Patent Docs

Myriad Files Appeal Brief in AMP v. USPTO

October 28, 2010

By Kevin E. Noonan —

Myriad Genetics filed its appellant's brief in Association of Molecular Pathology v. U.S. Patent and Trademark Office last Friday, joined by the Directors of the University of Utah Research Foundation (Lorris Betz, Roger Boyer, Jack Brittain, Arnold B. Combe, Raymond Gesteland, James U. Jensen, John Kendall Morris, Thomas Parks, David W. Pershing, and Michael K. Young). This is the first step in an appeal that awaits a large number of anticipated amicus briefs and appellees' briefs from plaintiffs (supported by the American Civil Liberties Union and the Public Patent Foundation). There are also rumors that the Government will weigh in, but it is unclear whether it will be in favor or in opposition to the verdict below.

Myriad's brief begins with an attack on the plaintiffs' standing to bring the lawsuit, something expressly litigated during the District Court case (see "Round One Goes to the ACLU"). Myriad lost below, but has a chance to win reversal on this procedural issue. Under this scenario, should Myriad prevail, the Federal Circuit would not reach the merits of the District Court's decision that isolated human DNA is not patent-eligible subject matter. This would make it more likely that a certiorari petition would be limited to the procedural question, thus delaying any reconsideration of the patent-eligibility questions. In view of the fact that the patents-in-suit expire between December, 2014 and March, 2017, any delay in a final resolution of the case on the merits works in Myriad's favor.

Myriad attacks both the District Court's conclusion that the plaintiffs had standing as well as the way the Court applied the relevant jurisdictional test. Citing Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007), Myriad argues that the District Court erred in misapplying the "all the circumstances" test, because plaintiffs had failed to show "that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment" (unless otherwise noted, all emphases are as set forth in the brief). Myriad cites as error the District Court's application of the test in view of its assertion that, after Medimmune, "there is now an ease of achieving declaratory judgment jurisdiction," reminding the Court that it has held that "a lowered bar does not mean no bar at all." Hewlett-Packard Co. v. Acceleron, LLC, 587 F.3d 1358, 1361-62 (Fed. Cir. 2009). Contrary to this precedent, Myriad argues that "[t]he court's application of the 'all the circumstances' test eliminated any meaningful threshold for declaratory judgment jurisdiction by allowing any plaintiff with 'the ability and desire' to infringe . . . the right to challenge the patent's validity based solely on subjective fears of suit." Myriad and the plaintiffs "do not have 'adverse legal interests,'" Myriad argues, because none of the plaintiffs have alleged that (recently) Myriad had any contact with any of them concerning the patents-in-suit nor did any of the plaintiffs "inform[] Myriad about their 'ability and desire' to infringe" these patents. Plaintiffs did not allege any "affirmative act" by Myriad, which the brief states is required under post-Medimmune Federal Circuit precedent, citing SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1380-81 (Fed. Cir. 2007). The brief analogizes the situation to the one in Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1339 (Fed. Cir. 2008), where "the totality of the circumstances analysis in the instant case is that which has not occurred." The District Court skirted this jurisdictional requirement, according to Myriad, by holding that such a requirement (for "a specific, affirmative act directed towards the plaintiff") would be contrary to the "all the circumstances" test. This decision was erroneous, Myriad argues, as being contrary to Federal Circuit (SanDisk) and Supreme Court (MedImmune) precedent (on the grounds that the Supreme Court found the "touchstone" of an "adverse legal interest" to be "threatened [patent] enforcement action"). The brief also argues that the District Court's finding that the plaintiffs had standing is contrary to the Federal Circuit's decision in Hewlett-Packard Co. that "a communication from a patent owner to another party, merely identifying its patent and the other party's product line, without more, cannot establish adverse legal interests between the parties, let alone the existence of a 'definite and concrete' dispute."

The brief also assails the District Court's decision insofar as it was grounded in the plaintiffs' "subjective perceptions" of an apprehension of suit. Specifically, Myriad objects to the claim that "it is widely understood within the research community that Myriad has taken the position that any BRCA1/2 related activity infringes its patents and that Myriad will assert its patent rights against parties engaged in such activity," calling it "rumor and innuendo." "The mere existence of a potentially adverse patent does not cause an injury nor create an imminent risk of an injury," Myriad argues, citing Prasco, and goes on to say that, post-MedImmune, "the law does 'not hold that a patent can always be challenged whenever it appears to pose a risk of infringement,'" citing Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599 F.3d 1377, 1382 (Fed. Cir. 2010). Instead of such chimerical fears and apprehensions, Myriad argues that case law demands that "a 'controversy must be based on a real and immediate injury or threat of future injury that is caused by the defendants — an objective standard that cannot be met by a purely subjective or speculative fear of future harm,'" citing Prasco.

Myriad also argues that the plaintiffs failed the second prong of the MedImmune test, that the controversy must be "real, imminent, and traceable to defendants," again citing Prasco, because Myriad had taken "no action towards plaintiffs threatening suit." The only actual "specific affirmative acts" Myriad had taken had been letters and other "communications" with three of the plaintiffs Drs. Kazazian, Ganguly, and Ostrer "from May 1998 to June 1999," as well as "an alleged exchange of phone calls between some [unidentified] Myriad employee and Dr. Matloff in 2005." The passage of time is sufficient, Myriad argues, to rob any controversy of "sufficient immediacy and reality," citing MedImmune. According to Myriad, the District Court "dismissed" the "staleness" of this conduct by attributing a requirement for greater immediacy with the "now-defunct 'apprehension of suit' test." Not so, according to Myriad, since an "apprehension of suit" is properly one of the "totality of the circumstances" that courts should consider in making jurisdictional determinations. (Although Myriad supports this position with pre-MedImmune Federal Circuit precedent, thereby weakening its impact.) Drawing an analogy with laches, Myriad argues that "a patentee's ten-year silence presumptively extinguishes any reasonably objective fear of suit." Myriad also brings to the Court's attention some interesting behavior by the plaintiffs (whether at the ACLU or PubPat's instigation is unknown), whereby Dr. Matloff contacted an unidentified Myriad employee in 2005 by telephone "regarding 'whether it was permissible for [Yale Laboratory] to perform genetic screening of BRCA genes.'" Fortunately, the District Court did not rely upon this purported incident in its jurisdictional decision-making, since as Myriad points out, to do so would permit "anyone [to] manufacture jurisdiction by initiating phone calls or letters to a patentee; the patentee would be left with an untenable choice — grant permission to infringe or face a declaratory-judgment suit."

Similarly unavailing to plaintiffs in satisfying this second prong of the jurisdictional test were "ten-year-old litigation and licensing activities," according to the brief. The District Court used evidence of these activities to find that Myriad had engaged in a "continuing course of [litigious] conduct over a period of several years." True or not, Myriad argues that the Court "fails to explain how such aged conduct created a 'substantially immediate' controversy with plaintiffs." Specifically, neither of the two patent cases cited by the District Court in support of its conclusion were against any of the plaintiffs here, and although Myriad concedes that the Court has held that "prior litigation is a circumstance to be considered in assessing the totality of circumstances," the Court has also held that "the fact that [patentee] had filed infringement suits against other parties for other products does not, in the absence of any act directed toward [plaintiff], meet the minimum standard discussed in MedImmune," citing Innovative Therapies, 599 F.3d at 1382. Under this standard, neither the prior litigations nor licensing efforts — amounting to "a single 1998 letter sent to nonparty Dr. Nayfield" — satisfy the jurisdictional standard, contrasting the situation here with cases where the Federal Circuit has held prior litigation conduct to support declaratory judgment jurisdiction (including Hewlett-Packard Co.; Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271, 1285 (Fed. Cir. 2007); and SanDisk Corp.).

Myriad finishes this portion of its brief by arguing that the District Court's jurisdictional decision was outside the proper scope of Article III of the Constitution by providing an advisory opinion. The Declaratory Judgment Act was intended to provide a party "with 'an equal start in the race to the court house, not a headstart,'" citing Kerotest Mfg. Co. v. C-O-Two Fire-29-Equip. Co., 342 U.S. 180, 185 (1952), and in the absence of any "suggestion of infringement by anyone for over a decade," a headstart is precisely what plaintiffs have sought (and, unfortunately for Myriad, obtained). Myriad characterizes the case for what indeed it is: "[i]n sum, this is a manufactured controversy with recruited plaintiffs having no dispute with Myriad beyond a desire to assist two public-advocacy groups' effort to use the courts to dictate public policy on DNA patents. That sort of "abstract" dispute is not enough for declaratory-judgment jurisdiction. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937).

Turning to the substance, Myriad makes what are now well-known arguments for the patentability of human (and indeed any) DNA. New to the argument is the citation of Bilski v. Kappos for the proposition that the Supreme Court continues to recognize that Congress has "plainly contemplated that the patent laws would be given wide scope," citing Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980), and that "[t]his breadth 'ensure[s] that 'ingenuity should receive a liberal encouragement,'" Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) (quoting, through Chakrabarty, 5 Writings of Thomas Jefferson 75-76 (H. Washington ed. 1871)). Isolated DNA is "unquestionably" a "composition of matter," or, in the alternative, "a new and useful improvement" on naturally occurring DNA. The brief cites the U.S. Patent and Trademark Office's 2001 Utility Examination Guidelines for the proposition that isolated human DNA ("a gene") "is a chemical compound and is patentable if all the statutory requirements are met." The brief also cites 35 U.S.C. § 103(b) as evidence that Congress has given its imprimatur to patenting isolated human DNA (specifically, wherein § 103(b)(3)(A)(i) specifies that "nucleotide sequences" would be a category of "patenting starting compositions" encompassed by the statute. Myriad draws an analogy to how the Supreme Court majority considered the effects of 35 U.S.C. § 273(a)(3) on the question of whether a "business method" was patentable in Bilski v. Kappos:

In Bilski, the Supreme Court concluded that § 273(a)(3) and its definition of "method" as including "a method of doing or conducting business" demonstrated that Congress did not view business methods as categorically ineligible for patenting. 130 S. Ct. at 3228-29. Section 103(b) similarly confirms that Congress viewed "nucleotide sequences" as appropriate subjects for patents; at minimum, it shows that Congress knows how to legislate in this area. Accord 141 Cong. Rec. S15220, S15222 (Oct. 17, 1995) (statement of Sen. Hatch) ("[t]he U.S. patent on the starting materials — typically a new DNA molecule, a genetically altered host cell, or a vector — can prevent others from using them in the United States in any way").

The brief also argues that isolated DNA does not fall within the three recognized exceptions to broad patent eligibility, "laws of nature, physical phenomena, and abstract ideas." The brief sets forth an extensive argument that Supreme Court precedent does not contain a "categorical" prohibition of patenting "products of nature." This section includes an explication of the commonly-cited precedents (American Wood-Paper Co. v. Fibre Disintegrating Co., 90 U.S. 566 (1874) (cellulose); Cochrane v. Badische Anilin & Soda Fabrik, 111 U.S. 293 (1884) (alizarine dye); American Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1 (1931) (borax-coated oranges); Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948) (mixed bacterial cultures); In re Kratz, 592 F.2d 1169, 1174 (C.C.P.A. 1979) (2-methyl-2-pentenoic acid); In re Bergstrom, 427 F.2d 1394, 1401 (C.C.P.A. 1970) (prosaglandins); and Chakrabarty), distinguishing those cases the District Court used to support its decision (because inter alia the precedent was based not on categorical patent-ineligibility but on unpatentability for obviousness, etc.) and arguing that the District Court had misread this precedent. Specifically, the brief argues that the Chakrabarty decision did not impose a requirement that to be patent-eligible a composition of matter must have "markedly different characteristics," making essentially a textual argument regarding how the Supreme Court set forth the applicable precedent. "'Markedly different' is a fine term for judges to use when describing the particular facts of a particular case, as in Chakrabarty, but it surely was not meant as a legal standard to govern all future cases decided under the statute," Myriad argues. This is particularly egregious error when a court, as the District Court here, uses such a "dubious standard" to "dismiss[] all the factual showings about the substantial differences between isolated BRCA DNA molecules and native DNA [by] concluding as a matter of law that the isolated molecules were not 'markedly different.'" Myriad performs a similar deconstruction of the decision in Funk Bros., arguing that that decision was based not on patent-ineligibility but on lack of "invention," today known as obviousness. (Cleverly, the brief turns Judge Dyk's dissent in Intervet Inc. v. Merial Ltd. to its advantage, arguing that the unpatentability of "the leaves of a plant" is founded not on patent ineligibility but on lack of novelty or obviousness.)

The District Court's decision that isolated human DNA was not patent-eligible "gave insufficient respect to the PTO's contrary determination, as well as to a long line of authority from this Court, its predecessor, and other respected jurists, holding that molecules that are newly isolated from natural products and useful are eligible for patents." Even the Supreme Court properly defers to Congress to make these types of changes in longstanding practice Myriad argues, citing J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124 (2001), and Bilski. The brief distinguishes the prudent application of judicial restraint by the Supreme Court in J.E.M. Ag Supply with the District Court "dismissing out of hand" their arguments concerning the high degree of "public reliance" on the patent-eligibility of isolated human DNA. (In a footnote, the brief recites the statistics that "[o]ver the past 29 years, the PTO has issued some 2,645 patents with claims to "isolated DNA," and over 50,000 patents containing at least one claim directed to a nucleic acid sequence, including those derived from humans, other animals, plants, bacteria, and so on). As a result:

[B]y refusing to give any consideration to this historical practice, and the significant industries built up in reliance thereon, the district court disregarded almost 100 years of precedent, dating back at least to Judge Learned Hand's opinion in Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (S.D.N.Y. 1911), aff'd, 196 F. 496 (2d Cir. 1912). In the face of this consistent and long-followed view of § 101's scope, plaintiffs' arguments are better addressed to Congress, not to the courts. The Supreme Court has long held that courts "should not read into the patent laws limitations and conditions which the legislature has not expressed." United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933).

The isolated BRCA1 and 2 genes are patent-eligible as claimed because the claims are directed at "a nonnaturally occurring manufacture or composition of matter" — "a product of human ingenuity 'having a distinctive name, character and use'" as required by Chakrabarty that "exist only because of the 'human ingenuity' [exercised] in discovering and isolating them."

And of course the brief alerts the Court to the deleterious consequences of "a sweeping exception to patent eligibility for 'products of nature' on 'truly 'new' and 'useful' discoveries, like pharmaceuticals derived from natural sources." Here, Myriad distinguishes the isolated BRCA 1 and BRCA 2 genes as being "unavailable" to scientists for any use, including the "detection and treatment of breast and other cancers." Even the District Court acknowledged that the isolated BRCA 1 and 2 genes had utility, a utility that the brief notes was "not available to the public" until the invention claimed in the patents-in-suit.

This section of the brief ends with Myriad's argument that the District Court improperly granted summary judgment because there remain questions of fact regarding "whether the characteristics of isolated DNA are 'markedly' different from those of native DNA" because "the meaning of 'markedly different' has never been developed in case law, [and thus] the court improperly viewed itself as free to draw the 'legal' conclusion that 'none of the structural and functional differences . . . between native BRCA DNA and the isolated BRCA DNA claimed in the patents-in-suit render the claimed DNA 'markedly different.'"

Finally, the brief addresses the patent eligibility of Myriad's method claims, which the District Court decided were patent-ineligible under the Federal Circuit's "machine-or-transformation" (MoT) test from In re Bilski. Here, Myriad argues that the claims, properly construed, encompass a transformation step sufficient to satisfy the MoT test. The brief notes that the Supreme Court, in holding that the MoT test was "useful" but not exclusive, specifically cited "advanced diagnostic medical techniques" as types of methods where innovation might be differentially harmed by an overly restrictive patent eligibility standard. The brief notes that, even under the arguably more limited patent eligibility regime of the Federal Circuit's MoT test, the Court found patent-eligible the method claimed in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009), certiorari granted, judgment vacated, and remanded, 130 S. Ct. 3543 (2010). In that case, the Court found transformative steps for assaying blood for the presence of thiopurine or its metabolites, since these steps involved physical or chemical transformations of levels that "cannot be determined by mere inspection." Similarly, Myriad argues, its claimed methods involve "extracting, processing and analyzing a human tissue or blood sample using 'nucleotide sequences,' which are molecules." (Myriad further argues that its claims "show an even stronger claim to patent-eligibility [because] the BRCA sequences were not known prior to Myriad's invention[, whereas] in Prometheus, by contrast, the method claims' transformative step involved the detection of old, known metabolites.) The District Court improperly "read out" these "critical elements" of the claims, considering only those elements that were (in the District Court's view) "directed only to the abstract mental processes of 'comparing' or 'analyzing' gene sequences." The District Court's error was in not considering the claims as a whole; "it is 'inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis,'" citing Diamond v. Diehr, 450 U.S. 175 (1981). Rather than being mere "data gathering steps," as the District Court characterized them, Myriad argues that the sequencing steps are the transformative steps that satisfy the requirements for patent-eligibility. (This argument illustrates the subjectivity introduced into the patent-eligibility determination by concepts like "(mere) data gathering steps" and "insignificant post-solution activity.") The problem is the failure of the District Court to construe the claims: "[u]nder a proper claim construction, the claims require the transformation of a human sample, and the transformation of the specific BRCA molecules in that sample," according to Myriad, illustrating the point with claim 1 of U.S. Patent 5,709,999:

1. A method for detecting a germline alteration in a BRCA1 gene, said alteration selected from the group consisting of the alterations set forth in Tables 12A, 14, 18 or 19 in a human which comprises analyzing a sequence of a BRCA1 gene or BRCA1 RNA from a human sample or analyzing a sequence of BRCA1 cDNA made from mRNA from said human sample with the proviso that said germline alteration is not a deletion of 4 nucleotides corresponding to base numbers 4184-4187 of SEQ ID NO:1.

Myriad argues that, properly construed, this claim requires the steps of "first, in order to analyze the BRCA1 gene, RNA or a BRCA1 cDNA made from mRNA of the human sample, the sample must be transformed[: t]he BRCA1 gene and mRNA are within the patient's body and must be isolated from a patient's tissue sample in order to be sequenced." Myriad's brief recites what this entails: "the cells of the tissue sample must be broken open, and a sample of the DNA or RNA extracted. . . . Sequencing is accomplished using a diagnostic probe or primer to hybridize to the target DNA or RNA extracted from the sample to initiate a sequencing reaction." The brief then sets forth the second step: "the DNA or RNA of the tissue sample is transformed when a primer or probe is used to bind to and 'hybridize' the DNA or RNA isolated from the human sample; a new 'hybrid' DNA/DNA or DNA/RNA compound is formed, allowing its sequence to be analyzed." As a consequence of these steps, Myriad argues, "the original human sample is no longer the same human sample, and the DNA and mRNA obtained from that sample are no longer the same DNA and mRNA from the original sample." Myriad draws the conclusion that "[t]his is transformative under Supreme Court precedent," citing Gottschalk v. Benson, 409 U.S. 63, 70 (1972); Diamond v. Diehr; and Parker v. Flook. Myriad characterizes these transformations as being "central to the purpose of the claim — detecting 'germline mutations in the BRCA1 gene and their use in the diagnosis of predisposition to breast and ovarian cancer.'" A similar analysis yields the same conclusion for all the other method claims at issue.

The brief then discusses the basis for the District Court's error — construing "the term 'sequence' in the method claims as mere information (i.e., letters from the alphabet), rather than as a physical molecule." This error was based on using what the Court considered the "plain meaning" of the term "sequence" devoid of any consideration of the disclosure of the specifications of the patents-in-suit, contrary to the mandates of Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc), Myriad argues, supporting its construction of the claim term "sequence" to mean the molecule rather than "mere words on a page" with citations to the specifications. And the brief also cites the District Court's invalidation of a method of screening claim (claim 20 of U. S. Patent 5,747,282):

20. A method for screening potential cancer therapeutics which comprises: growing a transformed eukaryotic host cell containing an altered BRCA1 gene causing cancer in the presence of a compound suspected of being a cancer therapeutic, growing said transformed eukaryotic host cell in the absence of said compound, determining the rate of growth of said host cell in the presence of said compound and the rate of growth of said host cell in the absence of said compound and comparing the growth rate of said host cells, wherein a slower rate of growth of said host cell in the presence of said compound is indicative of a cancer therapeutic.

The brief specifically criticizes the District Court's reliance on "the essence of the claim" (which is not the proper approach for construing a claim), which gave the Court "license" (according to Myriad) to "entirely ignore the 'arguably' transformative steps . . . involv[ing] administering a substance to a cell in the expectation that the substance will slow [the cell's] growth. If that is not transformative, nothing ever could be," Myriad asserts. Citing the Supreme Court's reasoning in Bilski:

Under the plain statutory language, these methods are "new and useful process[es]" (again, their utility is stipulated), and these extraordinarily useful (indeed, lifesaving) methods are not mere "concepts," or "unpatentable abstract idea[s]," as was the method of hedging ruled ineligible in Bilski, 130 S. Ct. at 3231. They are very real ways of diagnosing and treating cancers. They are patent-eligible because patent protection is in accord with the "larger object of securing patents for valuable inventions without transgressing the public domain." Id. at 3227. Patents representative of this "Information Age," id., should not be invalidated because they involve the use of information.

Finally, in a sentence, Myriad dismisses the "alternative, constitutional arguments" raised by plaintiffs (and used by the District Court to deny motions to dismiss for standing and then discarded when the Court reached the merits), and termed the First Amendment arguments as "frivolous . . . because these patent claims do not impede speech or thought; they are, as shown above, new and useful compositions and methods critical to the ongoing fight against one of the most insidious diseases known to man."

Amicus briefs in support of Myriad or neither party are due tomorrow.
Pfizer and Biocon Sign Global Commercialization Agreement on Biosimilars

October 27, 2010

By Donald Zuhn —

Since President Obama signed the Patient Protection and Affordable Care Act into law in March, thereby establishing an approval pathway for biosimilar biological products, the biotech industry has waited to see which company might be the first to take advantage of the new approval pathway. Last week, Pfizer Inc. joined a growing list of candidates when it announced that it had entered into a strategic global agreement with India's largest biotech company, Biocon Ltd., for the worldwide commercialization of Biocon's biosimilar versions of Insulin and Insulin analog products: Recombinant Human Insulin, Glargine, Aspart, and Lispro.

Under the terms of the agreement, Pfizer will have exclusive rights to commercialize Biocon's Insulin products globally, with certain exceptions, including co-exclusive rights with Biocon for all of the products in Germany, India and Malaysia, and co-exclusive rights with existing Biocon licensees for some of the products. Biocon will retain responsibility for the clinical development, manufacture, and supply of the biosimilar Insulin products, and for securing regulatory approval for these products in various countries. Biocon has secured approval for its Recombinant Human Insulin in 27 countries and has launched its Glargine product in India. Pursuant to the agreement, Pfizer will pay Biocon $200 million, with Biocon receiving up to $150 million in additional milestone payments as well as additional payments linked to Pfizer's sales of the four Insulin biosimilar products.

David Simmons, president and general manager of Pfizer's Established Products Business Unit, said the collaboration "supports our stated efforts to become a strong player in follow-on biologics as well as in the Diabetes disease area, by adding to Pfizer's broad biotherapeutics portfolio, ranging from biosuperiors to biosimilars, across multiple therapeutic areas." The release noted that a number of Insulin analogs are expected to lose patent protection by 2015, "resulting in a significant opportunity for the biosimilars market," and that the agreement will allow the companies "to be well positioned to be first movers in this potentially large market opportunity."

Pfizer's announcement noted that diabetes affects nearly 230 million people worldwide and causes 3 million deaths annually, with the number of afflicted individuals expected to rise to 400 million by 2030. According to the release, the diabetes pandemic has impacted both the developing and developed world, as evidenced by the 18 million diabetic patients in the U.S. (a number expected to rise to 30 million by 2030). In the U.S., an estimated $200 billion is spent annually treating the disease.

After the details of the Pfizer-Biocon deal were released, Biocon announced that it would be investing $161 million on the research and development and production of high-end biosimilars in Malaysia (see International Business Times report). In particular, Biocon will be investing with the Malaysian Biotechnology Corp. to construct a facility that is expected to be operational by 2014.

Additional information regarding the agreement between Pfizer and Biocon can be found in Biocon's press release.
Appellees File Reply Brief in Therasense v. Becton Dickinson

October 27, 2010

By Kevin E. Noonan —

Appellees Becton, Dickinson & Co. and Nova Biomedical Corp. filed their responsive brief in Therasense, Inc. v. Becton, Dickinson & Co. on October 8th. While addressing the Federal Circuit's questions generally directed to its application of the inequitable conduct doctrine, appellees' brief is particularly focused on its main objective — having the en banc Court affirm the District Court's finding that Abbott committed inequitable conduct in procuring the patent-in-suit (U.S. Patent No. 5,820,551).

The brief contends that the standard for materiality that best conforms judicial review of patentee conduct is the U.S. Patent and Trademark Office's Rule 56. Using the Rule 56 standard is proper, according to appellees, because it makes more consistent the standards used before the USPTO and at trial, thus minimizing any "unfairness" to patentees. In addition, the brief argues that using the Rule 56 standard is advantageous when compared with standards that are more or less stringent. Using the "reasonable examiner" standard would result in overdisclosure to the Office, since an applicant could not predict what a court might later find would be "reasonably" material, whereas a "but for" standard would not promote the public interest by motivating applicants to disclose prior art known to them. The best benchmark is the agency standard, in view of its expertise as well as the administrative considerations that underlie the rule (requiring consistent argument and submission of information or art that established a prima facie case of unpatentability). The brief notes that the Government's brief also argues for the Rule 56 standard of materiality for similar administrative efficiency reasons. And the brief argues that adoption of this standard would reduce the number of inequitable conduct claims asserted, since it would (presumably) prevent accused infringers from using less stringent standards (citing Digital Control Inc. v. Charles Machine Works, 437 F.3d 1309, 1314-16 (Fed. Cir. 2006); American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1362-1363 (Fed. Cir. 1984); Dayco Products, Inc. v. Total Containment, Inc., 329 F.3d 1358, 1363-64 (Fed. Cir. 2003); Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1354 (Fed. Cir. 2008), as examples of cases where less stringent standards were applied).

Moreover, the brief argues that the Rule 56 standard is consistent with Supreme Court precedent — specifically, Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250-51 (1944); and Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814 (1945). Appellees read this precedent for the proposition that the Keystone Driller and Hazel-Atlas cases were based on unclean hands principles, in view of the frankly fraudulent behavior patentees in these cases exhibited both before the USPTO and during litigation. But the brief contends that the Court created an "inequitable conduct" doctrine that was distinct from fraud in the Precision Instrument case: in that case, appellees argue that that Court stated that "the patentee must disclose 'all facts concerning fraud or inequitableness underlying the applications in issue' to the PTO," and that this distinction signaled that the doctrine should be broader than common law fraud (as well as providing "further guidance about what information should be considered for inequitable conduct"). The public policy rationale for this argument is that "the public has a strong interest in 'seeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct,'" again citing language that seems to suggest that the doctrine encompasses behavior in addition to common law fraud. The brief also argues that the current inequitable conduct doctrine is more equitable to patentees, since the "unclean hands" doctrine in the Keystone Driller and Hazel-Atlas cases was "amorphous" and did not set out clear lines for assessing culpable conduct. And the requirement of common law fraud for reliance and harm resulting from that reliance "may not be evident in the prosecution record in every case," allowing improperly procured patents to issue and be enforceable against the public interest. Thus, "reverting" to a common law fraud standard, as argued by Abbott and some amici, would be contrary to settled Supreme Court precedent, and would harm the public interest by permitting patents to be enforced that were obtained through inequitable conduct that fell short in some respect to fraud. "Swinging the pendulum too far in the other direction," to the unclean hands standard of Keystone Driller and Hazel-Atlas is just as bad, according to the brief, because the unclean hands doctrine is even more devoid of standards and guidelines than the current inequitable conduct doctrine.

The brief rejects the "but for" test called for by Abbott and some amici, arguing that such a decision would "turn back the clock of progress" to the standard applied prior to establishment of Rule 56 by the Office in 1977. The brief argues two practical deficiencies for using the "but for" standard: first, the standard fails to capture situations where the patent issued due to misconduct, but the prosecution record is unclear about the reason for allowance, inter alia because Examiners do not testify in infringement litigation and thus a court "will not know critical facts that may prove inequitable conduct." This is essentially an evidentiary argument, wherein "patentees may withhold or misrepresent information that significantly impacts the examiner's decision to issue the patent, without creating any record that such information was necessary for issuance" (emphasis in original). Second, "dishonest patentees could ignore the PTO's disclosure requirements knowing that the courts will apply a narrower materiality standard, without any effective sanction for violating the PTO's Rule" except practitioner disciplinary proceedings in the Office (that the Office itself admits it lacks the capability to properly enforce). Conversely, the brief argues, "[a]n honest applicant . . . would be left with less guidance about what to disclose because the 'but/for' test is applied in hindsight. Because he cannot know in advance what will be the 'but/for' reason for allowance, he will be forced to overdisclose to the PTO out of an abundance of caution," further impeding the efficient operation of the Office. The brief also disputes Abbott's interpretation of Supreme Court and Federal Circuit precedent upon which Abbott relied in its brief.

Finally, the materiality portion of the brief closes with a section on the materiality of the "misleading" declaration and argument Abbott submitted to the Office to overcome rejection and have the '551 patent grant; significantly, the brief argues that these "misrepresentations" satisfy the "but for" test (and thus that the District Court's finding of unequitable conduct should be affirmed no matter how the en banc Court decides to modify how it applies the inequitable conduct doctrine).

Turning to the intent prong, the brief argues that the "single most reasonable inference" standard as enunciated in Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008), should be used, so that circumstantial evidence can be considered by a court in finding deceptive intent. Appellees argue that instances where a patentee "admits" to committing inequitable conduct are "rare," as are instances where there is a "smoking gun" evincing an intent to deceive. Thus, circumstantial evidence and inferences therefrom are important for determining whether a patentee had deceptive intent by clear and convincing evidence, the brief contends. This standard is necessary, appellees argue, because otherwise "a dishonest patentee could deceive the PTO and then further perpetuate the wrong by simply refusing to admit intent in court." Using the "single most reasonable" inference standard is fair to patentees, according to the brief, because "[t]his is the most stringent possible standard for intent short of requiring an outright admission." This is also the standard used by the District Court in finding intent below.

The question of circumstantial evidence and how it (and what evidence) is applied does not somehow permit courts to find "lesser" evidence of intent the "greater" the evidence of materiality. Rather, the brief argues that courts can permissibly look to the degree of materiality as circumstantial evidence of intent (since it is difficult and unlikely to have deceptive intent for not disclosing information that is not material). Provided that a court does not find intent "solely" from the evidence of materiality, and finds both materiality and intent separately by clear and convincing evidence, appellees argue that using facts relating to materiality as circumstantial evidence of intent is proper (although it is apparent that this approach can easily be misapplied), citing Judge Prost's concurring opinion in Optium Corp. v. Emcore Corp., 603 F.3d 1313, 1325 (Fed. Cir. 2010). Ignoring the degree of materiality in assessing intent would require a court to ignore a portion of the "totality of circumstances" that it should consider for deciding inequitable conduct, the brief argues. Relevant evidence also includes patentee's excuses for not submitting material information, says the brief, and the credibility of such excuses also comprise relevant evidence for a court to consider in considering the sufficiency of the evidence for deceptive intent. "Facts common to materiality and intent include the prominence of a withheld reference in prosecution, concealing prior inconsistent statements, and submitting false declarations," which sounds reasonable; however, the brief goes on to argue that "[p]rominence of a reference, even in related litigation, underscores its materiality and the patentee's awareness of its relevance to show he deceptively withheld it" (emphasis added). This argument underscores arguments by plaintiff and amici that the Court should establish a deceptive intent standard that would not encourage litigation-related "bootstrapping" of evidence of materiality to establish intent. Appellees also argue that "[t]he 'single most reasonable inference' based on the totality of the evidence provides a high standard of intent, just short of an outright admission. That totality includes all the facts, including those that may also bear on materiality. It also limits the inequitable conduct doctrine by giving the patentee every opportunity to provide exculpatory evidence of good faith for his conduct and maintains 'a high bar' for proving intent," citing Eisai Co. v. Dr. Reddy's Labs., Ltd., 533 F.3d 1353, 1360 (Fed. Cir. 2008). This portion of the brief ends with a detailed discussion and argument supporting the District Court's determination that plaintiffs' acted with an intent to deceive.

The brief then addresses the appropriateness of the "materiality-intent-balancing" test that the Federal Circuit uses to determine whether there is sufficient evidence to support the exercise of the court's equitable powers to render a patent unenforceable. Appellees argue that this is the appropriate standard in cases ("the vast majority") where "the [withheld] information at issue bears on patentability of claims," but concede that there may be other cases where a court should not use its powers to negate patent rights. Such cases include those where the conduct in question has no bearing on patentability (e.g., disclosures regarding Inventorship [PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315 (Fed. Cir. 2000)], Petitions to Make Special [General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405], or Small Entity Status [Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223 (Fed. Cir. 2007)]. While being careful to note that "[t]he issue of non-patentability cases is not before the Court on the facts here," the brief suggests that "[c]ourts should have the discretion to refer such cases to the PTO for disciplinary action or, in rare circumstances, find the patent unenforceable under the unclean hands doctrine." The balancing test permits courts "to balance the equities before finding inequitable conduct," comprising "an important safeguard where the overall context of the case shows that the conduct was too insignificant to justify the severe penalty of unenforceability." However, the brief concedes that for most cases, "[o]nce materiality and intent are independently established, the balance will typically favor finding inequitable conduct," citing Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995), and Refac Int'l Ltd. v. Lotus Dev. Corp., 81 F.3d 1576, 1582-1583 (Fed. Cir. 1996). Nonetheless, even under these circumstances, the balancing test permits a court to exercise its discretion in imposing sanctions short of complete unenforceability.

The brief's arguments that the District Court's finding of inequitable conduct should be affirmed are straightforward. The declaration was an affirmative misrepresentation about the meaning of the language that a membrane was "optional" as disclosed in the relevant prior art, and statements in the declaration and argument that a membrane was "required" were completely contradictory to arguments submitted to the European Patent Office and not disclosed to the U.S. examiner. The declarant and attorney knew about the information and its materiality and did not disclose it to the USPTO. These circumstances are particularly prone to inequitable conduct because a declaration comprises extrinsic evidence that an examiner cannot independently verify; this is in contradistinction with submitted art and attorney argument, both of which an examiner is capable of assessing on her own. The "excuses" proffered by the declarant and attorney to explain their conduct were "incredible," and the District Court found their testimony to be unbelievable. Under these circumstances, the District Court's determination that the '551 patent was obtained through inequitable conduct and thus should be unenforceable was not an abuse of discretion and would be the conclusion no matter what changes the en banc Court may make in how the inequitable conduct doctrine should be applied. Thus, appellees argue that the District Court's inequitable conduct determination should be affirmed.

For additional information regarding this topic, please see:

• "Bayer Submits Brief in Therasense v. Becton Dickinson," October 20, 2010
• "PhRMA Files Amicus Brief in Therasense Case," August 22, 2010
• "PTO Files Amicus Brief in Therasense Case," August 19, 2010
• "American Bar Association Files Amicus Brief in Therasense Case," August 17, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. — Briefing Schedule Update," August 8, 2010
• "BIO Files Amicus Brief in Therasense Case," August 8, 2010
• "Pharma and Software Companies File Joint Amicus Brief in Therasense Case," August 3, 2010
• "IPO Files Amicus Brief in Therasense Case," August 2, 2010
• "Abbott Files Brief in Therasense Case," July 28, 2010
• "CAFC Sets Date for Oral Argument En Banc in Inequitable Conduct Appeal," June 9, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. — Briefing Schedule Update," May 16, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. Briefing," May 13, 2010
• "Federal Circuit Grants En Banc Review in Therasense v. Becton Dickinson," April 28, 2010
USPTO and EPO to Develop Joint Patent Classification System

October 25, 2010

By Donald Zuhn —

In a joint press release issued on Monday, the U.S. Patent and Trademark Office and European Patent Office announced that the two offices would be working together to develop a joint patent classification system. One of the goals of the joint effort will be to align the EPO classification and U.S. classification systems with the International Patent Classification (IPC) system, which is administered by the World Intellectual Property Organization (WIPO). However, the USPTO and EPO noted that the jointly developed system will be more detailed than the IPC system in order to improve patent searching. The joint classification system is expected to help the USPTO and EPO eliminate unnecessary duplication of work, thereby promoting more efficient examination and enhancing examination quality.

Regarding the joint effort, USPTO Director David Kappos and EPO President Benoît Battistelli stated that the USPTO and EPO had agreed "to work toward the formation of a partnership to explore the development of a joint classification system based on the European Classification system (ECLA) that will incorporate the best classification practices of the two offices," noting that the new system would be aligned with the World Intellectual Property Organization (WIPO) classification standards and the International Patent Classification (IPC) structure. The joint release called the effort "a milestone achievement" for the Five IP Offices (IP5) — consisting of the EPO, USPTO, Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), and State Intellectual Property Office of the People's Republic of China (SIPO) — which would bring the IP5 closer to a Common Hybrid Classification, one of the IP5's ten Foundation Projects.
Court Report

October 25, 2010

By Sherri Oslick —

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

Sandoz Inc. v. Boehringer Ingelheim
1:10-cv-01767; filed October 19, 2010 in the District Court of the District of Columbia

Declaratory judgment of invalidity and non-infringement of U.S. Patent No. 7,429,602 ("Treating Conjunctivitis by Topically Administering An Epinastine Solution to the Conjunctiva," issued September 30, 2008), licensed to Allergan, based on Sandoz's filing of an ANDA to manufacture a generic version of Allergan's Elestat® (epinastine hydrochloride ophthalmic solution, used to prevent itching associated with allergic conjunctivitis), and based on the continued listing of the '602 patent in the Orange Book, despite Boehringer's disclaimer of all claims and all term of the '602 patent and request that it be delisted from the Orange Book. View the complaint here.

Eli Lilly & Co. v. Accord Healthcare, Inc.
1:10-cv-00781; filed October 19, 2010 in the Middle District of North Carolina

Infringement of U.S. Patent No. 5,464,826 ("Method of Treating Tumors in Mammals with 2',2'-difluoronucleosides," issued November 7, 1995) following a Paragraph IV certification as part of Accord's filing of an ANDA to manufacture a generic version of Lilly's Gemzar® (gemcitabine hydrochloride for injection, used to treat non-small cell lung cancer, pancreatic cancer, breast cancer, and ovarian cancer). View the complaint here.

Mylan Pharmaceuticals Inc. v. Galderma Laboratories Inc. et al.
1:10-cv-00892; filed October 18, 2010 in the District Court of Delaware

• Plaintiff: Mylan Pharmaceuticals Inc.
• Defendants: Galderma Laboratories Inc.; Galderma Laboratories LP; Supernus Pharmaceuticals Inc.

Declaratory judgment of non-infringement and invalidity of U.S. Patent No. 7,749,532 ("Once Daily Formulation of Tetracyclines," issued July 6, 2010), licensed to Galderma based on Mylan's filing of an ANDA to manufacture a generic version of Galderma's Oracea® (doxycyline delayed release capsules, used to treat inflammatory lesions of rosacea). View the complaint here.

Genzyme Corp. v. Medicis Pharmaceutical Corp. et al.
1:10-cv-11763; filed October 15, 2010 in the District Court of Massachusetts

• Plaintiff: Genzyme Corp.
• Defendants: Medicis Pharmaceutical Corp.; Medicis Aesthetics, Inc.

Infringement of U.S. Patent No. 5,399,351 ("Biocompatible Viscoelastic Gel Slurries, Their Preparation and Use," issued March 21, 1995) based on Medicis' manufacture, use, sale, and offer for sale of its Restylane®, Perlane®, Restylane-L and Perlane-L products (hyaluronic acid, used to correct moderate to severe facial wrinkles and folds). View the complaint here.
Court Report

October 24, 2010

By Sherri Oslick —

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

Galderma Laboratories LP et al. v. Actavis Mid Atlantic LLC
1:10-cv-00887; filed October 15, 2010 in the District Court of Delaware

• Plaintiffs: Galderma Laboratories LP; Galderma SA; Galderma Research and Development SNC
• Defendant: Actavis Mid Atlantic LLC

Infringement of U.S. Patent No. 7,579,377 ("Administration of 6-[3-(1-adamantyl)-4methoxyphenyl]- 2-naphthoic Acid for the Treatment of Dermatological Disorders," issued August 25, 2009) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Galderma's Differin® gel (adapalene, used in the topical treatment of acne vulgaris). View the complaint here.

Warner Chilcott Co., LLC v. Mylan Inc. et al.
1:10-cv-07840; filed October 13, 2010 in the Southern District of New York

• Plaintiff: Warner Chilcott Co., LLC
• Defendants: Mylan Inc.; Mylan Pharmaceuticals Inc.; Famy Care Ltd.

Infringement of U.S. Patent No. 6,667,050 ("Chewable Oral Contraceptive," issued December 23, 2003) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Warner Chilcott's Femcon Fe® (formerly Ovcon® 35 Fe, norethindrone and ethinyl estradiol tablets, and ferrous fumarate tablets, used for oral contraception). View the complaint here.

Purdue Pharmaceutical Products L.P. et al. v. Hospira, Inc.
1:10-cv-06471; filed October 8, 2010 in the Northern District of Illinois

• Plaintiffs: Purdue Pharmaceutical Products L.P.; Purdue Pharma L.P.; Purdue Pharma Technologies Inc.
• Defendant: Hospira, Inc.

Infringement of U.S. Patent No. 6,589,960 ("Hydromorphone And Hydrocodone Compositions And Methods For Their Synthesis," issued July 8, 2003) following a Paragraph IV certification as part of Hospira's filing of an ANDA to manufacture a generic version of Purdue Pharma's Dilaudid® (hydromorphone hydrochloride for injection, used to treat moderate to severe pain). View the complaint here.

Celgene Corp. v. Natco Pharma Ltd.
2:10-cv-05197; filed October 8, 2010 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,635,517 ("Method of Reducing TNFα Levels with Amino Substituted 2-(2,6-dioxopiperidin-3-yl)-1-oxo-and 1,3-dioxoisoindolines," issued June 3, 1997), 6,045,501 ("Methods for Delivering a Drug to a Patient While Preventing the Exposure of a Foetus or Other Contraindicated Individual to the Drug," issued April 4, 2000), 6,281,230 ("Isoindolines, Method of Use, and Pharmaceutical Compositions," issued August 28, 2001), 6,315,720 ("Methods for Delivering a Drug to a Patient While Avoiding the Occurrence of an Adverse Side Effect Known or Suspected of Being Caused by the Drug," issued November 13, 2001), 6,555,554 ("Isoindolines, Method of Use, and Pharmaceutical Compositions," issued April 29, 2003), 6,561,976 ("Methods for Delivering a Drug to a Patient While Preventing the Exposure of a Foetus or Other Contraindicated Individual to the Drug," issued May 13, 2003), 6,561,977 ("Methods for Delivering a Drug to a Patient While Restricting Access to the Drug by Patients for Whom the Drug May be Contraindicated," issued May 13, 2003), 6,755,784 (same title, issued June 29, 2004), 7,119,106 ("Pharmaceutical Compositions of 1-oxo-2-(2,6-dioxopiperidin-3-yl)-4-aminoisoindoline," issued October 10, 2006), and 7,465,800 ("Polymorphic Forms of 3-(4-amino-1-oxo-1,3 dihydro-isoindol-2-yl)-piperidine-2,6-dione," issued December 16, 2008) following a Paragraph IV certification as part of Natco's filing of an ANDA to manufacture a generic version of Celgene's Revlimid® (lenalidomide, used in the treatment of multiple myeloma patients who have received at least one prior therapy, and in the treatment of patients with transfusion-dependent anemia due to Low- or Intermediate-1–risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality). View the complaint here.
Conference & CLE Calendar

October 24, 2010

October 25, 2010 – Advanced Patent Licensing 2010: Current Developments and Best Practices (Practising Law Institute) – San Francisco, CA

November 8, 2010 – Advanced Patent Licensing 2010: Current Developments and Best Practices (Practising Law Institute) – New York, NY (Groupcasts to be held in Atlanta, Philadelphia, Pittsburgh, and Mechanicsburg, PA)

November 8-9, 2010 – Patent Litigation 2010 (Practising Law Institute) – Atlanta, GA

November 15-16, 2010 – European Pharmaceutical Regulatory Law Boot Camp*** (American Conference Institute) – New York, NY

November 15-16, 2010 – Patent Litigation 2010 (Practising Law Institute) – New York, NY (Groupcasts to be held in Philadelphia, Pittsburgh, and Mechanicsburg, PA)

November 30 to December 1, 2010 – 12th Advanced Forum on Biotech Patents (American Conference Institute) – Boston, MA

December 7-8, 2010 – Developing IP Strategies for Crystalline Forms*** (International Quality & Productivity Center) – London, England

December 8-9, 2010 – Paragraph IV Disputes*** (American Conference Institute) – San Francisco, CA

January 26-27, 2011 – The Life Sciences Lawyer's Guide to Patent Term Adjustment and Patent Term Extensions*** (American Conference Institute) – New York, NY

***Patent Docs is a media partner of this conference or CLE
ACI Paragraph IV Disputes Conference

October 22, 2010

American Conference Institute (ACI) will be holding a West Coast edition of its Paragraph IV Disputes conference on December 8-9, 2010 in San Francisco, CA. The conference will allow attendees to:

• Identify patents for small molecules and small proteins that may be ripe for a Paragraph IV challenge;
• Recognize an ANDA applicant's initial obligations and reevaluate Orange Book tactics;
• Incorporate post-KSR obviousness considerations into Paragraph IV litigation strategies;
• Comprehend the procedural and substantive requirements for the contents and delivery of the Notice Letter;
• Develop a plan to use the 45 day post-Notice Letter receipt period more effectively and know when it makes sense to file suit;
• Master techniques for drafting the initial Paragraph IV pleadings and factor in considerations relative to venue, jurisdiction, local rules, and cost;
• Understand the criteria for 180-day exclusivity and the circumstances under which it may be forfeited;
• Appreciate the significance of generic versus generic actions for brand names and generics;
• Navigate the intricacies of litigation with multiple ANDA filers;
• Spearhead discovery dilemmas, optimize the use of experts, and perfect Markman timing;
• Analyze the CAFC's latest findings on declaratory judgments, inequitable conduct, preliminary injunctions, and Rule 11 sanctions vis-a-vis Paragraph IV cases; and
• Weigh the options over an at risk launch.

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

• Pre-suit due diligence strategies in anticipation of the Paragraph IV challenge;
• Assessing the ANDA applicant's initial obligations;
• New takes on obviousness: Pre-suit considerations for brand-names and generics;
• Throwing down the gauntlet: The Paragraph IV notice letter — delivery and receipt;
• Let the games begin: The start of the Paragraph IV law suit — Pleadings and considerations;
• Exploring exclusivity and forfeiture dilemmas relative to Paragraph IV litigation;
• A closer look at generic versus generic law suits;
• Litigating with multiple ANDA filers: Brand name and generic perspectives;
• FTC keynote: Pay for delay settlements;
• Recent decisions impacting Paragraph IV challenges and motion practice;
• Discovery strategies and pre-trial maneuvering tactics for brand names and generics; and
• Assessing danger and mitigating liabilities associated with injunctions and "at risk launches."

Two additional workshops will be offered before and after the conference. A pre-conference workshop, entitled "Hatch-Waxman and BPCIA 101 — A Primer on IP Basics and Regulatory Fundamentals," will be offered from 10:00 am to 5:00 pm on December 7, 2010. During this workshop, ACI's faculty will offer presentations on the following topics:

• A guide to the essentials of the FDA approval process for drugs and biologics for life sciences patent lawyers;
• Patent and IP overview for drugs and biologics: Hatch-Waxman, trade dress, and more;
• Patent and non-patent exclusivity;
• Bioequivalence and the "same active ingredient" vis-à-vis patentability; and
• Exploring pharmaceutical patent extensions: Patent Term Adjustment and Patent Term Restoration.

In addition, a post-conference workshop, entitled "The Master Class on Settling Paragraph IV Disputes: Brand-Name and Generic Perspectives," will be offered from 9:00 am to 12:30 pm on December 10, 2010. In this workshop, ACI faculty will explore the best practices for reaching and finalizing settlements that the parties and the FTC can live with.

The agenda for the Paragraph IV Disputes 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.

The registration fee for the conference is $2,295 (conference alone), $3,195 (conference and pre-conference workshop), $2,895 (conference and post-conference workshop), $3,595 (conference and both workshops), or $1,395 (pre-conference workshop alone). Those registering by November 12, 2010 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 Paragraph IV Disputes conference.
Biotech/Pharma Docket

October 21, 2010

By James DeGiulio —

Novo Fails to Dismiss Suit over Validity of Prandin Patent

The five year dispute over the validity of the patent covering the diabetes drug Prandin continues, as Novo Nordisk's attempt to dismiss the case with Sun Pharmaceutical Industries and Caraco Pharmaceutical Laboratories was recently denied.

Novo originally filed suit against Caraco in 2005 in the U.S. District Court for the Eastern District of Michigan, alleging infringement of U.S. Patent No. 6,677,358 based on their ANDA covering a generic version of Prandin. Sun was later added to the lawsuit. Sun and Caraco counterclaimed that Novo's patent was invalid and would not be infringed by the sale of their generic version of the drug. In 2007, the FDA notified Caraco that it could not grant final approval of the ANDA because of the Novo lawsuit. Caraco then amended its ANDA with a Section VIII statement, but Caraco's claim was rendered moot when the FDA allowed Novo to modify the use code of the '358 patent to include the method. Novo's request for a change of its use code was contested and appealed to the Federal Circuit, which ultimately ruled in April that the change was allowed (see "Novo Nordisk A/S v. Caraco Pharmaceutical Laboratories, Ltd. (Fed. Cir. 2010)"). In July, the Federal Circuit denied an en banc rehearing of the case. As a result, Novo moved for dismissal, arguing that there was no longer a controversy in the case because Caraco had dropped its Paragraph IV certification in favor of the Section VIII statement.

On October 6, Judge Avern Cohn denied Novo's motion to dismiss. Judge Cohn disagreed with Novo's argument, noting that Caraco had continued to pursue Paragraph IV certification in conjunction with the Section VIII statement. Judge Cohn also noted that Caraco's Paragraph IV certification is still pending before the FDA. Judge Cohn's Order can be viewed here.

Cobalt Pharmaceuticals and Sepracor Settle Lunesta Patent Litigation

Cobalt Pharmaceuticals has reached a settlement with Sepracor, thus ending its involvement in the multi-defendant infringement suit brought by Sepracor over the sleep drug Lunesta.

In March 2009, Sepracor brought suit in the U.S. District Court for the District of New Jersey against nine generic companies who intended to make generic versions of the sleep drug Lunesta (see "Court Report," March 29, 2009). Sepracor alleged that the generic maker's ANDAs infringed four patents covering the drug: U.S. Patent Nos. 6,319,926; 6,444,673; 6,864,257; and 7,381,724. Wockhardt and Glenmark were dismissed from the litigation in August, and Teva settled in September of this year (see "Biotech/Pharma Docket," August 12, 2010; "Biotech/Pharma Docket," September 2, 2010).

On October 12, Judge Dennis M. Cavanaugh signed off on a stipulation of dismissal without prejudice between the parties. Cobalt and Sepracor had previously informed Judge Cavanaugh that the matter had reached a resolution. Under the terms of the stipulation, the parties agreed that their claims and counterclaims were moot, following the resolution. Each party agreed to pay its own fees and costs. Judge Cavanugh's Order can be viewed here.

Warner Chilcott Settles Loestrin, Femcon Patent Suit with Lupin

Warner Chilcott and Lupin have settled a patent dispute regarding Lupin's development of generic forms of the birth control drugs Loestrin 24 Fe and Femcon Fe.

Warner Chilcott brought suit against Lupin in September 2009 in the U.S. District Court for the District of Maryland, accusing Lupin of infringing U.S. Patent Nos. 5,552,394 and 6,667,050, covering the birth control drugs Loestrin 24 Fe and Femcon Fe, respectively (see "Court Report," September 27, 2009). The case was transferred to the U.S. District Court for the District of Delaware in November 2009.

Under the settlement agreement, Lupin cannot launch generic Loestrin before July 22, 2014, or begin selling generic Femcon before Jan. 1, 2013. Warner Chilcott has also granted Lupin a nonexclusive license for Femcon, allowing Lupin to sell an authorized generic supplied by Warner Chilcott. Both parties' motions to dismiss have yet to receive court approval.

James DeGiulio has a doctorate in molecular biology and genetics from Northwestern University and is a graduate of Northwestern University School of Law. Dr. DeGiulio is a member of MBHB's 2010 associate class and he can be contacted at degiulio@mbhb.com.
Bayer Submits Brief in Therasense v. Becton Dickinson

October 20, 2010

By Kevin E. Noonan —

Co-defendant Bayer Healthcare LLC has submitted its brief in the Federal Circuit's en banc reconsideration of inequitable conduct in Therasense Inc. v. Becton Dickinson & Co. The brief's basic argument is that the Court's application of the inequitable conduct doctrine needs to be revised in keeping with traditional standards and that the Court should apply an "unclean hands" approach. "The Court does not need the hatchet offered by Abbott and need only take a scalpel to a few targeted areas of the inequitable conduct doctrine," according to Bayer's brief. The inequitable conduct doctrine is broader than common law fraud, and should be applied with flexibility to protect the public's interest.

While conceding that that the Court's application of the doctrine needs to be modified, the brief takes the position that "this Court's materiality-intent framework properly tailors the general requirements of the doctrine to the specific context of duty of candor inequitable conduct cases." The modification Bayer suggests is that inequitable conduct should be returned to its roots in the equitable doctrine of unclean hands, which requires "an (a) intentional, (b) 'wrongful' act (c) connected to the patent that is the subject of the litigation." While broad, this standard falls well below common law fraud or the "but for" tests proposed by Abbott and several amici, and Bayer argues that this is consistent with Supreme Court precedent. According to Bayer's brief, the Supreme Court "trilogy" of inequitable conduct cases — Keystone Driller Co. v. General Excavator Co., 290 U.S. 240 (1933); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250-51 (1944); and Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945) — supports the argument that merely casting doubt on the validity of a patent can be sufficient, thereby negating the reliance requirement of fraud. The brief accuses Abbott and amici with "mischaracterizing" the Supreme Court's precedent, saying that the unclean hands doctrine is adequate and is "sound policy" because the patent grant is a "special privilege" that the Supreme Court has held requires an "uncompromising duty" of candor. The brief also contends that the special status of patents as "exception[s] to the general rule against monopolies" provokes a public interest that supports using the broader unclean hands doctrine rather than the common law standard advanced by Abbott and amici. Bayer further argues that a higher standard of candor is demanded due to the ex parte nature of patent prosecution. Paradoxically, however, (in view of the deleterious consequences for the Patent Office occasioned by the current inequitable conduct standard) the brief cites the "ever increasing" patent application burden as a reason applicants must be compelled to comply with a higher standard of disclosure.

Conveniently, Bayer rejects the rather well-defined requirements of common law fraud with the more "flexible" unclean hands doctrine, that is "not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion," citing Keystone. Moreover, the brief argues that a significant distinction between common law fraud and inequitable conduct is that inequitable conduct does not require reliance, citing Morton Salt (a patent misuse case) in support of this argument. In contrast, Bayer argues that the materiality-intent test "appropriately applies" the unclean hands doctrine in the context of inequitable conduct, saying that the test tracks the requirements for unclean hands: intent (intent), a wrongful act (failure to disclose), and a connection (nexus) between the wrongful act and the cause of action (i.e., a lawsuit based on improperly-procured patent).

Materiality is what determines whether there is a wrongful act — it provides the link, since withholding immaterial information does not create a harm to the public. The brief cites Norton v. Curtiss, 433 F.2d 779 (CCPA 1970), and Molins PLC v. Textron, Inc. for the proposition that such withholding "constitutes the 'wrongful act' necessary to invoke unclean hands." The brief also cites language relating to "fraud or other inequitable conduct" from the Supreme Court's Precision decision to suggest the wrong that occasions inequitable conduct must be broader than fraud. Such an interpretation is consistent with the public interest, Bayer argues, since fraud is a wrong between private parties while inequitable conduct implicates a harm to the public (interestingly, citing a labor law case for this proposition). The brief also notes (not for the first time) that including requirements from common law fraud (specifically, the "but for" reliance prong) is contrary not only to Bayer's reading of Precision Instrument, but also to prior Federal Circuit precedent (which is what the Court is reconsidering by rehearing this case en banc, after all).

Bayer's brief does acknowledge that "the materiality-intent test may not be appropriate for every inequitable conduct allegation," specifically the "arguably less egregious conduct" cases. However, since intentional contravention of any PTO rule related to patentability should result in inequitable conduct, the brief suggests that such instances be subject to a different (and less draconian) remedy than complete unenforceability (although it does not suggest either where the line should be drawn nor any alternative remedies).

The brief does find a use for the common law fraud standard — in Walker Process cases involving antitrust liability. The brief supports this argument with its reading of the Precision Instruments decision, but again uses Federal Circuit precedent (which is what the en banc Court has put at issue) to support the use of the fraud standard in determining the existence of Walker Process fraud (specifically Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1070 (Fed. Cir. 1998)). The brief also asserts that nothing in the 1952 Patent Act (as specifically codified at 35 U.S.C. § 292) mandates using a common law fraud standard for inequitable conduct (while recognizing that the statute does not provide any guidance on what standard should be used for finding inequitable conduct).

Bayer argues that the Court should adopt the PTO's Rule 56 as the proper standard for materiality. This standard is fair to patentees, Bayer's brief argues, since it would not impose in litigation a higher standard than is applied for prosecution. The brief specifically rejects the proposition by Abbott and some of the amici that materiality be required to rise to a "but for" standard, but agrees with "the near consensus of amici" regarding the uncertainties caused by the absence of a consistent standard for materiality and the inefficiencies that situation has created in the PTO. Using Rule 56 as a standard would benefit from the "considered, expert judgment of the PTO" on the matter, Bayer argues; included in this "considered . . . judgment" was the PTO's rejection of a proposed "objective 'but for' test" during adoption of the current version of Rule 56. Rule 56 provides an objective definition, according to Bayer, and is integrated into other PTO rules, like its disciplinary rules. Moreover, the brief argues, Rule 56 "fosters disclosure of information the PTO needs to examine patent applications." Bayer argues that Rule 56 properly puts the burden of disclosure (and deciding what gets disclosed) on the applicant; however, the brief attempts to support this position using arguments set forth by the Office in rejecting the objective "but for" test, "that the rule was unnecessary and would require prosecutors to scour the earth for any potentially inconsistent statement made by an applicant" (which arguably is exactly what now occurs).

Importantly for its arguments in this case, Bayer's brief rejects excluding attorney argument from the definition of material information, arguing that it should be treated like any other instance of argument "inconsistent with a position taken by an applicant." This standard would also be consistent with an unclean hands standard, Bayer argues, analogizing to how courts handle these determinations in other contexts. Again, Bayer argues that the Federal Circuit has "recognized that the materiality standard should reflect the PTO's standard," which begs the question of whether that precedent has been correctly decided. The brief is clear that Dígital Control Inc. v. Charles Machine Works, 437 F.3d 1309 (Fed. Cir. 2006), should be overruled, if only because it revived the logic of American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984), that was repudiated by the en banc Court in Kingsdown Med. Consultants, Ltd. v. Hollister, Inc. The brief also makes an administrative law argument on the grounds that Rule 56 "reflects the considered, formal, and expert judgment of the PTO and is therefore entitled to 'great respect' under United States v. Mead Corp., 533 U.S. 218 (2001)." And any other standard "would not promote efficient and effective patent prosecution"; the "reasonable examiner" test would undermine efficient patent examination (because it is too vague and is responsible for disruptive applicant behavior)," and the "but for" test because it is inconsistent with Federal Circuit precedent (again, seemingly missing the point of en banc review) and "was rejected by the PTO" (which decision is not binding on the Court). The brief also argues that the PTO needs a way to police applicant behavior that is broader than invalidity and that encompasses within its scope individuals outside the scope of PTO disciplinary proceedings.

With regard to intent, the brief asserts that "inequitable conduct requires proof of specific intent" that cannot be inferred solely from the materiality of withheld information, and citing Kingsdown Medical, negligence or recklessness is not enough. The brief argues that the en banc Court should repudiate those cases that adopted a "knew or should have known" standard, because intent requires "at least actual knowledge of ail three of the following: (a) the reference or information at issue; (b) the omission or misstatement regarding the reference or information; and (c) the materiality of the reference or information," citing Molins. However, intent can be inferred from the "totality of the circumstances," the brief argues, because there is no requirement for direct evidence of an intent to deceive (a "smoking gun," citing Paragon Podiatry Lab., Inc. v. KLM Labs. Inc., 984 F.2d 1182,1189 (Fed. Cir. 1993), because "[d]irect proof of wrongful intent is rarely available," citing LaBounty Mfg., Inc. v. U.S. ITC, 958 F.2d 1066, 1076 (Fed. Cir. 1992), so that "[i]ntent is generally inferred from the facts and circumstances surrounding the appiicant's overall conduct," citing M. Eagles Tool Warehouse, Inc. v. Fìsher Tooling Co., 439 F.3d 1335, 1340 (Fed. Cir. 2006). Such determinations are within the expertise of district courts to perform, and courts should have "wide latitude" to consider evidence from the totality of the circumstances in making these determinations. The brief also argues that the materiality of a reference can be one of the circumstances in the totality, somewhat diminishing any bright line between the two determinations. The brief states that:

If an applicant fails to disclose a reference that it knows is highly material, the limited range of possible innocent explanations provides greater justification to infer intent. The other facts and circumstances necessary to cross the threshold of clear and convincing evidence of specific intent to deceive are therefore less than if the information only barely crosses the materiality threshold.

In maiking this argument, the brief appears to come close to advocating a "balancing" test that it otherwise rejects. It also cites Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008), for the proposition that, in inferring intent, that inference must be "the single most reasonable inference." But Bayer argues that any such determination should be entitled to deference by the Federal Circuit, because the district court is entitled to such deference when the Court applies an "abuse of discretion" standard of review.

According to Bayer's brief, there should be no "balancing" between materiality and intent. Any balancing by the trial court is properly performed to determine whether the court should exercise its discretion to render the patent unenforceable, but only after threshold determinations of materiality and intent are established by clear and convincing evidence. Unenforceability is not an automatic consequence but should be imposed in the court's discretion after consideration of "all of the relevant circumstances."

Regarding the Federal Circuit's final question to the parties, Bayer argues that it does not think standards developed in other agencies or contexts are appropriate, "because of statutory, regulatory, and precedential differences" particularly with regard to copyrights and trademarks.

Turning to this case, Bayer argues that the district court's finding of inequitable conduct should be affirmed. Here, the same people (Abbott's lawyer and scientist) were involved in arguing to the PTO something that was contradictory to what was argued to the EPO. The existence of an inconsistent argument provides materiality, according to the brief, and the absence of an "innocent explanation" provides intent. The brief also emphasizes that the statements at issue are not limited to attorney argument, but include the scientific declaration and under circumstances where the Examiner could not properly assess the evidence since the arguments made before the EPO were not in front of the Examiner. In addition, the court's determination that the reference that was the "subject of inequitable conduct" was sufficient to invalidate Abbott's claims provided "but for" causation, so that the District Court's inequitable conduct decision should be upheld even should the en banc Court adopt a common law fraud standard for inequitable conduct.

For additional information regarding this topic, please see:

• "PhRMA Files Amicus Brief in Therasense Case," August 22, 2010
• "PTO Files Amicus Brief in Therasense Case," August 19, 2010
• "American Bar Association Files Amicus Brief in Therasense Case," August 17, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. — Briefing Schedule Update," August 8, 2010
• "BIO Files Amicus Brief in Therasense Case," August 8, 2010
• "Pharma and Software Companies File Joint Amicus Brief in Therasense Case," August 3, 2010
• "IPO Files Amicus Brief in Therasense Case," August 2, 2010
• "Abbott Files Brief in Therasense Case," July 28, 2010
• "CAFC Sets Date for Oral Argument En Banc in Inequitable Conduct Appeal," June 9, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. — Briefing Schedule Update," May 16, 2010
• "Therasense, Inc. v. Becton, Dickinson & Co. Briefing," May 13, 2010
• "Federal Circuit Grants En Banc Review in Therasense v. Becton Dickinson," April 28, 2010

recent posts

about