Patent Docs

Court Report

September 29, 2013

By Sherri Oslick —

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

Pfizer Inc. et al. v. Apotex
Inc. et al.
1:13-cv-01613; filed September
25, 2013 in the District Court of Delaware

• Plaintiffs: Pfizer Inc.;
Wyeth LLC; Pfizer Pharmaceuticals LLC; PF Prism C.V.; Pfizer Manufacturing
Holdings LLC
• Defendants: Apotex Inc.; Apotex
Corp.

Infringement of U.S. Patent
No. 8,372,995 ("Crystalline Solid Forms of Trigecycline and Methods of
Preparing Same," issued February 12, 2013), licensed to Pfizer, following
a Paragraph IV certification as part of Apotex's filing of an ANDA to
manufacture a generic version of Pfizer's Tygacil® (tigecycline injectible,
used for the treatment of complicated skin and skin structure infections,
complicated intra-abdominal infections, and community-acquired bacterial
pneumonia). View the complaint here.

Merck Sharp & Dohme Corp. et
al. v. Ben Venue Laboratories Inc.
1:13-cv-01611; filed September
25, 2013 in the District Court of Delaware

• Plaintiffs: Merck Sharp
& Dohme Corp.; Millennium Pharmaceuticals Inc.
• Defendant: Ben Venue
Laboratories Inc.

Infringement of U.S. Patent
Nos. 5,807,825 ("Platelet Aggregation Inhibitors," issued September
15, 1998), 5,747,447 ("Stable Polypeptide Composition," issued May 5,
1998) and 5,968,902 ("Platelet Aggregation Inhibitors," issued
October 19, 1999), licensed to Merck, following a Paragraph IV certification as
part of Ben Venue's filing of an ANDA to manufacture a generic version of Merck's
Integrilin® (eptifibatide injection, used to treat acute coronary
syndrome). View the complaint here.

Helsinn Healthcare SA et al.
v. Ben Venue Laboratories Inc.
1:13-cv-01612; filed September
25, 2013 in the District Court of Delaware

• Plaintiffs: Helsinn
Healthcare SA; Roche Palo Alto LLC
• Defendant: Ben Venue
Laboratories Inc.

Infringement of U.S. Patent
Nos. 7,947,724 ("Liquid Pharmaceutical Formulations of Palonosetron,"
issued May 24, 2011), 7,947,725 (same title, issued May 24, 2011), and
7,960,424 (same title, issued June 14, 2011) following a Paragraph IV
certification as part of Ben Venue's filing of an ANDA to manufacture a generic
version of Helsinn's Aloxi® (palonosetron hydrochloride intravenous solution,
used to prevent chemotherapy induced nausea and vomiting). View the complaint here.

Cornerstone Therapeutics, Inc.
et al. v. Sandoz Inc.
1:13-cv-05723; filed September
25, 2013 in the District Court of New Jersey

• Plaintiffs: Cornerstone
Therapeutics, Inc.; Cornerstone Biopharma, Inc.; EKR Therapeutics, LLC
• Defendant: Sandoz Inc.

Infringement of U.S. Patent
Nos. 7,612,102 ("Pre-mixed, Ready-to-Use Pharmaceutical Compositions,"
issued November 3, 2009), 7,659,291 ("Methods of Treatment with Pre-Mixed,
Ready-to-Use Pharmaceutical Compositions," issued February 9, 2010),
8,455,524 (same title, issued June 4, 2013), and 7,659,290 ("Methods of
Preparing Pre-Mixed, Ready-to-Use Pharmaceutical Compositions," issued
February 9, 2010) following a Paragraph IV certification as part of Sandoz's
filing of an ANDA to manufacture a generic version of EKR's Cardene® I.V.
Premixed Injection (nicardipine hydrochloride premixed injection for
intravenous administration, used for the short-term treatment of hypertension
when oral therapy is not feasible or not desirable). View the complaint here.

Forest Laboratories Inc. et
al. v. Apotex Corp. et al.
1:13-cv-01602; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendants: Apotex Corp.;
Apotex Inc.

Forest Laboratories Inc. et
al. v. Hetero USA Inc. et al.
1:13-cv-01603; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendants: Hetero USA Inc.;
Hetero Labs Ltd. Unit V; Hetero Labs Ltd.

Forest Laboratories Inc. et
al. v. Lupin Limited et al.
1:13-cv-01604; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendants: Lupin Ltd.;
Lupin Pharmaceuticals Inc.

Forest Laboratories Inc. et
al. v. Mylan Inc. et al.
1:13-cv-01605; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendants: Mylan Inc.;
Mylan Pharmaceuticals Inc.

Forest Laboratories Inc. et
al. v. Par Pharmaceutical Inc.
1:13-cv-01606; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendant: Par
Pharmaceutical Inc.

Forest Laboratories Inc. et
al. v Ranbaxy Inc. et al.
1:13-cv-01607; filed September
23, 2013 in the District Court of Delaware

• Plaintiffs: Forest
Laboratories Inc.; Forest Laboratories Holdings Ltd.; Royalty Pharma Collection
Trust
• Defendants: Ranbaxy Inc.;
Ranbaxy Laboratories Ltd.

The complaints in these cases
are substantially identical. Infringement
of U.S. Patent Nos. 6,602,911 ("Methods of Treating Fibromyalgia,"
issued August 5, 2003), 7,888,342 ("Methods of Treating Fibromyalgia
Syndrome, Chronic Fatigue Syndrome and Pain," issued February 15, 2011),
and 7,994,220 ("Milnacipran for the Long-Term Treatment of Fibromyalgia
Syndrome," issued August 9, 2011), all licensed to Forest, following a
Paragraph IV certification as part of defendants' filing of an ANDA to
manufacture a generic version of Forest's Savella® (milnacipran hydrochloride,
used in the management of fibromyalgia).
View the Apotex complaint here.

Counsyl, Inc v. Myriad
Genetics, Inc.
3:13-cv-04391; filed September
20, 2013 in the Northern District of California

Declaratory judgment of
noninfringement and invalidity of U.S. Patent Nos. 5,709,999 ("Linked
Breast and Ovarian Cancer Susceptibility Gene," issued January 20, 1998),
5,747,282 ("17-Q-Linked Breast and Ovarian Cancer Susceptibility Gene,"
issued May 5, 1998), 5,753,441 (same title, issued May 19, 1998), 6,951,721 ("Method
for Determining the Haplotype of a Human BRCA1 Gene," issued October 4,
2005), 7,250,497 ("Large Deletions in Human BRCA1 Gene and Use Thereof,"
issued July 31, 2007), 5,837,492 ("Chromosome 13-Linked Breast Cancer
Susceptibility Gene," issued November 17, 1998), 6,033,857 (same title,
issued March 7, 2000), and 6,051,379 ("Cancer Susceptibility Mutations of
BRCA2," issued April 18, 2000) based on Counsyl's development and
anticipated launch of genetic tests and related services related to sequencing
and analysis of BRCAI and BRCA2 genes.
View the complaint here.

Senju Pharmaceutical Co. et
al. v. Sandoz Inc.
1:13-cv-06608; filed September
18, 2013 in the Southern District of New York

• Plaintiffs: Senju
Pharmaceutical Co.; Bausch & Lomb, Inc.; Bausch & Lomb Pharma
Holdings Corp.
• Defendant: Sandoz Inc.

Infringement of U.S. Patent
Nos. 6,335,335 ("Prolonged-Action Eye Drop," issued January 1, 2002)
and 6,645,963 (same title, issued November 11, 2003) following a Paragraph IV
certification as part of Sandoz's filing of an ANDA to manufacture a generic
version of Senju's Istalol® (timolol maleate ophthalmic solution, 0.5%, used
treat elevated intraocular pressure in patients with ocular hypertension or
open-angle glaucoma). View the complaint here.

AbbVie Inc. et al. v. Hikma
Pharmaceutical Co Ltd. et al.
1:13-cv-01557; filed September
13, 2013 in the District Court of Delaware

• Plaintiffs: AbbVie Inc.;
Wisconsin Alumni Research Foundation
• Defendants: Hikma
Pharmaceutical Co Ltd.; West-Ward Pharmaceuticals Corp.; Exela Pharma Sciences
LLC

Infringement of U.S. Patent
No. 5,597,815 ("Prevention of Hyperphosphatemia in Kidney Disorder
Patients," issued January 28, 1997) following a Paragraph IV certification
as part of defendants' filing of an NDA (under § 505(b)(2) of the Food, Drug
and Cosmetic Act) to manufacture a generic version of AbbVie's Zemplar®
(paricalcitol, used to treat secondary hyperparathyroidism in patients with
kidney failure). View the complaint here.

Eli Lilly and Co. v. Sun
Pharmaceutical Industries Ltd. et al.
1:13-cv-01469; filed September
13, 2013 in the Southern District of Indiana

• Plaintiff: Eli Lilly and
Co.
• Defendants: Sun
Pharmaceutical Industries Ltd.; Sun Pharma Global FZE

Infringement of U.S. Patent
No. 7,772,209 ("Novel Antifolate Combination Therapies," issued
August 10, 2010) following a Paragraph IV certification as part of Sun's filing
of an ANDA to manufacture a generic version of Lilly's Alimta® (pemetrexed for
injection, used to treat malignant pleural mesothelioma and locally advanced or
metastatic non-small cell lung cancer).
View the complaint here.

Jazz Pharmaceuticals, Inc. v. Amneal
Pharmaceuticals, LLC
2:13-cv-05450; filed September
12, 2013 in the District Court of New Jersey

Infringement of U.S. Patent
Nos. 8,457,988 ("Sensitive Drug
Distribution System and and Method," issued June 4, 0213) and 8,461,203 ("Microbiologically
Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of
Narcolepsy," issued June 11, 2013) following
a Paragraph IV certification as part of Amneal's filing of an ANDA to
manufacture a generic version of Jazz's Xyrem® (sodium oxybate, used to treat
narcolepsy). View the complaint here.

Merck, Sharp & Dohme Corp.
et al. v. Aurobindo Pharma Ltd. et al.
1:13-cv-05442; filed September
11, 2013 in the District Court of New Jersey

• Plaintiffs: Merck, Sharp
& Dohme Corp.; Bristol-Myers Squibb Co.; Bristol-Myers Squibb Pharma
Co.
• Defendants: Aurobindo Pharma
Ltd.; Aurobindo Pharma USA, Inc.

Infringement of U.S. Patent
Nos. 6,639,071 ("Crystal Forms of
(-)-6-chloro-4-cyclopropylethynyl-4-trifluoromethyl-1,4-dihydro-2H-3,1-benzoxazin-2-one,"
issued October 28, 2003), 6,939,964 (same title, issued September 6, 2005), and
6,673,372 ("Crystalline Efavirenz," issued January 6, 2004) following
a Paragraph IV certification as part of Aurobindo's filing of an ANDA to manufacture
a generic version of BMS' Sustiva® (efavirenz, used to treat HIV
infection). View the complaint here.
Conference & CLE Calendar

September 29, 2013

October 1, 2013 – 2013 Intellectual Property
Continuing Legal Education Seminar (DuPont and the Widener
University School of Law) – Wilmington, DE

October 3, 2013 – Patent
Owner Strategy in Post-grant Proceedings (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

October 3,
2013 – Resolving
IP Disputes: Calling for an Alternative Paradigm (University of Missouri School of Law's Center
for the Study of Dispute Resolution and Journal of Dispute Resolution) – University of Missouri
School of Law

October
3-4, 2013 – Paragraph IV Disputes*** (American Conference
Institute) – Chicago, IL

October
9, 2013 – Biosimilars: Navigating FDA's Evolving
Approval Pathway, Protecting Patents and Trade Secrets (Strafford) – 1:00 to 2:30 pm (EDT)

October 10, 2013 – Recent Judicial Decisions
Impacting Technology Licensing (McDonnell
Boehnen Hulbert & Berghoff LLP) – 10:00
to 11:15 am (CT)

October 15-17, 2013 – Business of
Biosimilars*** (Institute for
International Research) – Boston, MA

October 22, 2013 – Patent 'Trolls' Under Fire: Strategies,
Tactics and Legislation Impacting University Patents & Licensing (Technology
Transfer Tactics) – 1:00 to 2:00 pm (Eastern)

October
23, 2013 – European biotech patent law update (D
Young & Co) – 4:00 am, 7:00 am, 12:00 pm (EDT)

October 29, 2013 – IP Due Diligence in M&A Transactions —
Conducting IP Investigations and Leveraging Results During Deal Negotiations (Strafford) – 1:00 to 2:30 pm (EDT)

October
31, 2013 – Strategic Use of Patent Reissue After the AIA
— Correcting Errors in Patents, Determining Whether and When to Pursue a
Reissue Application, and Mastering the Recapture Rule (Strafford) – 1:00 to 2:30 pm (EDT)

November 4-5, 2013 – FDA Boot Camp Devices Edition*** (American Conference
Institute) – Chicago, IL

November 4-5, 2013 – Trade Secrets: Protecting Your Intellectual Capital and Confidential
Business Information*** (American Conference
Institute) – Chicago, IL

November 6-8, 2013 – 2013 Fall Intellectual Property
Counsels Committee (IPCC) Conference (Biotechnology
Industry Organization) – Washington, DC

November 17-20, 2013 – Creating and Leveraging Intellectual Property in Developing Countries: A Power Tool for Social and
Economic Growth*** (Companies and IP Commission and National
IP Management Office of South Africa) – Durban, South Africa

December 9-10, 2013 – Patent Infringement Litigation Summit (Legal iQ (IQPC)) – San Francisco, CA

December 10-11, 2013 – Advanced
Forum on Patent Litigation*** (American Conference
Institute) – New York, NY

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

September 27, 2013

American Conference Institute (ACI) will be holding its Advanced Forum on Patent Litigation — Managing Modern IP Litigation before the Federal Courts, PTO and ITC on December 10-11, 2013 in New York, NY. The conference will allow attendees to:

• Navigate complicated parallel proceedings before the PTO and ITC;
• Calculate damages in cases involving FRAND's or component technology;
• Litigate or defend a case involving joint or extra-territorial infringement;
• Incorporate the use of international forums in protecting domestic interests; and
• Streamline discovery, avoid spoliation, and identify inequitable conduct.

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

• PTO Keynote Address — Hon. Rama G. Elluru, Administrative Patent Judge, Patent Trial and Appeal Board, U.S. Patent and Trademark Office;
• Parallel proceedings under the AIA — Managing litigation in the new inter partes review, covered business methods, re-examination, and post-grant review proceedings;
• Administrative Judge's spotlight — The inside perspective on parallel proceedings;
• Damages in a post-Uniloc world — Expert tools for determining reasonable damages and obtaining further relief from infringement;
• ITC Keynote Address — Hon. Charles E. Bullock, Chief Administrative Law Judge, International Trade Commission;
• The effects of parallel litigation at the International Trade Commission;
• In-house perspective — Managing litigation costs and budgets; adapting to the post-AIA litigation world; dealing with discovery dilemmas;
• Views from the benches — Insights from multiple judicial venues on the effects of parallel proceedings, managing discovery, construing claims, assessing damages, and more;
• Separating fact from fiction in litigation by "non-practicing entities" — The debate over promoting innovation, protecting patent holders, policing frivolous suits, and avoiding chilling the filing of meritorious claims;
• Handling claims occurring along the chain of commerce — Joint infringement and extra-territoriality issues in the modern economy;
• Protecting intellectual property rights by enforcing patent rights abroad and understanding the impact of judicial determinations by foreign courts; and
• Inequitable conduct, streamlining discovery, and ethical requirements for data storage.

In addition, two pre-conference workshops will be offered on December 9, 2013. The first, entitled "Patent Reform Primer: Analyzing the Implementation of the America Invents Act and Investigating Unresolved Issues on the Forefront of Litigation" will take place from 9:00 am to 12:00 pm, and the second, entitled "Working Group Session: Patent Litigation Case Law Year in Review — An In-Depth Analysis of Major Cases and Their Effects on Patent Eligibility, Enablement, Pleading Requirements, Claim Construction, and Mores" will take place from 3:00 to 5:00 pm.

The agenda for the Advanced Forum on Patent Litigation can be found here. More information regarding the workshops can be found here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference is $2,295 (conference alone), $2,895 (conference and one workshop), or $3,295 (conference and two workshops). Those registering by October 4, 2013 will receive a $300 discount, and those registering by November 8, 2013 will receive a $200 discount. Patent Docs readers who reference the discount code "PD 200" will receive $200 off the current price tier when registering. Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs is a media partner of the Advanced Forum on Patent Litigation.
IPO Webinar on Post-grant Proceedings

September 27, 2013

The
Intellectual Property Owners Association (IPO) will offer a one-hour webinar on
"Patent
Owner Strategy in Post-grant Proceedings" on October 3, 2013
beginning at 2:00 pm (ET). A panel
consisting of Matthew Cutler of Harness, Dickey & Pierce, PLC; Jeanne
Suchodolski of Intellectual Ventures; and Jon Wright of Sterne, Kessler,
Goldstein & Fox, PLLC will consider the options open to the patent owner at
every stage of the post-grant proceeding process, including:

•
What steps should patent owners now take before asserting a patent to better
position themselves for a post-grant proceeding? Prior to the AIA, some patentees would
preemptively challenge their own patents in an ex parte reexamination
proceeding in the hope that the same art would be deemed cumulative in a later inter
partes reexamination. Is this tactic
still effective for patentees facing the imminent threat of an inter partes
review? Should patentees choose ex
parte reexam or reissue?

•
Should patent owners accept the opportunity to make a preliminary response to a
petition and, if yes, how to make the most of it?

•
What scope of claim amendments has the PTAB allowed in the new post-grant
proceedings?

•
What are the best tactics for patent owners in settlement discussions involving
post-grant proceedings?

The
registration fee for the webinar is $120 (government and academic rates are
available upon request). Those
interested in registering for the webinar can do so here.
European Biotech Patent Law Webinar

September 27, 2013

D
Young & Co will be offering its next European biotech patent law update on October
23, 2013. The 45-minute webinar will be
offered at three times: 4:00 am, 7:00 am, 12:00 pm (EDT). D Young & Co
European Patent Attorneys Robert Dempster and Simon O'Brien will provide an
essential update and live Q&A on EPO biotechnology case law.

While
there is no fee to participate, attendees must register in advance. Those wishing to register can do so here.
Conference on Creating and Leveraging Intellectual Property in Developing Countries

September 27, 2013

The Companies and IP Commission (CIPC) and National
IP Management Office (NIPMO) of South Africa will be co-sponsoring a conference
on "Creating and Leveraging Intellectual Property in Developing Countries: A Power Tool for Social and
Economic Growth" on November 17-20, 2013 in Durban, South Africa. The conference follows on from the successful
meeting of the BRICS Heads of Patent Offices in Durban in May 2013, and comes
at an important time — not just in the progress of South Africa, but
throughout all of Africa, as well as the BRICS nations, as the countries work
to shape the future of IP.

Highlights of the conference include:

• An opening Ministerial Round Table on "The
Strategic Use of IP in Emerging Economies," featuring two Ministers in the
cabinet of President Jacob Zuma: Rob Davies, Minister of Trade and Industry, Republic
of South Africa, and Derek Hanekom, Minister of Science and Technology

• Representatives of the BRICS Head of IP Offices
will discuss "The Effect of the National Patent System on the Perceived
Investment Value of a Patent."

• In addition to senior officials from the South
African government, the conference will be attended by international key
government, organization, industrial and academic leaders from Africa and other
BRICS countries, as well as the U.S. and Europe, to form a fertile environment
for discussion, networking, and relationships.

Additional information regarding the conference can
be found here or at the conference website.

Patent Docs is a media partner of the conference on Creating and Leveraging Intellectual Property in Developing Countries.
Sunovion Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2013)

September 26, 2013

By Andrew Williams —

Saying
"But I won't do it" is not sufficient to avoid infringement in a
Hatch-Waxman litigation, according to the Federal Circuit in the recently
decided Sunovion Pharmaceuticals, Inc. v.
Teva Pharmaceuticals USA, Inc. The
ANDA applicant in that case was applying to market a generic version of Lunesta^®,
a chiral drug sold as a sleep medication. The lower court had construed one of the claims to require "less
than 0.25%" of an unwanted chemical entity. However, the ANDA applicant was seeking to
market a drug with "not more than 0.6%" of this chemical entity,
which as the Court pointed out, is between 0.0-0.6%. Therefore, even though the ANDA applicant had
submitted a declaration to the District Court (but not the FDA) vowing that it
would only market its generic product with levels of this chemical entity at
0.3-0.6%, the Federal Circuit still found that the ANDA application had
infringed for purposes of 35 U.S.C. § 271(e)(2). "What a generic applicant asks for and receives approval to market,
if within the scope of a valid claim, is an infringement." As the Federal Circuit suggested, instead of
telling a Court that it would not infringe a patent should it get approval to
market it generic product, an ANDA applicant in such a case should instead
amend its ANDA application to avoid infringement.

As
background, Sunovion owns the rights in U.S. Patent No. 6,444,673 ("the '673
patent"), which claims the single-enantiomer drug eszopiclone. For those readers not up on chiral chemistry,
chemical entities with, for example, a carbon atom and four different
substituent atoms can assume two different structures that look similar but are
not superimposable. The classic example
used to illustrate this is your left and right hands. Instead of being superimposable, they are
mirror images of each other. For
chemical entities, the two different entities are called stereoisomers, and
each individual stereoisomer is referred to as an enantiomer. One enantiomer is termed the dextrorotatory
or (S)-enantiomer, while the other is
termed the levorotatory or (R)-enantiomer. In the case of the '673 patent, the
dextrorotatory entity is claimed, as shown in representative claim 1:

1. 6-(5-chloro-2-pyridyl)-5-[(4-methyl-1-piperazinyl)carbonyloxy]-7-oxo-6,7-dihydro-5H-pyrrolo[3,4-b]pyrazine,
or a pharmaceutically acceptable salt thereof, in the form of its
dextrorotatory isomer and essentially free of its levorotatory isomer.

Lunestra^®
is, of course, the dextrorotatory isomer, and the FDA required it contain no
more than 0.3% of levorotatory isomer, referred to as (R)-zopiclone.

Dr.
Reddy's Laboratories, Ltd. and Dr. Reddy's Laboratories, Inc. (collectively "Dr.
Reddy") submitted an ANDA to market a generic version of Lunestra^®,
which included a Paragraph IV certification to the '673 patent. In turn, Sunovion sued Dr. Reddy pursuant to
35 U.S.C. § 271(e)(2). The District Court construed the claim term "essentially free" to mean "less
than 0.25% of [the] levorotatory isomer." Dr. Reddy's initial ANDA application included the levels of the
levorotatory isomer to be "[n]ot less than 0.3% and [n]ot more than 1.0%." The FDA required Dr. Reddy to tighten this
limit to not more than 0.3%. Instead,
Dr. Reddy amended its application to recite not more than 0.6% of the
levorotatory isomer. The Federal Circuit
opinion suggested that Dr. Reddy's generic product had not yet received
approval. Nevertheless, as indicated
above, Dr. Reddy "certified" to the lower court that it would not
market any drug product that contained less than 0.3% of the levorotatory
isomer, even though the FDA had suggested that it would not allow approval of
such a limitation. In addition, the
lower court accepted the fact that Dr. Reddy's internal manufacturing
guidelines resulted in a level of levorotatory isomer that was more than 0.3%. Therefore, the lower court granted a summary
judgment motion of noninfringement.

Sunovion
first challenged the construction of the term "essentially free,"
which it thought should be defined as "largely but not wholly free"
of the levorotatory isomer. This claim
term was not defined in the specification, but according to the Court it was
used more than once in the prosecution history to mean "less than 0.25%." One of these times, the applicants had stated
that the disclosure of Example 1 was evidence of material that "consists
essentially of" the dextrorotatory isomer. Of course, even though this phase does have the word "essentially"
in it, the phrase "consists essentially of" has a particularized
meaning in patent parlance. It should,
therefore, not be evidence of what the applicants' thought to term "essentially"
meant, at least with regard to the levorotatory isomer. However, the applicants also submitted a
declaration during prosecution in which it was stated that the "pure form"
of the dextrorotatory isomer "as described in Example 1" contained "lower
than 0.25%" of the unwanted stereoisomer. This declaration was used in a subsequent interference as support for the
term "essentially free" to be equated with containing less than 0.25%
levorotatory isomer. The Federal Circuit
found that the "applicants' repeated and consistent attribution of the
purity level of less than 0.25% levorotatory isomer to 'the invention' and the 'the
instant invention' thus gives meaning to the term 'essentially free.'" Accordingly, the Court affirmed the lower
court's claim construction.

Sunovion,
nevertheless, also argued that even with the lower court's construction of this
claim term, Dr. Reddy also infringed. As
indicated above, the Federal Circuit agreed, because Dr. Reddy was seeking
approval to market a generic version of the drug that could fall within the scope
of the asserted claims. The Court was
not impressed with the internal manufacturing guidelines or the "certification"
made to the court below. Instead, "the
ultimate infringement question is determined by traditional patent law
principles . . . ." The Court
believed that allowing an ANDA applicant to avoid infringement based on "unconventional
and unenforceable 'guarantee[s]'" while seeking to market a product that
fell with the scope of asserted claims "would be incompatible" with
those principles.

Dr.
Reddy tried to rely on the Federal Circuit cases of Bayer AG v. Elan Pharmacetuical Research Corp., 212 F.3d 1241 (Fed.
Cir. 2000), and Glaxo, Inc. v. Novopharm,
Ltd., 110 F.3d 1562 (Fed. Cir. 1997). However, in both of those cases, the Court had found that the ANDA
product described in the application fell outside the scope of the patents at
issue. In fact, in Bayer, the NDA holder had based its infringement contention on a
particular biobatch received from the ANDA applicant, which when tested fell
within the scope of the claims. However,
the Court in that case noted that the biobatch did not fall within the
specification of the ANDA application, and therefore was irrelevant for
purposes of infringement under § 271(e)(2). The present case presents almost the converse issue — the ANDA applicant
is asserting that the product it will market will fall outside the scope of the
claim, but this is contrary to what the ANDA application teaches. "[Dr.] Reddy's ANDA specification clearly
describes a product that meets the limitations of the asserted claims." Correspondingly, the Federal Circuit reversed
the lower court's judgment of noninfringement.

Sunovion
Pharmaceuticals, Inc. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2013)
Panel:
Circuit Judges Lourie, Schall, and Reyna
Opinion
by Circuit Judge Lourie
Acting USPTO Director Vows Office Will Remain Open Even If Federal Government Is Shut Down

September 26, 2013

Acting Director Teresa Stanek Rea (at right) sent the
following memo to USPTO employees regarding the possibility that the government
will be shut down if Congress fails to agree to a continuing resolution to fund
government agencies for the rest of this year:

Dear
Colleagues,

As you know, the Obama administration is working
diligently with Congress to try to ensure that the federal government remains
open and continues to do its work on behalf of the American people. However, I
wanted to inform you that even in the event of a government shutdown on
October 1, 2013, the United States Patent and Trademark Office will
remain open, using prior year reserve fee collections to operate as usual for
at least a few weeks. We continue to assess our fee collections compared to our
operating requirements to determine how long we would be able to operate during
a government shutdown; we will update you as more definitive information becomes
available.

Because the USPTO maintains sufficient carryover
funding from prior fiscal years, our agency can and will stay open for business
for a period of time using these available reserves. During that time we will
all continue to conduct our duties and serve our Nation, by processing the
patent and trademark applications that drive our country's innovative economy.
Should we exhaust these reserve funds before the government shutdown comes to
an end, USPTO would have to shut down at that time, although a very small staff
would continue to work to accept new applications and maintain IT
infrastructure, among other functions.

I realize you likely have many more questions. As
new information becomes available, we will inform you promptly and thoroughly.
Your respective business unit managers will also be reaching out to you to
provide further clarification, as needed.

I thank you for your hard work, and the
continuing dedication you demonstrate to the American people.

Sincerely,

Terry Rea

Hat tip to Hal Wegner for
alerting us to this memo.
IPO White Paper Calls for Update to Patent Examination System

September 25, 2013

By Donald Zuhn —

A white paper authored
by two members of the Intellectual Property Owners Association (IPO) U.S.
Patent Office Practice Committee argues that the current patent examination
system "has run its course," and needs to be changed. In its place, the paper proposes a revised examination
system that would "offer[] a break from the past system . . . and
provide[] a new path to accomplishing the twin goals of reducing the unexamined
new case backlog and expeditiously concluding the examination process once it
is started."

The paper, authored by
William F. Smith, a former
Administrative Patent Judge at the U.S. Patent and Trademark Office with over
30 years of experience with the USPTO, and Dr. Joseph Mallon,
and entitled "In Order to Form A
More Perfect Patent Examination System — It Is Time to Update Compact
Prosecution to Compact Prosecution 2.0," notes that for the past 40 years, the U.S. patent examination system has been operating under the tenets
of "compact prosecution," which the authors refer to as "Compact
Prosecution 1.0." The authors
explain that "[t]he key to Compact Prosecution 1.0 is the PTO policy that,
normally, the prosecution of every patent application can be carried out in a
single round consisting of an office action and an applicant response, such
that, in the event that the applicant response does not place the application
in condition for allowance, every second office action on the merits should be
a final rejection." However,
because the landscape of patent examination has changed so dramatically since
the implementation of Compact
Prosecution 1.0, the authors argue for "a makeover
of the current patent examination system to transition from Compact Prosecution
1.0 to Compact Prosecution 2.0."

The paper's Compact Prosecution 2.0 proposal is based on
the authors' identification of "two significant dead zones in
Compact Prosecution 1.0 that needlessly delay the ultimate disposition of a
patent application once examination on the merits is initiated — final
rejections and the manner in which RCEs are docketed." In place of the current examination system,
in which the second office action on the merits may be a final rejection, the
authors propose an initial examination period in which the applicant will be
given two actions on the merits (with an opportunity to present evidence or
amendments as a matter of right) and, if needed, a third action. In response to the third action, however, the
applicant must pay the RCE fee, which will give the applicant two additional
actions (with an opportunity to present evidence or amendments as a matter of
right). In response to the second action
after an RCE, the applicant will have to pay an increased RCE fee. Under the Compact Prosecution 2.0 proposal, third actions in the initial
examination phase and second actions after an RCE filing would have to be
approved, preferably by a conference consisting of the examiner and two neutral
conferees. The authors also suggest that
interviews after third actions in the initial examination phase and after the
first action following an RCE filing would be "expected." Finally, in Compact Prosecution 2.0, the
applicant would be allowed to attend appeal conferences in which the Office
considers applicant's appeal brief, and the applicant would have the option of
choosing mediation after briefing is completed (with an individual APJ serving
as the mediator).

In
addition to outlining the Compact Prosecution 2.0 proposal, the paper also
proposes changes to examiner productivity metrics. The authors note that:

PTO management makes changes to the patent
examiners' docket management criteria based in large part of which cases have
policy priority. For example, when the
current administration began its focus on reducing the number of unexamined
patent applications, it changed the docketing system for RCEs so the examiners
were no longer required to take an RCE up for action within two months of its
filing. Instead RCEs are docketed such that a patent examiner need only take
one RCE up for action every 1-2 months.

According to the authors,
under the current system, "the examiner is actually 'rewarded' for
stopping and then re-starting the examination." In place of this system, the paper suggests assigning
each examiner an expectation of initially examining "X" number of
unexamined cases per fiscal year, wherein "X" is based on such
factors as the complexity of the technology and of the application, the
experience level of the examiner, and historic analysis of the number of claims
examined in the first action on the merits in a particular art area. The paper also suggests that "office
actions should be submitted for mailing/review no later than two-three months
from the filing date of applicant's response, not by the end of the pay period
where that date falls as is the present case," thereby eliminating the "so-called
'Count Monday' where SPEs are inundated with work to review and approve."

In addition to the above
docket management changes, the authors propose that first continuations and
divisional applications be docketed based on priority date, which will "avoid
needless term loss in continuations and term extension in divisionals,"
and provide examiners with an "opportunity to pick these cases up while
the parent examination is fresh, thus, providing more efficiency in the patent
examination process." As for
continuation-in-part applications and subsequent continuation and divisional
applications, the paper proposes that such applications be docketed based upon
their filing dates because CIPs are essentially new applications, and therefore
should not receive priority in the examination queue, and subsequent
continuation and divisional applications "have by definition already
obtained a complete examination of at least one application."
Rep. Goodlatte Introduces Second “Discussion Draft” of Legislation Aimed at Curbing “Abusive Patent Litigation”

September 24, 2013

By Andrew Williams —

In order to combat the perceived "patent troll" problem, members of Congress in both the House and the Senate introduced bills last spring aimed at addressing abusive patent litigation tactics. One of the more comprehensive "discussion drafts" was released on May 23, 2013 by Rep. Bob Goodlatte (R-VA), the Chairman of the House Committee on the Judiciary (see "Congress Continues Efforts to 'Reform' U.S. Patent Law"). Even though this discussion draft was not technically "introduced," it contained many provisions that were covered in other pieces of legislation that had been introduced, as well some of the various recommendations coming from the White House (see "'When the Patent System is Attacked!' — The White House Task Force on High-Tech Patent Issues"). As Rep. Goodlatte (below) explained at the time: "This bill helps to address the issues that businesses of all sizes and industries face from patent troll-type behavior and aims to correct the current asymmetries surrounding abusive patent litigation." A second version of this discussion draft was released in the past few days, although it was dated September 6, 2013, and several changes were made as compared to the May 23 version. Because it is possible that some version of this bill has might be passed in the upcoming year or so, we highlight below some of the major provisions of this discussion draft.

Patent Infringement Actions

The section of the discussion draft that will probably result in the most significant changes to the current system if passed is the one that suggests changes to how patent infringement actions are conducted. Some of the more significant proposals are highlighted below. This section begins by proposing changes to the pleading requirements for patent cases. Instead of the notice pleading that is currently required by Form 18 for patent infringement complaints, requiring little more than a statement of jurisdiction and notice as to the patent being asserted and the alleged infringing product or action, the new proposal would require something more akin to the infringement contentions of the party that are generally not required until much later in a case. For example, the new proposal would not only require an identification of each patent allegedly infringed, but also each claim of each patent alleged to be infringed. In addition, for each "accused instrumentality," the new proposal would require in the complaint an explanation as to where each element of each claim is found, whether each element is infringed literally or under the doctrine of equivalents, and how the terms of each claim correspond to the functionality of the accused instrument. Also, the pleadings will require a description of the direct infringement, the person or persons alleged to be directly infringing, and the acts of any alleged indirect infringer that contribute or induce the direct infringement. Finally, the complaint will require a description of the right of the party to assert the patent, a list of complaints already filed which identify the same patent, and whether the patent is subject to any licensing terms or pricing commitments. The good news for the pharmaceutical industry, however, is that this heightened pleading standard would not be required for any Hatch-Waxman type cases that claim infringement under 35 U.S.C. § 271(e)(2).

This "patent litigation" section of the discussion draft also proposes a significant change to 35 U.S.C. § 285, which currently provides for the possibility of awarding attorney's fees to the prevailing party in "exceptional circumstances." Many commentators have suggested that altering this section of the patent act might be the best way to allow courts to combat patent litigation abuses. Indeed, the original discussion draft had proposed removing the "exceptional circumstances" requirement, making it easier for the courts award such fees. However, the new draft goes further. Instead of attorney's fees being a possibility in certain cases, the new proposal requires that the court "shall award" reasonable fees to the prevailing party "unless the court find that the position of the nonprevailing party or parties was substantially justified or that special circumstances make an award unjust." As a result, even though the outcome of the two approaches might be similar, the default as to whether fees are to be awarded would shift to the affirmative in all cases.

In another part of this section of the discussion draft, changes to discovery in patent litigation are proposed. For example, the proposal provides that if a court determines that any claims need to be construed, discovery shall be limited to the information required for such construction until the court has ruled on the issue. Because discovery can be one of the most protracted parts of patent litigation, and the claim construction process can also be time-consuming, such a proposal could have the effect of severely extending the time to trial in patent infringement cases. This is probably one of the reasons why the proposal would exclude cases where timely resolution is essential, such as Hatch-Waxman type cases, which ideally should conclude before the expiration of the 30-month stay.

Transparency of Patent Ownership

The Goodlatte discussion draft also tackles the issue of patent ownership, which was also the subject of several other pieces of introduced legislation, and has been suggested by commentators as a mechanism to prevent PAEs from using shell companies to hide the true parties-in-interest. The proposal would require a plaintiff to disclose to the Patent Office, the court, and every adverse party, the assignee of the patents at issue, any party with the right to sublicense or enforce the patents at issue, any entity that has a financial interest in the patents at issue (or the plaintiff), and the ultimate parent of any assignees. Again, there is good news for the pharmaceutical industry because causes of action brought pursuant to § 271(e)(2) would be exempt from this requirement. The proposal would also create an on-going duty to notify the patent office of any changes to the assignee of the patents. If a plaintiff does not comply with these requirements, that party will not be entitled to recover attorney's fees or increased damages for willfulness during the period of noncompliance. The Court will also have the ability to award fees to the accused infringer for any expenses incurred to discover any updated assignment.

Customer-Suit Exception

The discussion draft would amend 35 U.S.C § 296 to allow a stay of an infringement action against a customer if the same or a similar suit has been initiated against the manufacturer of the accused product. Such as stay would only be allowed if both the covered manufacturer and the covered customer consent in writing. Also, the covered customer would need to agree to be bound by any judgment to the extent any issues are in common. This proposal appears to be in response to the "anti-troll" sentiment that blames PAEs for targeting end-users instead of the companies that manufacture the alleged infringing products. Interestingly, the revised draft does not include a provision that allows a manufacturer to intervene in cases where the downstream customers and retailers are targeted, as could have been found in the previous discussion draft.

Improvements and Technical Corrections to the Leahy-Smith America Invents Act

The discussion draft also includes some proposals to improve or correct the recently enacted America Invents Act. One proposal would be to remove the estoppel effect of the post-grant review process as to issues the party "reasonably could have raised." Another proposal would require the PTAB to construe claims in the same manner as district courts by using 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, if the claims have already been construed in Federal court, the Patent Office would be required to consider such construction. The discussion draft also includes a proposal to expand Covered Business Method Reviews. However, as we reported yesterday, many organization and companies, across the technological spectrum, oppose any such expansion of these reviews (see "Coalition Opposes Expansion of AIA § 18").

Finally, the discussion draft includes several other provisions, including recommendations to the Judicial Conference, providing for small business education and outreach, and tasking the director and the GAO to study issues related to patent transactions, patent quality, and patent examination. We will, of course, continue to follow and report on the progress of this discussion draft, as well any comparable bills that are introduced in either the House or the Senate.