Patent Docs

Patent Reform News Briefs

May 11, 2011

By Donald Zuhn —

H.R. 1249 Could Reach House Floor in June

In Friday's IPO Daily News, the Intellectual Property Owners Association (IPO) reported that "[m]any observers" believe the House version of the America Invents Act (H.R. 1249) will reach the House floor for a vote sometime in June. While the House Judiciary Committee ordered an amended version of the bill to be reported last month, only the introduced version of the bill is currently available on the Library of Congress' THOMAS site. The IPO report also indicated that House Judiciary Chairman Lamar Smith (R-TX) expects to propose additional amendments to the bill when it comes to the floor for a vote, and will likely craft a bill that the Senate would be willing to accept.

Delaware Senator Encourages House to Move Quickly on H.R. 1249

Delaware Senator Chris Coons (D), writing in The Huffington Post earlier this month, used the postponement of the prioritized examination (or Track I) portion of the Enhanced Examination Timing Control Initiative to push House leadership to bring H.R. 1249 to the floor for a vote ("Shortchanging Our Inventors Is Slowing Our Economic Recovery"). Noting that the recently delayed Track I program would have brought in an additional $40 million in patent fees (10,000 applications x $4,000 prioritized examination fee), Sen. Coons (at right) explained that the Track I program would have allowed "[i]nventors with time-sensitive applications . . . obtain faster consideration without slowing down the processing of applications on the normal track." The Senator reflected on his own experience, stating that "[a]fter working for eight years at a manufacturing company where patents were the lifeblood of our business, I know that Track One would have made a real impact on our economic recovery and the workforce-in-waiting of engineers, tradespeople, laborers, and others ready to get to work."

According to Sen. Coons, however, Congress got in the way of the Track I program by funding the U.S. Patent and Trademark Office at its 2010 level, thereby "shortchanging the agency by $85 to $100 million and forcing [Director] Kappos to pull the plug on the Track One program." By denying the USPTO its 2011 budget request, which included $40 million to implement the Track I program, Sen. Coons noted that the $40 million the program would have created would have been diverted to the Treasury. The Senator suggested that the America Invents Act would eliminate this problem by ending fee diversion. He concluded by expressing his hope that "Speaker Boehner move[] quickly to bring H.R. 1249 up for a vote on the House floor," adding that "[e]very day we fail to act is another day that hundreds of thousands of innovations — and the millions of jobs they can create — remain nothing more than unread good ideas on paper in someone's inbox."

Patent Reform Result of "Fierce" Lobbying

An article in The Washington Post reports that the Senate's passage of the America Invents Act was the result of more than 100 lobbying firms representing 267 different organizations ("Patent Reform Measure Ignited Fierce Lobbying Effort"). According to the piece, the first-inventor-to-file provision has generated the most interest among the organizations lobbying Congress. Among the most active lobbyists, the article pointed to the Coalition for 21st Century Patent Reform, which gave more than $1.4 million to the lobbying firms Akin Gump Strauss Hauer & Feld and the Palmetto Group, and the Coalition for Patent Fairness, which spent more than $2 million on lobbyists from Elmendorf Ryan; Fierce, Isakowitz & Blalock; the Franklin Square Group; Mayer Brown; and Patton Boggs.
FDA Seeks Comment on Biosimilar User Fee Proposal

May 10, 2011

By Donald Zuhn —

On Monday, the U.S. Food and Drug Administration published a notice in the Federal Register (76 Fed. Reg. 27062) requesting comments related to the development of a user fee program for biosimilar and interchangeable biological products under the approval pathway for biosimilar biological products established by the Patient Protection and Affordable Care Act (PPACA). In a press release, the FDA noted that the PPACA mandates that the agency develop recommendations for a user fee program for fiscal years 2013-2017, and that such recommendations must be presented to Congress by January 15, 2012.

In the Federal Register notice, the FDA states that the fee for a biologics license application (BLA) is currently the same regardless of whether the application is submitted under the new 351(k) approval pathway created by the PPACA or the preexisting 351(a) approval pathway. In working towards a user fee program for the 351(k) approval pathway, the FDA's notice outlines the agency's principles for developing the program, its proposal for a user fee program, and proposed performance goals for 351(k) applications for FY 2013-2017.

With regard to the FDA's principles for developing a user fee program, the agency seeks comment regarding the following proposed guiding principles:

(1) A user fee program must provide the FDA with sufficient review capacity in order to prevent unnecessary delays in the development and approval of biosimilar and interchangeable biologics.

(2) At least between 2013 and 2107, 351(k) user fees should remain comparable to 351(a) user fees. The notice explains that "at least initially, review to determine biosimilarity or interchangeability of a proposed product in a 351(k) application is expected to be comparably complex, technically demanding, and resource-intensive as review of a proposed 351(a) application."

(3) The 351(k) user fee program should provide funding to support activities that occur early in the biosimilar and interchangeable product development cycle.

(4) Because the same expert scientific teams at the FDA that conduct review of 351(a) applications will typically be involved in the review of 351(k) applications, the 351(k) user fee program should ensure adequate resources for the review of 351(k) applications, so that critical resources for 351(a) review are not redirected from innovator drug review to biosimilar products.

Based on the above principles, the FDA has proposed a user fee program consisting of two fees for 351(k) applications in the premarket phase (i.e., Biosimilar Product Development and 351(k) Marketing Application fees) and two fees for marketed 351(k) products (i.e., Establishment and Product fees). A detailed discussion of these fees can be found in the FDA's Federal Register notice. With regard to the premarket phase fees, the notice indicates that "the FY 2013 annual Biosimilar Product Development fee amount would be on the order of $150,000," and that the 351(k) Marketing Application fee would be set equal to the 351(a) marketing application fee (from which accrued annual Biosimilar Product Development fees would be deducted).

In the third section of its notice, the FDA describes two categories of 351(k) applications (noting that the biosimilars approval pathway prohibits applications from being submitted until 4 years after the reference product was first licensed, and prohibits the FDA from approving such applications until 12 years after the reference product was first licensed). The two categories include: (1) applications submitted 10 or more years after the date of first licensure of the reference product, which would be eligible for approval in 2 years or less, and (2) applications submitted between 4 and 10 years after the date of first licensure of the reference product. While the notice sets forth performance goals for the first category of applications, the FDA, noting that the agency "is concerned about committing resources to meet performance goals that might ready an application for approval years before it could be approved, necessitating updating of the application, new reviews, and new inspections of facilities shortly before the application becomes eligible for approval under the section 351(k)(7)," seeks public input regarding the second category of applications. To guide public comment on the latter category, the FDA poses several questions on page 27066 of the Federal Register notice.

In addition to soliciting public comment regarding user fees, the FDA states that it plans to hold public meetings with public and industry stakeholders on the issue. Those interested in participating in the public meetings should send their complete contact information to BiosimilarsUserFeeProgram@ fda.hhs.gov by June 3, 2011. Written comments are due by June 9, 2011, and can be submitted by regular mail addressed to the Division of Dockets Management (HFA–305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, or electronically at http://www.regulations.gov.  Additional information regarding the public meetings and submission of written comments can be found in the FDA's Federal Register notice.

In other biosimilar news, according to reports by Reuters and FierceBiotech, the director of the Center for Drug Evaluation and Research at the FDA, Dr. Janet Woodcock, has indicated that a full set of biosimilar guidelines will be released by the FDA later this year.
Federal Trade Commission Issues Report on Reverse Settlement Agreements in FY2010

May 9, 2011

By Kevin E. Noonan —

Under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, settlements between innovator drug companies and generic competitors must be filed with the Federal Trade Commission (FTC). On May 3rd, the Commission released a compilation of the statistics relating to these settlements. Consistent with its long-time concern with and vendetta against settlements between innovator and generic drug companies, the Report highlights what it views as an increase of settlements where a generic company is compensated for staying off the market for longer than would be the case if it won ANDA litigation against the innovator. Viewing the same data a different way suggests that the frequency of such "pay-for-delay" agreements are in fact decreasing (while at the same time suggesting that the wastefulness associated with ANDA litigation is beginning to be appreciated by innovators and generic drug makers alike).

First, the stats. For the 2010 fiscal year (October 1, 2009 to September 20, 2010), there were 113 "final resolutions of patent disputes" between innovator and generic drugmakers (in the context of ANDA litigation). Thirty-one of these settlements involved both "compensation" to the generic manufacturer and an agreement that the generic drugmaker not market its product for a term longer than would have resulted from successful ANDA litigation. These settlements involved drugs having a combined U.S. sales of about $9.3 billion. In another 66 settlements, the FTC stated that there was a restriction on the ability of a generic drugmaker to sell generic versions of a drug, without any "explicit compensation." A little more than one half (36) of these settlements were with generic drugmakers who were not the first ANDA filers (and thus were not eligible for the 180-day exclusivity for a first ANDA filer under the Hatch-Waxman Act). The Report recognizes that these settlements involved "restrictions on entry in exchange for the ability to market the relevant product for some period prior to patent expiration" (i.e., earlier than the generic drugmaker would have been able to market its product if unsuccessful in challenging Orange Book-listed patents). Finally, a total of 16 settlements had no restrictions on market entry for the generic drugmaker.

All of the settlements between innovators and first ANDA filers had restrictions on time of market entry, and about half (26/49) also had compensation from the innovator to the generic drugmaker for market entry delay.

Comparing fiscal year 2010 with prior years, the Commission's Report states that it witnessed:

[A] significant increase in the number of final settlement agreements filed, as well as the number of settlements potentially involving pay-for-delay. The number of final settlements filed in FY 2010 is almost double the amount received in any previous year. Similarly, the number of potential pay-for-delay (PFD) settlements and the number of potential pay-for-delay settlements involving first filers (FF) substantially increased over any previous year.

These statements were supported by the following table:

A more expanded table might have been more informative:

These numbers suggest that, while the absolute number of settlements having either market entry restrictions, compensation, or both have increased, this increase must be considered in the context of the overall increase in ANDA litigation settlements. Whether due to the scrutiny occasioned by FTC displeasure over the practice, or because of the threat of antitrust litigation (from state as well as private "attorneys general"; see "Second Circuit Denies En Banc Reconsideration in Cipro® Case"), "reverse settlement" agreements ("pay-for-delay" in FTC parlance) appear to be becoming less popular. This trend is essentially the same for first filers as well as other ANDA filers, and is not significantly more pronounced for first filers, who stand to lose the 180-day exclusivity benefit if they settle ANDA litigation.

The Report is accompanied by copies of settlements over Humira® (between Centocor and Abbott Labs), fentanyl (Cephalon and Watson), and gemcitabine (Eli Lilly & Co. against a number of foreign generic drug companies), among others. While the trend towards settling ANDA cases seems to support those who argue, inter alia, that the Hatch-Waxman ANDA regime is wasteful of resource that might better be spent addressing deficiencies in the pharmaceutical pipeline (see "Maybe Hatch-Waxman Data Exclusivity Isn't So Good For Traditional Drugs After All"), within that trend is a declining likelihood to settle ANDA litigation with agreements that provide monetary compensation to generic drugmakers in exchange for delayed market entry. This trend should be more welcome to the FTC than the latest Report seems to indicate.
Court Report

May 8, 2011

By Sherri Oslick —

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

Mutual Pharmaceutical Co. et al. v. West-Ward Pharmaceutical Corp.
3:11-cv-02276; filed April 21, 2011 in the District Court of New Jersey

• Plaintiffs: Mutual Pharmaceutical Co.; AR Scientific, Inc.; AR Holding Co.
• Defendant: West-Ward Pharmaceutical Corp.

Infringement of U.S Patent Nos. 7,619,004 ("Methods for Concomitant Administration of Colchicine and Macrolide Antibiotics," issued November 17, 2009), 7,601,758 ("Methods for Concomitant Administration of Colchicine and Macrolide Antibiotics in the Treatment of Gout Flares," issued October 13, 2009), 7,820,681 ("("Methods for Concomitant Administration of Colchicine and a Second Active Agent," issued October 26, 2010), and 7,915,269 (same title, issued March 29, 2011) following West-Ward's filing of an NDA (under § 505(b)(2) of the Food, Drug and Cosmetic Act) to manufacture a generic version of Mutual's Colcrys® (single-ingredient colchicine product, used to prevent and treat gout flares). View the complaint here.

Novartis AG et al. v. Teva Pharmaceuticals USA Inc. et al.
1:11-cv-00353; filed April 20, 2011 in the District Court of Delaware

• Plaintiffs: Novartis AG; Novartis Pharmaceuticals Corp.
• Defendants: Teva Pharmaceuticals USA Inc.; Teva Pharmaceutical Industries Ltd.

Infringement of U.S. Patent Nos. 6,025,391 ("Enteric-Coated Pharmaceutical Compositions of Mycophenolate," issued February 15, 2000), 6,172,107 ("Entric-Coated Pharmaceutical Compositions," issued January 9, 2001), and 6,306,900 (same title, issued October 23, 2001) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Novartis' Myfortic® (mycophenolate sodium, used for the prophylaxis or prevention of organ rejection in patients receiving allogeneic renal transplants, administered in combination with cyclosporine and corticosteroids). View the complaint here.

Genentech, Inc. et al. v. Sandoz Inc.
3:11-cv-01925; filed April 20, 2011 in the Northern District of California

• Plaintiffs: Genentech, Inc.; Roche Palo Alto, LLC
• Defendant: Sandoz Inc.

Infringement of U.S. Patent No. 6,083,953 ("2-(2-amino-1,6-dihydro-6-oxo-purin-9-yl)methoxy-1,3-propanediol Derivative," issued July 4, 2000) following a Paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Roche's Valcyte® (valganciclovir hydrochloride, used to treat cytomegalovirus retinitis and cytomegalovirus disease). View the complaint here.

Shire LLC et al. v. Mylan Pharmaceuticals Inc. et al.
1:11-cv-00055; filed April 20, 2011 in the Northern District of West Virginia

• Plaintiffs: Shire LLC; Supernus Pharmaceuticals, Inc.
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.

Infringement of U.S. Patent Nos. 6,287,599 ("Sustained Release Pharmaceutical Dosage Forms with Minimized pH Dependent Dissolution Profiles," issued September 11, 2001) and 6,811,794 (same title, issued November 2, 2004) based on Mylan's filing of an ANDA to manufacture a generic version of Shire's Intuniv (guanfacine, used to treat attention-deficit hyperactivity disorder). View the complaint here.

Bayer Schering Pharma AG et al. v. Mylan Pharmaceuticals Inc. et al.
3:11-cv-02225; filed April 19, 2011 in the District Court of New Jersey

• Plaintiffs: Bayer Schering Pharma AG; Bayer Healthcare Pharmaceuticals Inc.
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.; Famy Care Ltd.

Bayer Schering Pharma AG et al. v. Mylan Pharmaceuticals Inc. et al.
2:11-cv-00604; filed April 19, 2011 in the District Court of Nevada

• Plaintiffs: Bayer Schering Pharma AG; Bayer Healthcare Pharmaceuticals Inc.
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.; Famy Care Ltd.

Bayer Schering Pharma AG et al. v. Mylan Pharmaceuticals Inc. et al.
1:11-cv-00053; filed April 19, 2011 in the Northern District of West Virginia

• Plaintiffs: Bayer Schering Pharma AG; Bayer HealthCare Pharmaceuticals, Inc.
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.; Famy Care Ltd.

The complaints in these cases are substantially identical. Infringement of U.S. Patent No. RE37,564 ("Composition for Contraception," issued February 26, 2002) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Bayer's Yaz® (drospirenone & ethinyl estradiol, used for oral contraception). View the New Jersey complaint here.
Conference & CLE Calendar

May 8, 2011

May 18-19, 2011 – Forum on Freedom to Operate (C5) – Munich, Germany

May 23-25, 2011 – 6th International Judges Conference on Intellectual Property Law (Intellectual Property Owners Association) – Brussels, Belgium

June 2, 2011 – EPO Opposition & Appeals — The Case Law (Patent Resources Group and Management Forum) – Chicago, IL

June 3, 2011 – European Patents — The Case Law (Patent Resources Group and Management Forum) – Chicago, IL

June 7-8, 2011 – Biosimilars*** (American Conference Institute) – New York, NY

June 8, 2011 – Biotechnology/Chemical/Pharmaceutical (BCP) Customer Partnership Meeting (U.S. Patent and Trademark Office) – 10:00 am – 4:00 pm (EDT)

June 21-22, 2011 – 10th Annual Forum on Pharma Patent Lifecycles (C5) – London, England

September 18-20, 2011 – Accelerating Intellectual Property and Innovation in South Africa (South African Department of Science and Technology) – Cape Town, South Africa

***Patent Docs is a media partner of this conference or CLE
C5 Pharma Patent Lifecycles Conference

May 6, 2011

C5 (UK) will be holding its 10th Annual Forum on Pharma Patent Lifecycles on June 21-22, 2011 in London, England. The conference will provide practical and strategic guidance on patent lifecycle extensions, including:

• The scope of SPCs for combination products and the cases referred to the ECJ;
• Recent cases on SPCs in Europe — The originator perspective;
• Developing strategies to successfully monitor and manage SPCs on patent portfolios;
• The German Patent and Trade Mark Office (DPMA) perspective on tackling pharma and biotech patents;
• Examining potential anti-competitive practices and recent patent settlement agreements;
• Maximizing exclusivity for new medicinal products in light of regulatory and case law developments;
• Extending and protecting patent lifecycles in the BRIC countries;
• Structuring successful applications for selection patents and analyzing the various approaches in Europe;
• Guidance from the European Commission on lifecycle extensions;
• Classifying biosimilars and follow-on biologics in Europe and the U.S.;
• Preparing for the expiration of transitional provisions on paediatric extensions;
• Successfully obtaining preliminary injunctions to block exploitation from generic drugs; and
• The impact of U.S. developments on pharma lifecycle extensions.

In particular, C5 faculty will offer presentations on the following topics:

• A plethora of references: Medeva and its sequels — keynote address by Hon. Mr. Justice Arnold, Chancery Division of the High Court of Justice;
• Recent cases on SPCs in Europe — The Originator Perspective;
• Adopting strategies to overcome challenges based on recent industry trends;
• The German Patent and Trade Mark Office (DPMA) perspective on tackling biotech patents — Dr. Roman Maksymiw, Head of Division, German Patent and Trade Mark Office;
• Combating practical challenges for the grant of SPCs;
• Examining potential anti-competitive practices and recent patent settlement agreements;
• The impact of US developments on pharma lifecycle extensions;
• Structuring successful applications for selection patents and analysing the various approaches in Europe;
• Maximising exclusivity for new medicinal products in light of regulatory and case law developments;
• Guidance from the European Commission on lifecycle extensions — keynote address by Lavinia Teodorescu, Antitrust: Pharma and Health Services, DG Competition European Commission;
• Developing strategies to successfully monitor and manage SPCs on patent portfolios;
• Extending and protecting patent lifecycles in the BRIC countries;
• Preparing for the expiration of transitional provisions on paediatric extensions;
• Successfully obtaining preliminary injunctions to block exploitation from generic drugs;
• Classifying biosimilars and follow-on biologics in Europe and the US; and
• Monitoring the approval and grant processes of third party SPC applications.

A pre-conference workshop, entitled "Constructing Patent Settlement Agreements and Devising Effective SPC Strategies" will be offered from 1:00 pm to 4:30 pm on June 20, 2011.

The agenda for the Pharma Patent Lifecycles conference can be found here. A complete brochure for this conference, including an agenda, list of speakers, detailed descriptions of conference sessions, and registration form can be downloaded here.

The registration fee is £2197 for the conference and workshop and £1599 for the conference alone. Those registering by May 20, 2011 will receive a £100 discount. Those interested in registering for the conference can do so here, by calling +44 20 7878 6888, by faxing a registration form to +44 20 7878 6885, or by e-mailing registrations@C5-Online.com.
Billups-Rothenberg, Inc. v. Associated Regional and University Pathologists, Inc. (Fed. Cir. 2011)

May 5, 2011

By Donald Zuhn —

Last week, in Billups-Rothenberg, Inc. v. Associated Regional and University Pathologists, Inc., the Federal Circuit determined that the District Court for the Central District of California had properly granted summary judgment of invalidity with respect to U.S. Patent Nos. 5,674,681 and 6,355,425. In particular, the panel affirmed the District Court's decision that the asserted claims of the '681 patent were invalid for lack of written description, and its decision that the asserted claims of the '425 patent were invalid as anticipated by U.S. Patent No. 6,025,130.

In 2009, Plaintiff-Appellant Billups-Rothenberg, Inc. sued Defendants-Appellees Associated Regional and University Pathologists, Inc. (doing business as ARUP Laboratories) and Bio-Rad Laboratories, Inc. ("ARUP"), asserting that ARUP infringed certain claims of the '681 and '425 patents by providing or using diagnostic assays or kits for detecting Type I hereditary hemochromatosis. Type I hereditary hemochromatosis, which is an iron disorder characterized by excessive iron absorption by the body, is caused by specific mutations in the High Fe ("HFE") gene, which is located on the short arm of chromosome six in humans.

The '681 patent, which issued from an application filed by Billups in 1994, discloses that the gene responsible for hemochromatosis is located on human chromosome six. The '681 application also discloses that "[a] mutation in a nucleic acid sequence can be detected by various methods to analyze nucleic acids [which] are well known to those in the art." Claim 2 of the '681 patent recites:

2. A method to identify an individual having or predisposed to having hemochromatosis, comprising the steps of:
a) providing from the individual a sample containing a gene encoding a nonclassical MHC class I heavy chain and
b) detecting a mutation in said gene, which mutation results in the reduced ability of said heavy chain to associate with said β2 microglobulin, wherein the presence of said mutation identifies said individual as having or predisposed to having hemochromatosis.

The '681 patent does not, however, disclose the HFE gene or identify any mutations associated with hemochromatosis.

In 1996, a different group of researchers isolated and sequenced the hemochromatosis (or HFE) gene and identified three mutations in the gene that are associated with hemochromatosis: C282Y, H63D, and S65C. This research led to the issuance of the '130 patent, which discloses the HFE gene sequence and the C282Y, H63D, and S65C mutations (identified in the '130 patent as 24d1, 24d2, and 24d7, respectively):

The '130 patent, which is owned by Bio-Rad and licensed to ARUP, also discloses genetic tests for hemochromatosis that utilize the mutations and sequence variants identified in the patent.

Using the sequences disclosed in the '130 patent, Billups developed a method for diagnosing an iron disorder by testing for the S65C mutation. In 1999, Billups filed an application directed to this method, which issued as the '425 patent. Claim 1 of the '425 patent recites:

1. A method of diagnosing an iron disorder or a genetic susceptibility to developing said disorder in a mammal, comprising determining the presence of a mutation in exon 2 of an HFE nucleic acid in a biological sample from said mammal, wherein said mutation is not a CàG substitution at nucleotide 187 of SEQ ID NO: 1 and wherein the presence of said mutation is indicative of said disorder or a genetic susceptibility to developing said disorder.

At trial, Billups and ARUP filed cross-motions for summary judgment, Billups seeking summary judgment of infringement and ARUP seeking summary judgment of invalidity. The District Court denied Billups' motion and granted ARUP's motion of invalidity for lack of written description (as to the '681 patent) and anticipation (as to the '425 patent). With respect to the '681 patent, the District Court noted that neither the sequence of the HFE gene nor any mutations in the HFE gene were disclosed in the patent, and the "patentee has merely directed the person of ordinary skill in the art to a general location of a mutation on a chromosome and suggested that the mutation may be found in that vicinity." With respect to the '425 patent, the District Court determined that the '130 patent was prior art to the '425 patent, and further, that the '425 patent claims the same genetic test for the S65C mutation that is disclosed in the '130 patent.

Writing for the Federal Circuit, and addressing the issue of written description first, Judge Gajarsa noted that "Billups claims that its disclosure of the mutation's general location somewhere 'within less than a 300 base pair region of a defined exon of a well studied multi-gene family,' combined with the knowledge that existed at the time of filing the '681 patent, established that [the inventors] possessed the claimed invention." While "[t]he '681 patent claims a test for mutations," he also noted that "it is undisputed that the specification and originally filed claims of the '681 patent disclose neither the hemochromatosis gene sequence nor any specific mutations within that gene." In summarizing Billups' argument on appeal, Judge Gajarsa stated that:

Billups contends that the '681 patent taught structure, i.e., that hemochromatosis has a genetic basis, and function, namely, its adverse effect upon the binding of β2 microglobulin with a non-classical MHC class I heavy chain. Specifically, Billups argues that the '681 patent's correlation of function with the general location of the C282Y mutation, combined with the knowledge of a person of ordinary skill in the art in the field at the time of filing, satisfied the written description requirement by localizing the mutation to a 300 base pair region.

Agreeing with the District Court's findings that "[p]atentee's general location disclosure is too imprecise to constitute structural features necessary to meet the written description requirement," and that the "specification for the '681 patent contains only functional, not structural, characteristics of the predicted mutations," Judge Gajarsa determined that the District Court properly granted summary judgment of invalidity for lack of written description.

Turning to the issue of anticipation, Judge Gajarsa quickly concluded that:

The asserted claims of the '425 patent are invalid because they are anticipated by the '130 patent. The '130 patent was filed nearly three years before the '425 patent and is prior art under § 102(e). The district court correctly ruled that the '130 patent discloses use of the S65C mutation as a "HH [(hereditary hemochromatosis)] diagnostic," and, thus, Billups was not the first to disclose diagnosis of hemochromatosis using the S65C mutation.

While Billups argued on appeal that the '130 patent concludes that "the S65C mutation was only a clinically insignificant polymorphism unrelated to disease state," and therefore that "the '130 patent did not teach using the S65C mutation to diagnose hemochromatosis," Judge Gajarsa countered that "[d]espite the inventors' uncertainty regarding the utility of the S65C mutation because of their small sample size, the '130 patent describes two genetic tests for hemochromatosis that involve detection of the S65C mutation as an input for the diagnosis of hemochromatosis." Citing Celeritas Techs., Ltd. v. Rockwell Int’l Corp., 150 F.3d 1354, 1361 (Fed. Cir. 1998), Judge Gajarsa noted that "[a]lthough the '130 patent discounts the utility of the S65C mutation in diagnosing hemochromatosis, we have held that a 'reference is no less anticipatory if, after disclosing the invention, the reference then disparages it.'" Thus, "[e]ven though the inventors of the '425 patent performed experiments revealing greater diagnostic utility of the S65C mutation than initially suspected," Judge Gajarsa concluded that "the use of the S65C mutation as a diagnostic tool was already contemplated by the '130 patent," and therefore affirmed the District Court's finding of invalidity with respect to the '425 patent.

Billups-Rothenberg, Inc. v. Associated Regional and University Pathologists, Inc. (Fed. Cir. 2011)
Panel: Circuit Judges Gajarsa, Linn, and Moore
Opinion by Circuit Judge Gajarsa
Biotech/Pharma Docket

May 5, 2011

By James DeGiulio —

Seroquel Suit between AstraZeneca and Biovail Dismissed

AstraZeneca and Biovail have agreed to end their patent dispute over Seroquel XR after Biovail converted its Paragraph IV certification to a Paragraph III filing, thus agreeing not to market a generic version of Seroquel XR until after the expiration of the patents in the suit. The dispute between the drug companies began in January 2009, when AstraZeneca brought suit in the U.S. District Court for the District of New Jersey against Biovail, alleging that Biovail's Abbreviated New Drug Application (ANDA) covering three doses of extended-release quetiapine fumarate infringed U.S. Patent Nos. 4,879,288 and 5,948,437 (see "Court Report," January 18, 2009). In April 2009, Biovail countered that it did not infringe either patent, and that both patents were invalid. Biovail also argued that one of the patents was unenforceable because AstraZeneca engaged in inequitable conduct during prosecution of the patent by withholding internal information about compounds that could be considered atypical anti-psychotics.

On April 29, AstraZeneca and Biovail filed a joint stipulation of dismissal after Biovail changed its regulatory certification to a Pararaph III filing, agreeing not to commercially sell its generic drug until after the expiration of the '288 and '437 patents. The patents expire in 2011 and 2017, respectively. Judge Joel Pisano granted the parties' stipulation on May 2, dismissing all the claims and counterclaims in the action without prejudice, and ordered the parties to cover their own costs and attorneys' fees. The stipulation allows the AstraZeneca to retain some of Biovail's confidential information and other data for use in the related patent litigation against Handa, Torrent, and other generics.

Eli Lilly Successfully Blocks Release of Generic Cymbalta

Eli Lilly successfully secured an order that prohibits the defendants in the Cymbalta patent litigation from selling a generic version of duloxetine during the term of Eli Lilly's compound patent. In November 2008, Eli Lilly filed suit in the U.S. District Court for the Southern District of Indiana against Wockhardt, claiming the generic manufacturers' duloxetine oral capsules infringed U.S. Patent No. 5,023,269 (see "Court Report," November 23, 2008). Eli Lilly brought suit against several other generic companies, and these other suits were consolidated in February 2009 and stayed pending the outcome of Eli Lilly's case against Wockhardt. All defendants had alleged in their ANDAs that Eli Lilly's patent was invalid.

On April 27, Judge Tanya Walton Pratt entered final judgment against the defendants, prohibiting the sale of a Cymbalta generics and requiring that the defendants convert their certifications to a Paragraph III filing. The '269 patent provides protection for Cymbalta until at least June of 2013. The defendants also must notify the FDA that the defendants are no longer seeking approval for an ANDA. Eli Lilly argued that the group was bound by Judge Pratt's March approval of a settlement between the company and Wockhardt that favored the plaintiff. The judge's order ends Eli Lilly's case against Impax, Cobalt, Anchen, Actavis, Aurobindo, Lupin, Sandoz, and Sun.

Pfizer and Eon Settle Neurontin Patent Dispute

Pfizer and Eon Labs have reached an agreement ending their patent infringement suit over a generic version of the epilepsy drug Neurontin. In June 2000, Pfizer brought suit in the U.S. District Court for the District of New Jersey against Eon, after Eon filed an ANDA over gabapentin. In 2002, the case was joined with Pfizer's suits against other generic-drug makers Purepac and Teva. Despite the lawsuit, the defendants opted to begin selling their generic gabapentin products "at risk" before a court ruling on infringement liability had been issued. Pfizer asserted infringement of U.S. Patent No. 6,054,482 stemming from the ANDA and the sales of generic gabapentin. In August 2005, the District Court found no infringement because Pfizer failed to prove that the anions of the Neurontin generic drugs fall within the claims. Pfizer appealed the New Jersey court's decision to the Federal Circuit and it was reversed (see "In re Gabapentin Patent Litigation (Fed. Cir. 2007)").

On April 28, Judge Faith S. Hochberg signed off on a stipulation dismissing Eon and Sandoz from the case, leaving Purepac, Teva, and their affiliates as the only remaining defendants in the long-running patent suit, which is scheduled for trial on May 16. The companies stipulated that Eon's gabapentin capsules infringed Pfizer's patent and that all claims and counterclaims pending between the companies should be dismissed. The remaining terms of the settlement are confidential.
U.S. Trade Representative Releases Special 301 Report on Global IPR

May 4, 2011

By Kevin E. Noonan —

At the end of last month, the U.S. Trade Representative (USTR), Ronald Kirk, issued the 2011 Special 301 Report. According to the USTR website "[f]ighting [intellectual property rights, i.e.,] IPR theft in overseas markets is critical to the livelihoods of the estimated 18 million Americans who work in intellectual property-intensive industries." The USTR Report "provides a means for the United States to promote the protection and enforcement of IPR," according to the website announcement, noting that "for the first time, USTR has issued an open invitation to all trading partners listed in the report to cooperatively develop action plans to resolve IPR issues of concern." This is part of "a call to action" to all U.S. trading partners that the USTR says it is issuing with this Report. Ambassador Kirk asserts that the U.S. is "ready to work intensively with [our trading partners] to stop intellectual property theft that threatens IP-related jobs in the United States and other countries."

The Report is promulgated pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994). The Trade Representative is required under the Act to "identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection." The Trade Representative has implemented these provisions by creating a "Priority Watch List" and "Watch List." Placing a country on the Priority Watch List or Watch List is used to indicate that the country exhibits "particular problems . . . with respect to IPR protection, enforcement, or market access for persons relying on intellectual property." These watch lists are reserved for countries having "the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products."

This report, on the state of intellectual property rights worldwide, identifies twelve countries on a "Priority Watch List" and another 28 countries on the "Watch List," all relating to deficiencies in intellectual property protection in these countries. The Priority Watch List in the Report lists China, Russia, Algeria, Argentina, Canada, Chile, India, Indonesia, Israel, Pakistan, Thailand, and Venezuela, the same countries that were on this list in last year's Report. Countries on this list "do not provide an adequate level of IPR protection or enforcement, or market access to persons relying on intellectual property protection." On the Watch List this year are Belarus, Bolivia, Brazil, Brunei, Columbia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Italy, Jamaica, Kuwait, Malaysia, Mexico, Norway, Peru, Philippines, Romania, Spain, Tajikstan, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam; compared to last year, Lebanon has been removed from the list. Although many U.S. trading partners have acted to implement IPR protection into their national law, the Report "identifies a wide range of serious concerns, ranging from troubling a lack of criminal prosecutions and deterrent sentencing has reduced the effectiveness of IPR enforcement in many regions." This is the result, among other things, of a lack of knowledge of IPR law on the part of judges and enforcement officials, and insufficient enforcement resources," both areas the Report says the U.S. is ready to continue to "work collaboratively" to address.

The Report notes that public response to a Federal Register Notice used to prepare the Report reflected an "enhanced approach to public engagement" in this Report, with the USTR receiving 49 comments (access to these comments is provided at www.regulations.gov, docket number USTR-2010-0037). In addition, 17 witnesses provided testimony at a public hearing on March 2, 2011; these witnesses included "representatives of foreign governments, industry, and non-governmental organizations" (available on the USTR website).

The Report notes some "positive developments" in the past year, including work towards "finalizing" the Anti-Counterfeiting Trade Agreement (ACTA) between the U.S. and Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, and Switzerland; four separate pieces of IPR legislation in Russia relating to the 2006 Bilateral Agreement on Protection and Enforcement of Intellectual Property Rights; and "action" in Spain against copyright piracy on the Internet. In addition to ACTA, the Report cites the Trans-Pacific Partnership Agreement, between the U.S. and Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam; Trade Preference Program reviews such as the Generalized System of Preferences (GSP) program relating to Russia, Lebanon, and Uzbekistan, and regional programs including the Caribbean Basin Economic Recovery Act (CBERA); and bilateral free trade agreements (FTAs) and Trade and Investment Framework Agreements (TIFAs) as efforts in furtherance of greater IPR protection.

The Report contains a section on "best practices" among U.S. trading partners, which include "improved cooperation and stakeholder engagement [related to greater transparency]" in Argentina, Canada, Guatemala, Italy, Malaysia, Mexico, and Pakistan. Efforts in China and Russia to combat counterfeit drugs are commended, and the Report "strongly encourages foreign governments to make [IPR] training opportunities available to their officials." U.S. actions in this regard, including the USPTO's Global Intellectual Property Academy, "which conducts over 75 programs per year, training more than 4,500 participants from over 120 trading partners" are also mentioned, as is the State Department's International Visitors Leadership Program and programs run by the U.S. Copyright Office. U.S. efforts outside the country cited in the Report include agreements between the US PTO and "more than 40 national, regional, and international IPR organizations, such as the Caribbean Community (CARICOM), the Association of Southeast Asian Nations (ASEAN), the African Regional Intellectual Property Organization (ARIPO), the World Intellectual Property Organization (WIPO), the International Union for the Protection of New Varieties of Plants (UPOV), and Interpol, to partner on IPR training activities," and the Department of Commerce's International Trade Association and Commercial Law Development Program. Linking IPR protection with national security, the Report cites the Department of Homeland Security for its customs and border control activities, and training by DHS in Angola, Brunei, Egypt, Mali, Peru, Ukraine, and Thailand relating to IPR.

A significant part of the Report focuses on counterfeiting and copyright piracy, as it has in other years. This area has "evolved," according to the Report, "from a localized industry concentrated on copying high-end designer goods to a sophisticated global business involving the mass production and sale of a vast array of fake goods, including items such as counterfeit medicines, health care products, food and beverages, automobile and airplane parts, toothpaste, shampoos, razors, electronics, batteries, chemicals, and sporting goods." A greater variety of goods are being counterfeited and the counterfeits are more sophisticated, bearing the indicia (such as labels and trademarks) of the originators' goods. Free trade zones have been used as conduits for counterfeit goods, both for assembling and distributing the goods to other countries as well as disguising the origin of such goods. The result in many countries is a loss of tax and other revenue as well as increases in organized crime, which is attracted to the "enormous profits and little risk" involved (both low initial capitalization costs incurred and insignificant penalties imposed). The Report cites as evidence of increased sophistication separate shipment of counterfeit goods and their labels, wherein "unbranded products" are imported, packaged with counterfeit trademarks and packaging material, and then exported; Russia, Paraguay, Mexico and the Philippines are cited for such practices. Another "growing" problem is counterfeit pharmaceuticals, either final drug product or active pharmaceutical ingredients (API); Brazil, China, India, Indonesia, Lebanon, Peru, and Russia are cited as countries where the former type of counterfeiting is a problem and China is cited as being a "major source" of counterfeit APIs.

Another section of the Report is concerned with digital piracy, particularly over the Internet, facilitated by "[t]he increased availability of broadband Internet connections around the world." This is a "significant concern" in Brazil, Canada, China, India, Italy, Russia, Spain, and Ukraine, involving specifically "unauthorized retransmission" of sporting events. The Report cites improved technologies, including "mobile telephones, tablets, flash drives, and other mobile technologies" as exacerbating these problems, with some mobile devices being sold with "preloaded" illegal content in some countries. In addition to the traditional objects of counterfeiting (such as music and movies), counterfeiting is beginning to be a problem for "ring tones, 'apps', games, and scanned books." Countries where the U.S. "seek[s] to work" with local authorities to address this form of piracy include Argentina, Belarus, Brazil, Brunei, Canada, Colombia, India, Italy, Malaysia, Mexico, Philippines, Romania, Russia, Spain, Thailand, Turkey, Ukraine, Venezuela, and Vietnam.

As it has for the past few years, the Report contains a section on "Intellectual Property and Health Policy," again specifically mentioning the 2001 Doha Declaration on the TRIPS Agreement. The Report states that the Declaration "recognized the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria, and other epidemics," and that the U.S. "respects a trading partner's right to protect public health and, in particular, to promote access to medicines for all, and supports the vital role of the patent system in promoting the development and creation of new and innovative lifesaving medicines." Accordingly, the Report states that the U.S. "respects our trading partners' rights to grant compulsory licenses in a manner consistent with the provisions of the TRIPS Agreement, and encourages its trading partners to consider ways to address their public health challenges while maintaining intellectual property systems that promote investment, research, and innovation." On the other hand, the Report contains a section relating to the USTR's efforts to "reduce market access barriers faced by U.S. pharmaceutical and medical device companies in many countries," specifically calling out Algeria, Finland, Germany, Greece, Indonesia, Japan, Korea, New Zealand, Poland, and Taiwan as countries of particular concern in this regard.

The Report contains in a final section a review of U.S. activities in the WTO to resolve disputes with countries such as China and the EU over trade issues.

Section II of Report is a detailed, country-by-country discussion for each country on the Priority Watch List and the Watch List, relating to the activities (or lack thereof) of each country that results in placement of that country on these lists.

The U.S. Trade Representative Report provides insights into both the concerns of U.S. IP rights holders and the Administration's intentions to work with, cajole, coerce, or threaten other countries to increase protection for IP rights of U.S. IP rights holders. This year, the Report includes an invitation to U.S. trading partners for coordinated efforts in enforcing IPR:

USTR is pleased to announce a new initiative in the 2011 review, whereby it invites any trading partner appearing on the Special 301 Priority Watch List or Watch List to negotiate a mutually agreed action plan designed to lead to that trading partner's removal from the relevant list. . . . Through action plans and other engagement in the coming year, USTR looks forward to working with U.S. trading partners to address both emerging and continuing concerns, and to building on the positive results achieved thus far.

This initiative indicates that the attitude is one of cooperation against a common enemy (i.e., counterfeiters) rather than punitive action by the world's trade leader against foreign competitors. In the past, the U.S. and other Western governments have been frustrated, particularly with regard to pharmaceutical products, in implementation of international trade treaties designed to increase IP rights protection. This Report seems to indicate that the Administration now believes that achieving the goal of greater IPR enforcement and protection is better served by trying to convince our trading partners that such actions are in their best interest as well as ours. In view of past failures, it seems that this change in orientation may be the best option; its success no doubt will be a topic in next year's Report.

For additional information regarding this and other related topics, please see:

• "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 19, 2010
• "New Administration, Same Result: U.S. Trade Representative's Section 301 Report," May 6, 2009
• "Congressmen Criticize U.S. Trade Representative over Special 301 Report," July 1, 2008
• "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008
Protective Orders Put at Risk by New Bill

May 3, 2011

By Kevin E. Noonan —

Lost in all the hubbub over the America Invents Act (S. 23 and H.R. 1249, collectively "the patent reform bill"), Congress is considering another pair of bills (one in each House) that could have an equally deleterious effect on enforcing valuable patents. Identified as S. 623 (introduced by Senator Herb Kohl (D-WI), joined by Senators Lindsey Graham (R-SC) and Patrick Leahy (D-VT)) and H.R. 592 (introduced by Representative Gerald Nadler (D-NY)), the bills are called the "Sunshine in Litigation Act," and are intended to prevent courts from granting protective orders in certain cases.

Specifically, the bills require a ban on protective orders for any civil action "in which the pleadings state facts that are relevant to the protection of public health or safety," adding Section 1660 to Title 28, U.S. Code, Chapter 111. The bills constitute a Congressional "thou shalt not" for an order "otherwise authorized under rule 26(c) of the Federal Rules of Civil Procedure restricting the disclosure of information obtained through discovery, an order approving a settlement agreement that would restrict the disclosure of such information, or an order restricting access to court records." Such a protective order would be permitted only after a court makes "independent findings of fact" that "such [an] order would not restrict the disclosure of information which is relevant to the protection of public health or safety" or that "the public interest in the disclosure of past, present, or potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information or records in question" and "the requested order is no broader than necessary to protect the confidentiality interest asserted." In addition, the bills would prohibit any protective order (except for an order approving a settlement agreement) from continuing in place after final judgment is entered, unless the court "makes a separate finding of fact" at that time that the requirements of the statute balancing the private interest in secrecy with the public's "right to know" (based on the effect of the information on "public health or safety") continue to favor the protective order. A party that is the "proponent" of the protective order would bear the burden of establishing the requirements of the statute. Stipulation between the parties would not overcome the onus placed on the court for independent fact-finding (and the presumption against entering or maintaining a protective order) before such an order could be put into place. The bills also provide that "[t]he provisions [thereof] . . . shall not constitute grounds for the withholding of information in discovery that is otherwise discoverable" under the Federal Rules of Civil Procedure.

The bills contain similar provisions prohibiting a court from enforcing any provisions in a settlement agreement between private parties that would prohibit any party from disclosing "the fact that such a settlement was reached or its terms" (except the amount of money damages) or from "discussing a civil action, or evidence produced in the civil action, that involves matters relevant to the protection of public health or safety." Unless, of course, the court makes the independent factual findings that the public's right to know is outweighed by the parties' private interest in that information remaining secret. Moreover, the bills create a rebuttable presumption that a party's interest in "personally identifiable information" that relates to "financial, health or similar information of an individual outweighs the public interest in disclosure."

In a separate provision, each of the bills would prevent a court from giving effect to an order "to the extent that such provision or such order prohibits or otherwise restricts a party from disclosing any information relevant to such civil action to any Federal or State agency with authority to enforce laws regulating an activity relating to such information." Information disclosed to such an agency could remain confidential "to the extent provided by law," there not being any intention to abrogate other statutory protections.

The motivation for introducing these bills is products liability litigation, specifically in instances where companies have imposed non-disclosure provisions in settlement agreements. Senator Kohl (at left) made the case in these terms when he introduced the Senate version of the bill on March 17th. In remarks entered into the Congressional Record, the Senator stated that the bill was intended to "curb the ongoing abuse of secrecy orders in Federal courts . . . [that] keep[s] important health and safety information hidden from the public." He characterized his "bipartisan" bill as a "commonsense measure" that is "an important step to improving transparency in our courthouses by requiring judges to consider public health and safety before permitting secrecy agreements." This problem "most often arises in product liability cases," the Senator said, citing "a long history" of "tobacco companies, automobile manufacturers, pharmaceutical companies, medical device manufacturers, and others," and enumerated several purported instances, including automobile accidents caused by defective Bridgestone/Firestone tires; Toyota's recall of over 8 million cars due to sudden unintended acceleration problems; clinical studies about the harmful side effects of AstraZeneca's antipsychotic drug, Seroquel; explosions of "side saddle" fuel tanks in General Motors pickup trucks; and even the possibility of secrecy orders in cases stemming from the BP oil spill in the Gulf of Mexico last year. The Senator recounted as "typical" an individual plaintiff suing a large corporation and being coerced into agreeing to keep the corporation's culpability secret as a condition for a financial settlement necessary to compensate the individual for medical and other damages caused by a defective product. While this outcome may be adequate for the individual plaintiff, it is "the American public [that] incurs the loss because they remain unaware of critical public health and safety information that could potentially save lives," the Senator said. Similar sentiments can be found in press releases and on the websites of the other sponsors of the House and Senate bills.

Regardless of whether the protections of these bills are necessary or will be sufficient to achieve the sponsors' goals, one immediate consequence of these provisions will be to put pharmaceutical and biotechnology companies at risk in any litigation. Frequently, protective orders are entered in cases involving these companies to prevent disclosure of trade secrets, including technical know-how and valuable business information regarding prospective new uses and avenues of research. Biotech and pharma patentees have a legitimate interest in keeping such information secret, but the nature of their businesses could easily be characterized as involving "public health." The bill contains no definitions limiting the application of its provisions to products liability lawsuits, regardless of its sponsors' protestations of their intent; the case law is replete with decisions invoking the principle that the intent of an individual Member of Congress, even a sponsor, in introducing litigation is not dispositive on the scope of the bill when enacted into law. The bill also provides the opportunity for manipulation by litigants, insofar as the threat of litigation (and the disclosure mandated by the Federal Rules not trumped by the provisions of this proposed statute) could be used to obtain an advantage over patentee plaintiffs. This makes the bill particularly dangerous for biotech and pharma companies, since the multiple interests (especially the interest in lower drug costs regardless of the actual costs of developing such drugs) make the ultimate decision fraught with political consequences that overshadow the disputes and issues between private party litigants that might otherwise limit the extent of any public interest in disclosure of such private information.

The effective date of the statute is 30 days after enactment and will apply only to actions commenced thereafter and apply to protective orders or settlement agreements entered on or after that date. The Senate bill is slated to be marked up on Thursday, May 5th by the Senate Judiciary Committee for passage to the floor for a vote.

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