Patent Docs

USPTO Announces Agenda for Next BCP Customer Partnership Meeting

February 25, 2011

The U.S. Patent and Trademark Office has announced the agenda for the next biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting to be held on March 2, 2011. The proposed agenda is as follows:

Morning Session

• Greetings and Overview (10:00 – 10:15 am EDT): Jackie Stone, George Elliott, and Remy Yucel, Directors, Technology Center 1600

• Protest (10:15 – 11:15 am): Bennett Celsa, QAS, TC1600

• Break (11:15 – 11:30 am)

• Help the USPTO improve the MPEP using an Online Collaboration Tool (11:30 am – 12:00 pm): Robert Clarke, Office of Patent Legal Administration

• PATI (12:00 – 12:20 pm): Terrel Morris, SIRA

• Lunch (12:20 – 1:30 pm)

Afternoon Session

• Current USPTO Initiatives (1:30 – 2:30 pm): Robert Stoll, Commissioner for Patents

• Break (2:30 – 2:45 pm)

• Microsoft v. i4i Ltd.: How potential changes in the evidentiary standard for an invalidity defense could affect patent prosecution and litigation (2:45 – 4:00 pm): Garth M. Dahlen, Ph.D., Esq., Birch, Stewart, Kolasch & Birch, LLP

• Closing Remarks/Discussion (4:00 – 4:15 pm): Jackie Stone, George Elliott, and Remy Yucel, Directors, Technology Center 1600

The meeting can be attended in person at the USPTO's Auditorium in Madison East, 600 Dulany Street, Alexandria, VA, or viewed online here (select the "enter as guest" option). The Patent Office asks that non-USPTO employees login using their e-mail addresses. Additional information regarding the BCP customer partnership meeting can be found here.
Intellectual Property Panel Symposium

February 25, 2011

The George Washington University Law School will be holding an Intellectual Property Panel Symposium on March 18, 2011 at The Ritz Carlton-San Francisco in San Francisco, CA. The Symposium will offer panel discussions on the following topics:

• 9:15 – 10:15 am — "Intellectual Property in the Modern Boardroom: Major Issues Facing General Counsels, CEO's and Boards in Today's Corporations"
Moderated by Scott Kieff, Professor of Intellectual Property Law, GW Law School
Panelists: Dave Anderman, General Counsel, Lucasfilm Ltd.
Mark Chandler, Senior Vice President, General Counsel & Secretary, CISCO
Mike Jacobson, Senior Vice President & General Counsel, eBay
Bruce Sewell, Senior Vice President & General Counsel, Apple
Matt Zinn, Senior Vice President, General Counsel & Chief Privacy Officer, TIVO

• 10:30 am – Noon — "Intellectual Property in the Courtroom: Issues District Judges Face with Significant IP Dockets"
Moderated by John M. Whealan, IPAB Associate Dean for Intellectual Property Law Studies-GW Law School
Panelists: The Honorable James C. Ware, Chief Judge, U.S. District Court for the Northern District of California
The Honorable Lucy H. Koh, District Judge, U.S. District Court for the Northern District of California;
The Honorable Ronald M. Whyte, Senior District Judge, U.S. District Court for the Northern District of California
The Honorable Claudia Wilken, District Judge, U.S. District Court for the Northern District of California (invited)

• Noon – 1:30 pm — Luncheon Address
The Honorable Randall R. Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit

Additional information about the Symposium can be found here. There is no fee for the Symposium, but those interested in attending the event should register here or contact Susie Coggin at scoggin@law.gwu.edu or 202-994-7028 by March 11, 2011 to reserve a seat.
Webinar on Impact of KSR

February 25, 2011

The American Intellectual Property Law Association (AIPLA) will be offering a web-based program entitled "KSR and the Ripple Effect: Examining the Broad and Increasing Impact of KSR on Patent Litigation and Practice " on March 2, 2011 from 12:30 – 2:00 pm (Eastern). Jeffrey I. D. Lewis of Patterson Belknap Webb & Tyler LLP and Warren D. Woessner of Schwegman, Lundberg & Woessner will examine the broad and increasing impact of KSR on patent litigation and practice. The program will examine substantive obviousness issues since KSR and the continuing disputes in the lower courts, and will further examine the prohibition against the use of "hindsight bias" or ex parte reasoning in resolving the obviousness question, and provide best practices for responding to these arguments.

The registration fee for the program is $145 (AIPLA member rate) or $175 (non-member rate) (information regarding group fee options can be found here). Those interested in registering for the program, can do so here.
More Reaction to Senate Patent Reform Legislation

February 24, 2011

By Donald Zuhn —

After six years of committee debate, all indications are that the Senate will finally take up patent reform legislation by mid-March (see "Patent Reform Legislation Moves to Senate Floor"). Earlier this month, we reported on the reaction of several groups to the passage of the Senate bill (S. 23) out of committee (see "Reaction to Senate Patent Reform Bill (S. 23)"). Since then, other groups have joined the discussion.

On Wednesday, nine organizations representing the small business, startup, independent inventor, and technical employee segments of the innovation community sent a letter to each member of the Senate stating that "this sector of the innovation community does NOT support S. 23, the Patent Reform Act, in its current form" (emphasis in original). 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 'first inventor to file' section of the bill has unique adverse effects on small business, startup entrepreneurs, independent inventors, and U.S.-based technical professionals," as it "disrupts the unique American start-up ecosystem that has led to America's standing as the global innovation leader." The letter argues that "[b]ecause S. 23 removes the option to delay patent expenses, the bill advantages established companies, and disadvantages start-ups that must seek and carefully shepherd their capital," adding that "S. 23 changes the rules to favor global companies, against the start-up business model that utilizes the American grace period." The groups also have "serious concerns" with other provisions, asserting that "[i]ncreased filings driven by S. 23's 'use it or lose it' grace period rules and by post-grant review will further burden PTO at a time when PTO's backlogs are unacceptable." The letter would prefer that Congress "instead pass a streamlined, targeted bill that focuses only on long-term PTO funding." The groups conclude that "[c]hanging U.S. patent law to be like the less-successful patent systems of Europe and Asia cannot be regarded as positive 'reform.'"

Last week, the Coalition for Patent Fairness issued a short press release on Congressional patent reform efforts, "applaud[ing] Senate Majority Leader [Harry] Reid [D-NV], Assistant Majority Leader [Richard] Durbin [D-IL], Senator [Charles] Schumer [D-NY] and Senator [Patty] Murray [D-WA] for laying out an aggressive agenda to keep the United States competitive in the global market." The group noted that while it was "encouraged by the changes made to the bill reported out of the Senate Judiciary Committee from earlier versions, we continue to have concerns with the current Senate bill," stating that it "believes that additional changes need to be made to the bill to reflect the concerns of America's leading technology innovators and job creators as they continue to driving the economic recovery." Coalition for Patent Fairness members include Adobe, Apple, Autodesk, Cisco, Dell, Google, Intel, Intuit, Micron, Oracle, RIM, SAP, Symantec, and Verizon.

On February 15, the President of the National Small Business Association (NSBA), Todd McCracken, sent a letter to Senate Majority Leader Harry Reid, "to express the objection of America's entrepreneurs and small-business innovators to key provisions of S. 23, the Patent Reform Act of 2011." Noting that "[s]mall patenting companies produce five times as many patents per revenue dollar as large patenting companies and 20 times as many as universities," Mr. McCracken argues that "[i]t is imperative that any effort to modernize and improve America's patent system carefully consider the effect on the nation’s small businesses." The letter contends that "the bill's provisions on post-grant patent challenges, and its effective elimination of the American grace period, would put small-business patentees at greater risk than the current system and would result in a U.S. patent system strongly titled in favor of large incumbent firms at the expense of America's small-business innovators," noting that "[t]he small-business innovators of NSBA continue to be extremely troubled by the complete lack of consideration of how the radical transformation to a first-to-file invention priority system — which effectively guts the American grace period — would affect small, innovative firms and independent inventors." Contrary to the bill's supporters, Mr. McCracken argues that "S. 23 does not promote harmonization," but rather would produce "a one-sided 'harmonization' that will only benefit foreign firms and penalize small, innovative American firms." He states that "[i]t is clear that the weak or (entirely absent) grace periods used in the rest of the world's first-to-file patent system throttles small-business innovation and job creation." If a first-to-file system is implemented in the U.S., the letter predicts that "the pressure to establish filing date priority will require applicants to file more frequently, at every stage of development, without perfecting their inventions," and "[t]he costs of increased filings — more frequent invention reviews, earlier and more frequent hiring of outside patent attorneys, and new patenting costs — will be felt most strongly by small businesses."

Earlier this month, a coalition of 23 conservatives sent a letter to House Speaker John Boehner (R-OH), Senate Majority Leader Reid, Senate Minority Leader Mitch McConnell (R-NY), and House Minority Leader Nancy Pelosi (D-CA), asking them to "prevent the passage in this Congress of patent legislation that hampers U.S. competitiveness and threatens American jobs by undermining property rights." Among the letter's signatories are Phyllis Schlafly of the Eagle Forum and former U.S. Attorney General Edwin Meese. The group contends that "so-called 'patent reform' legislation . . . would cripple most of America's smaller inventors, research consortia and universities, and even the larger industrial firms that depend on patents." The letter contends that "some in Congress — again following the lead of several large multinational companies — want to make it easier to infringe patents, easier to challenge patent rights in administrative proceedings and in the courts, and more expensive for inventors to defend their patents." As for harmonization, the group explains that:

[S]ome of these so-called reforms have been proposed in the name of "harmonization" with foreign law. Frankly, this notion is misguided. Our competitors should have to “harmonize up” to our superior intellectual property regime, rather than our having to weaken our patent system and “harmonize down” to their levels. Does the United States really need to be "harmonized" with a calcified European system or the impossibly unfair Japanese system, not to mention the Chinese system, where intellectual property theft is a way of life? Such "patent reform" will lead to the plundering of American intellectual property and the loss of American factories and jobs to overseas competitors.

The letter concludes that "[t]his phony, market-distorting 'patent reform' is bad for America," and asks the Congressional leaders to "stop any such legislation from reaching the floor and protect the property rights enshrined in the Constitution." While it appears that the Senate bill will reach the floor sometime in the next two weeks, the House continues to debate such legislation in committee.

For additional information on this topic, please see:

• "Patent Reform Legislation Moves to Senate Floor," February 22, 2011
• "Reaction to Senate Patent Reform Bill (S. 23)," February 9, 2011
• "Judiciary Committee Votes on Patent Reform Bill," February 3, 2011
• "Here We Go Again," January 30, 2011
Centocor Ortho Biotech, Inc. v. Abbott Laboratories (Fed. Cir. 2011)

February 23, 2011

By Donald Zuhn —

Today, in Centocor Ortho Biotech, Inc. v. Abbott Laboratories, the Federal Circuit reversed the District Court's denial of judgment as a matter of law ("JMOL") of invalidity, holding the asserted claims of U.S. Patent No. 7,070,775 invalid for lack of written description.

Plaintiffs-Appellees Centocor Ortho Biotech, Inc. and New York University ("Centocor") sued Defendants-Appellants Abbott Laboratories, Abbott Bioresearch Center, Inc., and Abbott Biotechnology, Ltd. ("Abbott"), asserting that Abbott's Humira® antibody infringes claims 2, 3, 14, and 15 of the '775 patent, which Centocor owns. At trial, a jury found the asserted claims valid and Abbott liable for willful infringement, awarding Centocor $1.67 billion in damages. The District Court for the Eastern District of Texas granted Abbott's motion for JMOL of no willful infringement, but denied its other JMOL motions, including Abbott's motion for JMOL of invalidity.

The case involves antibodies to human tumor necrosis factor α ("TNF-α"). While Centocor and Abbott both sought to develop anti-TNF-α antibodies that would have high affinity, the desired neutralizing activity, and reduced immunogenicity, they pursued different strategies to develop their anti-TNF-α antibodies. Centocor, for example, identified a mouse antibody to human TNF-α ("A2 mouse antibody") that had high affinity and neutralizing activity and reduced the antibody's immunogenicity by exchanging the antibody's mouse constant region with a human constant region, creating a chimeric antibody having a mouse variable region and a human constant region. Abbott, meanwhile, screened a phage library of human variable regions for variable regions that bind human TNF-α, and then used various techniques to improve the binding affinity of selected variable regions. The resulting variable regions were then combined with human constant regions to create fully-human antibodies, from which the therapeutic antibody Humira® was identified.

Centocor filed a patent application in 1991 claiming its A2 mouse antibody and chimeric antibody. In 1993 and 1994, Centocor filed a series of continuation-in-part applications, and in 2002, Centocor added claims reciting human variable regions in the thirteenth member of the application family, which issued as the '775 patent in 2006. Claims 1 and 2 of the '775 patent recite:

1. An isolated recombinant anti-TNF-α anti-body or antigen-binding fragment thereof, said antibody or antigen-binding fragment comprising a human constant region, wherein said antibody or antigen binding fragment (i) competitively inhibits binding of A2 (ATCC Accession No. PTA-7045) to human TNF-α, and (ii) binds to a neutralizing epitope of human TNF-α in vivo with an affinity of at least 1×10⁸ liter/mole, measured as an association constant (Ka), as determined by Scatchard analysis.

2. The antibody or antigen-binding fragment of claim 1, wherein the antibody or antigen binding fragment comprises a human constant region and a human variable region.

Abbott filed a patent application directed to high affinity, neutralizing, fully-human antibodies to human TNF-α (such as the Humira® antibody) in 1996, and was granted a patent in 2000.

Writing for the Court, Judge Prost notes that:

The pivotal issue in this case concerns whether the '775 patent provides adequate written description for the claimed human variable regions. As noted above, Centocor first sought claims to human variable regions and fully-human antibodies in 2002. At that time, Abbott had already discovered and patented a fully-human antibody to TNF-α that had high affinity and neutralizing activity. To ensnare Abbott with later-filed claims, Centocor must use a priority date from an earlier application. Because Abbott's application was filed in 1996, Centocor relies on a priority claim to the 1994 CIP applications. Thus, in order for Centocor to prevail, the asserted claims must be supported by adequate written description in the 1994 CIP applications.

Summarizing Abbott's argument on appeal, she writes:

To underscore the inadequacy of Centocor's written description, Abbott points out that the specification does not disclose any fully-human, high affinity, neutralizing, A2 specific antibody. Moreover, the specification does not disclose a single human variable region. Abbott argues that the only described antibody is the chimeric antibody, which has a mouse variable region. Abbott also argues that Centocor has merely disclosed tools that might be used in an attempt to make the claimed invention — essentially, that Centocor's disclosure is no more than a mere wish or plan for how one might search for a fully-human antibody that satisfies the claims.

After reviewing Centocor's 1994 CIP applications to assess whether their disclosure provides adequate written description for the asserted claims, Judge Prost concludes that:

Contrary to Centocor's assertions, very little in the '775 patent supports that Centocor possessed a high affinity, neutralizing, A2 specific antibody that also contained a human variable region. The overwhelming majority of the '775 patent describes the A2 mouse antibody and the single chimeric antibody that Centocor made based on A2's mouse variable region. . . . As for describing suitable variable regions, the application only provides amino acid sequence information (a molecular description of the antibody) for a single mouse variable region, i.e., the variable region that the mouse A2 antibody and the chimeric antibody have in common.

Because the undisputed testimony at trial established that the sequence of the A2 variable region and a human variable region are "very different," the Court declares that "the mouse variable region sequence does not serve as a stepping stone to identifying a human variable region within the scope of the claims." In finding that Centocor's fully-human antibody claims go beyond the scope of its disclosure, Judge Prost notes that:

[W]hile the patent broadly claims a class of antibodies that contain human variable regions, the specification does not describe a single antibody that satisfies the claim limitations. It does not disclose any relevant identifying characteristics for such fully-human antibodies or even a single human variable region. Nor does it disclose any relationship between the human TNF-α protein, the known mouse variable region that satisfies the critical claim limitations, and potential human variable regions that will satisfy the claim limitations. There is nothing in the specification that conveys to one of skill in the art that Centocor possessed fully-human antibodies or human variable regions that fall within the boundaries of the asserted claims [citations omitted].

Citing Noelle v. Lederman, 355 F.3d 1343 (Fed. Cir. 2004), and the USPTO Written Description Guidelines, Centocor argues that because it fully disclosed the human TNF-α protein, it has provided adequate written description for any antibody that binds to human TNF-α. Judge Prost, however, counters that Centocor's "suggestion is based on an unduly broad characterization of the guidelines and our precedent," noting that Noelle and the Guidelines stand for the proposition that "an applicant can claim an antibody to novel protein X without describing the antibody when (1) the applicant fully discloses the novel protein and (2) generating the claimed antibody is so routine that possessing the protein places the applicant in possession of an antibody" (emphasis added). She points out that in this case, "both the human TNF-α protein and antibodies to that protein were known in the literature."

Thus, the panel concludes that, as in Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc), the jury lacked substantial evidence to find that the asserted claims were supported by adequate written description, and the District Court erred when it declined to grant Abbott's motion for JMOL that the asserted claims were invalid for lack of written description.

Centocor Ortho Biotech, Inc. v. Abbott Laboratories (Fed. Cir. 2011)
Panel: Circuit Judges Bryson, Clevenger, and Prost
Opinion by Circuit Judge Prost
Authorized Generics Again under Fire in Senate Bill

February 23, 2011

By Kevin E. Noonan —

In addition to patent reform, another patent-related idea from Congress's past has been resurrected in this Congress. Last Wednesday, Senator John D. Rockefeller, IV (D-DE) (at right) introduced S. 373, "The Fair Prescription Drug Competition Act," directed at limiting the right for an innovator drug company to market an "authorized generic" form of a patented drug. The bill had five co-sponsors: Senators Patrick Leahy (D-VT), Charles Schumer (D-NY), Daniel Inouye (D-HI), Jeanne Shaheen (D-NH), and Debbie Stabenow (D-MI).

The bill would amend Section 505 of the Food, Drug, and Cosmetic Act (codified at 21 U.S.C. § 355) by adding new subsection as follows:

Prohibition of Authorized Generic Drugs–

(1) IN GENERAL- Notwithstanding any other provision of this Act, no holder of a new drug application approved under subsection (c) shall manufacture, market, sell, or distribute an authorized generic drug, directly or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

(2) AUTHORIZED GENERIC DRUG- For purposes of this subsection, the term `authorized generic drug'–

(A) means any version of a listed drug (as such term is used in subsection (j)) that the holder of the new drug application approved under subsection (c) for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to subsection (j)(2)(B) with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed–

(i) by an entity eligible for 180-day exclusivity with respect to such drug under subsection (j)(5)(B)(iv); or

(ii) after expiration or forfeiture of any 180-day exclusivity with respect to such drug under such subsection (j)(5)(B)(iv).

The bill is aimed at preventing an innovator drugmaker from marketing its own generic version of a branded drug. It seemingly exempts a first ANDA filer from the prohibition (who is entitled to the 180-day exclusivity period under subsection (j)(5)(B)(iv)) or after expiration or forfeiture of the 180-day exclusivity period. The bill would thus prevent the innovator from pre-emptively entering the marketplace with a generic version of a branded drug prior to entry by a first ANDA filer; such early entry is understood to reduce the incentives for generic drug companies to pursue innovators who produce such authorized generics. The bill's provisions parallel provisions of bills (S. 501 and H.R. 573) introduced in the last Congress that had bipartisan support in the House (sponsored by Representative Jo Ann Emerson (R-MO) and co-sponsored by Representatives Marion Berry (D-AR), Dennis Moore (D-KS), and Zach Wamp (R-TN)) and in the Senate having as additional sponsors Senators Sherrod Brown (D-OH) and Herb Kohl (D-WI).

When introducing the bill, Senator Rockefeller addressed the perceived need to "close a loophole" under current law that permitted innovators of branded drugs to compete with generic drugmakers during the 180-day exclusivity period. Despite the evident benefit of an authorized generic in reducing prescription drug prices, the Senator opined that current law also permits a practice that reduces incentives for generic entry into the marketplace. The practice of innovator drug companies to market authorized generics is "widely undermining" the incentive for generic drugmakers to challenge branded drugs under the Hatch-Waxman Act, by "cutting in half" the expected profits during the 180-day exclusivity period. "The fact remains that brand-name firms regularly introduce authorized generics on the eve of generic competition, further extending their hold on the market and chilling competition from independent generic drugs," Senator Rockefeller said, and went on to specify the savings consumers garner by using generic rather than branded drugs.

Ironically, there is good evidence that while generic drugs eventually drive down the cost of prescription drugs, this is not a benefit that accrues during the 180-day exclusivity period. Indeed, during that period generic drug companies maximize their own profits, by pricing their drugs just below the price of the branded drug. And for what do these generic companies deserve these profits? The cost of bringing suit against the innovator drug companies, costs that are far less than the cost of bringing a new drug to market (something curiously missing from the Senator's calculus). The Senator's approval of the ANDA process and the benefits to American consumers stand in stark contrast to reports from several sources that the Hatch-Waxman regime has been characterized by wasted resources in pursuit of such market windfalls by generic drugmakers (see "Academic Study Supports Longer Data Exclusivity Term for Conventional Drugs" and "Maybe Hatch-Waxman Data Exclusivity Isn't So Good For Traditional Drugs After All"). And the Senator evinces his animus for innovator companies by stating that "[t]he fact that the brand-name company can launch an authorized generic even if it loses a patent challenge to a generic company gives it an incentive to pursue multiple additional patents on dubious grounds, just for the sake of extending its market share," without further comment or support.

Senator Rockefeller's interest in the issue of authorized generic drugs is long-standing; as early as 2005, he joined Senators Leahy and Chuck Grassley (R-IA) in sending a letter to the Federal Trade Commission asking the FTC to investigate whether the practice could have a "negative impact" on generic competition. In addition to S. 373 introduced in this Congress and S. 501 introduced in the last Congress, the Senator introduced the bill as S. 3695 in the 109th and 110th Congresses.

The bill is now under consideration by the Senate Committee on Health, Education, Labor and Pensions. A companion bill to S. 373 (H.R. 741) has also been introduced in the House.
Patent Reform Legislation Moves to Senate Floor

February 22, 2011

By Donald Zuhn —

According to a recent Reuters report, the Senate will take up consideration of patent reform legislation when it returns from a break next week. Senate Majority Leader Harry Reid (D-NV) said the Senate would take up patent reform after the break, and Assistant Senate Democratic Leader Dick Durbin (D-IL) expressed confidence that the bill would be passed; Democratic aides said that the plan was to get to the bill by March 14. The IPO Daily News noted that if the Senate takes up the bill, it would be the first time in six years that a version of the bill had reached the Senate floor. The House passed a much different patent reform bill in September 2007 (see "Patent 'Reform' Bill Passes House of Representatives").

As reported to the Senate, the bill (S. 23) would, among other things:

Sec. 2 – Define the "effective filing date" of a claimed invention as the actual filing date of the application, thus establishing a first-to-file system to replace the current first-to-invent system. Establish one-year grace period for inventors to file an application after certain disclosures of the claimed invention by the inventor or another who obtained the subject matter from the inventor. Revise provisions concerning novelty and nonobvious subject matter. Replace interference proceedings with derivation proceedings.

Sec. 3 – Modify requirements regarding the oath or declaration required of an inventor. Allow a person to whom an inventor has assigned (or is under an obligation to assign) an invention to make an application for patent.

Sec. 4 – Set forth a damages determination procedure that requires the court or jury to consider only court-identified methodologies and factors.

Sec. 5 – Allow a person who is not the patent owner to request to cancel as unpatentable one or more claims of patent by filing a petition with the USPTO to institute: (1) post-grant review on any ground that could be raised under specified provisions relating to invalidity of the patent or any claim (up to nine months after issuance), and (2) inter partes review (replaces inter partes reexamination procedures) on specified novelty and nonobvious subject matter grounds based on prior art consisting of patents and printed publications (after post-grant review). Allow any person, at any time, to cite to the USPTO: (1) prior art bearing on the patentability of a claim, and (2) statements of the patent owner filed in a proceeding before a federal court or the USPTO in which the patent owner took a position on the scope of any claim of a particular patent.

Sec. 8 – Require a district court to transfer a civil patent action if another venue is clearly more convenient than the venue in which the action is pending.

Sec. 9 – Authorize the Director to set or adjust by rule any fee established or charged by the USPTO. Establish $400 fee for original patent applications filed non-electronically.

Sec. 12 – Define the term "micro entity" for both an assigned and unassigned application.

Sec. 15 – Prohibit using a failure to disclose the best mode as a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable.

A full summary of the bill can be obtained on the Library of Congress' THOMAS website.

For additional information on this topic, please see:

• "Reaction to Senate Patent Reform Bill (S. 23)," February 9, 2011
• "Judiciary Committee Votes on Patent Reform Bill," February 3, 2011
President’s Budget Proposal Increases Funding for Basic Research But Seeks to “Trim” Data Exclusivity Period and Pay-for-Delay Agreements

February 21, 2011

By Donald Zuhn —

President Obama unveiled his 2012 budget last week, and while the President's budget calls for cuts in many areas of government, he would like to raise investment in basic research. As a result, under the President's budget proposal, funding for the National Institutes of Health (NIH) would rise from the current $31.3 billion to $32.3 billion in fiscal 2012, and the National Science Foundation would get $7.77 billion in 2012, or 13% more than it did in 2010. In a statement on the White House website entitled "Winning the Future through Innovation," the Office of Management and Budget (OMB) states that "[h]aving emerged from the worst recession in generations, the President has put forward a plan to rebuild our economy and win the future by out-innovating, out-educating, and out-building our global competitors and creating the jobs and industries of tomorrow." The OMB outlines a number of ways in which the budget will "spur innovation," including:

Increase Investment in Research and Development and Create Transformational Technologies. For many years, the United States has been a world leader in research and development (R&D) spending, as well as in the quality and impact of that spending. The challenge is for the Nation to make private and public investments in science, research and development that will keep the U.S. as the world's leader in innovation for decades to come. The 2012 Budget does that by providing $148 billion for R&D overall, while targeting resources to those areas most likely to directly contribute to the creation of transformational technologies that can create the businesses and jobs of the future. The Budget makes progress toward the President's commitment to double funding for key basic research agencies: the National Science Foundation (NSF), the Department of Energy's Office of Science, and the National Institute of Standards and Technology (NIST) laboratories. These funds will be directed at priority areas, such as clean energy technologies, advanced manufacturing technologies, and cyber security. In addition, the Budget provides $12 million in NIST for the Advanced Manufacturing Technology Consortia program, a new public-private partnership that will develop road maps for long-term industrial research needs and fund research at universities, government laboratories, and businesses directed at meeting those needs. The Budget also funds research at the National Institutes of Health with an increased focus on translating research discovering into clinical trials.

Support Biomedical Research at the National Institutes of Health. The Budget includes $32 billion for basic and applied biomedical research supported by the National Institutes of Health (NIH). Innovation in this field creates and sustains companies, products, and jobs. Through implementation of the National Center for Advancing Translational Sciences and the Cures Acceleration Network, NIH will increase its focus on bridging the translational divide between basic science and therapeutic applications. By fostering novel collaborations among government, academia, and industry, NIH will accelerate the development of treatments for diseases and disorders that affect millions of Americans. NIH will continue to pursue the leading edge of discovery in basic cancer science, development of new cancer treatments, and prevention and early detection of cancer, focusing on recent discoveries regarding cancer genomes. For Alzheimer's disease, NIH is partnering with the private sector to find new methods for early diagnosis and to support early drug discovery and preclinical drug development. Ongoing research into environmental factors, early detection, and novel treatments will transform our understanding and care for those with autism spectrum disorders.

The OMB also notes that the budget will:

Improve the Patent System and Protect Intellectual Property. The Budget proposes to give the U.S. Patent and Trademark Office (USPTO) full access to its fee collections and strengthen USPTO's efforts to improve the speed and quality of patent examinations through a temporary fee surcharge and regulatory and legislative reforms. The surcharge will better align application fees with processing costs. In total, this will provide USPTO with over $2.7 billion of resources in 2012, or more than 34 percent more than in 2010.

In announcing the budget proposal, the President declared that it was important "to invest in those things that are absolutely critical to preparing our people and our Nation for the economic competition of our time," which could be accomplished in part "by encouraging American innovation and investing in research and development — especially in the job-creating industries of tomorrow such as clean energy." The President noted that:

[S]ince many companies do not invest in basic research that does not have an immediate pay off, we — as a Nation — must devote our resources to these fundamental areas of scientific inquiry. In this Budget, we are increasing our investment in research and development that contributes to fields as varied as biomedicine, cyber-security, nano-technology, and advanced manufacturing.

Lost in the initial discussion of the President's 2012 budget were two proposals that would have a significant impact on drugmakers. With respect to the $79.9 billion of the budget targeted for the Department of Health and Human Services (HHS), the Administration notes that the 2012 budget:

Increases Affordability and Reduces Costs for Prescription Drugs Across Federal Programs. The high cost of prescription drugs is a burden for many Americans. The Administration will accelerate access to more affordable pharmaceuticals that will lead to cost savings for consumers and health programs across the Federal Government. The President's Budget includes two proposals to increase availability of generic drugs by providing the Federal Trade Commission authority to stop drug companies from entering into anticompetitive agreements intended to block consumer access to safe and effective generics, and hastening availability of generic biologics while retaining the appropriate incentives for research and development for the innovation of breakthrough products.

A Reuters report noted that the President would accomplish the goal of "hastening availability of generic biologics while retaining the appropriate incentives for research and development for the innovation of breakthrough products" by trimming the data exclusivity provision of the Approval Pathway for Biosimilar Biological Products section of the Patient Protection and Affordable Care Act (PPACA) from 12 years to 7 years. In an article in the San Francisco Business Times, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood said that the budget proposal to reduce the exclusivity period "flies in the face of President Obama's own call for the U.S. to 'win the future' and maintain our nation's leadership in research and technology."

In a document entitled "Terminations, Reductions and Savings" on the President's website, the White House states that:

The Administration is proposing to give consumers more access to affordable pharmaceuticals by: 1) reducing the exclusivity period for brand biologics to encourage faster development of generic biologics; and 2) giving the Federal Trade Commission the authority to prohibit brand and generic drug companies from entering into anticompetitive or "pay-for-delay" agreements intended to keep more generics off the market.

The Administration attempts to justify both proposals by explaining that:

Generic Biologics. Under current law, innovator brand biologics have 12 years of exclusivity and broad "evergreening" authority, whereby innovator manufacturers are able to make relatively minor changes to the "potency, purity, and safety" of their products to receive an additional 12 years of exclusivity.

Under the Administration proposal, beginning in 2012, innovator brand biologic manufacturers would have 7 years of exclusivity and would be prohibited from receiving additional exclusivity by "evergreening" their products. According to the Federal Trade Commission, 12-year exclusivity is unnecessary to promote innovation by brand biologic drug manufacturers and can potentially harm consumers by directing scarce research and development funding toward developing low-risk clinical data for drug products with proven mechanisms of action rather than toward new products to address unmet medical needs. The Administration policy strikes a balance between promoting affordable access to medication while at the same time encouraging innovation to develop needed therapies.

Pay-for-Delay. In these agreements, a brand name company settles its patent law suit by paying the generic firm to delay entering the market. Such deals can cost consumers billions of dollars because generic drugs are typically priced significantly less than their branded counterparts. The Administration proposal would give the Federal Trade Commission the authority to prohibit pay-for-delay agreements in order to facilitate access to lower-cost generics.

As for the savings derived from each proposal, the Administration asserts that shortening the exclusivity period will produce $330 million in savings between 2012 and 2016 (but no savings between 2012 and 2014) and $2.34 billion in savings between 2012 and 2021. The Administration estimates that the pay-for-delay ban will produce $3.42 billion in savings between 2012 and 2016 and $8.79 billion between 2012 and 2021.

While the means of accomplishing both goals may be surprising, the Administration's positions on both are not. Before signing the PPACA last March, the President pushed hard for a reduction of the 12-year period (see "Snatching Defeat from the Jaws of Victory?"). Moreover, the Administration's support for a 7-year exclusivity period can be traced back to a letter the White House sent in June 2009 to Rep. Henry Waxman (D-CA), the Chairman of the House Energy and Commerce Committee, stating that a biosimilars regulatory pathway providing a 7-year data exclusivity period would "strike[] the appropriate balance between innovation and competition" (see "White House Recommends 7-Year Data Exclusivity Period for Follow-on Biologics"). In addition, little is new about the Administration's proposal "to stop drug companies from entering into anticompetitive agreements intended to block consumer access to safe and effective generics." Prior to the February 2010 health care meeting at the White House, the President outlined 34 key improvements to reform health care, including a ban of pay-for-delay settlements, wherein a brand-name pharmaceutical company can delay generic competition through an agreement to pay a generic company to keep its drug off the market for a period of time (see "President's Health Care Plan Includes Pay-for-Delay Ban and Biosimilar Regulatory Pathway"). Nevertheless, when coupled with the Administration's decision to send the Acting Solicitor General to argue in support of the Justice Department's amicus curiae brief in the Association of Molecular Pathology v. U.S. Patent and Trademark Office appeal (see "Curiouser and Curiouser"), the President's budget proposals leave many of his supporters to question whether the biotech industry will have a role in helping the nation "win the future."
Court Report

February 20, 2011

By Sherri Oslick —

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

Abbott Laboratories et al. v. Sandoz Inc.
1:11-cv-00145; filed February 16, 2011 in the District Court of Delaware

• Plaintiffs: Abbott Laboratories; Abbott Respiratory LLC
• Defendant: Sandoz Inc.

Infringement of U.S. Patent Nos. 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 Sandoz's filing of an amended ANDA to manufacture a generic version of Abbott's Niaspan® (niacin extended-release tablets, used to treat hypercholesterolemia). View the complaint here.

Leo Pharma A/S v. Perrigo Isrel Pharma Ltd.
1:11-cv-00963; filed February 14, 2011 in the Southern District of New York

Infringement of U.S. Patent No. 6,753,013 ("Pharmaceutical Composition," issued June 22, 2004) following a Paragraph IV certification as part of Perrigo's filing of an ANDA to manufacture a generic version of Leo's Taclones® (betamethasone diproprionate and calcipotriene monohydrate, used to treat psoriasis vulgaris). View the complaint here.

Velcera Inc. et al. v. Merial Ltd.
1:11-cv-00134; filed February 11, 2011 in the District Court of Delaware

• Plaintiffs: Velcera Inc.; Fidopharm Inc.
• Defendant: Merial Ltd.

Declaratory judgment of non-infringement and invalidity of U.S. Patent Nos. 6,096,329 ("Insecticidal Combination to Control Mammal Fleas, in Particular Fleas on Cats and Dogs," issued August 1, 2000), 6,620,943 ("Process for Preparing 4-Trifluoromethylsulfinylpyrazole Derivative," issued September 16, 2003), and 6,881,848 (same title, issued April 19, 2005), all licensed to Merial in the animal health field, based on Plaintiffs' anticipated sale of fipronil-based animal health products. View the complaint here.

Novartis Pharmaceuticals Corp. et al. v. Mylan Pharmaceuticals Inc. et al.
1:11-cv-00015; filed February 11, 2011 in the Northern District of Illinois

• Plaintiffs: Novartis Pharmaceuticals Corp.; Novartis AG
• Defendants: Mylan Pharmaceuticals Inc.; Mylan Inc.

Infringement of U.S. Patent No. 6,242,003 ("Organic Compounds," issued June 5, 2001) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Novartis' Lescol® (fluvastatin sodium, used to treat hypercholesterolemia). View the complaint here.
Conference & CLE Calendar

February 20, 2011

February 25, 2011 – 55th Annual Intellectual Property Law Conference (John Marshall Law School Center for Intellectual Property Law) – Chicago, IL

February 25, 2011 – "Navigating the IP Waters of Europe — Understanding and Using the European Patent System" (American Bar Association (ABA) Section of Intellectual Property Law, Young Lawyers Division, ABA-IPL Young Lawyers Action Group, Section of International Law, and the ABA Center for Continuing Legal Education) – 1:00 – 2:00 PM (Eastern)

March 4, 2011 – Sixth Annual Symposium, "The Economics of Intellectual Property and Technology" (Northwestern Journal of Technology & Intellectual Property) – Chicago, IL

March 16-17, 2011 – FDA Boot Camp*** (American Conference Institute) – New York, NY

March 31, 2011 – Clinical Biotech Forum West (Institute for International Research) – Phoenix, AZ

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

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