By Andrew Williams —

This week, the Patent Trial and Appeal Board began hosting a month-long series of roundtables devoted to sharing information about the new AIA trials.  These include inter partes reviews, covered business method reviews, and the soon-to-be experienced post grant review and derivation proceedings.  The inaugural event took place on Tuesday, April 15, 2014, in Alexandria Virginia, with the event being webcast (an archival copy is accessible here).

Janet Gongola, Patent Reform Coordinator at the USPTO, introduced and moderated Tuesday's event.  The first item on the agenda was a presentation by Acting Vice Chief Judge Scott Boalick, which included an overview of trials, review of statistics, and observations of lessons learned.  A copy of the presentation can be found here.  Judge Boalick pointed out that over 1,151 petitions had been filed with the PTAB since its inception, and that even though activity had appeared to slow in the past few months, 76 petitions had already been filed in the month of April.  He noted that as the petition volume has increased, the Board has more motivation to deny petitions.  Therefore, he recommended that if you are filing a petition, it would behoove you to pay more attention to the details.  For example, if your petition is based on an obviousness challenge, it should include an explanation as to why one of ordinary skill in the art would combine the references, and it definitely should not rely on conclusory statements.

After Judge Boalick's presentation, the floor was opened for questions.  Chief Judge James Smith was present and responded to a large number of the questions.  At the forefront of most practitioners' minds was the subject of claim amendments, likely due to the fact that no motions to amend have been granted to date.  Chief Judge Smith did not think that would be the situation much longer, and in fact he advised those in attendance not to gamble on the issue.  The reason provided for the apparent strict standards for amending claims is that, if included in the patent, they would be so without a search of the prior art.  Therefore, it is essential that the patentee explains the patentable distinctions of the amendment.  This is especially true when the additional element was not previously examined.  In such cases, it was advised that the patent holder should disclose as much about the art as they are aware (although without necessarily listing potential prior art).  The Board explained, however, that the substitution of claims could be made contingent on the petitioner's success in rendering the existing claim unpatentable.  This would be useful in cases, such as when damages might be at issue.

One of the more interesting questions was directed to Chief Judge Smith, when he was asked whether the PTAB was a patent death squad.  It is likely that the asker was alluding to Chief Judge Rader's recent comments about the PTAB.  Chief Judge Smith seemed genuinely surprised by the question, suggesting that he has not considered the question before.  Nevertheless, he stated with certainty that the PTAB was absolutely not a death squad.  He cited to the record of petitions terminated to date (specifically as of April 2, 2014), pointing out that for the 167 patent review petitions which reached termination, only 28 had at least one claim removed.  The support for these statistics was made available after the presentation, and suggests that the Chief Judge's characterization of the record was somewhat misleading.  Of the 167 petitions terminated, only 28 had reached the final written decision stage, while the remainder have either settled or that patent holder requested an adverse judgment.  Thus, the 28 cases to which Chief Judge Smith referred made up the universe of cases for which there was a final written decision.  In other words, he essentially acknowledged that for every case not terminated by the parties (as of April 2, 2014), at least one claim was removed (and the statistics would also suggest that 20 of the 28 cases had every claim reviewed found unpatentable).  It was suggested that the reason that this number was so high was because petitioners are motivated to mount a strong challenge.  It was also pointed out that the Board only institutes reviews when there is sufficient evidence, so it stands to reason that if a review is instituted, the likely outcome is for the claims to be found unpatentable.

The second item on the agenda was a mock conference call with Lead Judge Grace Obermann playing the part of the petitioner, Judge Justin Arbis playing the part of the patent holder, and Judge Michael Kim playing the part of the Judge.  The topics for this call included addressing a motion to amend the claims and a motion for additional discovery.  This was probably the most useful segment of the afternoon, even though the script was a little strained in spots, such that anyone with even a minimal knowledge of the rules could see through the issues.  It was announced that the script will likely be made available via the website, but only after the last of the roundtables next month.  The Board appears to be equally concerned about the lack of success with motions to amend, as the majority of time spent during this mock call dealt with that issue.  Any patent holder facing an IPR challenge would be advised to watch this section of the webcast if claim amendments are desired.  The panel did provide some guidance on the issue, suggesting that instead of providing an inventory of prior art, it would instead be advisable to tell a story in the motion.  Moreover, it would probably be advisable to include an expert opinion to support the narrative outlined in the motion.  Chief Judge Smith did suggest during the question and answer session that more guidance would be coming very shortly, so stay tuned.

The roundtables may be coming to a city near you.  The rest of the schedule is available on the Patent Office's PTAB AIA Trial Roundtables webpage, and will take place between 1:00 pm and 5:00 pm local time.  Next week is the Midwest leg, with stops in Chicago, IL and Detroit, MI.  The following week, the roundtables will be on the west coast, in Silicon Valley, CA and Settle, WA.  Finally, the last week will take place in Dallas, TX and Denver, CO.  This last event in Denver will also be webcast.  The website promises that at least five administrative patent judges will be present at each of the locations and will be available for questions, so you should definitely try to attend if you are able.

By Donald Zuhn —

The U.S. Patent and Trademark Office spent the entire afternoon session of today's biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting focusing on the guidance memorandum for determining the subject matter eligibility of claims under 35 U.S.C. § 101 that the Office issued on March 4 (see "USPTO Issues Guidance for Analyzing Subject Matter Eligibility of Claims Reciting Laws of Nature/Natural Principles, Natural Phenomena or Natural Products").  The Office spent nearly an hour discussing the Guidance, as well as the Training Materials that were released a few weeks after the Guidance, and then took questions from attendees and online viewers for more than an hour and a half.

The Office's spokesperson for the initial presentation was June Cohan, a Legal Advisor with the USPTO's Office of Patent Legal Administration, who was joined during the question-and-answer portion of the session by Ali Salimi, also a Legal Advisor with the USPTO's Office of Patent Legal Administration, and Daniel Sullivan, a Supervisory Patent Examiner with the Art Unit 1611.  Ms. Cohan began her presentation by noting that the Office would be hosting a public forum on the Guidance from 1:00 to 5:00 pm (ET) on May 9.  Ms. Cohan also noted that the Office plans to collect public input via the forum and then "update or modify the Guidance as needed."  The details regarding the forum have been posted on the Office's Myriad-Mayo Guidance webpage, which indicates that the forum is being held "to receive public feedback from organizations and individuals on the Guidance," and allow members of the public "to present their interpretation of the impact of Supreme Court precedent on the complex legal and technical issues involved in subject matter eligibility analyses during patent examination."  The Office's Guidance webpage also indicates that "[p]articipants who believe that the Supreme Court decisions could be implemented in an alternative manner from the approach taken in the Guidance should use the forum to present their alternative approach and the legal rationale for the alternative."  Participants have also been invited "to suggest additional examples for use by the Office to create a more complete picture of the impact of Supreme Court precedent on subject matter eligibility."  The Office noted that registration will be required to attend the forum in person or via webcast (details for registering can be found on the Guidance webpage).

Following the announcement of the forum, Ms. Cohan dove into the Guidance, suggesting that the public had some "misunderstandings" regarding the Guidance that she hoped to clear up.  She noted that the Office had received a lot of "public input" regarding the fireworks example (Example C of the Guidance), the scope of the second step in the Guidance's three-step analysis (i.e., Does the claim recite or involve one or more judicial exceptions?), and why the Office considered anything other than DNA when discussing natural products.  With respect to the last question, Ms. Cohan explained that the Guidance was not only about Myriad or Mayo, but was about a whole host of cases, and that the Office took a comprehensive approach in the Guidance because the Supreme Court discussed these cases in both Myriad and Mayo.  One of Ms. Cohan's slides provided a list of these cases:

and another slide showed, at least in part, how these cases are interrelated:

As a result, Ms. Cohan explained that there are many things that can be natural products, and that these things must then be analyzed under the third step of the process for determining subject matter eligibility:

Ms. Cohan also admitted that the Guidance is a "course correction" because the Office had received the message from the courts that some of the patents it had been issuing on DNA in the past were improperly issued (and presumably does not want to be admonished by the courts on other natural products in a piecemeal fashion).

With respect to the fireworks example, Ms. Cohan noted that the public response took the Office by surprise, and that the claim was adapted from an actual claim from the 1920's.  She pointed out that there at least four types of gunpowder (simple mixture, corned gunpowder, glazed powder, and white powder), and that one of the four types (simple mixture) is "[a] mixture of three naturally occurring materials" wherein "[v]ibration causes separation back into its component parts," and therefore that "[s]uch a mixture is not markedly different because none of the components have been changed."  Ms. Cohan indicated that the example was intended to demonstrate that because examiners must construe claims according to the broadest reasonable interpretation, examiners and applicants may be thinking about the meaning of gunpowder in different ways, as shown in one slide from her presentation:

Ms. Cohan also indicated that the Office was in the process of developing better examples than the fireworks example, which would not be as "confusing."

With respect to the three-step procedure described in the Guidance for analyzing claims for subject matter eligibility, Ms. Cohan noted that the heart of the analysis was not the second step, but rather the third step:  Does the claim as a whole recite something significantly different than the judicial exception(s)?  She also noted that the Office had received a lot of input about the meaning of the term "significantly different" in the third step, and one slide indicated that the "Guidance brings together the outcomes of both Myriad and Mayo in its expression of the 'significantly different' standard for eligibility."  More importantly, because the Supreme Court has not created any bright line rules for determining subject matter eligibility, the Guidance does not involve the application of any bright line rule.  Instead, examiners have been given a list of factors to consider, some weighing toward eligibility and some weighing against eligibility:

Ms. Cohan pointed out that the "markedly different" changes apply to structure because the Office found that functional change was usually tied to structural change.  (During the question-and-answer portion of the session, someone pointed out that gunpowder was a good example of something for which the components were not structurally changed, but which when combined, had a significant change in function.)  She also indicated that examiners had been warned not to jump to conclusions based on the inclusion of any particular claim terms (e.g., cDNA) because there are no magic words for establishing subject matter eligibility.  Examples of some of these terms were provided in one slide:

Several questions during the question-and-answer portion were posed about claims directed to methods of treatment involving natural products (such as claim 3 in Example B of the Guidance, which recites a method of treating colon cancer using "amazonic acid").  With respect to the amazonic acid example, some questioners wanted to know why the Office decided to include dosages and course of administration, and whether this suggested that those limitations were necessary for subject matter eligibility.  While Ms. Cohan explained that this was not the point of the example, she said that an analysis of a claim without those limitations should be conducted according to the Guidance and that factor (d) (Do more than describe the judicial exception(s) with the general instructions to apply/use it) could impact the analysis.

Another questioner drew an analogy between the fireworks example and vaccines, which also possess significant functional differences despite no change in the structure of their components (although the questioner was reluctant to admit that there were no structural changes in vaccines).  The questioner noted that her company was already receiving § 101 rejections based on the Guidance on some of its vaccine claims.  A different questioner suggested that the gunpowder example could be compared with the result in Funk Brothers, arguing that in the latter, natural products were combined with the components performing the same function, and in the former, natural products were combined with the combination performing a significantly different function.  The questioner noted that many biotech combinations yield results that are superior as compared with the separate components.

Another questioner asked about the impact of the Guidance on antibodies, to which Ms. Cohan responded that if the antibody had been isolated (i.e., occurs in nature), then the antibody "is not looking very eligible," and that one way to make an antibody "look eligible" would be to engineer it.  She also noted, however, that "many antibodies will be eligible absent evidence that [the antibody] is not naturally occurring."  According to Ms. Cohan, examiners have been told not to speculate about whether something can be found in nature, and instead to produce evidence that something can be found in nature.  In response to the hypothetical in which a claim recites something the applicant synthesized but that later turns out to be found in nature, Ms. Cohan explained that if the patent had not yet issued, the claim would be rejected for lack of subject matter eligibility, and if the patent had issued, then it would be up to the courts to invalidate the patent.

Towards the end of the session, Ms. Cohan acknowledged that the Office had not taken its task lightly when formulating the Guidance, and that the Office understands that the Guidance impacts "the livelihood of you, your clients, and their companies."  Unfortunately, by putting the cart before the horse by only now seeking public input regarding the Guidance, the Office has not evinced such understanding.  Maybe it has started.

Note:  Ms. Cohan will be participating in a session at next week's Biotechnology Industry Organization (BIO) 2014 Spring Intellectual Property Counsels Committee (IPCC) Conference in Palm Springs, CA.  The session, entitled "Facing the Future of Biotech Patenting: How to Satisfy the Supreme Court and Have Valuable Claims, Too," which is sponsored by McDonnell Boehnen Hulbert & Berghoff LLP, also features David Hoffman, Senior Corporate Counsel, IP & Transactions, Genomic Health; Laurie Hill, Vice President & Deputy General Counsel, MedImmune; and Patent Docs authors Kevin Noonan and Donald Zuhn.