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  • Docs at BIO: Steve Burrill’s State of the Biotech Industry Report 2012

    By Kevin E. Noonan —

    Burrilll, StevenEvery year, Steve Burrill, President and CEO of Burrill & Co. takes the stage at the BIO International Convention and spends 90 minutes giving the audience his take on the state of the biotech nation.  And every year he has a theme:  upbeat optimism in 2008 followed by downright pessimism in 2009, "Adapting for Success" in 2010, and "Looking Back to See Ahead' in 2011 (his 25-year retrospective).  Last week, Mr. Burrill was again in front of his BIO convention audience, and his theme was "The New Austerity."  And while on the surface his presentation was devoted to some of the most important challenges the industry faces, by the end Mr. Burrill left the audience with his characteristic enthusiasm for the prospects of the biotech industry.

    His presentation began by enumerating several "crises" facing the industry and the country, including aging and end of life care; obesity; the need for chronic care; the end of the 'blockbuster drug" era; poverty and its impact on disease; emergent diseases in a global population; the dysfunctionality of the healthcare system and what he termed "basic" economics — the reality that there isn't enough money to keep everyone alive.  His recap of the year since his last (2011) talk was not optimistic:  market gains during "recovery" reversed by current economic situation; high unemployment (8.2%) and political infighting (citing the debt ceiling fight as an example).  Particularly mentioned in his presentation was the European debt crisis, with many European countries in significant and growing debt (including BE, IT, ES, PT, IE and GR).  He then addressed the "solution du jour":  austerity, defined as "a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public services provided," noting that this is not good for the biotech industry (and that European populations appear to be rejecting it).  His presentation specifically focused on the effects of austerity on the pharmaceutical industry, including governments cutting spending on drugs or mandating reduction in drug prices (e.g., by requiring generic drugs where available).  He also cited issues created by permitting lower-priced drugs to be imported and efforts by governments to introduce efficiencies into drug development process.  Insurers were called out for their effects on markets by increasing requirements for reimbursement.

    BIO International ConventionHaving briefly surveyed the economic situation (he would return to it), the presentation then looked at "everything else."  This included the increase in biologic drugs and the possibility for biosimilars in the U.S. (assuming the Supreme Court does not do away with healthcare reform this Thursday).  In addition, he noted the increased uncertainty of patenting, in view of actions judicial (Prometheus) and legislative (patent reform).  And that the mainstay of the industry, "big pharma," is faced with a patent cliff at the same time that their presumptive saviors, startups and biotech companies are having greater difficulties in attracting capital.  On the positive side, Mr. Burrill showed a slide of various biologic drugs and an increased number of biologic drug approvals, predicting that these drugs would be "top selling" drugs by 2016 (including Humira, Avastin, Rituxan, Enbrel, Herceptin, Remicade, Prevnar 13).

    Mr. Burrill's presentation then posed a critical question for healthcare:  who pays and how are care decisions made?  More specifically, "what it the balance between individual responsibility and societal costs?  Should new drug approval be determined by safety and efficacy, or is cost also a factor?"  He then related this question (essentially regarding healthcare consumer decisions) to dilemmas for producers, specifically reduction in R&D spending both public and private.  The U.S. government has reduced R&D investment (although less of a drop under administration proposals than Congressional proposals) to the point that, without "American Recovery and Reinvestment Act" funding, federal funding would have been flat for the past 5 years.  This is also reflected in who gets funded, with the age of first RO1 award increasing from about 36 to about 42 from 1980 to 2011.  The track record for industry R&D is not much better, with U.S. funding between 2009 and 2012 steady between $70-80 million/year; worldwide between $140-150 million.  Looking specifically at industry segments important to his audience, Mr. Burrill reported that pharma R&D funding was down 11.5% from 2010-2011 and that a similar story could be told in biotech.

    In addition to financial pressures, Mr. Burrill's presentation identified weakening of intellectual property, "burdensome and opaque" regulation, a rising bar for reimbursement, and difficult access to capital as evidence that "it's getting tougher" to innovate.  The IP problems mentioned included Prometheus, Myriad, compulsory licenses in India (Bayer's Nexavar), and patent reform.  On the regulatory front, reform issues with FDA have led companies to seek approval outside the U.S. (which slows access to the U.S. market), a phenomenon that extends to approval of medical devices.  While acknowledging that an industry pioneer, Geron had left the stem cell space and that that the European Court of Justice had banned patents on human embryonic stem cells, the first glimmer of optimism surfaced when the presentation noted that other companies had stepped up to continue development of stem cell therapies.  Other areas of progress mentioned included antibody conjugates, in vitro production of "body parts," gene therapy successes, the impending advent of the $1,000 genome, and the NIH translation research initiative (indicating perhaps that the government recognizes the importance of translating basic science to the clinic and the marketplace).

    Then Mr. Burrill turned to the "big" themes, such as why innovation is important in the first place.  Innovation, he contended, is the only way to address problems of aging population and chronic diseases, but new technology also tends to increase rather than decrease costs (at least in the short term), and medicine and the healthcare system are still focused on treating rather than preventing disease (because, inter alia, changing unhealthy behaviors is difficult to do).  And healthcare costs are an important factor even in conventional terms:  healthcare costs increased from 13.7% of U.S. GDP in 1993 to 17.7% in 2012 (and are projected to be 19.5% in 2017), with the same trend being seen in other member countries of the Organization for Economic Co-operation and Development (OECD).  And, not surprisingly, the U.S. leads in per capita healthcare spending.  Presented were statistics indicating that 63% of disease-related deaths were non-communicable (cardiovascular disease, cancer, diabetes) and the presentation posed the question:  "is aging a disease that can be treated?"  The answer is "maybe not," but diseases characteristic of aging (like Alzheimer's) are, illustrated by estimates that delaying onset of Alzheimer's disease by 5 years would save $447 million in U.S. alone by 2050.

    Where there is healthcare, there has traditionally been drugs delivered by "Big Pharma" but Big Phama is "in trouble" according to Mr. Burrill (using a slide having a dinosaur to illustrate the point).  The "old" model (blockbuster drugs, "large, expensive clinical trials," marketing emphasis and sales in developed countries) doesn't work, and what the industry needs is to "retrench, redefine [its] business model, buy rather than build and seek opportunities in emerging markets," because the era of blockbuster, "one-size-fits-all" drugs over.  Illustrating the point was evidence that despite an overall increase in R&D spending 1992-2011, on average no more than ~27 new medical entities (NME) were produced per year and that the timeline for recovering development costs for these drugs had been "compressed" by generic drugs and Hatch-Waxman timelines (5 years of market exclusivity).  Added to this is the patent cliff, termed "significant":  branded drugs are losing patent protection at a rate of ~$17 billion in sales per year over the past 5 years, which will double in 2012 and remain at least about ~$20 million through 2014.  As a consequence, the trend is for innovator pharma companies to acquire technology (both successfully and not) and pursue other avenues (OTC, branded generics, access to emerging markets, biosimilars).  Regarding generics, 80% of prescriptions for these versions of branded drugs have a retail price 75% lower than their branded counterparts; as a result, generics account for only 26% of drug costs, with the generics market expanding in U.S. and globally, especially in emerging markets.

    The "new" model for innovation? — co-opetition (a term Mr. Burrill coined last year) — with innovator companies combining efforts, as well as partnering in emerging markets (CN, RU) and with payors.  Mr. Burrill's presentation also cited collaborations between pharma and academic researchers, which he termed "reaching over" traditional biotech start-ups by going after early stage development.  This development generated an interesting question, to wit "is big-pharma nuts?" in view of fact that less than 10% of candidates pre-phase II fail (and 35-40% of costs are incurred pre-phase II) — looking like a lose-lose proposition, where "thinking outside the box" is merely a reminder of why there is a box in the first place.

    Turning to what he does best, the presentation showed that partnering (rather than public offerings) have become a major funding source (compared with financing) over the past 5-7 years, but that venture capital deals are down after having recovered somewhat last year, and the trend over the past 12 months is for VCs to "move away" from therapeutic drug investment with "angel" investors "filling the gap."  Capital is available, but accessing it has become increasingly difficult — and while IPOs are still used by some, "M&A" exits (that is, takeovers) have been the the predominant "end game" for startups since 1998 – 2000.  But capital is "funding products, not companies" and there is a rise of government and NGO/patient (disease-focused) group participation around the world.

    Emerging markets (changing the global focus from US-EU-JP to BRICS and CIVETS countries) are becoming a "magnet" for foreign investment due to growing middle classes (defined as household income >$5,000/yr) and, as a result, finding an increasing consumer drug market.  In this environment, the opportunity and challenges facing the industry are due to unfamiliar business and regulatory environments.

    Another "big theme" of Mr. Burrill's presentation was wastefulness in pharma on many levels.  These included statistics that most (90%) drugs only work for at best 50% of the population; estimates that $350 billion are wasted annually simply due to this lack of effectiveness.  Worst of these are cancer drugs (which are 75% ineffective), but Mr. Burrill's list also included drugs for arthritis, depression, asthma, diabetes, and depression.  As a result, the focus is on the promise of personalized medicine, something desired by all segments of the medical supply chain (patients, doctors, drugmakers, regulators, and payers).  However, targeted drug treatment approaches are in their infancy, with 150 of the ~2 million protein targets presently used (and these targets are predominantly cancer targets).  But in infancy there are mistakes, and the experience has been more trial-and-error than theoretical, and as with all biotech, personalized medicine has over-promised and under-delivered.  In this regard, Mr.  Burrill also notes a more general problem, what his presentation labeled as "sloppy science," resulting in 15-fold increase in number of papers retracted since 2001 (339 in 2010 vs. 22 in 2001).  He did not provide any indication that this reflects increased complexity or reduced carefulness.

    In another theme (and one Mr. Burrill has discussed before), the existence or development of a paradigm shift in healthcare was discussed, changing from symptom-based, universal treatment models based on present illness to mechanism-based, individualized models based on prevention and recognition of heterogeneity of illnesses and potential illnesses.  As a consequence, healthcare systems are changing/must change, to focus on wellness instead of sickness and use technology to alter delivery and venue (another Burrill theme of "consumer digital health").  This change is accompanied by changes in roles — patients being less passive consumers than active managers of their own health status, with greater amount of (genetic) information and greater access to that information (both generally and their own personal health records).  In this new world, doctors are less "unquestioned authorities" and are now advisors, with greater integration in a team approach (comprising labs, pharmacists and other specialists), and also relying on digital information and prevention instead of treatment.  Increased (genetic) information is "transforming" medicine from treating the symptoms to changing the "actual" disease according to this portion of Mr. Burrill's presentation.

    All this genetic information is accelerated by falling costs for sequencing — the "$1,000 genome" by the end of 2012 — but this raises the "era of the big data problem," raising the question of how this data will be handled.  The problem with genetic information is magnified by the "omics" revolution (genomics, proteomics, metabolomics, etc.), which is really just a manifestation of the complexities of the biology.  Once again, the effects are most prominent in cancer, where from 21-73% of different cancer types have identified mutations having therapeutic significance as targets.  Mr. Burrill also discussed in his presentation a "refinement" in the granularity of what it means to have "cancer," illustrated by identification (on genetic grounds) of 38 types of leukemia and 51 types of lymphoma.  But there are also growing pains for the technology, as healthcare is still a "brick and mortar" industry and chronic illnesses have compliance issues.  Returning to the "big data" theme, Mr. Burrill asserted that sufficient computing power can "capture, validate and analyze" high volumes of data with benefits of multiple data sources and pattern recognition, enabling "real time" answers for doctors, consumers, payors, etc.  There was also a little traditional Burrill futuristic vision in the presentation, surrounding IBMs Jeopardy-playing Watson computer and its application to healthcare, and purported "brain chips" by IBM intended to mimic human brain.

    As Mr. Burrill indicated last year, there is another side of this paradigm change, namely social media, where 32% of people say they have used social media for healthcare (and ~30% of this is Facebook and YouTube) and the inherent (or potential) unreliability making this phenomenon problematic.  Mr. Burrill's presentation illustrated the "disruptive" aspects of this change by comparing the time taken to reach 50 million users for different technologies:  from the telephone (75 years) to radio (38), TV (13), the Internet (4), iPhones (2.5) and Facebook (< 1 year).  He identifies the smartphone as the "center of the digital revolution" based on adoption by physicians and patients (illustrated by ECG app as one of > 100,000 "healthcare" apps).  The benefits include increased access/delivery of healthcare, reduced costs, increased compliance, enabling better monitoring/compliance, changing behavior, and permitting the elderly to continue independent living longer.

    Fully 163 of Mr. Burrill's 209 slides relate to healthcare; at the end of the presentation, the slides turned to the other uses for biotechnology — agriculture and energy (as well as water purification and industrial applications generally).  His presentation mentions in passing that most "new" discoveries of fossil fuels occurred outside the Middle East in the past decade (South America, Australia, Canada).  But this developing industry is threatened by "austerity," which can prevent adoption of (today) more costly biofuels in favor of fossil fuels.  This of course has negative consequences for energy independence and security.

    Mr. Burrill's presentation also mentioned the conflict between agriculture and fuel needs, and that land and water are limited.  Capital requirements are "vast" in the aforementioned limited financial space; on this regard he used Amyris as an example of difficulties in scaling up to commercial levels and Wall Street's reaction (not good).  But the trend is to (try) to "go green," and the presentation cited efforts by traditional food (packaging) and chemical companies to invest/partner with biorenewable companies (citing several examples).  Government also as a role, in providing infrastructure, R&D funding, and tax and other incentives (regulations and policy).  The benefits for society (which in turn justify governmental investment) include increases in productivity and reductions in environmental impact, as well as reducing the carbon footprint.

    In conclusion, Mr. Burrill predicted the remaking of pharmaceutical companies, changing impact of value on pharma regulation, a continuing shift from doctors to payors to determine what healthcare will be provided, continued trend from IPO to acquisition as endgame, his personal obsession with "minute clinics" over traditional doctors' offices, the smartphone as medical advisor, and the digitalization of data and diagnostics.  His presentation ends on a typically upbeat note:  "value capture is key" and "opportunity to create value has never been greater."  Even austerity is not so bad in Mr. Burrill's view.  It makes capital efficient, fosters new businesses and business models, imposes discipline, prioritizes "true" innovation, and focuses on capturing value, thus rewarding creativity.  Once again, Mr. Burrill points out that this is biotech's "greatest moment," and most if not all the BIO 2012 attendees hope that he is right.

    The complete Burrill Report can be purchased from Burrill & Co.; sales at BIO 2012 included Mr. Burrill's presentation slides.

  • USPTO Takes Next Step Towards Cooperative Patent Classification System

    By Donald Zuhn —

    USPTO SealIn a notice published in today's Federal Register, the U.S. Patent and Trademark Office announced that it will be hosting a Cooperative Patent Classification (CPC) External User Day event from 8:30 am to 12:00 pm (EST) on July 10, 2012 (77 Fed. Reg. 37879).  During the event, which will be held in the Madison Auditorium on the USPTO's Alexandria campus, the USPTO will provide an overview of the CPC, a new patent classification system being jointly developed by the USPTO and the European Patent Office (EPO).  USPTO staff will also provide information concerning external user interaction, accessibility, training and outreach related to the CPC.  Those interested in attending the event should e-mail their name and phone member to CPC_Users_Day@uspto.gov.

    EPOThe CPC is a detailed classification system that will be based on the International Patent Classification, which is administered by the World Intellectual Property Organization (WIPO), and will also use the European Classification system (ECLA) as a foundation.  According to the two offices, the new classification system will incorporate the best classification practices of both the U.S. and European systems.  The joint effort to develop a joint patent classification system was first announced in October 2010 (see "USPTO and EPO to Develop Joint Patent Classification System").  Four months after that announcement, the USPTO and EPO provided additional information regarding the foundation of the joint classification system (see "USPTO and EPO Agree to Principles of Joint Patent Classification System").  And one year after their initial announcement, the two offices launched a website providing information on the CPC initiative (see "USPTO and EPO Launch Patent Classification Website").  According to the USPTO, next month's event is the next step in educating and informing external stakeholders about the current development and future implementation plans of the CPC.

    Earlier this month, USPTO Director David Kappos posted a list of twelve reasons why the USPTO is moving to the CPC on his blog.  Director Kappos also noted that the Office had provided an overview of its CPC efforts to the examining corps in February.  As for the twelve reasons for moving to the CPC, the Director indicated that:

    1. The CPC, unlike the current U.S. Patent Classification System (USPC), would be current and revised on a regular basis.

    2. The CPC would allow for more frequent updating, allowing the offices to adapt to filing trends and incorporate emerging technologies into the scheme.

    3. The CPC, unlike the USPC, would be more compatible with the classification schemes used by the EPO, KIPO, JPO, and SIPO, which are all based on the IPC standard.

    4. U.S. examiners using the CPC system will have better access to pertinent prior art.

    5. By providing more 50,000 additional breakdowns, the CPC will provide more targeted searches yielding more focused results.

    6. The CPC will benefit from the incorporation of U.S. documents dating back from 1920, which were classified under the ECLA.

    7. U.S. examiners will benefit by only having to classify documents filed first in the U.S.

    8. The USPTO and EPO examiners will be able to share and exchange classification and search tools.

    9. Examiners and users worldwide will be able to conduct patent document searches by accessing the same document collections.

    10. The CPC will allow the USPTO to use work of other intellectual property offices.

    11. The USPTO will run both the CPC and USPC in parallel for two years beginning on January 1, 2013 to allow examiners sufficient opportunity to learn and transition to the new scheme.

    12. The CPC will eventually be used by more than 45 patent offices in their internal search systems, thus becoming the international standard.

  • Court Report

    By Sherri Oslick —

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

    Bristol-Myers Squibb Company v. Sandoz Inc.
    1:12-cv-00787; filed June 21, 2012 in the District Court of Delaware

    Infringement of U.S. Patent No. 5,206,244 ("Hydroxymethyl (Methylenecyclopentyl) Purines and Pyrimidines," issued April 27, 1993) following a Paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of BMS's Baraclude® (entecavir, used to treat chronic hepatitis B virus infectrion).  View the complaint here.


    Illumina, Inc. et al. v. Complete Genomics, Inc. et al.
    3:12-cv-01465; filed June 15, 2012 in the Southern District of California

    • Plaintiffs:  Illumina, Inc.; Illumina Cambridge Ltd.
    • Defendants:  Complete Genomics, Inc.; DOES 1-50, inclusive

    Infringement of U.S. Patent No. 8,192,930 ("Method for Sequencing a Polynucleotide Template," issued June 5, 2012) based on Complete Genomic's manufacture, use, sale, and/or offer for sale of products, services, methods and/or systems, under the moniker "COMPLETE GENOMICS Analysis Platform."  View the complaint here.


    Janssen Products, L.P. et al. v. Teva Pharmaceuticals USA, Inc. et al.
    2:12-cv-03569; filed June 13, 2012 in the District Court of New Jersey

    • Plaintiffs:  Janssen Products, L.P.; Janssen R&D Ireland; G.D. Searle, LLC
    • Defendants:  Teva Pharmaceuticals USA, Inc.; Teva Pharmaceutical Industries, Ltd.; Mylan Pharmaceuticals Inc.; Mylan Inc.

    Infringement of U.S. Patent No. RE42,889 ("α- and β-Amino Acid Hydroxyethylamino Sulfonamides Useful as Retroviral Protease Inhibitors," issued November 1, 2011) in conjunction with defendants' filing of an ANDA to manufacture a generic version of Janssen's Prezista® (darunavir, used to treat human immunodeficiency virus (HIV-1) infection).  View the complaint here.

  • Conference & CLE Calendar

    Calendar

    June 24-26, 2012 – IP Business Congress (Intellectual Asset Management (IAM) magazine) – Cascais, Portugal

    June 25-26, 2012 – Hatch-Waxman Boot Camp*** (American Conference Institute) – San Diego, CA

    July 11-13, 2012 – Fundamentals of Patent Prosecution 2012: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

    July 12, 2012 – Inducement to Infringe in Hatch-Waxman Litigation:  Lessons from Bayer Schering v. Lupin and AstraZeneca v. Apotex for Pharma Patents (Strafford) – 1:00 – 2:30 pm (EDT)

    July 17-19, 2012 – Product and Pipeline Enhancement for Generics*** (marcus evans) – Washington, DC

    July 30-31, 2012 – Freedom to Operate*** (American Conference Institute) – Philadelphia, PA

    July 30 to August 1, 2012 – Intensive Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

    August 2, 2012 – USPTO Post-Grant Proceedings:  Meeting the New Requirements for Post-Grant and Inter Partes Reviews and Supplemental Examination (Strafford) – 1:00 – 2:30 pm (EDT)

    September 10-12, 2012 – Business of Biosimilars & Generic Drugs (Institute for International Research) – Boston, MA

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

  • Business of Biosimilars & Generic Drugs Conference

    Boston SkylineThe Institute for International Research (IIR) will be holding its 13th Annual Business of Biosimilars & Generic Drugs conference from September 10-12, 2012 in Boston, MA.  The conference offer presentations on the following topics:

    September 10 — Summits
    • Biosimilar R&D Scenario Planning Session
    • Map the Strengths, Weaknesses, and Defenses of your IP Assets to Prepare for the Challenges of the Follow-On Process

    September 11 — Main Conference:
    • Think Different — Navigating the Brave New Globalized Life Science Industry
    • The World is Flat — Make Sure Your Sales Are Not — Commercializing Generics in Global and Emerging Markets
    • The New Paradigm in Strategic Partnerships for Follow-on Biopharmaceutical Development
    • Reimbursement Strategies for Generics & Biosimilars Around the World

    BannerLegal/IP for Biosimilars Track
    • Turn Antitrust Laws to your Advantage in the Generics and Biosimilars Marketplace
    • Best Practice in Portfolio Management during Patent Exchange Process
    • Experiences from Developing Biosimilars for EMA: Unique Perspectives from Growth Hormones to Monoclonal Antibodies
    • Adapt to New Regulatory Requirements for Biosimilar Approval and Success

    Market Access for Biosimilars Track
    • The Strategy and Case Study of Global Biosimilar Development
    • Successful Designs for R&D Collaborations and Tech Transfer Necessary to the Biosimilars Market in China
    • The Future of Biosimilars in Specific Emerging Markets
    • When Being the Same is Good Enough:  Building Public Confidence in Biosimilars

    Market Access for Generics Track
    • Getting Global Manufacturing Processes Prepared for Product Rollouts
    • Direct-to-Pharmacy and Direct-to-Consumer Rebate Strategies: What's Coming Next?
    • Analyze the Regulatory Criteria that your Generic Drug Candidate Must Meet
    • Establish R&D Methods & Timetables that will Streamline your Expansion to New Markets

    September 12 — Main Conference:
    • Outlook and Strategic Impact of U.S. Biosimilar Approval Pathway
    • Novel Nomenclature for Biosimilars:  What the Guidelines Say, and What You Need to Knowegulatory
    • Improve and Approve: Boost the Safety and Convenience of Biobetters, and Navigate the New Regulatory Environment
    • Building Product Awareness and Acceptance: What can Biosimilars and Generics Learn from One Another?
    • Preparing for IP Challenges: What Originators and Follow-On Companies Need to Know

    A brochure for this conference, including an agenda, list of speakers, and descriptions of the scheduled presentations can be downloaded here.

    IIRThe registration fee for this conference is $2,295 (conference only), $2,695 (conference and half day summit), or $2,995 (conference and full day summit).  Those registering before July 20, 2012 will receive a $400 discount, and those registering before August 17, 2012 will receive a $300 discount.  Those interested in registering for the conference can do so here, by calling 1-888-670-8200, or by sending an e-mail to customerserviceiir@informausa.com.

    Patent Docs is a media partner of the Business of Biosimilars & Generic Drugs conference.

  • Webinar on USPTO Post-Grant Proceedings

    Strafford #1Strafford will be offering a webinar/teleconference entitled "USPTO Post-Grant Proceedings:  Meeting the New Requirements for Post-Grant and Inter Partes Reviews and Supplemental Examination" on August 2, 2012 from 1:00 – 2:30 pm (EDT).  Greg H. Gardella, Scott A. McKeown, and Jessica J. Harrison of Oblon Spivak McClelland Maier & Neustadt will provide guidance on post-grant practice under the America Invents Law, including proposed rules on trial validity, and will discuss post-grant review proceedings, special transitional review of business method patents, and supplemental exams.  The webinar will review the following questions:

    • How has the AIA transformed post-grant practice?
    • How do the changes of the AIA alter the strategic use of post-grant proceedings parallel to litigation?
    • What are the relevant deadlines and best practices for the new post-grant review process?

    An interactive Q&A session will follow the presentation.

    The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by July 13, 2012 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

  • USPTO News Briefs

    By Donald Zuhn —

    USPTO Extends After Final Consideration Pilot Program

    USPTO SealIn March, the U.S. Patent and Trademark Office implemented an After Final Consideration Pilot (AFCP) program, which provided examiners with a limited amount of non-production time — three hours for utility, plant, and reissue applications and one hour for design applications — to consider responses filed following a final rejection (see "USPTO to Assess After Final Consideration Pilot Program").  On Wednesday, the Office announced that it had extended the AFCP program, which was scheduled to end on June 16, 2012, to September 30, 2012.  According to the Office's announcement regarding the extension, the AFCP program has resulted in an increase in allowance rates for applications after final rejection.  More information regarding the AFCP program can be found here.


    USPTO Publishes Notice on Full Implementation of PPH with HIPO

      HPOIn April, the U.S. Patent and Trademark Office announced that the USPTO and the Hungarian Intellectual Property Office (HIPO) had signed a Memorandum of Understanding making the Patent Prosecution Highway (PPH) program between the two offices permanent (see "USPTO News Briefs").  The USPTO has now published a pre-OG notice regarding the full implementation of this PPH program as of June 4, 2012.  The notice outlines the requirements for participating in the program and provides a number of examples of U.S. applications that satisfy those requirements.

    The PPH program between the USPTO and HIPO permits an applicant having an application whose claims have been allowed by HIPO to fast track the examination of an application before the USPTO, or vice versa, such that the latter application is examined out of turn.  In particular, an applicant receiving a ruling from the USPTO (or HIPO) that at least one claim in an application is patentable may request that HIPO (or the USPTO) fast track the examination of corresponding claims in the corresponding application in that office.  The USPTO also announced that the two offices set forth in the Memorandum of Understanding a common desire to implement further developments of the PPH program.

    Since implementing its first Patent Prosecution Highway (PPH) program with the Japan Patent Office (JPO) on July 3, 2006, the U.S. Patent and Trademark Office has established a total of twenty PPH programs with other patent offices.  Currently the USPTO has PPH programs (full or pilot) in place with the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the United Kingdom Intellectual Property Office (UK IPO), the Canadian Intellectual Property Office (CIPO), IP Australia (IP AU), the European Patent Office (EPO), the Danish Patent and Trademark Office (DKPTO), the Intellectual Property Office of Singapore (IPOS), the German Patent and Trade Mark Office (DPMA), the National Board of Patents and Registration of Finland (NBPR), the Hungarian Intellectual Property Office (HIPO), the Russian Federal Service for Intellectual Property, Patents and Trademarks (ROSPATENT), the Spanish Patent and Trademark Office (SPTO), the Austrian Patent Office (APO), the Mexican Institute of Industrial Property (IMPI), and the Israel Patent Office (ILPO), the Taiwan Intellectual Property Office (TIPO), the Norwegian Industrial Property Office (NIPO), China's State Intellectual Property Office (SIPO), and the Icelandic Patent Office (IPO).  The USPTO has also established eleven PCT-PPH programs with other patent offices:  IP Australia, APO, SIPO, EPO, NBPR, JPO, KIPO, the Nordic Patent Institute (NPI), ROSPATENT, SPTO, and the Swedish Patent and Registration Office (PRV).  Additional information regarding the various PPH and PCT-PPH programs can be found here.


    USPTO and UKIPO Issue Report on Work Sharing Initiative

    UKIPOEarlier this year, the U.S. Patent and Trademark Office and United Kingdom Intellectual Property Office (UKIPO) issued a "Preliminary Progress Report for USPTO-UKIPO Work Sharing Initiative."  The 8-page report provides preliminary results from a survey of USPTO and UKIPO examiners who had referred to a search or examination work product generated by the counterpart office.  The report notes that:

    The preliminary results suggest that further cooperation should be undertaken to explore the differences in practice between the Offices, particularly regarding novelty and inventive step/non-obviousness.  Collaboration on these issues could facilitate a deeper understanding among examiners and help to close gaps, in turn leading to more effective reutilization of work products.

    While the report recommends that the offices continue their work sharing program, it also suggests that the offices "focus on increasing examiner understanding of each Office's practice."  The report concludes by noting that "observations by examiners at both Offices reveal that the practices and/or patent laws of the counterpart Offices are not always fully understood" — particularly with respect to novelty and obviousness/inventive step — and therefore that "the potential benefits of work sharing may not be fully exploited until there is a better understanding regarding the applicability of prior art."

  • Docs at BIO: Session on Prior User Rights as a New IP Option

    By James DeGiulio —

    BIO International ConventionThe Leahy-Smith America Invents Act changed the law on prior user rights ("PUR") in the United States, providing protection for inventors' trade secrets and protection against infringement liability from a later granted patent.  This change in the law brings the U.S. closer to harmonization with many other countries with these rights, including Canada and Japan.  The strengthening of prior user rights under the AIA requires a reconsideration of trade secret protection and PUR as an alternative to patent protection, which is what occurred in Tuesday's session entitled "A new IP option to secure FTO for internally-used technology in biotechnology."  Moderators Thomas Kelly (Monsanto) and R. Mark Halligan (Nixon Peabody) introduced the session and the panel, which comprised Dr. Andrew Torrance (University of Kansas and MIT), Mary Ann Dillahunty (Oncolytics), Brian Barrett (Eli Lilly), and Jason Duncan (EMD Serono).

    PUR under the statute requires, among other factors, secret commercial use for more than one year, thus establishing trade secret as a key component of PUR.  Mr. Duncan began by presenting the challenges of trade secrets in the pharmaceutical industry, which were echoed by the other panelists throughout the session.  Protection over trade secret information is fragile by nature, as it flows from keeping its secrecy, and particularity and specificity must be shown in litigation to avoid forfeiture of rights.  In the internet age, this secrecy is most threatened by data mobility and employee mobility.  Since the pharmaceutical industry has one of the highest levels of employee mobility of any industry, maintaining trade secrets under any circumstances is particularly difficult.  Pharmaceutical firms also typically rely heavily on outside vendors, presenting even more chances for data disclosure.

    PUR protection depends on trade secrets, thus making PUR fragile as well, and perhaps even more so since establishing PUR requires the additional standard of clear and convincing evidence.  Dr. Torrance discussed this point and the other additional requirements for establishing PUR as a defense to patent infringement under the AIA, and compared PUR and patent protection as two alternative options.  Indeed, despite the additional evidentiary requirements, PUR presents certain advantages to patent protection.  By filing a patent application, the invention will be published and therefore disclosed, yet protection is not guaranteed, as the patent may never be granted.  For PUR, since a record of prior secret use is all that is needed to avoid infringement, there is no publication and definitive protection.  While patents and PUR are certainly not "true" alternatives, in light of these advantages, the panelists hypothesized that, at minimum, the amount of defensive patent filings may decrease in favor of reliance on PUR, and firms may not feel as obligated to file patents over, for example, minor changes in a process.

    The positives and negatives of PUR from the perspective of small and big pharmaceutical firms were discussed by Ms. Dillahunty and Mr. Barrett, respectively.  Both panelists recognized the policy goals of stronger PUR, such as harmonization with other countries, encouraging U.S. manufacturing, reducing defensive patent filings, and the public benefit of the products' commercial use.  And both panelists recognized the difficulty with trade secret protection in the pharmaceutical industry, as discussed earlier.

    One major drawback presented by both sides was the potential disruption of the patent portfolio valuation processes.  First, PUR and trade secret protections are difficult for investors to evaluate, and how these alternative protections will fit into company valuations is unknown.  This is of particular importance to startups, where the company's patent portfolio value can be a critical factor in a partner or acquiror's decision to pursue the company further.  Also of concern for both large and small firms is that PUR will devaluate patents overall.  In typically competitive markets, it will be uncertain whether potential infringers have secret and therefore unknowable PUR, which would lead to the weakening of patent protection.  This type of protection, by its secret nature, would be nearly impossible to address by opinions of counsel as well.

    In terms of preference, larger pharmaceutical companies currently will choose patent protection due to the availability of injunctions, money damages, and other remedies.  For smaller or startup firms, PUR do not appear to be a viable patent alternative at all, particularly due to the requirement of secret commercial use for more than one year.  Many startups never intend to commercialize their product, as they are just looking to be acquired by a larger pharmaceutical company that will commercialize the product.  Also, since PUR are personal, it is unclear whether they can be transferred in such a situation.

    While the session explored many possibilities, it is still unclear whether the change in the law will actually change behavior of patentees or potential infringers.  There is no model and very few cases to follow, even in other countries with more established PUR laws.  Further, PUR usage may prove to be technology dependent.  For technology that moves quickly, PUR may be irrelevant, but PUR may be very important for technology that moves slowly.  Fortunately, if desired, inventors can delay making the decision on whether to rely on PUR or patent protection by using a "patent insurance" strategy as presented at the session.  This is achieved by first filing a provisional application, then filing a non-provisional application with a non-publication request within 1 year.  This can buy the inventor additional time to both establish the 1-year commercial use required to establish PUR, as well as more time to monitor published applications and evaluate which protection to pursue.  The patent could then be fully prosecuted, or should PUR prove to be the better option, the patent application could be abandoned without trade secret-destroying publication or disclosure.

  • Biotech Companies Send Letter on Myriad Case to Attorney General and Solicitor General

    By Donald Zuhn —

    Department of Justice (DOJ) SealLast week, a group of 23 industrial, environmental, food, and agricultural biotechnology companies sent a letter to Attorney General Eric H. Holder, Jr. and Solicitor General Donald Verrilli, Jr., expressing their concerns over Association for Molecular Pathology v. Myriad, which was remanded back to the Federal Circuit in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc. in March (see "Supreme Court Remands Myriad Case").  The group states that "it is essential that it be understood that this case could potentially adversely impact ours and other industries whose activities are far removed from the clinical diagnostic testing context in which this case is commonly discussed."

    Noting that their products — which include renewable fuels and chemicals, industrial enzymes, fermentates, pigments, dyes, fragrances, flavorants, food additives, bio-based specialty chemicals, cosmetics, biological fungicides and pesticides for farm and garden use, pest- and disease-tolerant crops, higher-yield plant varieties, drought-resistant crops, nutritionally improved plants, and genetically modified trees — "were originally, in some way, modified or derived from natural sources," the companies indicate a "concern[] that the AMP case invites, potentially, a broad reinterpretation of the judge-made exclusion from patentability for 'manifestations of nature' that would create significant uncertainty about the patentability of technologies unique to the areas in which we conduct our businesses."  The group argues that "[v]isceral and unsubstantiated objections to human 'gene patents' should not be grounds for wholesale revision of an area of patent law that has long been settled," and contends that "[s]ubjecting [their] inventions to a new and uncertain patentability analysis under a broadened 'laws of nature' or 'natural phenomena' exclusion that is nowhere to be found in the Patent Act draws into question tens of thousands of issued U.S. patents and upsets longstanding, settled, investment-backed reliance interests."

    The companies suggest that because Myriad and Prometheus were developed in the context of human diagnostics without a discussion of the broader implications of these cases, "many in our industry are concerned that unless some wider context is added, the very essence of what is patentable in our field of biotechnology will be jeopardized."  While noting that biotech companies had continued to pursue innovation despite recent economic tumult, the group indicated that "the patentability of their innovations was never as uncertain as it is in light of the AMP and Mayo cases."  The companies conclude by asking the Attorney General and Solicitor General to "carefully consider the[] implications as you develop the position of the US Government in the pending remand of the AMP case to the U.S. Court of Appeals for the Federal Circuit."

    The 23 signatories to the letter are:  AgraQuest, Inc., Agrivida, Inc., ArborGen, Inc., AquaBounty Technologies, Inc., BASF Plant Science, Bayer Crop Science LP, Dow Agrosciences, LLC, DuPont, EPYGEN, Genomatica, Inc., Hematech, Inc., Mendel Biotechnology, Inc., Monsanto Company, Modular Genetics, Inc., Recombinetics, Inc., Renmatix, Inc., Senomyx, Inc., Sweetwater Energy, Inc., Syngenta Corporation, Targeted Growth Inc., Tate & Lyle, Yorktown Technologies L.P., and ZeaChem, Inc.

  • USPTO Report on Genetic Testing Delayed

    By Kevin E. Noonan —

    Gongola, JanetJanet Gongola, Patent Reform Coordinator at the U.S. Patent and Trademark Office, and manager of all aspects of the agency's implementation of the Leahy-Smith America Invents Act has informed Patent Docs that the Office's report on "second opinion" genetic diagnostic testing has been delayed past its nominal deadline date of June 15, 2012.  Patent Reform "Czarina" Gongola (at right) explains that the Report continues to undergo "interagency clearance" that has caused the delay.  Many government agencies (ncluding the National Institutes of Health (NIH) and the National Institutes of Standards and Technology (NIST)) have weighed in with "diverse views."  While the Report is expected "soon," Czarina Gongola was unable to predict when interagency review would be complete and the Report would be ready to be issued.

    The Report is one of several mandated by the Act, and provoked two rounds of public hearing and comment (see "USPTO to Hold Hearing on Genetic Diagnostic Testing").  Specifically, Section 27 of the Act requires the Office to conduct a study regarding the advisability of permitting "second opinions" for patented genetic diagnostic tests without patent infringement liability:

    SEC. 27. STUDY ON GENETIC TESTING.

    (a) IN GENERAL.—The Director shall conduct a study on effective ways to provide independent, confirming genetic diagnostic test activity where gene patents and exclusive licensing for primary genetic diagnostic tests exist.

    (b) ITEMS INCLUDED IN STUDY.—The study shall include an examination of at least the following:

    (1) The impact that the current lack of independent second opinion testing has had on the ability to provide the highest level of medical care to patients and recipients of genetic diagnostic testing, and on inhibiting innovation to existing testing and diagnoses.

    (2) The effect that providing independent second opinion genetic diagnostic testing would have on the existing patent and license holders of an exclusive genetic test.

    (3) The impact that current exclusive licensing and patents on genetic testing activity has on the practice of medicine, including but not limited to: the interpretation of testing results and performance of testing procedures.

    (4) The role that cost and insurance coverage have on access to and provision of genetic diagnostic tests.

    (c) CONFIRMING GENETIC DIAGNOSTIC TEST ACTIVITY DEFINED.—For purposes of this section, the term ''confirming genetic diagnostic test activity'' means the performance of a genetic diagnostic test, by a genetic diagnostic test provider, on an individual solely for the purpose of providing the individual with an independent confirmation of results obtained from another test provider's prior performance of the test on the individual.

    (d) REPORT.—Not later than 9 months after the date of enact- ment of this Act, the Director shall report to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives on the findings of the study and provide recommendations for establishing the availability of such independent confirming genetic diagnostic test activity.

    In view of the importance of the question and the Office's expertise in making its recommendation, it can only be hoped that the Report will provide a balanced discussion of the issues and provide Congress with the information it needs to quell the calls for unnecessary "second opinions" in genetic diagnoses.