Patent Docs

BIO IP & Diagnostics Symposium

July 9, 2013

The Biotechnology
Industry Organization (BIO) will be holding an IP & Diagnostics Symposium
from 8:00 am to 2:45 pm on July 22, 2013 at the Hilton Alexandria Old Town
Hotel in Alexandria, VA. The Symposium will
review the current patent law landscape and evaluate the impact on both the
genetic diagnostics and biopharmaceutical sectors. The program will
review IP issues for diagnostics and companion diagnostics, and explore
potential regulatory dimensions. In hosting the event, BIO aims to inform
industry and government alike on how to move the science forward in the current
climate. The Symposium will offer the
following presentations and sessions:

• Keynote breakfast
— Jeffrey N. Peterson, Chief Executive Officer, Target Discovery, Inc.

• Session 1 — Obtaining Patent Protection — Patent Docs author Donald Zuhn of
McDonnell Boehnen Hulbert & Berghoff LLP will moderate a panel including Mary
Till, Legal Advisor, Office of Patent Legal Administration, U.S. Patent &
Trademark Office; Duane Marks, Patent Counsel, Roche Diagnostics Operations,
Inc.; and Patent Docs author Kevin
Noonan of McDonnell Boehnen Hulbert & Berghoff LLP

• Session 2 —
Regulatory & Reimbursement — Jennifer L. Fox of Brinks Hofer Gilson &
Lione will moderate a panel including Sheila D. Walcoff, Founding Principal, Goldbug Strategies LLC

• Session 3
(Working Luncheon) — Business Development & Strategic Deals — Eric Steffe
of Sterne Kessler Goldstein & Fox LLP will moderate a panel including Tim
Shea of Sterne Kessler Goldstein & Fox LLP; Pia Maria Gargiulo, Managing
Director, Companion Diagnostics, Precision for Medicine; Mollie Roth of PGx
Consulting; and Zoran Zdraveski, Senior Director of Intellectual Property,
Epizyme, Inc.

An agenda for the
Symposium, including a list of speakers, moderators, and panelists can be
obtained here.

Although there is
no registration fee for the Symposium, space is limited and attendees must
register for the program. A registration
form can be obtained here. Additional information regarding the Symposium can be found on BIO's Patently Biotech blog.
Coalition of University TTOs File Amicus Brief in Lighting Ballast Control LLC v. Philips Electronics North America Corp.

July 8, 2013

By Kevin
E. Noonan —

In
his novel My Summer in a Garden
(1870), Charles Dudley Warner famously said "Politics makes
strange bedfellows." That aphorism
is illustrated once again in the joining of the Public Patent Foundation with
eight technology transfer organizations and the Association of University of
Technology Managers,* urging the Federal Circuit to overturn its decision in Cybor Corp. v. FAS Technologies, Inc.,
138 F.3d 1448, 1456 (Fed. Cir. 1998) (en banc), that claim construction by a
district court is entitled to no deference.

The
brief (~7 page) amicus brief addresses the three questions posed by the Federal
Circuit for en banc review:

1) Should [the] court
overrule Cybor []?

2) Should [the] court afford
deference to any aspect of a district court's claim construction?

3) If so, which aspects should be
afforded deference?

As
to the first question, the brief answers in the affirmative, simply stating
that Cybor should be overruled to the
extent it places factual determinations "outside the realm of deferential
review" for reasons set forth in the remainder of the brief.

Regarding
the second question, the brief notes that claim construction is a mixed
question of law and fact, a situation not unusual in patent law, citing
obviousness and enablement as being questions of law based on frequently
disputed facts. A district court's
factual determination relating to these questions is reviewed under a "substantial
evidence" standard (e.g., Martek
Biosciences Corp. v. Nutrinova, Inc., 579 F.3d 1363, 1378
(Fed. Cir. 2009) (enablement); Honeywell Int'l,
Inc. v. United States, 609 F.3d 1292, 1297 (Fed. Cir. 2010) (obviousness). The brief also notes that the Supreme Court's
decision in Markman v. Westview Instruments does not mandate the approach taken
by the Federal Circuit in Cybor. Even certain members of the Court (former
Chief Judge Michel, current Chief Judge Rader) don't agree with the Court's
approach in Cybor:

It seems to me that the claim construction question often
cannot be answered without assessing, at least implicitly, what the average
artisan knew and how she thought about the particular technology when the
patent claims were written. To make such determinations, the trial judge
necessarily relies upon prior art documents and other evidence concerning the
skill of the ordinary artisan at the relevant time. Indeed, trial judges are
arguably better equipped than appellate judges to make these factual
determinations, especially in close cases. In such instances, perhaps we should
routinely give at least some deference to the trial court, given its greater
knowledge of the facts.

Amgen Inc. v. Hoechst Marion
Roussel, Inc.,
469 F.3d 1039, 1041 (Fed. Cir. 2006) (Michel, C.J. and Rader, J., dissenting).

And
other members of the Court have gone further, citing Fed. R. Civ. Pro. Rule
52(a); see Phillips v. AWH Corp.,
415 F.3d 1303, 1332 (Fed. Cir. 2005) (en banc) (Mayer, J., and Newman, J.,
dissenting). The TTO's amicus brief states:

The
Amici agree with these dissenting opinions — there is no reason to treat the
appellate review of factual underpinnings related to claim construction any
differently than any other factual determinations. The resulting deference will
ensure a greater predictability for the claim construction proceeding, and will
avoid having to "re-try" the factual underpinnings of claim
construction on appeal.

The
advantages of adopting this standard of review would include "a greater
predictability for the claim construction proceeding" and "avoid[ing]
having to 're-try' the factual underpinnings of claim construction on appeal." The resulting "[p]redictability and
avoidance of duplicative effort are of particular importance to
universities, related institutions, and
the organizations to which such institutions belong," according to the
brief, "particularly since patent litigation, with its attendant costs and
uncertain outcome already places such institutions in a disadvantaged position."

Finally,
the brief argues that a district court's factual determinations incident to
claim construction should be reviewed under a "substantial evidence"
standard. The brief illustrates the
consequences and justifications of their approach using the case at bar:

In
resolving this question [i.e., the meaning of a disputed claim term], the
district court evaluated evidence in the form of expert deposition testimony
(and the parties' arguments thereon) regarding how persons skilled in the art
would understand the limitation[]. After
such evaluation, the district court found that such limitation indeed "corresponds
to a class of structures."

The
district court's finding regarding the meaning of [the disputed claim term] to
those of ordinary skill in the art was indisputably one of fact. The subject
patent itself contained no evidence of how such hypothetical persons would
understand that term, and the parties were consequently required to rely upon
extrinsic evidence in the form of expert depositions in order to support their
respective positions on the subject. As with any other factual finding
regarding claim construction, this factual finding is entitled to deference in
the appellate review thereof.

One relevant argument in favor of
discarding the claim construction analysis from Cybor is that in so doing the Federal Circuit might avoid the high
percentage of reversals of district court claim construction (~30-40%
according to some legal academics). The
counter-argument is that often, and perhaps the majority of the time, a
district court's factual determinations can be dispositive of the claim
construction exercise. In these
circumstances, giving even a "substantial evidence" level of
deferential review to these factual determinations may vitiate any de novo review by the Federal Circuit of
how the claims are properly construed as a matter of law.

The Federal Circuit is scheduled
to hear the appeal en banc on September 13, 2013.

*
The amici are: Association of University Technology Managers (AUTM), NUtech
Ventures, Inc. (University of Nebraska – Lincoln), UNeMED Corporation
(University of Nebraska Medical Center), STC.UNM (University of New Mexico),
Wisconsin Alumni Research Foundation (University of Wisconsin), Colorado State
University Research Foundation, Public Patent Foundation, Tec Edmonton
(University of Alberta and City of Edmonton), The University of Pittsburgh of
The Commonwealth System of Higher of Education, and Newsouth Innovations
(University of New South Wales, Australia)

Hat tip to Gray on Claims for providing the amicus brief.
USPTO Files Reply Brief in Exelixis v. Rea

July 7, 2013

By Donald Zuhn —

At the end of June, the
U.S. Patent and Trademark Office filed its reply brief with the Federal Circuit
in Exelixis, Inc. v. Rea. The appeal involves two decisions by the
Eastern District of Virginia involving the impact of a Request for Continued
Examination (RCE) on the calculation of patent term adjustment (PTA) for a patent, and in
particular, on the amount of B-Delay an applicant can obtain after filing an RCE. A discussion of the first decision to come
out of the Eastern District of Virginia (Exelixis
I), which was issued by Judge T. S. Ellis III on October 1, 2012, and which
the USPTO has appealed, can be found here. The opinion for the second decision (Exelixis II) — which was issued by
Judge Leonie M. Brinkema on January 28, 2013, and which Exelixis has appealed,
can be found here.

The USPTO brief begins by
noting that the Office's issue on appeal is:

[W]hether this Court should uphold the
agency's longstanding interpretation of [35 U.S.C. § 154(b)(1)(B)(i)], under
which any time consumed by an applicant's request for continued examination
("RCE") is excluded from the calculation of patent term adjustment
under subsection 154(b)(1)(B) regardless of when the applicant filed the RCE.

While Exelixis argues that
an RCE filed after the 3-year deadline (i.e.,
three years after the application was filed) should not impact the amount of
B-Delay a patent can accrue, the USPTO argues that regardless of whether an RCE
is filed before or after the 3-year deadline, a patent should not accrue
B-Delay after the RCE is filed. The
Office summarizes Exelixis' issue on appeal as being:

[W]hether the Court should defer to the
USPTO's definition of "any time consumed by continued examination of the application
requested by the applicant under section 132(b)" to include all time elapsed
between filing of an RCE and issuance of a patent.

In arguing that the
Office's interpretation of the statute "avoids absurd results, realizes
Congress's intent, and best makes sense of the provision as a whole," the
USPTO brief notes that the District Court in Exelixis II "explained[ that]
an RCE adds time to the processing of the application but delay after the
filing of an RCE 'emanates solely from an applicant's original failure to file
an application fit for a notice of allowance.'" Therefore, the USPTO contends that the filing
of an RCE is applicant-caused delay and not PTO-caused delay. The brief argues that
"although the statute is ambiguous, the USPTO's interpretation is by far
the better reading of the statute and this Court should defer to it under Skidmore."

With respect to the
ambiguity of the statute, the brief states that "the text of 35 U.S.C. § 154(b)(1)(B)
is ambiguous," in that "[i]t can be read as providing that time
associated with the filing of an RCE is excluded from the B-delay category of
PTA, regardless of when the RCE is filed, or it can be read to apply only to
RCEs filed within the first three years."
The brief asserts that "[r]eading the statute as a whole, the
USPTO's interpretation is by far the better way to resolve this textual
ambiguity." Fearing that Exelixis'
interpretation of the statute would permit submarine patents, the brief explains
that "an applicant could file an overly broad patent application,
repeatedly fail to address the examiner's reasons for rejection, and then
narrow it only in a later RCE."

As for Exelixis' issue on
appeal, the brief contends that:

The USPTO has discretion under Section 132(b)
to define the RCE process and to determine when it is completed. The USPTO has done so and determined that the
RCE process continues until the patent is actually issued because, once an RCE
is requested, "any further processing or examination of the application,
including granting of a patent, is by virtue of the continued
examination."

The brief notes that
"Congress left it to the USPTO to define the process for 'continued
examination' under Section 132(b), including when that process begins and
ends." And as the brief explains, the Office defined the
process to be such that "[o]nce an RCE is requested, 'any further
processing or examination of the application, including granting of a patent,
is by virtue of the continued examination,'" meaning that "any time
following the filing of an RCE is consumed by the RCE."

In response to Exelixis' argument that examination
cannot include the period between the issuance of the notice of allowance and
the issuance of the patent because the notice of allowance states that the
application "has been examined" and no actual examination occurred
after that time, the brief counters that:

In the patent context . . . the word
"examination" is not limited in such a way. The period of examination spans the entire
time that the application is pending before the USPTO. See
35 U.S.C. § 131 (indicating that issuance immediately follows
examination). This understanding of the
term "examination" is consistent with the USPTO's regulation
governing "adjustment of patent term due to examination delay," which
includes patent term adjustment for delays in issuing the patent after payment
of the issue fee. See 37 C.F.R. § 1.703(a)(6) (emphasis added). Likewise, late payment of the issue fee and
requests to defer issuance of a patent after payment of the issue fee, both of
which must occur after the notice of allowance is issued, represent a failure
of the applicant to engage in reasonable efforts to conclude "processing
or examination" of the application.

As for Exelixis' argument
that it is unfair to deny an applicant PTA for time between the notice of
allowance and the issue date because the USPTO controls the time it takes to
issue a patent, the brief indicates that:

As an initial matter, this
is only partially true. The USPTO only
controls the time after payment of the issue fee and satisfaction of any other
outstanding requirements by the applicant.
The applicant controls the time it takes to pay the issue fee and
fulfill any other necessary requirements.
In Exelixis II, it took Exelixis
almost three months (from July 1 to September 30) to pay the issue fee, accounting
for the majority of the time that elapsed between the notice of allowance and
the patent issue date. Even though
Exelixis, not the USPTO, was responsible for that time, and Exelixis waited
until the last day to pay the issue fee, Exelixis now requests PTA for the
entire period and asserts that it is "time consumed by [the USPTO's]
administrative delay."

(citation omitted).

The brief also notes that
"PTA is . . . available where there are undue USPTO delays in issuing the
patent [e.g., when the USPTO takes more
than four months to issue a patent after the issue fee is paid]." Explaining that "PTA
is designed to compensate for delays by the USPTO," the brief argues that
"[i]t is not punitive to decline to grant PTA for delays that are not due
to a failure on the part of the USPTO," and therefore concludes that
"[g]iving PTA for '[t]his applicant-caused delay is incompatible with the
concept of B-delay PTA, which is fundamentally anchored to PTO-caused
delay.'"
Webinar on AIA and Patent Prosecution

July 5, 2013

Strafford
will be offering a webinar/teleconference entitled "AIA and Patent Prosecution: Navigating the
Ethical Grey Areas" on July 24, 2013 from 1:00 to 2:30 pm
(EDT). Mercedes K. Meyer of Drinker
Biddle & Reath, and Patent Docs
author Dr. Kevin E. Noonan of McDonnell Boehnen Hulbert & Berghoff will
provide guidance on the legal ethics implications of the new patent system and
recent changes in patent law, and offer best practices for staying on the right
side of the ethical line in patent prosecution.
The webinar will review the following questions:

•
How has the AIA changed the ethical landscape for patent attorneys?
•
What are the legal ethics implications of supplemental examination?
•
What steps should patent counsel take to ensure compliance with legal ethics
requirements?

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 Patent Trolls

July 5, 2013

McDonnell
Boehnen Hulbert & Berghoff LLP will be offering a live webinar entitled
"Are We Innovators, or Are We
Trolls: The Slippery Slope of Defining A Patent Troll" on July 30,
2013 from 10:00 am to 11:15 am (CT).
MBHB attorneys Alison J. Baldwin and Sarah J. Duda will cover proposed
governmental anti-patent troll actions and initiatives from both the White
House and Congress. Topics to be covered
include:

• An overview of proposed changes including
legislative and executive proposals
• How the proposed changes impact whether different
business organizations are considered patent trolls
• Whether your organization may be a patent troll
under the proposed changes
• Effects on organizations falling under the
proposed changes

While
there is no fee to participate, attendees must register in advance. Those wishing to register can do so here. CLE credit is pending for the states of
California, Georgia, Illinois, North Carolina, New Jersey, New York and
Virginia.
CLE on FTC v. Actavis

July 5, 2013

Law
Seminars International (LSI) will be offering a one-hour telebriefing entitled
"FTC v. Actavis: Practical Implications of the Landmark
Supreme Court Decision" on July 16, 2013 from 3:00 to 4:00
pm (Eastern). Jarod M. Bona of DLA Piper
will moderate a panel that includes Markus H. Meier, Assistant Director, Health
Care Division, Bureau of Competition, Federal Trade Commission; and Rohit K.
Singla of Munger Tolles & Olson LLP.
The panel will discuss the practical implications of this landmark case
and related antitrust issues involving pharmaceutical patents. Among the topics to be covered are:

•
Practical tips for drafting patent-settlement agreements going forward
•
FTC perspective on reverse-payment settlements and the underlying litigation of
the decision
•
Possible implications beyond pharmaceutical-patent settlements
•
Likely impacts on future litigation and patent settlements

A
Q&A will follow the presentation and last for up to 30 minutes.

The
registration fee is $150 per caller and $100 for each additional person on the
same line who desires continuing education credit. Those interested in registering for the
telebriefing, can do so here.
ABA 2013 Annual Meeting

July 5, 2013

The American Bar
Association (ABA) will be holding its 2013 Annual Meeting from August 8-11,
2013 in San Francisco, CA. During the
Annual Meeting, various ABA sections and divisions will be offering more than
250 CLE programs, including the following programs that will be offered by the
Intellectual Property Law section:

• European Patent
Litigation: A Brand New Era
• Conjoint
Analysis: Its Role in Determining Patent Damages and its Application to the
Entire Market Value Rule
• Navigating the
Patent Thicket
• Was Prometheus a Flook? The Outlook for Patent Eligibility of Software, Biotech, and
Related Technologies
• Patent Markets
Evolution — The Buying, Selling and Brokering of Patent Assets

A schedule of programs and events being offered by the Section of
Intellectual Property Law at the ABA Annual Meeting can be found here. Information regarding registration fees can
be found here. Those interested in registering for the
Annual Meeting can do so here.
Organic Seed Growers & Trade Ass’n v. Monsanto Co. (Fed. Cir. 2013)

July 4, 2013

By Kevin E. Noonan —

Somewhat
lost in the hubbub over the Supreme Court's ruling in AMP v. Myriad was the Federal Circuit's decision, just a few days
earlier, in Organic Seed Growers & Trade Ass'n v. Monsanto Co. That case is the latest windmill tilt by
Cardozo Law School's Public Patent Foundation (PubPat) over biotechnology
patents, which it brought on behalf of "a
coalition of [several dozen] farmers, seed sellers, and agricultural
organizations."

The
case involved a declaratory judgment action against 23 Monsanto patents* brought
by plaintiffs who alleged that they were at risk of patent infringement
liability due to "inadvertent" infringement of Monsanto's patents
relating to recombinant seeds, specifically the company's Roundup Ready® seeds used with the glyphosate
herbicide, Roundup®. Plaintiffs alleged as
their injury that they were at risk for inadvertent infringement, that they
were forced to forego planting even conventional "corn,
cotton, canola, sugar beets, soybeans, and alfalfa" due to the extent to
which these crops were transgenic ("over 85-90% of all soybeans, corn,
cotton, sugar beets, and canola grown in the U.S. contains Monsanto's patented
genes") and that they were burdened by the cost and efforts they expended to avoid
infringing. Plaintiffs also noted that Monsanto
has brought 144 infringement suits between 1997 and 2010, and settled ~700 more
over that time. Showing that PubPat had
learned the lessons of the Myriad case
regarding standing, "[a]t least one plaintiff
[Bryce Stephens] declared that the fear of suit by Monsanto is the sole reason
he refrained from cultivating organic corn and soybeans, and that he would
resume growing those crops if that threat were eliminated."

Shortly
after they initiated the lawsuit, plaintiffs asked Monsanto for an express
covenant not to sue. While demurring
from supplying such a covenant, Monsanto referred plaintiffs to its website,
wherein there was an explicit statement regarding "inadvertent"
contamination and infringement:

It has never been, nor will
it be Monsanto policy to exercise its patent rights where trace amounts of our
patented seeds or traits are present in farmer's fields as a result of
inadvertent means.

Moreover,
Monsanto's attorneys by letter further expanded on the company's absence of any
intent to sue plaintiffs:

Monsanto is unaware of any circumstances that would give rise to any claim for
patent infringement or any lawsuit against your clients. Monsanto therefore
does not assert and has no intention of asserting patent-infringement claims against
your clients. You represent that "none of your clients intend to possess,
use or sell any transgenic seed, including any transgenic seed potentially
covered by Monsanto's patents." Taking your representation as true, any
fear of suit or other action is unreasonable, and any decision not to grow
certain crops unjustified.

In
view of these representations, the District Court found that plaintiffs did not
have standing to sue under the Declaratory Judgment Act and dismissed the
lawsuit.

The
Federal Circuit affirmed, in an opinion by Judge Dyk joined by Judges Bryson
and Moore. The opinion set forth the "ground rules" of standing from
the Supreme Court's decision in MedImmune, Inc. v. Genentech, Inc., 549
U.S. 118, 127 (2007):

"Basically, the question in each case is whether the facts alleged,
under all the circumstances, show that there is a substantial controversy,
between parties having adverse legal interests, of sufficient immediacy and
reality to warrant the issuance of a declaratory judgment," citing Md.
Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).

The
Federal Circuit had applied these rubrics in implementing this precedent:

Although there is no bright-line rule applicable to patent cases, we have held
that "Article III jurisdiction may be met where the patentee takes a
position that puts the declaratory judgment plaintiff in the position of either
pursuing arguably illegal behavior or abandoning that which he claims a right
to do," citing SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d
1372, 1380–81 (Fed. Cir. 2007)

Here,
"the question in this case is not whether the appellants' subjective fear
of suit by Monsanto is genuine, but whether they have demonstrated a "'substantial
risk' that the harm will occur, which may prompt [them] to reasonably incur
costs to mitigate or avoid that harm," citing Monsanto Co. v. Geertson
Seed Farms, 561 U.S. ___, ___, 130 S.Ct. 2743, 2754–55 (2010). The plaintiffs' asserted basis for their
belief that they were at risk for infringement liability was "Monsanto's
evident history of aggressive assertion of its transgenic seed patents against
other growers and sellers"; however, simply a patentee's activities
against other defendants are not always enough to confer jurisdiction,
according to the panel opinion, relying on Arkema Inc. v. Honeywell Int'l,
Inc., 706 F.3d 1351, 1356 (Fed. Cir. 2013), Micron Tech, Inc. v. MOSAID
Techs., Inc., 518 F.3d 897, 901 (Fed. Cir. 2008), Prasco, LLC v. Medicis
Pharm. Corp., 537 F.3d 1329, 1341 (Fed. Cir. 2008), and Holder v.
Humanitarian Law Project, 561 U.S. ___, 130 S.Ct 2705, 2717 (2010), and
requires the court to look at the totality of the circumstances in each
case. Which, on these facts, required
the court to assess whether Monsanto's "representations" regarding
inadvertent infringers was sufficient to negate the company's "evident
history of aggressive assertion" of it patents.

Monsanto
(at oral argument) defined "inadvertent" infringers to be those whose
crops become accidentally contaminated and who don't spray their fields with
Roundup (consistent with their position in Bowman). The District Court, the parties, and the panel
accepted as inevitable that the plaintiffs' crops would be contaminated with
Monsanto's recombinant seed, based on the predominance (~50% on average, with
some crops comprising 90%) of such seeds in the seed stock of many conventional
crops, stemming from "windblown pollen or seeds from genetically modified
crops or other sources" (a high standard in view of their counsel's
assertion, at oral argument in the Bowman
case, that it would take winds such as those in Hurricane Sandy to blow a
transgenic soybean seed onto a farmer's field).

The
opinion also notes that "[t]here is [] a substantial risk that at least
some of the appellants could be liable for infringement if they harvested and
replanted or sold contaminated seed" despite the opinion also stating that
"the [Supreme] Court's recent decision in Bowman v. Monsanto Co. leaves
open the possibility that merely permitting transgenic seeds inadvertently
introduced into one's land to grow would not be an infringing use." The Federal Circuit's own precedent is to the
contrary, such that "one who, within the meaning of the Patent Act, uses
(replants) or sells even very small quantities of patented transgenic seeds
without authorization may infringe any patents covering those seeds,"
according to the opinion, citing SmithKline Beecham Corp. v. Apotex Corp.,
403 F.3d 1331, 1336, 1339–40 (Fed. Cir. 2005); Abbott Labs. v. Sandoz, Inc.,
566 F.3d 1282, 1299 (Fed. Cir. 2009); and Embrex, Inc. v. Serv. Eng'g Corp.,
216 F.3d 1343, 1352–53 (Fed. Cir. 2000), regarding the non-existence of "de minimis infringement" (none of
these cases involved seeds or other "self-replicating"
technologies). Accordingly, the Court
assumed inadvertent infringement would likely occur.

But
these technical considerations were not the issue; it was standing, not the
merits, that was before the Court. The
question was whether Monsanto's "representations" that it will not sue
for inadvertent infringement were sufficient to "moot any potential
controversy" and thus defeat standing. The Court looked for guidance from the Supreme Court's recent Already,
LLC v. Nike, Inc. case, where an express covenant not to sue from a trademark
owner defeated declaratory judgment jurisdiction. 568 U.S. ___, ___, 133 S.Ct.
721, 732 (2013). Thus the Federal Circuit was
faced with determining whether an express covenant was required or if Monsanto's
reassurances would do.

The Court found that they would. "Taken
together, Monsanto's representations unequivocally disclaim any intent to sue
appellant growers, seed sellers, or organizations for inadvertently using or
selling 'trace amounts' of genetically modified seeds," the panel found,
wherein the panel interpreted "trace amounts" to be approximately one
percent. "We conclude that Monsanto
has disclaimed any intent to sue inadvertent users or sellers of seeds that are
inadvertently contaminated with up to one percent of seeds carrying Monsanto's patented
traits," said the Court.

Important
to the panel decision was the effect of judicial estoppel on Monsanto and its
representations to the Court that it had "no intention of asserting
patent-infringement claims" against plaintiffs or other "inadvertent"
infringers. The opinion set forth the "main
factors" that raise the estoppel:

(1) a party's later position is "clearly inconsistent" with its prior
position, (2) the party successfully persuaded a court to accept its prior
position, and (3) the party "would derive an unfair advantage or impose an
unfair detriment on the opposing party if not estopped," citing New
Hampshire v. Maine, 532 U.S. 742, 750–51 (2001).

Any
future lawsuit brought by Monsanto against these plaintiffs would satisfy "all
three [of these] factors," according to the Court. Somewhat wryly, the opinion notes that this
conclusion was "wisely acknowledged" by Monsanto's counsel at oral
argument.

One
drawback to the Court's certainty regarding this conclusion is the limitation in
Monsanto's representations that only individuals producing crops having only "trace
amounts" produced from infringing recombinant seed would fall within the
scope of those representations, including the company's reluctance to include
within their commitment not to sue crops having greater than such trace amounts
but that were not produced using Roundup® treatment. While the panel noted that "we cannot
conclude that Monsanto has disclaimed any intent to sue a conventional grower
who never buys modified seed, but accumulates greater than trace amounts of
modified seed by using or selling contaminated seed from his fields," none
of the plaintiffs was willing to allege that they did, would or planned to "fall
outside Monsanto's representations" to the Court in this regard. All plaintiffs alleged that they were "using
their best efforts" not to
produce crops comprising more than "trace amounts" of recombinant
seed, and thus they did not allege activities that would put them at patent
infringement risk — a requirement for the plaintiffs to have standing under
Supreme Court (Already) as well as
Federal Circuit precedent (e.g., Benitec Austl., Ltd. v. Nucleonics, Inc.,
495 F.3d 1340, 1346–50 (Fed. Cir. 2007)).

Finally,
the Court found that allegations of a "chilling effect" or other
subjective apprehensions of patent infringement liability risk were not
sufficient to confer standing, because they did not amount to "a claim of
specific present objective harm or a threat of specific future harm,"
citing Laird v. Tatum, 408 U.S. 1, 13–14 (1972) or a "substantial
risk" of liability:

The appellants have not made that showing here, because the future harm they
allege — that they will grow greater than trace amounts of modified seed, and
therefore be sued for infringement by Monsanto — is too speculative to justify
their present actions. Parties "cannot manufacture standing merely by
inflicting harm on themselves based on their fears of hypothetical future harm,"
citing Clapper v. Amnesty Int'l USA, 568 U.S. ___, _____, 133 S.Ct. 1138,
1151 (2013)

Because
the Court found that Monsanto had made binding representations that removed any
risk of suit against plaintiffs who produced crops comprising trace amounts of
Monsanto's recombinant seed, and that plaintiffs had made no allegations that
they had any "concrete plans or activities" to make, use or sell
greater than trace amounts of Monsanto's seed, these plaintiffs had failed to
show any risk of suit and thus "lacked an essential element of standing"
required by the Declaratory Judgment Act.

At
least until the Supreme Court decides to grant certiorari.

Organic
Seed Growers & Trade Ass'n v. Monsanto Co. (Fed. Cir.
2013)
Panel:
Circuit Judges Dyk, Bryson, and Moore
Opinion by Circuit Judge Dyk

*
U.S. Patent Nos. 5,322,938 ("DNA sequence for enhancing the efficiency of
transcription"); 5,352,605 ("Chimeric genes for transforming plant
cells using viral promoters"); 5,362,865 ("Enhanced expression in
plants using non-translated leader sequences"); 5,378,619 ("Promoter
for transgenic plants"); 5,424,412 ("Enhanced expression in plants");
5,463,175 ("Glyphosate tolerant plants"); 5,530,196 ("Chimeric
genes for transforming plant cells using viral promoters"); 5,554,798 ("Fertile
glyphosate-resistant transgenic corn plants"); 5,593,874 ("Enhanced
expression in plants"); 5,641,876 ("Rice actin gene and promoter");
5,659,122 ("Enhanced expression in plants using non-translated leader
sequences"); 5,717,084 ("Chimaeric gene coding for a transit peptide
and a heterologous peptide"); 5,728,925 ("Chimaeric gene coding for a
transit peptide and a heterologous polypeptide"); 5,750,871 ("Transformation
and foreign gene expression in Brassica species"); 5,859,347 ("Enhanced
expression in plants"); 6,025,545 ("Methods and compositions for the
production of stably transformed, fertile monocot plants and cells thereof");
6,040,497 ("Glyphosate resistant maize lines"); 6,051,753 ("Figwort
mosaic virus promoter and uses"); 6,083,878 ("Use of N-
(phosphonomethyl) glycine and derivatives thereof"); 6,753,463 ("Transformed
cotton plants"); 6,825,400 ("Corn plants comprising event
PV-ZMGT32(nk603)"); RE38,825 ("Glyphosate tolerant plants"); and
RE39,247 ("Glyphosate-tolerant 5-enolpyruvylshikimate-3-phosphate synthases").
After Myriad: A Herd of Elephants in the Room

July 3, 2013

Guest
Post by Sean Brennan —

As
we all know by now, the Supreme Court last month decided that isolated genes
are not eligible for patenting. Although
seemingly drawing a clear-cut distinction between DNA molecules having the same
sequence as that which occurs in nature (genes), and DNA molecules having
different sequences from those that occur in nature (cDNA) (see
Patent Docs posts here
and here), the decision leaves
a host of unsettled questions about the patent-eligibility of numerous biologicals. Although ostensibly concerned with human
genes, the reasoning supporting the decision could be used to call into
question the patent-eligibility of compositions ranging from purified metabolites
(such as antibiotics) to isolated proteins to procaryotic genes.

Non-human
genes

Although
the question addressed by the Court was "Are human genes patentable?",
in its decision the Court couldn't seem to decide whether its decision applied strictly
to human genes or to genes in general. In framing the question, the Court stated that the case "requires
us to resolve whether a naturally occurring segment of . . . DNA is patent eligible . . . by virtue of its isolation from the rest of the human genome." (Slip.
Op. at 1, emphasis added). But in
announcing its decision, the Court appeared to have lost sight of the "human"
limitation when it stated: "we hold that a naturally occurring DNA segment
is a product of nature and not patent eligible merely because it has been
isolated" (Id.); "separating
[a] gene from its surrounding genetic material is not an act of invention"
(Id. at 12); and "[w]e merely
hold that genes and the information they encode are not patent eligible under §
101 simply because they have been isolated from the surrounding genetic
material" (Id. at 18).

Thus,
the decision leaves open the question of whether it is only human genes that
are not patent-eligible (i.e., did
the Supreme Court buy the "you can't patent my body" argument?) or is
any gene, from any organism, barred from patent eligibility? It is difficult to understand how the Court
could justify one standard for human genes and another for genes of other
species.

This
being the case, the decision would seem to doom the patent-eligibility of
procaryotic genes; the vast majority of which do not contain introns. Although it is possible to reverse-transcribe
a procaryotic mRNA molecule to generate a cDNA from a procaryotic gene, such a
nucleic acid molecule would not have a sequence different from the sequence of
the gene as it occurs in nature.

This
result would be unfortunate, since new bacterial species are being discovered
every day, and many of these contain genes encoding proteins that are useful
for processes such as pesticide production and bioremediation. It would also set up a technology-specific
distinction between biotechnological and pharmaceutical practice, in which it is
typical to obtain composition claims for the first disclosure of a new
compound.

Vectors

If
it is no longer possible to claim an isolated gene per se, might we still be able to claim a gene sequence as a
component of a vector? Unfortunately,
the decision provided no guidance on this point, because none of Myriad's
claims reciting BRCA genes as components of a vector or expression system (e.g., claims 8-11 of U.S. Patent No. 5,747,282)
were at issue. Although it is undisputed
that the combination of a gene with one or more of a heterologous promoter,
termination site, regulatory sequence(s), replication origin, or antibiotic
resistance marker is a composition that does not occur in nature; I worry that,
given the current judicial climate (see Mayo
v. Prometheus), addition of heterologous sequences to a newly isolated gene
will be dismissed as "insignificant post-solution activity." After all, cloning vectors and expression vectors
are standard materials that can be purchased from any one of a dozen or more
suppliers. Then again, it could turn out
that certain vectors (and/or heterologous sequences) will be considered
standard and others not, so that the patent eligibility of a gene might end up
depending upon what other sequences are attached to it. A good deal of biotech practice over the next
few years may well involve figuring out how much we need to "dress up"
a gene before it can be "taken out" into the realm of patent-eligibility.

Informational content

The
Court seemed to imply that identity of informational content
between a cloned gene and a naturally-occurring gene is what renders gene
sequences patent-ineligible; and not the (supposed) identity of chemical
structure between the two: "Myriad's
claims are simply not expressed in terms of chemical composition, nor do they
rely in any way on the chemical changes that result from the isolation of a
particular section of DNA. Instead, the
claims understandably focus on the genetic information encoded in the BRCA1 and
BRCA2 genes." (Slip Op. at 14-15). "Myriad . . . is concerned primarily with the information contained in the
genetic sequence, not with the
specific chemical composition of a particular molecule." (Id. at 15, emphasis in original).

If
this is the case, I wonder why even cDNA was found to be patent-eligible. Inasmuch as the informational content of most
DNA molecules resides in their ability to encode a polypeptide sequence, a cDNA
is no different in this respect from the intron-containing gene sequence from
which it is derived.

At
the risk of presenting a somewhat far-fetched example to make another point, I note
that it is possible to create recombinant gene sequences that do not have the
same chemical structure, but nonetheless contain the same informational
content, as a naturally-occurring gene.
For instance, certain bacteriophages contain hydroxymethyluracil (HMU)
instead of thymine in their DNA. Imagine
an enterprising geneticist who develops a cloning system, based on this
bacteriophage, that generates cloned DNA containing HMU instead of
thymidine. The cloned gene now has a
structure that does not occur in the natural gene — is it patent eligible? It would seem to depend on whether the criterion
is a different chemical structure or a different information content. Unfortunately the decision, while leaning
toward informational content, failed to provide a clear criterion.

Another
biological fact that seemed to get lost in the Myriad case is that naturally
occurring DNA sequences contain epigenetic informational content (the most
well-known example being methylation of cytosine residues) that is generally
not present in an isolated cloned gene. Consequently,
there are both structural (e.g., methyl
groups) and informational (gene methylation generally signals transcriptional repression)
differences between certain isolated genes and their naturally-occurring
counterparts. This being so, whatever
the Court's criterion for eligibility (structural difference or informational
difference), it would appear that at least some isolated DNA molecules remain
patent-eligible.

What is a mutant?

The
Court punted on the question of whether mutated sequences are patent-eligible
and, to make matters worse, provided scant guidance as to what types of sequences
they considered mutant and, thereby, at least potentially patent-eligible. The decision failed to comment specifically
on claims that recited naturally-occurring mutant BRCA sequences (claim 7 of
the '282 patent and claim 1 of U.S. Patent No. 5,693,473). But following the Court's "product of
nature" reasoning would lead to the conclusion that naturally-occurring
alleles of a gene (some of which might be "mutants" in the classical
sense of encoding a gene product with altered function) would not be
patent-eligible.

On
the other hand, isolated genes whose sequences have been altered in the
laboratory would appear to escape at least the "product of nature"
barrier to eligibility. The question
then arises as to whether a gene with a change in a single nucleotide (that
does not alter the amino acid sequence of the encoded polypeptide) would be
considered a "mutant." What
about a single nucleotide change that did result in an amino acid change? Would it make any difference if the new amino
acid encoded by the mutant sequence was a conservative or a non-conservative
substitution? Eventually, we may need to
know how large or significant a change in sequence is necessary to confer "mutant"
status on an isolated nucleic acid.

A
further complication is that assessing whether a laboratory-altered sequence is
different from a naturally-occurring sequence can present the patent applicant
with a moving target. Consider the
hypothetical heartbreaker in which an applicant constructs a mutant sequence in vitro that is found to be both
patent-eligible and patentable. Years
after the patent is granted, the same sequence is discovered in nature. Does the patentee's claimed mutant sequence
become retroactively ineligible?

Transformed cells

What
about a claim to a gene sequence that has been introduced into a heterologous
cell? Surely, this is a composition that
does not occur in nature. Although such
claims (e.g., claims 12 and 13 of the '282 patent) were not at issue in Myriad,
it was just such a composition that was validated as patent eligible by the
Supreme Court in Chakrabarty (albeit
the cell in that case comprised more than one heterologous nucleic acid), which
was cited favorably by the Myriad
Court. It's possible that, in the end,
this may be as close as we'll be able to get to a composition claim to a
newly-isolated gene. In many cases, this
may be good enough, since the principal use for most cloned genes is to express
their gene product and, in order to do so, the gene is often placed into a
heterologous cell for expression.

Proteins

The
Court's proscription of naturally-occurring substances would also seem to rule
out patent eligibility for isolated polypeptides. In most cases, the amino acid sequence of a
purified protein is exactly the same as the amino acid sequence of the
naturally-occurring protein. One
normally doesn't even have to break any chemical bonds to purify a protein
(thus failing the test for eligibility set forth by Judge Lourie in the
decision below). In the same way that "Myriad
did not create or alter any of the genetic information encoded in the BRCA1 and
BRCA2 genes" and "[t]he location and order of the nucleotides existed
in nature before Myriad found them"; the amino acid sequence of a
protein exists in nature before that protein is purified, and it is generally
not altered by the purification procedure.

Does
this mean that isolated proteins are also no longer patent-eligible? Maybe not, since, in some cases, there are
structural differences between isolated and naturally-occurring proteins
(assuming structural distinction is sufficient for eligibility — see above). For example, if an isolated protein is
obtained through expression of a recombinant nucleic acid, it often lacks certain
naturally-occurring post-translational modifications, such as glycosylation or
phosphorylation. This is particularly
true of a eukaryotic protein expressed in a procaryotic host cell. Thus, it may be possible to obtain a claim to
a polypeptide that lacks certain post-translational modifications, or contains
additional modifications not present on the naturally-occurring protein. Whether such a claim will have any value will
depend, of course, on whether the isolated protein, containing more or fewer
post-translational modifications than its naturally occurring counterpart,
functions effectively for its intended purpose.

Antibiotics and other naturally-occurring
compounds

Denial
of patent-eligibility to an isolated biological molecule, based on identity to
its naturally-occurring counterpart, will have repercussions well beyond the
field of molecular biology. As other
commentators have already pointed out, the Myriad
decision could sound the death knell for patent eligibility of all purified
naturally-occurring substances (such as antibiotics, certain chemotherapeutics,
and bacterial metabolites). In a
worst-case scenario, even chocolate chip cookies and baseball bats could become
patent-ineligible.

Conclusion

The
Myriad decision leaves me with a lot
to be pessimistic about. But on the
bright side, keeping my expectations low will at least minimize the chance that
I'll be disappointed. I give the Court
credit for trying to limit the breadth of its decision. Presumably, they wanted to come-up with a
clear-cut answer to a clear-cut question and thought they had done so by
accepting the Solicitor's and Judge Bryson's distinction between genomic DNA
and cDNA. But in so doing, the Court let
not just one, but a whole herd of elephants into the room. I have a feeling we'll be shoveling for quite
a while.

Dr.
Brennan is a Patent Agent with Brennan IP Services. He received a Ph.D. in Molecular Biology from
the University of California, San Diego in 1982, and prior to becoming a patent
practitioner, Dr. Brennan was a faculty member at the University of Connecticut
School of Medicine and the University of Southern California.
Consortium Launches Public Database of BRCA Data

July 2, 2013

By Donald Zuhn —

On June 13, the Genetic
Alliance announced the launch of
an initiative to fill the public information gap caused by the lack of
available genetic information for the BRCA1 and BRCA2 genes. According to the Genetic Alliance statement, the Free the Data! initiative, which also includes the University of
California San Francisco (UCSF) and InVitae Corporation
among its primary founders, will eventually be expanded to provide other types
of genetic information in open, searchable databases, including the National
Center for Biotechnology Information's database, ClinVar. Not coincidentally, the consortium announced
the launch of the initiative on the same day that the Supreme Court was issuing
its decision in Association for Molecular Pathology v. Myriad Genetics, Inc.,
holding that a naturally occurring DNA segment is a product of nature and not
patent eligible merely because it has been isolated, and determining that cDNA
is patent eligible (with one caveat) because it is not naturally occurring (see
Patent Docs posts here
and here).

The Genetic Alliance, which
describes itself as "the world's
leading nonprofit health advocacy organization committed to transforming health
through genetics and promoting an environment of openness centered on the
health of individuals, families, and communities," is a network of more
than 1,200 disease-specific advocacy organizations, and thousands of
universities, private companies, government agencies, and public policy
organizations. In announcing the launch
of the Free the Data! initiative, the
consortium also took the opportunity to applaud the Supreme Court decision
eliminating gene patents. Sharon Terry,
president and CEO of the Genetic Alliance, noted however that the Supreme Court's
"ruling against gene patentability doesn't immediately provide broad
access to BRCA 1 and 2 mutations or place them in a public database that will
allow for better diagnosis and care," and that the initiative will "enable[]
individuals to contribute their information publicly . . . through a customized
portal that can be used by all patients and their clinicians in order to
improve care."

According to the Genetic
Alliance's announcement, the consortium is inviting individuals "to share
their genetic variation on their own terms and with appropriate privacy
settings, in a public database so that their families, friends, and clinicians
can better understand what the mutation means." The consortium has created a dedicated
website where individuals can
upload their BRACAnalysis® reports.
Before uploading a report, contributors must check a box to confirm that
they are "the owner of the attached report and wish to anonymously
contribute the variant in it to the ClinVar public database maintained by the
NCBI." The site also provides
instructions for masking the contributor's name and any identifiable
information without obscuring the test results or interpretation of the
results.

For additional reports on
the initiative, please see:

• "A New High-Tech, Grass-Roots Effort to Fight
Breast Cancer," Slate, June 25,
2013
• "Coalition Launches Open BRCA Sharing Site,
Seeks to 'Liberate' Test Data," GenomeWeb
Daily News, June 14, 2013

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