• By Kevin E. Noonan —

    Hinxton Group Think tanks, consortia, foundations, subcommittees, and "working groups" frequently assay an area with some social, economic, or technological significance to determine whether issues exist or can be anticipated that deserve to be studied to minimize harm or maximize opportunity.  These groups can be helpful in focusing attention of what may be "over the horizon," although it is hard to remember any examples of a report from such groups that actually helped avoid the unforeseen problem.  What must be remembered in reviewing the recommendations of such groups (or government agencies like the Federal Trade Commission) is the political aspect:  none of these reports ever concludes that "everything is fine, there is nothing to worry about."  Dr. Pangloss cannot be found in the roster of luminaries populating such bodies.

    Human Embryonic Stem Cell (Wikipedia Commons) All this comes to mind when assessing the recommendations of The Hinxton Group on stem cell policy.  The Group's Report, entitled "Statement on Policies and Practices Governing Data and Materials Sharing and Intellectual Property in Stem Cell Science," which issued in February, contains several fairly commonsensical recommendations; that some of them are accompanied by admonitions that they should be adopted through coercion merely reflects the tendency for intelligent and well-minded people not to understand and to be offended by anyone who disagrees with them.  More troubling than the recommendations are the justifications for them contained in the preamble of the Report, about which it can only kindly be said suffers from the rhetorical error of assuming the conclusion of the argument it tries to raise.

    But first to the recommendations, which number five:

    1a:  Establish a central hub for accessing global stem cell registry information

    The basis for this recommendation is purportedly a lack of data sharing due to a failure to publish or otherwise disclose.  The proposed solution is to provide an "information portal" to be established as a resource, taking as examples existing resources such as the National Institutes of Health, the EU and International Stem Cell Registries, to be modeled after NCBI, GenBank, and EMBL Bank.  The Report also recommends that the data to be shared be contained in multiple sites (as is genetic information), which is advocated to distribute "funding, physical security, transparent operation and collective ownership."

    The Report cites as advantages of such repositories collaboration, incentives for participation, and open access, as well as promoting cooperation and coordination across organizations, standardized formats, information about cells, mutations, characteristic features, publication details, and other aspects of information distribution.  It also recommends that participation be coerced, for example by requiring participation as a condition for obtaining grants or access to publication in major journals (or alternatively that participation be left voluntary).  It seems that the recommendation that such behavior be compelled rather than voluntary could undermine the purported advantages of this recommendation, by reducing the incentives for disclosure and making more attractive private rather than public funding sources.

    1b:  Establish a central hub for accessing information about stem cell patents

    The Report cites "scholars" as contending that:  1) public databases of patent information "are often difficult to search"; 2) outcomes of patent examination differ in different jurisdictions (which is certainly true); 3) intellectual property rights (IPR) are "copious and atomized into a profusion of patents with overlapping claims"; and 4) "no one is curating the global body of patent data."  This results in "considerable uncertainty and enormous costs" in trying to survey the IPR landscape.  Evocatively, the Report states that "[e]veryone suffers when there is no map for a new research area, and individual explorers are in no position to do the mapping and have no incentive to satisfy the needs of other stakeholders."

    Distinct from the stem cell hub proposed in Recommendation 1a, this recommendation envisions an "information resource" for IPR (called the IPR Resource), and suggests primary (patent) and secondary (scientific journals, etc.) databases and linkages between them.  Underlying this proposal is the benefits of coordination and cooperation, including information on patent licensing and assignment information from public sources (such as the trade press) and even a stem cell patent "wiki."  While this recommendation undoubtedly could help academic and legal research and researchers, it is unlikely that anyone seeking this information for commercial purposes would neglect to consult a patent attorney, for whom many of these impediments would not be as daunting.

    Recommendation 2:  Encourage, support and coordinate international human stem cell banks and human tissue and cell repositories

    This recommendation is aimed at material transfer agreements and "impediments" to stem cell "sharing" between laboratories (presumably, academic laboratories).  Also addressed is the possibility that "[w]e may need new, internationally coordinated mechanisms to deal with emerging issues related to informed consent and privacy."  The Report recommends that existing stem cell banks (e.g., UK Stem Cell Bank) be "supported" and that existing stem cell banks and repositories coordinate with one another regarding "standards," proposing "a well‐networked international set of cell banks and repositories could quickly and efficiently distribute existing and newly generated human stem cell lines of common interest."

    The Report also advocates that provenance information be coordinated between banks (which, while admirable and useful may conflict with "standards" for protecting privacy), and addresses emerging areas like induced pluripotent stem cell (iPSC) characterization, and standards for inclusion based on academic "popularity," potential for use in "particular therapeutic efforts" and the "level of constraint" there may be on the use of certain stem cells, such as from IPR.

    Recommendation 3:  Develop and institute incentives for data and materials sharing through publication, participation in information hubs, and other mechanisms

    This recommendation is related to the earlier-noted problem of data accession and efficiencies for sharing materials.  The Report cites disincentives to "early publication and distribution, especially in industry" and lack of avenues for publishing negative data.  The recommendation argues that databases be established, to be populated by the "insist[ance] on the deposition of data, with release on  . . . publication."  Examples (or perhaps justification) for such restrictions cited in the Report are standards for publishing results of clinical trials from the NIH in collaboration with "the top 20 clinical journals," and microarray standards (MIAME) to which 50 journals ascribe.

    The Report also recommends that funding agencies require minimum information on methods etc. regarding a publication, with mechanisms to supplement if information is found to be inadequate.  Such efforts should be part of consistent policies between "[r]egulatory bodies, research institutions funding bodies, companies and journals" for data and material sharing, again using a coercive rather than voluntary or cooperative paradigm.  The Report also advocates estabilishing bases for promoting release of negative data, for example by entry into a database, and that all publications should conform to guidelines for "appropriate standards for data completeness and norms of behavior."

    Recommendation 4:  Explore options for formal collaborative networks, patent brokering, and formation of patent pools when those mechanisms for collective management of intellectual property can move the field forward

    Turning again to IPR, the Report advances the idea that there is "[c]opious IP" that requires "[c]ollective action . . . to reduce transaction costs and bureaucratic friction that can intrude on market mechanisms to advance stem cell R&D."  The Report claims that individual research institutions are "hedging their bets" and "seeking patent rights as a matter of course, in the unlikely event that one of these patents will result in a large financial payoff."  This "creat[es] a culture of pervasive patent infringement married to a potential option for prosecuting selected infringement later," creating a "broad shadow of uncertainty about freedom to do research and pursue applications."

    This portion of the recommendations highlights a pervasive concern among academic researchers:  the unlikely event that mere scientific research will incur patent infringement liability.  This fear informs the Report's assertions that IPR promotes "under-investment in new firms, high barriers to entry for new innovators, and slower progress in the field" than would be the case "if individual research institutions were more constrained and targeting in their seeking of patent rights."  The "problem" posits a fear of later patent lawsuits from "research institutions with public missions."  Of course, the other way to view the current situation is that without IPR, universities would see their publicly funded research pirated by corporations, foreign and domestic.

    The Report recommends that the law recognize distinctions between stem cell IPR and other technologies, without any express statement of what those distinctions are.  For example:

    Intellectual property relevant to stem cell research has several features in common with other technologies, but some features that are distinctive.  Many patents have been granted in different countries and multinational patent jurisdictions (such as the European Patent Office).  The accumulation of IPR is common for an emerging technology, and since 1998, this has been occurring in human pluripotent stem cell research and its applications.

    The Report asserts (without reciting evidence in support of its assertions) that the number and frequency with which researchers are encountering "delays and blockages" may be sufficient to produce a consensus that there is an IPR problem that needs to be addressed, particularly with regard to iPSCs.  "The time may be ripe for collective action to ensure that R&D proceeds apace, and with less congestion or friction than is likely to be possible without such coordinated action," according to the Report's authors.  Proposals for "disposing of the accumulated IPR in a way that benefits all parties" include:

    Patent Pools.  Formal patent pools are one possible solution to reducing transaction costs around particular applications or standards (this may include iPSCs).  Patent pools require a collection of issued patents that patent holders agree to "pool," meaning that they have a formal contractual agreement to not enforce the patents against one another or against others licensed by the pool.  A pool requires valid patents, a gatekeeping function to determine what belongs or does not belong in the pool, a way to value and return revenues for patents in the pool, and sufficient common interests among the patent‐holders to be sustained.

    Usenow paylater semicommons.  Another model for collective management of IPR involves a set of rules designed and enforced by stakeholders, through a network of agreements.  Some agreements may be informal, but a subset of rules and practices needs to be written and formal.  The formation of norms and practices around IPR is easier when there is a small number of research funders, but in stem cell research, the emergence of the field from small companies, individual universities and funding by state governments within the US, and many regional and national governments internationally, but without a dominant funding organization, has led to an unusually intense problem of research coordination, coupled to a profusion of IPR held by disparate actors with divergent interests.  The development of a semicommons may be a way to address this.

    Patent brokers.  Short of a formal patent pool, if patent‐holders have generally similar licensing strategies, collections of patents managed by a neutral arbiter could emerge.  A "patent supermarket" does not require a strong gatekeeper to vet the patents entering a formal pool, but only a broker to collect patents available to potential licensees to be made available on standard terms.  A "royalty clearinghouse" can consolidate and simplify the transactions of incremental royalty payments for such standard term licenses.

    Collaborative networks.  One promising strategy is to reduce transaction costs by eliminating patents that are never enforced, licensing existing patents on nonexclusive terms except when exclusivity is needed to induce investment in product development, and generally clearing out the accumulated underbrush of IPR detritus.  These actions require changes in policy among individual stakeholders in the field, and are likely to emerge only if there are explicit norms articulated by those engaged in stem cell research.

    The deficiencies in these specific recommendations is that there is little evidence in the Report to support imposing any of these "controls" on how the various stakeholders are managing their IPR, or that such arrangements are impossible without being imposed by government, funding agencies or other outside forces (in contrast to the experience of the computer industry, for example, where standards-setting and cooperative patent licensing has evolved without such externally imposed conditions).

    Recommendation 5:  Adopt licensing practices and patent policies that promote fair, reasonable, and nondiscriminatory (equitable) access to knowledge and health care applications

    The Report proposes that licensing "should reflect the goal of global justice, borne out of a human dignity common to all and a universal commitment to reduce suffering"; while a laudatory statement of moral behavior, licensing as it is understood in the marketplace is not a flexible means for promoting social goals.  These statements are reminiscent of the idea that "a patent is affected with a public interest," and here the interest relates to using the "power of the state" to enforce IPR, which must be done with an "awareness of its social context and utility," requiring "reasonable limits on its use in the form of obligations towards others."  The Report also cites as justification the altruism of donors (which is both an assumption and certainly not always a factor in making such a donation, any more that altruism explains all blood donations) and "commitments made to ethics review bodies."

    This portion of the Report contains specific recommendations, in contrast to other portions of the Report.  Citing to "statements of principle" such as the "Nine Points" adopted by the Association of University Technology Managers (AUTM) and others, they propose:

    First, that [a]ny licensing on government‐funded stem cell inventions must:

    • Reserve research rights for non‐profit institutions;
    • Promote R&D on and access to technologies that can help meet critical health needs in both developing and developed nations.  This can be facilitated through the use of, wherever possible, negotiated global access terms and jurisdictional and field‐of‐use limitations;
    • Use non‐exclusive licensing of platform technologies and technologies of broad ancillary utility that are instrumental to the development of the field; and,
    • Ensure that data and materials are available to government and academic researchers with a minimum of delay.

    Second, that "[t]echnology transfer offices in government‐funded research institutions should make public their stem cell IPR, including their geographic scope and licensing history (including where rights have been reserved or non‐assert clauses have been used), in order to promote transparency and greater use of stem cell technologies.

    Third, "[p]atent offices and key policymakers should reassess whether the current standards for granting stem cell patents are appropriate, given both the power of broad platform patents to block R&D, and the proliferation of patents that can create uncertainty and fragmentation in the patent landscape.

    While reasonable people may differ regarding specific recommendations and the need for the recommendations in the Report in general, in some ways the most interesting aspect of the Report is the Preamble.  This section contains the general justification for the recommendations and definition of the problem.  Unfortunately, this is also the section that contains the least evidentiary support, and indeed has a tone and tenor that the problems are self-evident.  For example:

    Tension is increasing between fairly new and pervasive policies and practices governing data and materials sharing and intellectual property in science ('proprietary structures'), and norms of openness and free exchange.  While intellectual property rights (IPR) can bring private investment into areas underfunded by governments and help bridge gaps between scientific invention or discovery and useful technologies, some new and emerging policies and practices risk slowing innovation in research and development (R&D) and skewing attention toward large markets, to the disadvantage of small markets, such as those for rare diseases and in some emerging economies.  This is of concern, as one central goal of the life sciences is to improve global health: our shared humanity and the potential for biological knowledge to benefit all people create this obligation. Further, the self‐ regulatory structures within scientific communities, as much as the legal institutions we consciously erect for science, should be responsive to this goal.

    While the proprietary dilemmas currently faced in stem cell science confound many if not all areas of cutting edge life science, they are especially pronounced in the field of stem cell research.  First, the tree‐like shape of cellular differentiation makes the field especially prone to IPR holdings that can function as tollbooths to broad areas of work, creating a drag on investment and slowing down basic research.  Second, the consequences of such slowing are especially severe in the stem cell field, where novel cell lines, reagents and related technologies function as platforms for broad areas of follow‐on work.  Third, the competition to stake out aggressive patent positions is accentuated in the current context of competitive national innovation policies featuring stem cell science.

    None of these assertions is supported by evidence, and in fact there is significant evidence to the contrary.  Examples include the expiry of foundational stem cell patents, which will occur within the next 7-10 years; patent challenges to such patents in the U.S. and abroad; and the likelihood that successful commercialization of stem cell science will take much longer than the term of even the most recent patents, and that the growing body of expired patent disclosure will promote the same goals the Report now advocates.  The difference, of course, is patent rights prior to expiry will foster investment when it is most critical, at the beginning of the development cycle, nurturing translation of basic research to useful medical technologies.  Openness is in fact promoted by the patent system, which requires not only a written description and enabling disclosure but also (at least for now) disclosure of the best mode for practicing the invention.  None of these requirements exist with regard to scientific journal articles or public grant proposals, and indeed there are significant incentives against such full disclosure in those documents.  While the potential for harm recited in the Report may in fact exist, neither the preamble nor the body of the recommendations establish (or even provide evidence for) the assertion that the Report's recommendations be adopted to avoid such harm, or that the consequences of adopting the Report's recommendations would not cause other, different harms.  One of those possible harms is likely to be reducing or limiting full, frank and enabling disclosure of stem cell technology as it develops over the next decades.  Such a cure would be worse that the disease.

    The Hinxton Group consists of:

    Steering Committee:

    Sarah Chan, BSc(Hons), LLB, MA (Health  Care Ethics and Law)
    Deputy Director & Research Fellow in Bioethics and Law
    Institute for Science, Ethics and Innovation
    School of Law, University of Manchester

    Peter J Donovan, PhD
    Professor, Departments of Biological Chemistry and Developmental & Cell Biology
    Co‐Director, Sue & Bill Gross Stem Cell Center
    University of California – Irvine

    Ruth Faden, PhD, MPH
    Philip Franklin Wagley Professor of Biomedical Ethics
    Executive Director, Johns Hopkins Berman Institute of Bioethics
    Professor, Department of Health Policy & Management, School of Public Health
    Professor, Department of Medicine
    The Johns Hopkins University

    John Harris, FMedSci, BA, DPhil
    Lord Alliance Professor of Bioethics Director, Institute for Science, Ethics and Innovation
    School of Law
    University of Manchester

    Robin Lovell­Badge, PhD, FMedSci, FRS
    Head, Division of Developmental Genetics,
    MRC National Institute for Medical Research
    Division of Developmental Genetics
    MRC National Institute for Medical Research

    Debra JH Mathews, PhD, MA
    Assistant Director for Science Programs,
    Johns Hopkins Berman Institute of Bioethics
    Assistant Professor, Department of Pediatrics
    The Johns Hopkins University

    Alan Regenberg, MBe
    Bioethics Research Manager, Johns Hopkins
    Berman Institute of Bioethics
    The Johns Hopkins University

    Julian Savulescu, BMedSci, MB, BS, MA, PhD
    Uehiro Chair in Practical Ethics
    Director, Oxford Uehiro Centre for Practical Ethics
    University of Oxford

    David Winickoff, JD
    Co‐Director, Science, Technology, and Society Center, University of California – Berkeley
    Associate Professor of Bioethics and Society University of California – Berkeley

    Executive Committee:

    Robert Cook­Deegan, MD
    Director, IGSP Center for Genome Ethics, Law & Policy
    Duke University

    Gregory Graff, PhD
    Assistant Professor, Department of Agricultural and Resource Economics
    Colorado State University

    Aurora Plomer, BA, MA, LLB, PhD
    Chair in Law and Bioethics, Director of SIBLE, School of Law, University of Sheffield
    Director, Sheffield Institute of Biotechnology Law and Ethics
    University of Sheffield

    Kris Saha, PhD
    Postdoctoral Fellow, Whitehead Institute for Biomedical Research, MIT
    Science Technology and Society Fellow, Kennedy School of Government
    Harvard University

    Christopher Scott
    Director, Program on Stem Cells in Society, Center for Biomedical Ethics, Stanford University
    President/CEO, The Stem Cell Advisors

    John Sulston, PhD
    Chair, Institute of Science, Ethics, and Innovation
    University of Manchester School of Law
    University of Manchester

    Patrick Taylor, JD
    Fellow, Petrie‐Flom Center for Health Law Policy, Biotechnology and Bioethics, Harvard Law School
    Assistant Clinical Professor, Harvard Medical School
    Staff Scientist, Children’s Hospital, Boston, MA

    Hinxton Group Members:

    Elona Baum, JD (Observer*)
    General Counsel, California Institute of Regenerative Medicine

    Laura Biron, PhD
    Greenwall Fellow in Bioethics and Health Policy, Johns Hopkins Berman Institute of Bioethics, The Johns Hopkins University

    Tania Bubela, PhD
    Assistant Professor, School of Public Health, University of Alberta, Canada

    Francesca Cesari, PhD (Observer*)
    Senior Editor, Nature

    Haidan Chen, PhD
    Post Doctoral Research Fellow, Center for STS, Zhejiang University, China

    Jorge Contreras, JD
    Director, Intellectual Property Program, School of Law
    Washington University in St. Louis

    Ishan Dasgupta
    Research Program Coordinator, Johns Hopkins Berman Institute of Bioethics
    The Johns Hopkins University

    Matthew DeCamp, MD, PhD
    Greenwall Fellow in Bioethics and Health Policy, Johns Hopkins Berman Institute of Bioethics, Fellow in General Internal Medicine
    The Johns Hopkins University

    Richard Gold, SJD
    Professor, McGill University Faculty of Law
    President, Innovation Partnership

    Søren Holm, BA, MA, MD, PhD, DrMedSci
    Chair, Center for Social Ethics and Policy, University of Manchester
    Professor of Medical Ethics, University of Oslo

    Jim Houlihan, PhD (Observer*)
    Head of Innovation Policy
    UK Intellectual Property Office

    Ryuichi Ida, LLB, LLM
    Professor of International Law, Kyoto University Graduate School of Law
    Member, Expert Panel on Bioethics, Council for Science and Technology Policy,
    Japan Member, Bioethics & Biosafety Committee, Ministry of Education, Culture, Sport, Science & Technology, Japan

    Kazuto Kato, PhD
    Associate Professor of Science Communication and Bioethics, Institute of Research in Humanities, Graduate School of Biostudies
    Kyoto University

    Annabelle Lever, PhD
    Wellcome Interdisciplinary Research Fellow, Institute of Science, Ethics, and Innovation
    University of Manchester

    Jacob Leveridge (Observer*)
    Biomedical Ethics & Medical Humanities Adviser
    Wellcome Trust

    Reinhard Merkel, Prof, Dr
    Institut für Kriminalwissenschaften
    Universität Hamburg

    Dianne Nicol, LLM, PhD
    Professor
    University of Tasmania, Australia

    Amanda OdellWest, PhD
    Lecturer in Law, School of Law
    University of Manchester

    Beverly A Purnell, PhD
    Senior Editor, Science Magazine

    Mahendra Rao, MD, PhD
    Vice President, Stem Cells at Invitrogen
    Adjunct Professor, Buck Institute of Age Research
    Vice President, Medicine at Life Technologies

    Brock Reeve, MPhil, MBA
    Executive Director, Harvard Stem Cell Institute
    Harvard University

    Mark Rohrbaugh, PhD, JD (Observer*)
    Director, Office of Technology Transfer
    National Institutes of Health

    Mark Sheehan, PhD, MA
    BRC Ethics Fellow, The Ethox Centre
    James Martin Research Fellow in the Program on the Ethics of the New Biosciences
    Oxford University

    Glyn Stacey, PhD
    Head of Division of Cell Biology and Imaging, National Institute for Biological Standards and Control, Director, The UK Stem Cell Bank

    Jeremy Sugarman, MD, MPH, MA
    Harvey M Meyerhoff Professor of Bioethics and Medicine
    Deputy Director for Medicine, Johns Hopkins Berman Institute of Bioethics
    The Johns Hopkins University

    Dieter Treichel, PhD
    Patent and Start‐up Manager
    Max Planck Innovation

    Fanyi Zeng, MD, PhD
    Professor, Associate Director, Shanghai Institute of Medical Genetics, Shanghai Stem Cell Institute, Shanghai Jiao Tong University, China

  • By Kevin E. Noonan —

    Federal Circuit Courtroom On Monday, the Federal Circuit hears oral argument in Association of Molecular Pathology v. U.S. Patent and Trademark Office (aka the Myriad case).  In addition to the parties (Appellant Myriad Genetics and Appellees represented by the American Civil Liberties Union and the Public Patent Foundation), the Court has granted leave for the Solicitor General, Neal Katyal, to represent the government's views.  This portion of the proceedings will be the first opportunity for the government to explain the change in its position after ~30 years of the U.S. Patent and Trademark Office granting patents on isolated human (and other) DNA.

    In advance of the argument, The Atlantic on Sunday published an article by Andrew Cohen entitled "Nature vs. Nurture: The Continuing Saga of the Gene Patenting Case."  The article contains a relatively balanced discussion of the issues, but cannot resist the provocative statement that "no one can patent a human being.  Not yet anyway"; the author is likely unaware that such an outcome is barred by the 13th Amendment.

    The article does contain an idea that strikes at the heart of the important policy question raised by the controversy (but sadly lost in the hyperbole regarding purported efforts to determine "who owns you").  The relevant paragraphs are these, attributed to Gary Cohen, Vice President of Bioethics, Law and Policy at Foundation Medicine:

    We've been accustomed to thinking of DNA as a molecule, a chemical entity (which, of course, it is).  But in this more sophisticated era, we understand that DNA is not "just" a molecule; it's an information-carrying molecule.  Genes are better thought of as packets of information, not mere molecules, Judge Sweet reasoned.  This reasoning is key to his decision — because the information encoded by a gene is the same, whether it's sitting amongst its natural neighbor genes, or in isolated form.  That's why researchers want to isolate genes — because they are useful in all sorts of ways, but only because the isolated form contains the same genetic instructions as the naturally occurring form.  Using this information paradigm, the judge reasoned that "isolation" does not render a naturally occurring gene something novel, something patentable.  This part of the ruling is what makes it so interesting — its very much consistent with "information age" thinking — bits, bytes, genetic base pairs, genes:  all information carriers.

    Myriad Genes are not bits or bytes, of course, and there is no paradigm shift necessary regarding genes as chemical compounds the way they have traditionally been used:  as the means to produce biologic drugs like erythropoietin, tissue plasminogen activator, interferon, clotting factors, human growth hormone and insulin, to name but a few.  Judge Sweet didn't hear from any of the millions of patients whose lives have been saved or improved by these drugs.  And thus he was able to focus, as Mr. Cohen does, on the "informational" properties of DNA molecules (ignoring the inconvenient fact that the information is not patented).

    ACLU The method claims in the case were summarily dismissed by Judge Sweet under the Federal Circuit's In re Bilski precedent (prior to the Supreme Court's clarification of the patent eligibility standards in Bilski v. Kappos).  But it is the distinct character of the diagnostic method claims at issue in this case (as they were in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc. ("LabCorp"), Classen Immunotherapies, Inc. v. Biogen Idec, and Prometheus Laboratories, Inc. v. Mayo Collaborative Services) that raises the important issue:  how best to "promote the Progress . . . of the Useful Arts" for method claims that produce information (as opposed to traditional methods of making and methods of using tangible machines, manufactures, or compositions of matter).  This characteristic of diagnostic method claims is not limited to genetic or medical diagnoses; it arguably was the issue in Parker v. Flook and Diamond v. Diehr.  The answer depends on how the Constitutional mandate is considered.

    PUBPAT If, as the Supreme Court frequently seems to believe, the focus on patent eligibility should be on restricting patent rights to private inventors, then a parsimonious approach to patenting (as advocated by plaintiffs in the Myriad case) might make sense.  But looking at the public interest in innovation, investment and commercialization of inventions, and disclosure, yields the opposite result.  For genetic diagnostic claims like those in Myriad's patents, the issue is whether the limited patent rights granted to patentees (which support commercialization of such diagnostic tests) are balanced by disclosure and thus the public's right to freely practice the invention when the patent expires.  (And the possible early dedication to the public of patent rights by those who fail to profitably commercialize such tests.)  The value in promoting disclosure is particularly important for inventions that are difficult to reverse-engineer, an example being the unpatented menopause drug Premarin®, for which no generic equivalent has ever been available.  The complexities of genetic diagnosis are sufficiently great that a subject matter eligibility ban on genetic diagnostic patents threatens an outcome similar to Premarin®:  failure to promote disclosure could lead to "monopolies" lasting far longer than the 20-years-from-earliest-filing-date term of U.S. patents.

    None of these issues will be heard by the Federal Circuit on Monday.  But however these questions are ultimately decided will impact how broadly, how quickly, and how effectively genetic diagnostics (the long-promised "personalized medicine") will become a reality.

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

    • "Curiouser and Curiouser," February 16, 2011
    • "AMP v. USPTO — Briefing Update III," February 8, 2011
    • "Amicus Briefs in AMP v. USPTO: AARP," January 27, 2011
    • "AMP v. USPTO: Appellees' Brief," January 12, 2011
    • "AMP v. USPTO — Briefing Update II," December 16, 2010
    • "Amicus Briefs in AMP v. USPTO: Alynylam Pharmaceuticals, Inc.," December 15, 2010
    • "The Relevance of Patent Exhaustion in the Myriad Genetics Case," December 14, 2010
    • "AMP v. USPTO — Briefing Update," December 14, 2010
    • "Amicus Briefs in AMP v. USPTO: University of New Hampshire School of Law," December 12, 2010
    • "Amicus Briefs in AMP v. USPTO: Rosetta Genomics & George Mason University," December 8, 2010
    • "Academic Amici Refute ACLU Falsehoods in Gene Patenting Debate," December 7, 2010
    • "Amicus Briefs in AMP v. USPTO: Genetic Alliance," November 10, 2010
    • "BIO and AUTM File Joint Amicus Brief in AMP v. USPTO," November 9, 2010
    • "AIPLA Submits Amicus Brief in AMP v. USPTO," November 3, 2010
    • "IPO Files Amicus Brief in AMP v. USPTO," November 2, 2010
    • "AMP v. USPTO — Briefing Update," November 1, 2010
    • "DOJ Tries to Be All Things to All Constituencies in Myriad Amicus Brief," October 31, 2010
    • "Myriad Files Appeal Brief in AMP v. USPTO," October 28, 2010
    • "AMP v. USPTO — Briefing Schedule Update," August 22, 2010
    • "FCBA Submits Amicus Brief on Motion for Recusal in AMP v. USPTO," August 9, 2010
    • "Appellees Move for Recusal of Chief Judge Rader in AMP v. USPTO Appeal," July 19, 2010
    • "AMP v. USPTO after Bilski v. Kappos," July 6, 2010
    • "Myriad Appeals AMP v. USPTO Decision," June 16, 2010
    • "AMP v. USPTO: What Everyone Else Is Saying – Part II," June 8, 2010
    • "AMP v. USPTO: What Everyone Else Is Saying," April 6, 2010
    • "'60 Minutes' and 'Newshour' Take Different Approaches to Covering Gene Patenting Story," April 5, 2010
    • "'60 Minutes' Examines Gene Patenting Issue on Sunday, April 4th — Patent Docs Author Kevin Noonan to Appear on Program," April 2, 2010
    • "AMP v. USPTO: What the Parties Are Saying About the Decision," April 1, 2010
    • "Caught in a Time Warp: The (In)validity of BRCA1 Oligonucleotide Claims," March 30, 2010
    • "Round One Goes to the ACLU," March 29, 2010
    • "USPTO Asks out of Gene Patenting Case (Again)," January 19, 2010

  • By Sherri Oslick —

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

    Senju Pharmaceutical Co. Ltd. et al. v. Lupin Ltd. et al.
    1:11-cv-00271; filed March 31, 2011 in the District Court of Delaware

    • Plaintiffs:  Senju Pharmaceutical Co. Ltd.; Kyorin Pharmaceutical Co. Ltd.; Allergan Inc.
    • Defendants:  Lupin Ltd.; Lupin Pharmaceuticals Inc.

    Infringement of U.S. Patent Nos. 6,333,045 ("Aqueous Liquid Pharmaceutical Composition Comprised of Gatifloxacin," issued December 25, 2001) and 5,880,283 ("8-Alkoxyquinolonecarboxylic Acid Hydrate With Excellent Stability and Process for Producing the Same," issued March 9, 1999) following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of Allergan's Zymaxid® (gatifloxacin ophthalmic solution, used to treat bacterial conjunctivitis).  View the complaint here.


    Eurand Inc. et al. v. Anchen Pharmaceuticals Inc. et al.

    1:11-cv-00268; filed March 30, 2011 in the District Court of Delaware

    • Plaintiffs:  Eurand Inc.; Anesta AG
    • Defendants:  Anchen Pharmaceuticals Inc.; Anchen Inc.

    Infringement of U.S. Patent Nos. 7,820,203 ("Modified Release Dosage Forms of Skeletal Muscle Relaxants," issued October 26, 2010) and 7,829,121 (same title, issued November 9, 2010), licensed to Cephalon, following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Cephalon's Amrix® (cyclobenzaprine hydrochloride, used for relief of muscle spasm associated with acute, painful musculoskeletal conditions).  View the complaint here.


    United States of America et al. v. Hetero Drugs, Ltd. et al.

    2:11-cv-01750; filed March 28, 2011 in the District Court of New Jersey

    • Plaintiffs:  United States of America; Board of Trustees of The University of Illinois
    • Defendants:  Hetero Drugs, Ltd.; Unit III; Hetero USA Inc.

    Infringement of U.S. Patent No. 7,470,506 ("Fitness Assay and Associated Method," issued December 30, 2008), licensed to Tibotec, following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Tibotec's Prezista® (darunavir, used to treat human immunodeficiency virus (HIV-1) infection).  View the complaint here.


    Oncolytics Biotech Inc. v. Kappos

    1:11-cv-00621; filed March 25, 2011 in the District Court of the District of Columbia

    Review and correction of the patent term adjustment calculation made by the U.S. Patent and Trademark Office for U.S. Patent No. 7,803,385 ("Reoviruses Having Modified Sequences," issued September 28, 2010).  View the complaint here.


    Abbott Laboratories et al. v. Watson Pharmaceuticals Inc. et al.

    1:11-cv-00251; filed March 25, 2011 in the District Court of Delaware

    • Plaintiffs:  Abbott Laboratories; Abbott Respiratory LLC
    • Defendants:  Watson Pharmaceuticals Inc.; Watson Laboratories Inc. – Florida; Watson Pharma Inc.

    Infringement of U.S. Patent Nos. 6,129,930 ("Methods and Sustained Release Nicotinic Acid Compositions for Treating Hyperlipidemia at Night," issued October 10, 2000), 6,406,715 ("Intermediate Release Nicotinic Acid Compositions for Treating Hyperlipidemia Having Unique Urinary Metabolite Profiles," issued June 18, 2002), 6,676,967 ("Methods for Reducing Flushing in Individuals Being Treated with Nicotinic Acid for Hyperlipidemia," issued January 13, 2004), 6,746,691 ("Intermediate Release Nicotinic Acid Compositions for Treating Hyperlipidemia Having Unique Biopharmaceutical Characteristics," issued June 8, 2004), 7,011,848 ("Hydrophobic Component Free Sustained Release Nicotinic Acid Compositions for Treating Hyperlipidemia and Related Methods Therefor," issued March 14, 2006), 6,818,229 ("Intermediate Release Nicotinic Acid Compositions for Treating Hyperlipidemia," issued November 16, 2004), 6,080,428 ("Nicotinic Acid Compositions for Treating Hyperlipidemia and Related Methods Therefor," issued June 27, 2000), and 6,469,035 ("Methods of Pretreating Hyperlipidemic Individuals with a Flush Inhibiting Agent Prior to the Start of Single Daily Dose Nicotinic Acid Therapy to Reduce Flushing Provoked by Nicotinic Acid," issued October 22, 2002) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Abbott's Simcor® (niacin extended release / simvastatin tablets, used to treat hypercholesterolemia).  View the complaint here.


    Celgene Corp. et al. v. Intellipharmaceutics Corp.

    2:11-cv-01736; filed March 25, 2011 in the District Court of New Jersey

    • Plaintiffs:  Celgene Corp.; Novartis Pharmaceuticals Corp.; Novartis Pharma AG
    • Defendant:  Intellipharmaceutics Corp.

    Infringement of U.S. Patent Nos. 5,908,850 ("Method of Treating Attention Deficit Disorders with d-Threo Methylphenidate," issued June 1, 1999), 6,355,656 ("Phenidate Drug Formulations Having Diminished Abuse Potential," issued March 12, 2002, with a reexamination certificate issued March 27, 2007), 6,528,530 ("Phenidate Drug Formulations Having Diminished Abuse Potential," issued March 4, 2003), 5,837,284 ("Delivery of Multiple Doses of Medications," issued November 17, 1998), 6,635,284 (same title, issued October 21, 2003), and 7,431,944 ("Delivery of Multiple Doses of Medications," issued October 7, 2008) all licensed exclusively to Novartis in certain fields of use, following a Paragraph IV certification as part of Intellipharmaceutics' filing of an ANDA to manufacture a generic version of Novartis' Focalin XR® (extended release dexmethylphenidate hydrochloride, used to treat attention deficit hyperactivity disorder).  View the complaint here.


    Elan Corp. PLC et al. v. Intellipharmaceutics Corp. et al.

    1:11-cv-00255; filed March 25, 2011 in the District Court of Delaware

    • Plaintiffs:  Elan Corp. PLC; Elan Pharma International Ltd.
    • Defendants:  Intellipharmaceutics Corp.; Intellipharmaceutics Ltd.; Par Pharmaceutical Inc.

    Infringement of U.S. Patent Nos. 6,228,398 ("Multiparticulate Modified Release Composition," issued May 8, 2001) and 6,730,325 (same title, issued May 4, 2004), licensed to Novartis, following a Paragraph IV certification as part of Intellipharmaceutics' filing of an ANDA to manufacture a generic version of Novartis' Focalin® XR (extended release dexmethylphenidate hydrochloride, used to treat attention deficit hyperactivity disorder).  View the complaint here.

    Tibotec Inc., et al. v. Hetero Drugs, Ltd.
    2:11-cv-01696; filed March 24, 2011 in the District Court of New Jersey

    • Plaintiffs:  Tibotec Inc.; Tibotec Pharmaceuticals; G.D. Searle, LLC
    • Defendants:  Hetero Drugs, Ltd.; Unit 111; Hetero USA Inc.

    Infringement of U.S. Patent Nos. 5,843,946 ("α- and β-Amino Acid Hydroxyethylamino Sulfonamides Useful as Retroviral Protease Inhibitors," issued December 1, 1998) and 6,248,775 (same title, issued June 19, 2001) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Tibotec's Prezista® (darunavir, used to treat human immunodeficiency virus (HIV-1) infection).  View the complaint here.


    Purdue Pharma LP et al. v. Andrx Labs LLC

    1:11-cv-00248; filed March 24, 2011 in the District Court of Delaware

    • Plaintiffs:  Purdue Pharma LP; PF Laboratories Inc.; Purdue Pharmaceuticals LP; Rhodes Technologies; Board of Regents of the University of Texas System; Grunenthal GMBH
    • Defendant:  Andrx Labs LLC

    Purdue Pharma L.P. et al. v. Actavis Elizabeth LLC
    1:11-cv-02038; filed March 23, 2011 in the Southern District of New York

    • Plaintiffs:  Purdue Pharma L.P.; The P.F. Laboratories, Inc.; Purdue Pharmaceuticals L.P.; Rhodes Technologies; Board of Regents of the University of Texas System; Grunenthal GMBH
    • Defendant:  Actavis Elizabeth LLC

    Purdue Pharma L.P. et al. v. Watson Laboratories, Inc.- Florida et al.
    1:11-cv-02036; filed March 23, 2011 in the Southern District of New York

    • Plaintiffs:  Purdue Pharma L.P.; The P.F. Laboratories, Inc.; Purdue Pharmaceuticals L.P.; Rhodes Technologies; Board of Regentsof the University of Texas System; Grunenthal GMBH
    • Defendants:  Watson Laboratories, Inc.- Florida; Andrx Labs, LLC

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent Nos. 6,488,963 ("Hot-Melt Extrudable Pharmaceutical Formulation," issued December 3, 2002), 7,674,799 ("Oxycodone Hydrochloride Having Less Than 25 PPM 14-Hydroxycodeinone," issued March 9, 2010), 7,674,800 (same title, issued March 9, 2010), 7,683,072 (same title, issued March 23, 2010), and 7,776,314 ("Abuse-Proofed Dosage System," issued August 17, 2010) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Purdue Pharma's OxyContin® (controlled release oxycodone hydrochloride, used to treat pain).  View the Watson complaint here.


    Purdue Pharma L.P. et al. v. Teva Pharmaceuticals USA, Inc.

    1:11-cv-02037; filed March 23, 2011 in the Southern District of New York

    • Plaintiffs:  Purdue Pharma L.P.; The P.F. Laboratories, Inc.; Purdue Pharmaceuticals L.P.; Rhodes Technologies; Grunenthal GMBH; Board of Regents of the University of Texas System
    • Defendant:  Teva Pharmaceuticals USA, Inc.

    Infringement of U.S. Patent Nos. 7,674,799 ("Oxycodone Hydrochloride Having Less Than 25 PPM 14-Hydroxycodeinone," issued March 9, 2010), 7,674,800 (same title, issued March 9, 2010),  7,683,072 (same title, issued March 23, 2010), and 7,776,314 ("Abuse-Proofed Dosage System," issued August 17, 2010) following a Paragraph IV certification as part of Watson's filing of an ANDA to manufacture a generic version of Purdue Pharma's OxyContin® (controlled release oxycodone hydrochloride, used to treat pain).  View the complaint here.


    Shire LLC et al. v. Mylan Inc. et al.

    1:11-cv-02024; filed March 23, 2011 in the Southern District of New York

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


    Noven Therapeutics, LLC v. Kappos

    1:11-cv-00607; filed March 23, 2011 in the District Court of the District of Columbia

    Review and correction of the patent term adjustment calculation made by the U.S. Patent and Trademark Office for U.S. Patent No. 7,598,271 ("Crystalline Paroxetine Methane Sulfonate," issued October 6, 2009).  View the complaint here.

  • Calendar

    April 5-6, 2011 – International Patent Forum 2011 (Managing Intellectual Property) – London, UK

    April 6-9, 2011 – 26th Annual Intellectual Property Law Conference (American Bar Association Section of Intellectual Property Law) – Arlington, VA

    April 7, 2011 – "The Oral Argument in Myriad" (Intellectual Property Owners Association) – 2:00 PM (ET)

    April 13-15, 2011 – Intellectual Property Counsels Committee (IPCC) Spring Conference & Meeting (Biotechnology Industry Organization) – Seattle, WA

    April 15, 2011 – 2nd Annual John Marshall Law School Review of Intellectual Property Law Symposium – Chicago, IL

    April 27, 2011 – 27th Annual Joint Patent Practice Seminar (Connecticut, New Jersey, New York, and Philadelphia Intellectual Property Law Associations) – New York, NY

    April 29, 2011 – Ethics in the Practice of Intellectual Property Law (John Marshall Law School Center for Intellectual Property Law) – Chicago, IL

    May 3-4, 2011 – Paragraph IV Disputes*** (American Conference Institute) – New York, NY

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

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

  • IPO #2 The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "The Oral Argument in Myriad" on Thursday, April 7, 2011 beginning at 2:00 PM (ET).  The IPO webinar will discuss and analyze the April 4th Federal Circuit oral argument in Association of Molecular Pathology v. U.S. Patent and Trademark Office.  The panel, which includes Donald Dunner of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP; Patent Docs author Dr. Kevin Noonan of McDonnell Boehnen Hulbert & Berghoff LLP; and Ed Reines of Weil, Gotshal & Manges, LLP, will garner evidence from the oral argument on where the CAFC is heading and discuss possible outcomes.  The registration fee for the webinar is $120 (government and academic rates are available upon request).  Those interested in registering for the webinar, can do so here.

  • New York #1 American Conference Institute (ACI) will be holding a conference on Biosimilars on June 7-8, 2011 in New York, NY.  ACI faculty will help attendees:

    • Understand the FDA's current position on the implementation of a biosimilar pathway and strategically position companies to protect or increase market share;
    • Determine what level of clinical data biosimilar applicants must provide to prove safety and efficacy;
    • Evaluate the impact that the 12-year exclusivity period will have on competition and research and development;
    • Assess the financial viability of biosimilars in light of potential regulatory hurdles and forecast potential profit margins; and
    • Develop proactive strategies and plans in preparation for the eventuality of biosimilar patent disputes.

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

    • Update on current FDA position and initiatives regarding biosimilars;
    • Predicting, preparing and positioning for the FDA's implementation of the biosimilar pathway;
    • Scrutinizing the financial viability of biosimilars and making the business case for or against follow-on biologics;
    • No two biologics are alike: Defining biosimilarity and meeting the heightened standard of interchangeability under the statute — to be presented in part by Patent Docs author Dr. Kevin Noonan;
    • Debating the practical implications of a 12-year exclusivity period: Striking a balance between innovator and biosimilar interests;
    • Branding and promotional considerations for biosimilars;
    • Learning from the global development of biosimilars: Enforcement and risk management strategies to protect your biologic on the international stage;
    • An overview of the statutory dispute resolution mechanisms: Analyzing the practical impact of linking the FDA approval process with the patent resolution process;
    • Developing proactive procedures and strategies now for the eventual flood of biosimilar litigation: Early considerations to best position yourself;
    • Developing proactive procedures and strategies now for the eventual flood of biosimilar litigation: Prevailing through preparedness;
    • Ascertaining the type and volume of clinical data necessary to establish biosimilarity;
    • Structuring a patent portfolio strategy to protect IP in light of FOB legislation; and
    • Alternative routes to market for biosimilars: Evaluating the benefits of using the abbreviated pathway.

    A pre-conference primer, entitled "Biologics Science 101: Understanding and Deconstructing the Complicated Scientific Principles Behind Biosimilar," will be offered from 2:00 pm to 5:00 pm on June 6, 2011.  In this in-depth and interactive primer, scientists on the front lines of research and development and the thought-leaders who are guiding the FDA on the relevant scientific considerations will maximize your understanding of the science to put you in the best position to determine actual costs of biosimilar research and development and to prepare for protecting your intellectual property at the patenting and litigation stages.  In addition, a post-conference master class, entitled "In-Depth Breakdown of the Biosimilar Framework in the EU," will be offered from 9:00 am to 12:00 pm on June 9, 2011.

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

    ACI - American Conference Institute The registration fee for the conference is $2,295 (conference alone), $2,895 (conference and either pre-conference primer or post-conference master class), or $3,495 (conference, pre-conference primer, and post-conference master class).  Those registering by April 15, 2011 will receive a $300 discount and those registering by May 13, 2011 will receive a $200 discount.  Those interested in registering for the conference can do so here, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

    Patent Docs is a media partner of the Biosimilars conference.

  • JMLS The John Marshall Law School Center for Intellectual Property Law will be holding its "Ethics in the Practice of Intellectual Property Law" program from 9:00 am to 3:00 pm on April 29, 2011 in Chicago, IL.  The program will consist of the following sessions:

    • What IP Lawyers Should Know about the ARDC and Client Complaints
    • Therasense — Does it Make Sense?  Has the Federal Circuit Finally Fixed the Law of Inequitable Conduct?
    • The Ethics of Deception
    • How to Have Fewer Clients and Yet Make More Money
    • Ethical Issues Relating to the Attorney Client Privilege in IP
    • Ethics in IP Licensing

    Additional information about the program, including a registration form, can be found here.  Those interested in registering for the program online can do so here; the registration fee is $195 (general rate) or $95 (government, judicial, and academic rate); attendees are eligible for 4 hours of professional responsibility CLE credit.

  • By Donald Zuhn —

    On Wednesday, the House introduced its own version of the "America Invents Act" (H.R. 1249).  Although the legislation introduced in the House and the bill that was passed in the Senate earlier this month (S. 23) share the same name, the two bills are not identical (a discussion of the differences between the House and Senate bills can be found here). Since the House bill was introduced, patent organizations, industry groups, and members of the House have begun to line up in support of or opposition to the new legislation.

    Biotechnology Industry Organization (BIO) Earlier today, the Biotechnology Industry Organization (BIO) issued a press release in which BIO president and CEO Jim Greenwood "praise[d] House Judiciary Committee Chairman Lamar Smith (R-TX) for his introduction of a comprehensive patent reform bill similar to the bill adopted by the U.S. Senate earlier this month by a nearly unanimous vote."  Mr. Greenwood called the House legislation "a clear improvement over prior House versions of patent reform legislation" (readers may recall that the House passed a patent reform bill in September 2007; see "Patent 'Reform' Bill Passes House of Representatives").  He also noted that BIO was "pleased that the legislation will end, once and for all, the diversion of fees collected by the U.S. Patent and Trademark Office, allowing the agency to use all of its fees to hire more examiners, reduce the backlog of pending applications, and make other improvements to its operations."  With regard to the first-inventor-to-file provisions of the House bill, Mr. Greenwood suggested that the inclusion of this and "many other reforms" would "improve the patent system and enhance patent quality."

    The biotech industry group was not satisfied with everything in the House version of legislation, however.  Mr. Greenwood stated that "BIO has serious concerns with several significant changes made in the House bill regarding the inter partes review system," concluding that:

    Taken as a whole, these changes would make it easier to bring frivolous challenges to patents, harder for patent owners to enforce them, and more likely that patent owners will find themselves in duplicative and costly patent-related proceedings.  These changes negatively alter the carefully-crafted balance between patent owners and accused infringers that was achieved in the Senate bill — a bill that won support not only from 95 Senators, but from a wide range of industries, universities, and small businesses across the spectrum of American innovation.

    BIO was also concerned about "the inclusion of broader prior user rights in the House bill, and believes that this issue, coupled with the harmful inter partes review changes, could set back efforts to pass meaningful patent reform this year by undermining the broad coalition of American innovators currently supporting patent reform."  Noting that small biotech companies rely on IP to attract investment, Mr. Greenwood asserted that "[i]t is critical that patent reform legislation preserves and enhances the incentives necessary to sustain our nation's global leadership in biotechnology innovation and to spur the creation of high-wage, high-value jobs throughout the country."

    American Innovators for Patent Reform On Tuesday, nine organizations representing U.S. small businesses, startup entrepreneurs, independent inventors, and technical professionals sent a letter to each member of the House "to clarify [their] objections to the House version of the America Invents Act, in its current form," and highlight "troubling provisions pertaining to matters that are critical to small businesses." The organizations signing onto the letter included the American Innovators for Patent Reform, CONNECT, IEEE-USA, IP Advocate, National Association of Patent Practitioners, National Congress of Inventor Organizations, National Small Business Association, Professional Inventors Alliance USA, and U.S. Business and Industry Council.  In their letter, the groups contend that "[t]he proposed Act has several features that will increase our costs sharply and reduce our access to the patent system, increase the Patent Office's delay and backlog, and decrease our ability to enforce our patents" (emphasis in original).  Among the bill's problematic features is the first-inventor-to-file provision, which the letter argues will lead to a "weakening of the grace period," which in turn "raises risk of loss of patent rights by our members, as it impedes the important process of incubating and vetting inventions."

    The letter suggests that the America Invents Act "limits the grace period to that which is commercially similar to a failed system that the U.S. abandoned in 1839, when the U.S. recognized that inventors need a commercially-reliable opportunity to work and market their inventions before the deadline for patenting."  The letter also notes that the "constitutionality of the 'first to file' provision has been questioned among legal scholars," adding that "this complex constitutional legal question and its uncertainty will disrupt investment until it is decided."  The groups also expressed "serious concerns" about the post-grant review provision of the House bill, stating that "[i]ncreased filings driven by the Act's 'use it or lose it' grace period rules and by post-grant review will further burden the U.S. Patent & Trademark Office (PTO) at a time when its backlogs are unacceptable."  As with their objections to the Senate bill, the groups contend that "[c]hanging U.S. patent law to be like the less-successful patent systems of the rest of the world cannot be regarded as positive 'reform.'"  The letter concludes by "urg[ing] Congress to shift its attention away from the broad and technically difficult America Invents Act, and instead pass a streamlined, targeted bill that focuses only on long-term PTO funding."

    Manzullo, Donald On Wednesday, two members of the House issued statements in opposition to H.R. 1249.  Rep. Don Manzullo (R-IL) (at right) stated that he was "deeply concerned" that the House bill "will stall American innovation and send more of our jobs overseas."  He suggested that "[t]his legislation reflects an approach to patent reform that stalled previously, in 2007, in the face of massive opposition from American innovators."  Rep. Manzullo called the first-inventor-to-file section "an unfortunate provision that would shift America's current patent system — where the first person to conceive of an invention is granted a patent — to a 'first to file' system that would turn our system into a foot race to the Patent Office," and noted that "[t]he Constitution . . . mandates that inventors have exclusive right to their discoveries."  As for those who promote harmonization, Rep. Manzullo stated that "[w]ith all due respect to our friends and allies abroad, I would not trade America's record of innovation for that of any of those first-to-file countries."  He also suggested that the bill would "devastate small inventors by effectively eliminating the one-year 'grace period' that U.S. inventors currently have," which he said was "critical to small inventors, who can use that year to develop their invention, seek investors and raise funds to begin the expensive patent application process."  Rep. Manzullo concluded by noting that "[m]any of America's inventors and innovators are alarmed over these fundamental changes to our patent system," and recommended that "we must hear them out and address their concerns."

    Michaud, Michael Rep. Mike Michaud (D-ME) (at left) also issued a statement in opposition to the House bill, stating that he was "disappointed and concerned with the 'America Invents Act,'" and suggesting that "[p]atent reform should focus on addressing the Patent and Trademark Office's backlog, first, and do no harm, second."  He contended that "[a]s introduced, this bill would be bad for American inventors, bad for American manufacturers, and bad for our economy."  Rep. Michaud called two of the provisions in the bill "particularly troubling" saying that the post-grant review process and changes to inter partes reexamination would "allow infringers to challenge patents more easily," particularly because "the bill does not include all necessary safeguards to prevent strategic attacks of patents that are often used to the disadvantage of American inventors."  He also found fault with the first-inventor-to-file and prior user rights provisions, which would be "particularly problematic for universities, tech startups, and small inventors."  Rep. Michaud urged the House Judiciary Committee "to take testimony and input from a broad range of stakeholders so that we can find a better way forward on this important issue."

    Innovation Alliance The Innovation Alliance also issued a press release opposing the House bill.  On Wednesday, the group, which represents innovators, patent owners, and stakeholders from a diverse range of industries, said it was "disappointed" that the House bill "does not include some important safeguards against the potential for abuse of the post-grant review procedures at the U.S. Patent and Trademark Office (USPTO)."  The group contended that the bill "includes a weak threshold for 'second window' inter partes review proceedings, one that will allow virtually all challenges to proceed to a trial-like hearing before an administrative patent judge," and argued for "a higher threshold . . . to enable the USPTO to manage the increased workload of the new administrative review system fairly and efficiently by screening out meritless or unsubstantiated petitions."  The Innovation Alliance also said it was "deeply concerned" that the House bill:

    [I]ntroduces new standards that may preclude the enforceability of patents in court and at the International Trade Commission (ITC) pending completion of a post-grant administrative review at the USPTO, lengthens the time period defendants in infringement actions have to decide whether to pursue a post-grant administrative review, expands prior user rights to the detriment of early stage innovation and job growth, and unduly prejudices rights in an overly broad category of so-called 'business method patents' regardless of whether they survive a validity challenge.

    The group did find some "positive aspects" in the bill, including "language that would end the diversion of USPTO fees," and create "some critical safeguards against abuse of the new post-grant administrative review system, including 'could have raised' estoppel and a presumption of validity for patents."  Notwithstanding the few positives, the Innovation Alliance concluded that it would oppose the America Invents Act absent "significant improvement" in the areas of concern the group raised in its statement.

  • By Kevin E. Noonan  —

    Smith, Lamar Today, the Chairman of the Judiciary Committee in the House of Representatives, Lamar Smith (R-TX) (at right), introduced a version of the America Invents Act (passed by the Senate as S. 23).  While identical in most respects, the bill has come provisions that differ from the Senate bill.  (Update: the House bill has been assigned bill number H.R. 1249).

    The House bill as set forth on Representative Smith's website has the following sections (sections that are unique to the House bill are indicated in italics; where the numbering of sections differs, the Senate section number is indicated in brackets):

    Sec. 1.  Short title; table of contents
    Sec. 2.  First inventor to file
    Sec. 3.  Inventor's oath or declaration
    Sec. 4.  Defense to Infringement Based on Earlier Inventor

    Sec. 5.  Post-grant review proceedings
    Sec. 6.  Patent Trial and Appeal Board
    Sec. 7.  Preissuance submissions by third parties
    Sec. 8.  Venue
    Sec. 9.  Fee setting authority
    Sec. 10.  Fees for patent services

    Sec. 11.  Supplemental examination [Sec. 10, S. 23]
    Sec. 12.  Funding agreements [Sec. 13, S. 23]
    Sec. 13.  Tax strategies deemed within the prior art [Sec. 14, S. 23]
    Sec. 14.  Best mode requirement [Sec. 15, S. 23]
    Sec. 15.  Marking [Sec. 4, S. 23]
    Sec. 16.  Advice of counsel [Sec. 4, S. 23]

    Sec. 17.  Ownership; assignment
    Sec. 18.  Transitional program for covered business method patents
    Sec. 19.  Clarification of jurisdiction [Sec. 17, S. 23]
    Sec. 20.  Technical amendments [Sec. 16, S. 23]
    Sec. 21.  Travel expenses and payment of administrative judges [Sec. 19, S. 23]
    Sec. 22.  Patent and Trademark Office funding [Sec. 20, S. 23]
    Sec. 23.  Satellite offices [Sec. 21, S. 23]
    Sec. 24.  Patent Ombudsman Program for small business concerns [Sec. 22, S. 23]
    Sec. 25.  Priority examination for technologies important to American competitiveness [Sec. 23, S. 23]
    Sec. 26.  Designation of Detroit satellite Office [Sec. 24, S. 23]
    Sec. 27.  Effective date [Sec. 25, S. 23]
    Sec. 28.  Budgetary effects [Sec. 26, S. 23]

    Sec. 11 (Residency of Federal Circuit Judges) and Sec. 12 (Microentity defined) from S. 23 are not included in the House version of the bill.

    Section 4 of the House bill, contains a more extensive revision to 35 U.S.C. § 273 than S. 23, as follows (with differences indicated by strikethrough or underlining):

    35 U.S.C. 273 Defense to infringement based on earlier inventor.

    (a) DEFINITIONS.- For purposes of this section-

    (1) the terms "commercially used" and "commercial use" mean use of a method in use of the subject matter of a patent inside or outside the United States, so long as such use is in connection with an internal commercial use or an actual arm's-length sale or other arm's-length commercial transfer of a useful end result, whether or not the subject matter at issue is accessible to or otherwise known to the public, except that the subject matter for which commercial marketing or use is subject to a premarketing regulatory review period during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall be deemed "commercially used" and in "commercial use" during such regulatory review period;

    (2) in the case of activities performed by a nonprofit research laboratory, or nonprofit entity such as a university, research center, or hospital, a use for which the public is the intended beneficiary shall be considered to be a use described in paragraph (1), except that the use-

    (A) may be asserted as a defense under this section only for continued use by and in the laboratory or nonprofit entity; and

    (B) may not be asserted as a defense with respect to any subsequent commercialization or use outside such laboratory or nonprofit entity;

    (3) the term "method" means a method of doing or conducting business; and

    (4) (3) the "effective filing date" of a patent is the earlier of the actual filing date of the application for the patent or the filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title.

    (b) DEFENSE TO INFRINGEMENT.-

    (1) IN GENERAL.- It shall be a defense to an action for infringement under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims for a method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent.

    (2) EXHAUSTION OF RIGHT.- The sale or other disposition of a useful end product produced by a patented process method, by a person entitled to assert a defense under this section with respect to that useful end result shall exhaust the patent owner's rights under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the patent owner.

    (3) LIMITATIONS AND QUALIFICATIONS OF DEFENSE.- The defense to infringement under this section is subject to the following:

    (A) PATENT.- A person may not assert the defense under this section unless the invention for which the defense is asserted is for a method.

    (B) (A) DERIVATION.- A person may not assert the defense under this section if the subject matter on which the defense is based was derived from the patentee or persons in privity with the patentee.

    (C) NOT A GENERAL LICENSE.- The defense asserted by a person under this section is not a general license under all claims of the patent at issue, but extends only to the specific subject matter claimed in the patent with respect to which the person can assert a defense under this chapter, except that the defense shall also extend to variations in the quantity or volume of use of the claimed subject matter, and to improvements in the claimed subject matter that do not infringe additional specifically claimed subject matter of the patent.

    (D) FUNDING. –

    (i) DEFENSE NOT AVAILANLE IN CERTAIN CASES. -  A person may not assert the defense under this section if the subject matter of the patent in which the defense is based was developer pursuant to a funding agreement under chapter 18 of this title of be a nonprofit institution of higher education, or a technology transfer organization affiliated with such an institution, that did not receive funding from a private business enterprise in support of that development.

    (ii) DEFINITIONS. – In this subparagraph –

    (I)  the term "institution of higher education" has the meaning given that term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a); and

    (II)  the term "technology transfer organization" means an organization the primary purpose of which is to facilitate the commercialization of technologies developed by one or more institutions of higher education.

    (4) BURDEN OF PROOF.- A person asserting the defense under this section shall have the burden of establishing the defense by clear and convincing evidence.

    (5) ABANDONMENT OF USE.- A person who has abandoned commercial use of subject matter may not rely on activities performed before the date of such abandonment in establishing a defense under this section with respect to actions taken after the date of such abandonment.

    (6) PERSONAL DEFENSE.-

    (A) IN GENERAL: The defense under this section may be asserted only by the person who performed or caused the performance of the acts necessary to establish the defense, as well as any other entity that controls, is controlled by, or is under common control with such person, and, except for any transfer to the patent owner, the right to assert the defense shall not be licensed or assigned or transferred to another person except as an ancillary and subordinate part of a good faith assignment or transfer for other reasons of the entire enterprise or line of business to which the defense relates.

    (B) EXCEPTION. – Notwithstanding subparagraph (A), any person may, ion the person's own behalf, assert a defense based on the exhaustion of rights provided under paragraph (2), including any necessary elements thereof.

    (7) LIMITATION ON SITES.- A defense under this section, when acquired as part of a good faith assignment or transfer of an entire enterprise or line of business to which the defense relates, may only be asserted for uses at sites where the subject matter that would otherwise infringe one or more of the claims is in use before the later of the effective filing date of the patent or the date of the assignment or transfer of such enterprise or line of business.

    (8) UNSUCCESSFUL ASSERTION OF DEFENSE.- If the defense under this section is pleaded by a person who is found to infringe the patent and who subsequently fails to demonstrate a reasonable basis for asserting the defense, the court shall find the case exceptional for the purpose of awarding attorney fees under section 285 of this title.

    (9) INVALIDITY.- A patent shall not be deemed to be invalid under section 102 or 103 of this title solely because a defense is raised or established under this section.

    In addition, Section 2 lacks the provisions of S. 23 relating to amending the False Marking statute (35 U.S.C. § 291) to restrict actions under subsection (a) to the U.S., and to restrict private plaintiffs to those that can allege a competitive injury under subsection (b).

    Regarding Section 5, the post-grant review provisions, the House amendments to the inter partes reexamination provisions differ from the Senate version by maintaining the current standard for granting inter partes reexamination, i.e., raising a substantial new question of patentability (rather than showing a "reasonable likelihood that the petition would prevail with respect to at least one of the claims challenged in the petition" in S. 23).  The House version also gives the Director less time to initiate an inter partes reexamination where the patentee does not respond to the petition (§ 314(b)).  The House version also contains provisions in § 315 requiring an automatic stay of "civil proceedings" if an inter partes reexamination request is filed (and exempt counterclaims of invalidity from these provisions (§ 315(a)(2) and (a)(3)).  The House bill also includes a new section not in the Senate version, § 320, providing that, when a party seeks a stay in a "civil action" (including patent infringement litigation as well as actions before the International Trade Commission), the court "shall decide" whether to grant the stay based on "whether the stay, or denial thereof, will simplify the issues . . . and streamline the trial" (§ 320(1)); "whether discovery is complete and whether a trial date has been set" (§ 320(2)); "whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party" (§ 320(3)); or "whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court" (§ 320(4)).  (These provisions are in both the Senate and House versions of the section relating to expedited Patent Office review of business method patents; Sec. 18(c).)  Moreover, the House bill does not contain the exception in S. 23, that the provisions as amended do not apply to an inter partes reexamination request filed prior to the date of enactment.

    House of Representatives Seal With regard to the new post-grant review provisions relating to review after a patent grants, there are some important differences between the House and Senate bills (in addition to formatting changes in some of the provisions).  These differences include expanding the time for filing a petition from 9 months to 12 months from grant (Sec. 321(c)), permitting as the basis of review an assertion of "a novel legal question that is important to other patents or patent applications" (Sec. 324(b)), and outlining the considerations courts should make regarding whether to grant a stay in a civil action (§ 330).

    There are also some minor differences in where certain provisions can be found in the two bills.  For example, the definition of "micro-entity" is set forth in a separate section in S. 23 (Sec. 12) and is contained in Section 9 on Fee Setting Authority in the House bill; the only substantive difference in the definition is that the House bill requires an applicant claiming the benefits of micro-entity status not to have been named on 4 or more previously filed application, while in the Senate bill the requirement is 5 or fewer.  The Fees for Patent Services provisions in Section 9 of S. 23 are set forth in a separate section (Sec. 10) in the House bill, which contains a specified amount for Patent Office services (which will be presumably subject to adjustment by the Director under the provisions of Section 9).  The virtual marking and changes to the False Marking provisions found in S. 23 in Sec. 4 and Sec. 4 are together in Sec. 15 of the House bill, and the advice of counsel provisions in Sec. 4 of S. 23 are separately set forth in Sec. 16 of the House version of the bill.

    The provisions regarding tax strategy patents being considered to be within the prior art is slightly more precisely worded in the House bill, exempting not only computer programs for tax filing but also any "method, apparatus, technology, computer program product or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer of tax advisor" (Sec. 13(e)(2)).

    Section 17 of the House bill uniquely amends 35 U.S.C. § 261 by adding the following provision:

    35 U.S.C. 261 Ownership; assignment.

    Subject to the provisions of this title, patents shall have the attributes of personal property.

    Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing. The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.

    A certificate of acknowledgment under the hand and official seal of a person authorized to administer oaths within the United States, or, in a foreign country, of a diplomatic or consular officer of the United States or an officer authorized to administer oaths whose authority is proved by a certificate of a diplomatic or consular officer of the United States, or apostille of an official designated by a foreign country which, by treaty or convention, accords like effect to apostilles of designated officials in the United States, shall be prima facie evidence of the execution of an assignment, grant, or conveyance of a patent or application for patent.

    An assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage and identifies all real parties in interest and those entities that control, directly or indirectly, such real parties in interest.

    The provisions for institution of a transitional program for covered business-method patents (Sec. 18 in both bills) differ only in that the House bill has an extensive section on venue, limiting venue for business method patent infringement to be brought "only in a judicial district . . . (1) where the defendant has its principal place of business or is incorporated" [or] "(2) has committed acts of infringement and has a regular and established place of business" [or] "(3) where the defendant has agreed or consented to be sued" [or] "(4) for foreign defendants [that do not meet the requirements of (1) or (2)] in accordance with [28 U.S.C. § 1391(d)." (Sec. 18(d)).  The House bill also contains provisions of recovery of attorney's fees for the prevailing party (Sec. 18(e)) and exempts automated teller machines from the definition of a "physical facility" for venue purposes (Sec. 18(f)).

    The House bill does not contain provisions relating to the residency requirements for Federal Circuit judges (Sec. 11 of S. 23).

    The House held a hearing before the Subcommittee on Intellectual Property, Competition and the Internet on its version of the America Invents Act today; there has been no announcement by Rep. Smith regarding any additional hearings or timing of bringing the bill to a vote by the full Judiciary Committee.

  • By Donald Zuhn —

    House of Representatives Seal On Wednesday afternoon, the House Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing on the House version of Senate bill S. 23, otherwise known as the "America Invents Act."  The hearing on the as yet unnumbered House bill, which begins at 1:30 pm (ET), will consist of two panels of witnesses, with U.S. Patent and Trademark Director David Kappos on the first panel, and Steve Bartlett, President and Chief Executive Officer of the Financial Services Roundtable; Steven W. Miller, Vice President and General Counsel for Intellectual Property for the Procter & Gamble Co.; Mark Chandler, Senior Vice President, General Counsel and Secretary for Cisco Systems, Inc.; and John Vaughn, Executive Vice President of the Association of American Universities on the second panel.

    Last week, the Intellectual Property Owners Association (IPO) reported that the House bill was likely to be introduced on Tuesday in advance of tomorrow's hearing.  However, it does not appear that the House version of S. 23 was introduced during today's legislative session.  The IPO also reported that while many observers expect the House bill to be similar to S. 23, the inter partes review procedure may differ.  One area where the bills are not expected to differ is with respect to the first-inventor-to-file provision.

    Tomorrow's hearing will be the Subcommittee's third patent-related hearing in the past month and a half.  On February 11, the Subcommittee held a hearing on "Crossing the Finish Line on Patent Reform — What Can and Should be Done," where it heard testimony from David Simon, Associate General Counsel, Intellectual Property Policy for Intel Corp.; Carl Horton, Chief Intellectual Property Counsel for General Electric, who spoke on behalf of the Coalition for 21st Century Patent Reform; and the Honorable Paul Michel  former Chief Judge for the U.S. Court of Appeals for Federal Circuit.  On March 10, the Subcommittee held a hearing on "Review of Recent Judicial Decisions on Patent Law," where it heard testimony from Dan L. Burk, Chancellor's Professor of Law at the University of California, Irvine; Andrew J. Pincus, Partner at Mayer Brown; and Dennis D. Crouch, Associate Professor of Law at the University of Missouri School of Law (and founder of the patent weblog Patently-O).

    American Innovators for Patent Reform While the House has picked up the patent reform discussion from the Senate, the debate in the patent community over the Senate bill, which was passed on March 8 (see "Senate Passes S. 23"), continues.  The latest group to voice its opposition to S. 23 is American Innovators for Patent Reform (AIPR), a trade association dedicated to promoting innovation by strengthening the U.S. patent system, which issued a press release last week stating that the Senate bill "does not address the needs of the innovation community: inventors, small businesses and universities."  AIPR founder and president Dr. Alexander Poltorak said that notwithstanding the bill's new name "the America Invents Act is still anti-inventor and anti-small-business legislation."

    The AIPR contends that that there are two "problematic" elements in the legislation that "will hinder American innovation and weaken the U.S. patent system":  the first-inventor-to-file provision, which the AIPR believes "will result in a flood of patent applications as applicants rush to the patent office with half-baked inventions afraid of losing their priority date," which in turn "will further clog a Patent Office that already has a 700,000 patent application backlog," and post-grant review, a third patent challenge that the AIPR calls "a dream-come-true for infringers."  Although the AIPR found fault with the above provisions of S. 23, it found favor with the bill's reduction in the fee small entities would pay for accelerated examination and end to fee diversion (the AIPR believed the bill could have gone even farther, however, by calling for a return of the nearly one billion dollars diverted from the USPTO since 1992).

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

    • "The Disappearance of Deceptive Intent in S. 23," March 23, 2011
    • "'Reform' at the U.S. Patent and Trademark Office," March 22, 2011
    • "Few 'Reform' Provisions Remain in S. 23 Relating to the Judiciary," Marech 21, 2011
    • "Additional Opportunities for Pre- and Post-grant Review, and Brand New Patent Trial and Appeal Board in S. 23," March 17, 2011
    • "Post-grant Review Provisions of S. 23," March 16, 2011
    • "Inventor's Interests, If Not Rights, Limited by S. 23," March 15, 2011
    • "What Are the Provisions of the Proposed "First-Inventor-to-File" System in S. 23?" March 14, 2011
    • "Obama Administration Supports S. 23," March 9, 2011
    • "Reaction to Senate Passage of S. 23," March 8, 2011
    • "Senate Passes S. 23," March 8, 2011