone cataract surgery).  View the complaint here.

    AstraZeneca AB v. Actavis Laboratories FL Inc. et al.
    1:14-cv-01356; filed October 31, 2014 in the District Court of Delaware

    • Plaintiff:  AstraZeneca AB
    • Defendants:  Actavis Laboratories FL Inc.; Watson Laboratories Inc.; Actavis Inc.; Actavis LLC

    Infringement of U.S. Patent Nos. RE44,186 ("Cyclopropyl-Fused Pyrrolidine-Based Inhibitors of Dipeptidyl Peptidase IV and Method," issued April 30, 2013) and 8,628,799 (same title, issued January 14, 2014) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of AstraZeneca's Kombiglyze XR (saxagliptin and metformin hydrochloride, extended-release, used as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus).  View the complaint here.

    Otsuka Pharmaceutical Co., Ltd. v. Aurobindo Pharma Ltd. et al.
    1:14-cv-06890; filed October 31, 2014 in the District Court of New Jersey

    • Plaintiff:  Otsuka Pharmaceutical Co., Ltd.
    • Defendants:  Aurobindo Pharma Ltd.; Aurobindo Pharma USA, Inc.; Aurolife Pharma LLC

    Infringement of U.S. Patent No. 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 Aurobindo'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

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

    November 13, 2014 – "Leveraging Patent Reissue for Patent Portfolio Management — Strengthening Patent Portfolios, Correcting Patents, and Understanding the Risks and Limitations of Reissue" (Strafford) – 1:00 to 2:30 pm (EST)

    November 14, 2014 – IP Law Symposium (Intellectual Property Law Association of Chicago) – Chicago, IL

    November 19, 2014 – "Navigating the Shoals between the PTAB and District Court" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    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)

    December 4, 2014 – "Section 112(a) Enablement and Written Description: Leveraging CCPA and Early Federal Circuit Decisions — Capitalizing on Past Precedent to Withstand 112(a) Rejections and Attacks on Patent Validity and Patentability" (Strafford) – 1:00 to 2:30 pm (EST)

    December 10, 2014 – European Patent Reform Forum (Managing Intellectual Property) – San Jose, CA

    December 12, 2014 – European Patent Reform Forum (Managing Intellectual Property) – New York, NY

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

  • European Patent Reform Forum USA 2014

    Managing Intellectual PropertyManaging Intellectual Property will be holding a European Patent Reform Forum on December 10, 2014 in San Jose, CA and on December 12, 2014 in New York, NY.  The conference will offer presentations on:

    • The Unitary Patent
    • Understanding the Unified Patent Court in detail
    • Bifurcation: Why you shouldn't be scared of it
    • Industry discussion: Global litigation strategies
    • How to win opposition proceedings without discovery
    • Litigation planning and forum shopping in the European Unified Patent Court
    • Alternative IP strategies parallel to the UPC

    An agenda for the forum can be found here (San Jose) and here (New York).  The registration fee for the conference is $795 (Private practitioners, consultants, advisers, and service providers).  There is no fee for in-house IP counsel, patent managers, R&D professionals, and academics.  Those interested in registering for the conference can do so here.

  • Webinar on Enablement and Written Description

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Section 112(a) Enablement and Written Description: Leveraging CCPA and Early Federal Circuit Decisions — Capitalizing on Past Precedent to Withstand 112(a) Rejections and Attacks on Patent Validity and Patentability" on December 4, 2014 from 1:00 to 2:30 pm (EST).  Mareesa A. Frederick, Thomas L. Irving, Partner, and Jill K. MacAlpine, Ph.D. of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel on leveraging decisions by the Court of Customs and Patent Appeals (CCPA) and the Federal Circuit in the application of § 112 written description, and examine lessons learned through CCPA and early Federal Circuit decisions and offer strategies to overcome the challenges of § 112.  The webinar will review the following questions:

    • What lessons can patent counsel draw from CCPA decisions when making arguments of written description support and enablement?
    • What steps can counsel for patentees take to meet the written description requirement and withstand invalidity/unpatentability challenges based on written description and enablement?
    • What steps should patent counsel take going forward to avoid making the mistakes of the past?

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

  • Webinar on Interplay between District Court Litigation and PTAB Post-Grant Proceedings

    AIPLA #1The American Intellectual Property Law Association (AIPLA) will be offering a webinar entitled "Navigating the Shoals between the PTAB and District Court" on November 19, 2014 from 12:30 – 2:00 pm (Eastern).  Scott M. Daniels of Westerman Hattori Daniels & Adrian, LLP, Brent Hawkins of McDermott Will & Emery, and Joseph Re of Martens Olson & Bear, LLP will explain similarities and differences in practice and procedure in PTAB proceedings and District Court litigation, and how Post-Grant Proceedings including patent reexamination can influence patent-related District Court litigation.  The panel will also provide practice tips for litigating in District Court while an invalidity challenge on the same patent is progressing before the PTAB.

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

  • Ultramercial Inc. v. Hulu LLC — Party Briefs

    By Michael Borella —

    Introduction

    Federal Circuit SealThis case has a storied history.  Ultramercial sued Hulu, YouTube, and WildTangent for infringement of U.S. Patent No. 7,346,545.  Hulu and YouTube were eventually dismissed from the case.  On a 12(b)(6) motion, 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 again reversed the District Court, finding the claims did indeed address patent-eligible subject matter.  Notable here was the agreement between Chief Judge Rader and Judge Lourie, who had previous adopted opposing views regarding the test to apply to claims that incorporate one of the exceptions to § 101.

    WildTangent petitioned for Supreme Court review.  On June 30th of this year, the Court granted the petition for writ of certiorari, vacated the Federal Circuit's judgment, and remanded the case back to the Federal Circuit for further consideration in view of the Court's then-recent Alice Corp. v. CLS Bank decision.  Since Chief Judge Rader has stepped down in the interim, the remand will be heard by Judges O'Malley and Lourie.  If these two judges cannot reach an agreement about the case, a third Federal Circuit judge will be appointed to break the tie.  (See Fed. Cir. R. 47.11.)

    While oral arguments have yet to be scheduled, both Ultramercial and WildTangent submitted supplemental briefs in late August.  These briefs argue why the Alice decision should or should not change the panel's ruling.  Bubbling under the surface of these arguments, however, is evidence that the Supreme Court's Alice decision not only muddied the waters between patent-eligibility and obviousness, but has essentially turned the patent-eligibility analysis into an obviousness analysis in which prior art does not need to be cited.

    Example Claim

    Claim 1 of the '545 patent recites:

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

    WildTangent's Brief

    WildTangentWildTangent begins its brief by restating the two-prong subject matter eligibility test of Alice.  The first prong is to determine whether the claims are directed to a patent-ineligible law of nature, natural phenomenon, or abstract idea.  If so, the second prong is to determine whether any additional claim elements transform the nature of the claim into a patent-eligible application that amounts to significantly more than the ineligible concept itself.

    WildTangent then characterizes the '545 patent as being drawn to "the abstract idea of offering free media in exchange for watching advertisements," contending that this "basic concept of using advertising as a form of currency, which has grounded the broadcast television industry for decades, is unquestionably a fundamental economic practice."  WildTangent then contends that this concept is similar to the concepts in other "business method" inventions that were found to be abstract by the Federal Circuit, including those of Accenture Global Servs. v. Guidewire Software, Inc., Bancorp Servs., LLC v. Sun Life Assurance, Dealertrack, Inc. v. Huber, Fort Props., Inc. v. American Master Lease LLC, and CyberSource Corp. v. Retail Decisions, Inc.

    Moving to the second prong of the Alice test, WildTangent asserts that the '545 patent's lengthy claim 1 merely breaks this abstract idea into a series of steps without introducing any meaningful, narrowing limitations.  Eight of these steps, according to WildTangent, "simply instruct the practitioner to implement the abstract advertisement-media-exchange idea or various necessary prerequisites," while the remaining three steps recite insignificant pre- or post-solution activity.  Further, WildTangent contends that the claims being directed to distribution of a media product is a field of use limitation that is insufficient to provide subject matter eligibility under Alice.

    WildTangent also takes the position that the adding "well-known . . . Internet functionality" to a claim is the same as adding well-known generic computer functionality to a claim, in that such functionality is not a significant limitation that would lend patentability to the claim.  In doing so, WildTangent essentially argues that the claimed use of the Internet is in the prior art.  When all is said and done, WildTangent represents that the "claims themselves provide no guidance beyond restating the abstract idea and directing practitioners to apply it," which places the '545 patent in the same place as Alice's patents with regard to § 101.

    If WildTangent's argument seems like it seeks to establish obviousness under § 103 rather than patent-ineligibility under § 101, that is no mistake.  After Alice, these notions appear to be analogous, because claims that fail that case's § 101 test are effectively obvious per-se.

    Turning to the procedural issue (which may have won the day for Ultramercial in the previous Federal Circuit opinion), WildTangent notes that "patent-eligibility is a question of law and no formal claim construction or fact finding is necessary to dispose of this case under § 101."  Thus, WildTangent believes that this action is suitable for a 12(b)(6) motion, and no fact discovery or claim construction is needed for the Federal Circuit to invalidate of the claims.

    Ultramercial's Brief

    UltramercialUltramercial starts off its argument by describing the patented technology as new, noting that the invention "did not appear in brick-and-mortar stores, and it did not appear online, where all advertising was passive in nature."  Ultramercial accuses WildTangent of "shoehorn[ing] the claimed method into the artificial construct of advertising as currency . . . artfully recasting [the] claim at the highest possible level of generality" in a way that was forbidden by Alice.

    Similarly, Ultramercial disputes WildTangent's notion that the '545 patent was directed to a fundamental, longstanding economic principle.  Instead, Ultramercial writes "[i]f the '545 patent reflected such well-understood, routine, conventional activity, one would expect to find at least some evidence that this activity existed before the claimed method was disclosed in the '545 patent."  Ultramercial states that WildTangent has been unable to cite any such evidence, and that the "patented process was the very opposite of well-understood, routine, or conventional, which is exactly why it proved a groundbreaking and successful means of operating commercial website."

    If it seems as if Ultramercial is making a non-obviousness argument and invoking a secondary consideration while doing so, that is also no mistake.  Without actually coming out and saying it, Ultramercial is viewing a § 101 defense under Alice in the same light as a § 103 defense.  In fact, Ultramercial accuses WildTangent of having such a dearth of prior art to cite against the '545 patent that WildTangent relies on § 101 because it is "reluctant to rely instead on §§ 102 or 103 for its defense."

    Ultramercial sets forth a measured view of the first prong of Alice, asserting that the Supreme Court "offered no indication that every idea – including novel, groundbreaking innovations – were automatically included within § 101's exceptions so long as an accused infringer could somehow reduce the claimed invention to some form of abstract concept."  Indeed, the Court warned that the exclusions to § 101, if improperly applied, could "swallow all of patent law" because "at some level, all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas."

    Ultramercial further rebuts the notion that its patent is directed to "advertising as currency."  Instead, Ultramercial describes the invention as pairing "copyrighted content with advertisements on a web server, and gat[ing] that content to limit accessibility until a user (after making an affirmative election) viewed the advertisement in its entirety, completed any interactive steps, or purchased a product."  Ultramercial characterizes its technology as "a dramatic shift [because it held] back an advertisement until [the advertisement] was affirmatively selected by the user."

    Again addressing a secondary consideration of non-obviousness, Ultramercial contends that "[o]nce reduced to practice, the patented method was quickly adopted by major advertisers and online publishers."  Ultramercial staked out this position to rebut WildTangent's claims that the patented process is fundamental or longstanding.

    Moving to the second prong of the Alice test, Ultramercial offered that "claims are patent-eligible if they improve an existing business process in a way that involves more than simply migrating an existing business process to a generic computer."  To back up this point, Ultramercial points to specific and rather narrow claim elements, such as when "a server sends each individual end-user an interactive page containing very specific items:  an explicit offer to purchase content or the choice of activating a prompt to begin an interposed message to obtain the same content," and when "the computer receives the end-user's selection and either completes a credit or debit sale or delivers the interposed advertisement."

    Finally, Ultramercial reminds the Federal Circuit that on review of the 12(b)(6) motion, the claims have to be interpreted in its favor.  Ultramercial again invokes § 103, by contending that the extent of claim interpretation necessary for a § 101 analysis is "a question of law, [that] still rests on fact-bound considerations," and that the District Court is the place to introduce such evidence.

    Analysis

    The Federal Circuit can make quick work of this remand by denying WildTangent's 12(b)(6) motion, either because the § 101 analysis does require at least some findings of fact, or because interpreting the claims in Ultramercial's favor results in the claims being patent-eligible.  However, the Federal Circuit may take this opportunity to expound upon the Alice test, and signal how it is going to view the patent-eligibility of computer-implemented inventions in the future.

    If the panel gets beyond the procedural issues of this case, the outcome will depend on how expansively the Court views the notion of an abstract idea.  When considered piece by piece, claim 1 of the '545 patent indeed seems to recite well-known aspects of communication technology.  However, when viewed as a whole, Ultramercial's point that the claimed configuration of these pieces is novel becomes compelling.

    This case also illustrates the ambiguity that the Supreme Court has left us with post-Alice.  It is a bedrock principle that a patented invention is defined by its claims.  But, when a claimed invention is boiled down to a mere "concept" or considered piecemeal in order to determine whether that invention incorporates an abstract idea, the exposition of this concept, rather than the language of the claims, can determine whether the patent is valid or invalid.  Such a dissection of claim language, in the words of the Supreme Court itself from Diamond v. Diehr, is inappropriate.

  • Lex Machina Looks at ANDA Cases

    By Kevin E. Noonan —

    Lex MachinaLex Machina, a commercial venture spinning out of the "quantitative statistics" trend in patent scholarship popularized by Mark Lemley, Kimberly Moore, David Schwartz, and others, has released a Report on ANDA litigation that provides a slew of statistics ripe for interpretation (or at least speculation).

    Written by Brian C. Howard (Legal Data Scientist and Director of Analytics Services) and Jason Maples (Legal Data Analyst), the Report covers the years 2009 to date and begins with a brief summary defining what an ANDA case entails.  Then it dives right into the statistics, some of which are not surprising.  For example, the Report shows (Figure 1) that most ANDA litigation occurs in the District of Delaware (678 cases), the District of New Jersey (481 cases) and the Southern District of New York (148 cases); the Northern District of Illinois, with 39 cases, is a distant fourth in ANDA case frequency.  Within those judicial districts, the judges hearing ANDA cases are easily recognizable to those representing ANDA clients (Figure 2): Judges Sleet (195 cases), Robinson (187 cases), Stark (139 cases) and Andrews (122 cases) in Delaware; Judges Pisano (64 cases), Cooper (49 cases), Chesler (38 cases) and Sheridan (34 cases) in New Jersey; and Judge Stein (33 cases) in New York, as well as Judge Keeley (27 cases) in the Northern District of West Virginia.  Similarly, that 98% of drugs involved in ANDA litigation are prescription drugs will come as no surprise and, indeed, is almost a requirement for ANDA litigation (albeit about 2.5% of drugs involved in the cases reported are "over the counter" drugs; Figure 15).

    Filing trends have been relatively consistent over this period (Figure 3), during which they have averaged between 239 and 293 cases per year between 2009-2013; this year has seen 323 cases filed by the end of June with the biggest uptick having occurred in the first two quarters of the year (Figure 4).  Curiously, most of these cases seem to have been filed in Delaware (Figure 6).  The Report provides (Figure 7) some perspective, however, noting that while there have been 323 ANDA cases filed so far this year, that number pales in comparison to the 3,564 "non-ANDA" patent cases filed so far in 2014 (and the 5,167 and 5,793 such cases filed in 2013 and 2012, respectively).

    The Report also notes (Figure 8) that in 70.3 percent of ANDA cases an injunction is obtained by the prevailing patentee, compared with a 57.6% rate in non-ANDA cases; generally, a prevailing patentee is rewarded an injunction to prevent "at risk" launch and the FDA does not approve the generic drug until the Orange Book listed patents have expired.  Thus, this statistic may merely reflect the percentage of the time an NDA holder prevails in ANDA litigation where the Court grants relief only under 35 U.S.C. § 271(e)(4)(a).

    Using "word cloud" graphics (Figures 12 and 13) the Report identified oxycodone and metformin as the drugs involved in the greatest number of ANDA litigations, which is not surprising in view of the patient populations existing (and growing) for these drugs.  These drugs are also involved in ANDA litigation having some of the largest number of Orange Book listed patents at issue (metformin, 20 patents, exceeded only by testosterone having 23 asserted patents) and the greatest number of cases (oxycodone, more than 50 cases; metformin, 38 cases) as shown in Figure 14.

    The surprising statistics are set forth at the end of the Report, having to do with the time in an Orange Book-listed patent's term that ANDA litigation ensues.  For example, Figure 20 shows that the median "patent age" at ANDA filing has decreased, from 10 years in 2009 to 5.1 years in 2014 (with the trend beginning in earnest last year).  Conversely, the time between the median date of FDA approval and ANDA litigation filing has increased, from 3.9 years in 2009 to 4.9 years in 2014.  One explanation for the former trend is a statistical one:  looking at the "raw" data in Figure 22, the decreased age may have something to do with a sharp skew in the data for 100-200 patents challenged within the first three years of their term.  Alternatively, this trend may reflect slower innovation rates in the industry, so that truly "new" drugs are fewer than the combinations or follow-on drugs.  This has a lot to do with economics, and with the "low hanging" fruit of these drugs having been harvested, as well as competition by biologic drugs which are more expensive (and may be more profitable) but also more specific for their biological targets.  The second trend (Figure 21) is more difficult to sort out, but perhaps it just reflects generic challengers waiting (or having to wait) for the innovator to grow the market to a size worth pursuing.  The raw data supporting these numbers (Figure 23) shows "negative" times wherein an ANDA case is filed before approval, which suggests that the statistics include declaratory judgment actions filed by generic challengers trying to invalidate the patents before they are even listed in the Orange Book.

    Finally, the time before expiration at approval (based on expected expiration dates) has risen, from 8.1 years in 2009 to 15.4 years in 2014 (Figure 25).  This may merely reflect faster approval times by the FDA, perhaps spurred by the increase in combination therapies using individual drugs already approved, or the frequency of filings for approval of related," evergreening" forms of a drug such as purified enantiomers, or a greater reliance on patent term extensions to increase patent life, or some combination of these factors.

    While these statistics are fascinating, it is well to remember Twain's imprecation against "lies, damned lies, and statistics" when considering them (as well as the proverbial "grain of salt").  Perhaps more important than any of these statistics are recognized trends in the industry, which include at least the following:

    • There are more ANDA filers for each branded drug than in the past (when, if you were not the first filer you might not file at all)

    • There are more follow-on or derivative branded drugs, or combinations of drugs which are based on older, well-established drugs

    • The Supreme Court's recent Actavis decision, and FTC actions (and private party actions supported by the FTC), make it harder to settle

    And, of course, the ANDA statute requires a branded drug maker to file suit (or be subject to a DJ action that does not postpose generic approval), so that the actions of the generic filers and trends on that side of the fence influence what branded, NDA holders do (and must do).  While the type of statistics provided by Lex Machina are interesting and may even be informative, they are just a reflection of these, and other, larger trends in the pharmaceutical industry.  These include, of course, the 800 pound gorilla of biologic drugs which most industry observers have noted are the fastest growing sector of the pharmaceutical industry and are completely outside the scope of ANDA litigation or the Hatch-Waxman regime.

    For additional information regarding this topic, please see:

    • Silverman, "Sue Me, Sue You Blues: More Generic Patent Litigation is Being Filed," WSJ Pharmalot, November 5, 2014