Patent Docs

Boehringer Ingelheim Int’l. v. Barr Laboratories, Inc. (Fed. Cir. 2010)

January 26, 2010

The Metes and Bounds of Obviousness-type Double Patenting

    By Kevin E. Noonan —

Obvious-type double patenting has become an
important issue in patent litigation (Amgen Inc.
v. F. Hoffman-La Roche Ltd., Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc., Proctor & Gamble Co. v. Teva Pharmaceuticals USA, Inc.) and in the
Patent Office (In re Fallaux). While in many ways an anachronism with
the change in U.S. patent term to 20 years from earliest priority date, the
doctrine is still viable as a way to prevent third parties from having
to defend related patents against different patent assignees, due to the
provision that terminally-disclaimed patents be commonly assigned.

The Federal Circuit had occasion to opine on the
doctrine once again in Boehringer
Ingelheim Int'l. v. Barr Laboratories, Inc. The patent at issue, U.S. Patent No. 4,866,812, was found
invalid by the District Court under the doctrine of obviousness-type double patenting. This patent claimed priority as a
divisional application to U.S. Patent No. 4,843,086, which in turn claimed
priority as a divisional application to U.S. Patent No. 4,731,374. The subject matter was directed to tetrahydrobenzthiazoles,
particularly pramipexole, marketed as Mirapex for the treatment of Parkinson's
disease.

During prosecution of the grandparent '374 patent,
the examiner imposed a restriction requirement listing 10 overlapping groups of
15 originally-filed claims. These groups comprised product (Groups I-V), "utility" (VIII-X) or process
(VI) claims. The examiner
permitted applicant to pick one group from the product and utility groups or
the process group, and the applicant picked Group II and IX for prosecution
that resulted in the '374 patent. The first filed divisional application, that resulted in the '086
patent, encompassed claims from Groups VIII, IX and X, but "none of the
claims [in this divisional] covered subject matter claimed [in the '374
patent]." The second-filed divisional
application encompassed claims from Groups I, III, IV and V "and [did] not cross the examiner's
lines of demarcation with either the claims of the grandparent '947 application
(the '374 patent) or those of the parent '197 application (the '086 patent)." The applications "were therefore
divided as between applications along the lines of demarcation drawn by the
examiner in the restriction requirement." The '812 patent received a patent term extension under 35
U.S.C. § 156 of 1,564 days (4 years
and about 15 weeks), which extended the expiration date from December 12, 2006
to March 25, 2011.

Litigation ensued as the result of ANDAs being
filed by Barr (the original filer) and Mylan, and during the ensuing bench
trial Boehringer filed a terminal disclaimer of the '812 patent over the '086
patent (which had expired by that time). In doing so, "Boehringer
sought to disclaim the approximately six months of the '812 patent's original
term that extended beyond the term of the '086 patent, and then to apply its
1,564-day extension to this shortened original term." The District Court held that this terminal
disclaimer was ineffective, since the '086 had expired, and also rejected Boehringer's claim that 35
U.S.C. § 121 "safe harbor" precluded application of the '086 patent
against the '812 patent for obviousness-type double patenting.

Consequently, the District Court found the patent
invalid for obviousness-type double patenting: "On the merits, the district court
concluded that the compound claims of the '812 patent were obvious in view of
the method-of-use claims of the '086 patent."

The Federal Circuit reversed and remanded (and
awarded costs to Boehringer) in an opinion by Judge Linn, joined by Judge Prost
and joined in part by Judge Dyk, who also filed a dissent-in-part. The Court opined on two issues raised
by Boehringer: Was the terminal
disclaimer effective? Do the
safe-harbor provisions of 35 U.S.C. § 121 apply?

As to the first issue, the Court rejected
Boehringer's characterization of the District Court's decision, saying that the
basis was not that Boehringer attempted to disclaim term during litigation, but
that the terminal disclaimer was filed after the expiration of the '086
patent. The issue was
retroactivity — the opinion "agree[s] with Boehringer . . . that a patentee may file a disclaimer
after issuance of the challenged patent or during litigation, even after a
finding that the challenged patent is invalid for obviousness-type double
patenting." The problem with permitting such
retroactive terminal disclaimers, according to the Court, is that:

[T]he later patent purports to
remain in force even after the date on which the patentee no longer has any
right to exclude others from practicing the claimed subject matter. By
permitting the later patent to remain in force beyond the date of the earlier
patent's expiration, the patentee wrongly purports to inform the public that it
is precluded from making, using, selling, offering for sale, or importing the
claimed invention during a period after the expiration of the earlier patent.

This constitutes "an unjustified advantage"
for the patentee, the Court opined, that cannot be undone by retroactive
disclaimer "because it
has already enjoyed rights that it seeks to disclaim" (emphasis
in original). For
this reason, and that permitting such retroactive terminal disclaimer "would be inconsistent with '[t]he
fundamental reason' for obviousness-type double patenting, namely, 'to
prevent unjustified timewise extension of the right to exclude'," Boehringer
argued that the patent term extension vitiated any such "unjustified
advantage" because the '812 patent enjoyed a patent term extension that
covered the term after the '086 patent expired. The Court disagreed, distinguishing "the
rights enjoyed by a patentee during the term of a patent" from "the
rights enjoyed by a patentee during the term of an extension under § 156." The Court says these are "not the
same" because "the rights of a patentee during a term extension are
limited in ways that do not normally apply to granted patents." In this regard the Court cited the
provisions of 35 U.S.C. § 156(d)(5)(F):

The rights derived from any patent the
term of which is extended under this paragraph shall, during the period of
interim extension —
    (i)
in the case of a patent which claims a product, be limited to any use then
under regulatory review;
    (ii)
in the case of a patent which claims a method of using a product, be limited
to any use claimed by the patent then under regulatory review; and
    (iii)
in the case of a patent which claims a method of manufacturing a product, be limited
to the method of manufacturing as used to make the product then under
regulatory review.

(emphases
added). The
point is that the claims extended under § 156 are only those claims identified
by Boehringer as reading on "the use of pramipexole for the treatment of the 'signs and
symptoms of idiopathic Parkinson's disease.'" Since there were claims (5 and 6) that were not
eligible for extension, the pubic would have been misinformed that Boehringer
was entitled to exclude the practice of these claims after the '086 patent
expired — constituting an "unjustified advantage":

[A] competitor that performed a
patent search on June 28, 2006 would have wrongly been led to believe that the '812
patent continued to cover the specific compounds claimed in claims 5 and 6, and
that it precluded use of pramipexole for treatment of conditions beyond those
approved by the FDA. This is precisely the type of "unjustified timewise
extension of the right to exclude" that the doctrine of obviousness-type
double patenting is designed to prevent.

Turning to
the safe-harbor issue, the Court noted that the safe-harbor is available when
the claims of a patent are divided by the Patent Office, and "is not lost
if an applicant does not file separate divisional applications for every
invention or when independent and distinct inventions are prosecuted together" — it is not limited to filing "only one divisional application":

[W]here the third sentence of § 121
refers to a patent issuing on an application filed as a result of a restriction
requirement, it is referring to patents issuing from any number of multiple
divisional applications and precludes any one from being used as a reference
against any other.

The opinion states that the basis of the District Court's decision (that the safe harbor did not apply) was that the application
that resulted in the '812 patent was not filed "as the result of" a
restriction requirement in the '086 (parent) patent, but in the '374
(grandparent) patent. The Federal Circuit characterizes the questions raised regarding the safe harbor as "(1) whether § 121 can ever apply to a
divisional of a divisional of the application in which a restriction
requirement was entered; and (2) whether the 'as a result of' requirement of §
121 applies to the '812 patent and is satisfied here," which the Court
reviewed de novo.

With regard
to the first question, the Court construed the safe-harbor provisions of 35 U.S.C. § 121:

A patent issuing on an application with
respect to which a requirement for restriction under this section has been
made, or on an application filed as a result of such a requirement, shall not
be used as a reference either in the Patent and Trademark Office or in the
courts against a divisional application or against the original application or
any patent issued on either of them, . . .

as meaning
that the safe harbor applies "when the PTO issues a restriction
requirement that leads to more than two separate applications." In addition, the Court noted that
§ 121 refers broadly to "a divisional application," and does not
state that the divisional must be a direct divisional of the original
application, and that Congress could have worded the statute to be
limited to "a divisional application of the original application" if
that was its intention. The Court
noted that in other situations the safe harbor has been applied to applications
"sharing a common lineage (Geneva
Pharms., Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373, 1378 (Fed. Cir. 2003))
or to continuation applications of divisional applications (Amgen Inc. v. F. Hoffman-La Roche Ltd.,
580 F.3d 1340, 1354 (Fed. Cir. 2009))." Thus, the Court held that there is no basis to
conclude that the safe harbor does not apply to "a divisional of a
divisional" as here.

With regard
to the "as a result of" provision of the statute, the Federal Circuit agreed
with the District Court that this provision must be satisfied by both the '086
('reference") and '812 ("challenged") patents, citing Pfizer, Inc. v. Teva Pharm. USA, Inc.,
518 F.3d 1353, 1360 (Fed. Cir. 2008). In this case, the Court
agreed with Boehringer that "so long as consonance is met, it makes no
difference in terms of compliance with the 'as a result of' requirement whether
the applicant responds to the examiner's restriction requirement by filing one
or more divisional applications from the original application, or instead files
a single divisional application followed by successive additional divisionals,"
where "consonance" is defined as the situation where "the line of
demarcation between the 'independent and distinct inventions' that prompted the
restriction requirement be maintained." Here, Boehringer filed two divisionals encompassing various
combinations of claims comprising the "different inventions" set
forth as being distinct in the restriction requirement assessed against the
(grandparent) '374 application, but not overlapping any of these different
classes between the different patents. In the way Boehringer prosecuted these patents it "neither violated
the examiner's restriction requirement nor risked loss of the safe harbor of §
121." In making this
determination, the Court rejected defendant's argument that the safe harbor
only applies where an applicant "strictly follow[s] an examiner's election
procedure and [does] not overlap claims to independent and distinct inventions
in any single divisional application":

An overlap of claims to independent and
distinct inventions within a given divisional application is neither contrary
to the restriction requirement nor relevant to the requirements of the third
sentence of § 121. Rather, what consonance requires is that the claims
prosecuted in two or more applications having common lineage in a divisional
chain honor, as between applications, the lines of demarcation drawn by the
examiner to what he or she considered independent and distinct inventions in
the restriction requirement.

Because "[n]one
of the inventions claimed as between the '374 original patent, the '086
division, and the '812 division of the division, crosses the examiner's lines
of demarcation of inventions identified in the restriction requirement, . . . consonance
is met and the '086 patent cannot be used as a reference against the '812
patent any more than if both patents had issued from direct divisions from the
application in which the restriction requirement was made."

While this
decision appears to be a straightforward (and sensible) application of the
statute (as well as the policy concerns behind the statute and a common-sense
approach to how patent prosecution is performed), Judge Dyk (at left) dissented to this
aspect of the Court's opinion. In
Judge Dyk's opinion, the majority opinion "significant expands" the
scope of the safe harbor. His
interpretation of the safe harbor is as a narrow exception to the general rule
precluding unwarranted extension of patent term for closely-related inventions
that are obvious variants. His objection is not that the majority's determination that the safe
harbor applies to "later" divisional applications filed as the result
of a restriction requirement. Rather, his dissent is based on consonance, which he defines as
requiring a complete adherence with the contours of the restriction. His reasoning is that Federal Circuit
precedent was based on an applicant being "compelled to comply with a
restriction requirement" and
who "faithfully follows" the requirement.

In Judge Dyk's
view, neither the '086 patent nor the '812 patent are consonant with the
restriction requirement, because while the claims prosecuted in these patents
did not overlap with the claims in the '374 patent or each other, they were not
limited to one of the groups of claims set forth in the original
restriction. Rather, each of the '086
and '812 patents contained non-overlapping combinations of claims from several
of these groups. It is not enough
that there is no overlap — Judge Dyk believes that "preserving the lines
of demarcation" requires applicants to file divisional applications for
each of the groups set forth in the restriction requirement asserted in the
grandparent '374 application. He
supports his position by citing several cases that he contends are inconsistent
with the majority opinion. These include
Gerber Garment Tec., Inc. v. Lectra Sys.
Inc., 916 F.2d 683, 688 (Fed. Cir. 1990); Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1569 (Fed.
Cir. 1991); Texas Instruments Inc. v.
U.S. International Trade Commission, 988 F.2d 1165 (Fed. Cir. 1993); and Applied Materials, Inc. v. Advanced
Semiconductor Materials America, Inc., 98 F.3d 1563 (Fed. Cir. 1996).

Judge Dyk
also believes that a proper interpretation of the statute would preclude the '812
(daughter) patent from the benefit of the safe harbor from the '086 (parent)
patent regardless of whether the '812 patent was entitled to the benefit of the
safe harbor over the '374 (grandparent) application, because the '812 patent
was not filed "as the result of" a restriction requirement imposed
against the '086 patent. This
portion of his dissent seems to imply that divisional applications would need
to be filed on the same date to maintain the safe harbor, and seems to contradict
his apparent agreement with the majority that "a divisional of a
divisional" was entitled to safe harbor protection. His rationale is that "the child
was not separated from the parent 'as a result of' the restriction requirement,
but rather as the result of the applicant's voluntary choice" and "[s]ince
the separation was not 'due to the administrative requirements imposed by the
Patent and Trademark Office,' . . . the child application should not be
afforded the protections of section 121 with respect to the parent application." This situation would permit a patentee to
file successive applications, none of which could be asserted against each other
due to the safe harbor, resulting in "multiple unjustified extensions of
the patent term." He
characterizes this as "abuse," saying that "[t]he majority's
opinion is devoid of any justification for this untenable result. It hardly
requires argument to demonstrate that Congress could not have intended section
121 to operate in this perverse fashion."

Boehringer Ingelheim Int'l. v. Barr Laboratories, Inc. (Fed. Cir. 2010)
Panel: Circuit Judges Linn, Dyk, and Prost
Opinion by Circuit Judge Linn; opinion dissenting-in-part by Circuit Judge Dyk
Law Professors Contend that Data Exclusivity Is Secondary Issue in Follow-on Biologics Debate

January 25, 2010

By
Donald Zuhn —

In
a paper published earlier this month, David Adelman and Christopher Holman assert
that in the debate on follow-on biologics legislation, "the controversy over
regulatory 'data exclusivity' is
a sideshow." The authors
argue that policymakers should instead "focus on mitigating the systemic
barriers to entry that pose much greater and longer-term obstacles to
lower-cost biotech drugs."
Dr. Adelman (at right)
the Harry Reasoner Regents Chair in Law at the University of Texas School of
Law, and Dr. Holman (below left), Associate Professor of Law at the University of
Missouri-Kansas City School of Law (and author of Holman's Biotech IP blog),
discuss these assertions in a paper entitled "Misplaced Fears in the
Legislative Battle Over Affordable Biotech Drugs."

The
authors begin with several observations regarding data exclusivity. First, they note that "data
exclusivity would neither create restrictions on the use of the [biologic]
itself, nor would it preclude FOB makers from conducting their own studies to
obtain FDA approval." Next,
the authors note that the inclusion of a twelve-year data exclusivity period in both
the House and Senate health care bills was "driven by concerns that patent
protection is less effective for biotech drugs than it is for conventional
drugs." While acknowledging
that "[p]revailing uncertainties provide grounds for and against Congress
legislating a twelve-year term of data exclusivity for biotech drugs," the
two professors contend that:

What is unequivocal, though, is that
the effects either way on health care expenditures would be modest. According to a 2007 estimate by the
Congressional Budget Office, establishing an abbreviated FDA approval process
for FOBs would reduce national spending on prescription drugs by just 0.5
percent over the first ten years of the program. The impact of a shortened data exclusivity period would be a
fraction of this estimate, since competitive market entry by FOBs would still
face [] barriers to market entry . . .
. Overall the health care
savings would be nominal, as drugs account for only about ten percent of total
health care expenditures in the United States.

As
a result, the authors conclude that "on balance, the potential benefit to
patients that might result from a shortened period of data exclusivity for
innovators is outweighed by the financial risks to the biotech industry, and
particularly the negative impacts on investments in research and development."

Regarding
the limitations of the patent system for biologics, the paper points to the
complexity of biologics as creating two mutually reinforcing problems for
innovators. First, "[t]he
size and complexity of biotech drugs affords competitors many molecular degrees
of freedom, which opens [u]p many opportunities to design around an original
innovator's patents." Second,
"the scientific uncertainties surrounding the relationship between changes
in structure and protein function bounds the original inventors' capacity to
draft and support broad patent claims." The paper next focuses on the limited success innovators
have had in enforcing biologic patents, particularly composition-of-matter
patents. The authors note,
interestingly, that:

The history of cases involving
enforcement of composition-of-matter patents on biotech drugs paints a
decidedly negative picture. There
does not appear to be a single appellate-level decision in which a patent on
the active ingredient of a biotech drug has been found valid and infringed.

According
to the authors, the problems associated with securing broad biologic patent
protection and then enforcing such patents means that "[a]n abbreviated
FDA approval process could permit FOB producers to have their cake and eat it." In other words, generic manufacturers
"could benefit not only from the research conducted by the original
innovator but also from its clinical data to gain rapid, low-cost FDA approval
— and all while circumventing the patent on the active ingredient."

For
the authors, the real obstacle to low-cost follow-on biologics is not a
twelve-year data exclusivity period, but rather barriers to entry that would
prevent follow-on biologics from reaching the market even after patent and data
exclusivity protection expires.
For example, the paper notes that:

Recent studies have developed models to
estimate the number of FOB producers and price reductions of biologics once FOB
entry occurs. Using conservative
R&D costs assumptions for drugs with mid-level markets (i.e., ~$500 million
annually), one study estimated that the average number of FOB entrants would be
just two, as opposed to nine for traditional drugs, and that on average FOB
prices would remain at eighty-two percent of the brand price.

The
authors argue that if such numbers turn out to be accurate, "this
translates into a negligible impact on total health care costs, as biotech
drugs generate about fourteen percent of the total revenues for
pharmaceuticals, which in turn account for only about ten percent of total
health care costs." More
importantly, the authors argue that "[t]he low sensitivity of aggregate
health care expenditures to the presence or absence of a data exclusivity term
contrasts the heavy reliance of biotech drug makers on profits from successful
drugs." The paper also contends
that:

Limiting the term of data exclusivity
could also be counterproductive for everyone. Although counterintuitive, safeguarding high short-term
profits through a twelve-year data exclusivity term stands to mitigate the
difficulties of balancing innovation and patient access. Owing to the huge upfront costs of drug
development, the optimal temporal profile of drug prices arguably favors high
initial prices followed by a dramatic drop after patent protection (or data
exclusivity) ends.

The
authors conclude the paper by stating that:

[W]e find reasonable grounds for a
twelve-year term of data exclusivity for biotech drugs, but this issue is
ultimately secondary. The most
important problem to address is the multiple barriers to entry of FOB
manufacturers. Designing effective
policies to overcome them warrants much greater attention and careful economic
analysis, as reducing barriers to entry holds out the promise of dramatically
lowering prices of biotech drugs over the long run.

Additional information regarding Dr. Adelman's and Dr. Holman's article can be found on Holman's Biotech IP blog.
NVCA Report Shows Slight Drop in 4Q Venture Funding and Sharp Decline for 2009

January 24, 2010

By
Donald Zuhn –-

On
Friday, the National Venture Capital Association (NVCA), a trade association
representing the U.S. venture capital industry, released the results of its
latest MoneyTree Report on venture funding. The study, conducted with PriceWaterhouseCoopers and Thomson
Reuters, indicates that venture capitalists invested $5.0 billion in 794 deals
in the fourth quarter of 2009, a 2% decrease in dollars and 15% increase in
deals as compared to the third quarter of 2009, when $5.1 billion went into 689
deals. Interestingly, the NVCA had
indicated back in October that $4.8 billion had gone into 637 deals in the
third quarter (see "NVCA Study
Shows Increase in Third Quarter Venture Funding"),
numbers which would have placed the fourth quarter results in a more positive light.

Over the entire year, the NVCA report indicated that venture
capitalists invested $17.7 billion in 2,795 deals in 2009, which marked the
lowest level of funding in twelve years.
The 2009 totals also represented a 37% decrease in dollars and a 30%
decrease in deals as compared with 2008 — the second consecutive year of declines
in deals and dollars invested.

While
the overall investing numbers were down slightly in the fourth quarter, biotech
investing saw a 10% increase in dollars in the fourth quarter, with $1.0
billion being invested in 108 deals.
As a result, the biotech sector was the number one sector for dollars
invested in the fourth quarter and the only sector to receive more than $1
billion in the quarter.

The
biotech sector was also the top sector for the whole of 2009, drawing $3.5
billion in 406 deals for the year.
Despite the top ranking, however, biotech investing declined by 19% in
both dollars and deals in 2009. The
Life Sciences sector, which comprises the biotechnology and medical device
industries, accounted for 34% of all venture capital dollars invested in 2009 as
compared to 28% in 2008.

In
a press release announcing the release of the new MoneyTree Report, the NVCA pointed
to fourth quarter increases in the number of first-time and early stage deals
completed as "potentially marking the beginning of an uptick in investment
levels for 2010." NVCA
president Mark Heesen predicted that "[n]ow that the economy has begun to
show signs of improvement, we expect to see dollars flow more freely back into
those sectors that offered the most promise before the recession began — clean
technology, life sciences and IT."
Tracy Lefteroff, the global managing partner of the venture capital practice
at PricewaterhouseCoopers, noted that "[d]espite the overall drop in funding
in 2009, VCs placed more bets in the fourth quarter of 2009 than we've seen all
year," adding that venture capitalists were "investing fewer dollars
in these companies but the fact remains that there are still entrepreneurs out
there with great ideas who are getting the opportunity to take the next step
forward with their businesses."

Additional
information regarding the latest report can be found here.

For
additional information on this and other related topics, please see:
•
"Biotech/Pharma Companies Look to Market for Capital," December 29,
2009
•
"NVCA Study Shows Increase in Third Quarter Venture Funding," October
23, 2009
•
"Biotech/Pharma Financing Improving, R&D Spending Up," August 31,
2009
•
"Investors Saw Biotech Rebound Coming," August 17, 2009
•
"Is Biotech/Pharma Beginning to Bounce Back?" August 12, 2009
•
"First Quarter Venture Capital Funding at 12-Year Low," April 23,
2009
•
"NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech
Rebound in 2009," February 16, 2009
Conference & CLE Calendar

January 24, 2010

January 25, 2010 – "Are Genes Patentable?" (Intellectual Property Litigation Committee, American Bar Association) – Atlanta & Seattle

January 25-26, 2010 – European Pharmaceutical Regulatory Law Boot
Camp (American Conference
Institute) – New York, NY

January 26-27,
2010 – Advanced In-House Counsel Forum on China IP Law (C5) – Shanghai, China

January 27-30, 2010 – Mid-Winter Institute (American
Intellectual Property Law Association) – La Quinta, CA

January 27-28, 2010 – Pharma & Biotech Patent Litigation (C5) – Amsterdam, Netherlands

January 28, 2010 – "Are Genes Patentable?" (Intellectual Property Litigation Committee, American Bar Association) – Memphis

January 29, 2010 – "Are Genes Patentable?" (Intellectual Property Litigation Committee, American Bar Association) – Wilmington

February 4, 2010 – "Are Genes Patentable?" (Intellectual Property Litigation Committee, American Bar Association) – Chicago

February 4, 2010 – Bay Area Pharma and Life Sciences IP Summit (Fish
& Richardson and Berkeley Center for Law & Technology) – San Mateo, CA

February 9, 2010 – Patent
Prosecution: Best Practices for Reducing Costs While Improving Patent
Quality (Technology
Transfer Tactics) – 1:00 – 2:30 PM (EST)

February
17-18, 2010 – Biotech & Pharmaceutical Patenting (IIR) – Munich, Germany

February 24-25, 2010 – 2nd Expert Forum on ITC Litigation &
Enforcement (American Conference
Institute) – New York, NY

March 1-2, 2010 – 4th Annual Patent Law Institute (Practising
Law Institute) – New York, NY

March 2-4, 2010 – 6th Annual Biosimilars Conference (Visiongain) – Boston,
MA

March 17-18, 2010 – 18th Forum on Biotech Patenting (C5) – Munich,
Germany

March 18-19, 2010 – 4th Summit on Biosimilars and
Follow-on Biologics (Center for
Business Intelligence) – Washington, DC

March 22-23, 2010 – 4th Annual Patent Law Institute (Practising
Law Institute) – San Francisco,
CA

March 24-25, 2010 – FDA Boot Camp*** (American Conference
Institute) – New York, NY

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

January 22, 2010

American Conference
Institute (ACI) will be holding the spring session of its FDA Boot Camp
conference on March 24-25, 2010 in New York, NY. ACI faculty will help attendees:

• Master the basics
of the application and approval processes for drugs, biologics, and devices;
• Comprehend the
structure of the FDA and the roles of the three major agency centers: CDER, CBER, and CDHR;
• Develop a
practical working knowledge of clinical trials for drugs and biologics and the
clearance process for devices;
• Learn how devices
are classified, monitored, and regulated;
• Appreciate the
complexities of pharmaceutical IP and the regulatory balance between brand name
and generic products;
• Recognize the
pivotal role of labeling in the drug and biologics approval process;
• See the
importance of cGMPs to the post-approval regulatory process; and
• Navigate the
protocols of adverse events monitoring, signal detection, product withdrawals,
and recalls.

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

• The basics: Understanding and working with the FDA
— Jurisdiction, functions, organization, and operations;
• The nature of the
approval process;
• Understanding the
clinical trial process for drugs and biologics;
• Patent and IP
overview for drugs and biologics:
Hatch-Waxman, trade dress, and more;
• Drugs and
biologics: Labeling;
• cGMPs: Drugs and biologics (current good
manufacturing practices);
• Non-patent
exclusivity (part of the conference's patent track);
• Bioequivalence: What patent lawyers need to know
(patent track);
• Follow-on
(comparable or biosimilar) biologics (patent track);
• Adverse events
monitoring, pharmacovigilance, and risk management;
• Medical
devices: Classification and the
essentials of the device premarket review process;
• Post-market
requirements and concerns for medical devices;
• Medical device
labeling and advertising; and
• Recall guidance
for drugs, biologics, and medical devices: What you need to know.

A complete brochure
for this conference, including an agenda, list of speakers, and registration
form can be obtained here.

The registration
fee for this conference is $2,195.
Those registering on or before February 19, 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 ACI's FDA Boot Camp conference.
Biotech Patenting Conference

January 22, 2010

C5 (UK) will be
holding its 18th Forum on Biotech Patenting on March 17-18, 2010 in Munich,
Germany. C5 faculty will provide
information and insights into:

• Strategies for
adapting your patent practice to EPO rule changes;
• The latest EPO
requirements for the patentability of biotechnological inventions;
• The practical
impact of major EPO and national court cases;
• Disclosure
requirements for gene patents — what is patenable? From T1329/04 to Eli Lily vs. HGS;
• Second Medical
Use Claims: How to draft your
claims in light of the Enlarged Board's Decision and national case law;
• The evolving
landscape for stem cell patentability in Europe; and
• Ground-breaking
decisions from U.S. courts and major U.S. policy and legislative initiatives.

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

• Keynote
address: The judicial view — Dr.
Klaus Grabinski, Judge at the German Federal Court of Justice;
• EPO examiner's
perspective on patenting biotechnological inventions;
• Panel
discussion: Raising the bar —
Examining and debating EPO's new standards and rule changes;
• An overview of
the year's most important biotech cases and other landmark decisions;
• The Enlarged
Board's decision on second medical use claims and dosing regimens and its
relationship to national case law;
• The disclosure
requirements for gene patents:
From T 1329/04 to T 18/09 (Eli Lilly v. HGS);
• New life breathed
into gene patenting debate;
• The current state
of play for biosimilars in Europe;
• Major case law
and policy developments in the U.S.;
• Patenting and
protecting treatment/diagnostic methods:
Comparing and contrasting European and U.S. standards;
• Maximising patent
protection — Developments in SPCs with a critical review of recent case law;
• Patent strategies
for antibodies: How to draft your
claim to meet heightened patentability requirements;
• Freedom to
operate — Strategies for the biotech practitioner;
• The evolving
landscape of stem cell patentability in Europe; and
• Developments in
patent litigation procedure and cross-jurisdictional litigation management
strategies.

A pre-conference
workshop, entitled "Drafting Successful Patent Applications for
Biotechnology Related Inventions," will be offered from 2:00 to 5:00 pm on
March 16, 2010. During this
workshop, C5 faculty will walk attendees through the process of drafting claims
and specifications for increasingly complex biotechnology applications, and
provide attendees with the tools needed to draft strong applications that will
be well-positioned to withstand future challenges.

In addition, a
post-conference workshop, entitled "Managing Due Diligence: Scrutiny of
Your Patent Portfolio," will be offered from 9:00 am to 12:30 pm on March
19, 2010. This workshop will focus
on the key areas attendees need to consider with regard to due diligence.

A complete brochure
for this conference, including an agenda, list of speakers, and registration
form can be requested here.

The registration
fee for the conference is £1399 ($2,241.69), for the conference and one workshop £1798
($2,897.21), for the conference and both workshops £2197
($3,540.14), and for one workshop alone £499 ($1,322.56). Those interested in
registering for the conference can do so here.
Study Examines Paragraph IV Settlement and Litigation Success Rates

January 21, 2010

By James DeGiulio —

With very little downside
and huge upside, exclusivity is the driving force to the huge increase in
first-to-file Paragraph IV filings. Adam Greene and D. Dewey Steadman, both at RBC Capital Markets Corp., conducted
a recent study where they analyzed over 370 court rulings since the beginning
of 2000 to establish the "success rates" of generics (as defined by
the authors). Using PACER, company reports, and RBC Capital Markets estimates
as their sources, the authors looked at company, district court, and judge, as
well as other relevant trends in the industry such as at-risk launches,
authorized generics, and the number of patent settlements. The authors
hypothesize that, based on the incentives of the Hatch-Waxman first-to-file
structure, every patented product would be challenged. As expected, the authors
saw an increase in first-to-file lawsuits in each year since 2003, reaching a
record high of 65 in 2009 (see chart below).

(Exhibit 2: First-to-File Lawsuits, Greene and Steadman, "Pharmaceuticals: Analyzing Litigation Success Rates," January 15, 2010)

Perhaps the most
intriguing finding of the study, the authors determined the "success rate"
of generics for Paragraph IV challenges was a healthy 76% (282/370) (see chart below). Importantly, the authors consider a settlement as a "success" for the
generic, as it eliminates uncertainty and expensive legal costs. Dropped cases
were also considered a successful outcome for generics, though the reasoning
for this is not provided in the study. Thus, as long as settlements and dropped
cases are considered a "success" for generics, the study supports the
authors' hypothesis that every patent would be challenged by a generic. With a
76% success rate, the potential payoff of a first-to-file Paragraph IV
challenge is worth the risk of litigation. However, the study finds generics
fare much worse at trial. Of the 171 cases resolved at trial, generics won 82
rulings while losing 89 (48%).

(Exhibit 3: Generic Drug Industry: Litigation Success Rate, Greene and Steadman, "Pharmaceuticals: Analyzing Litigation Success Rates," January 15, 2010)

The authors next
analyzed the track records of generics with five or more resolved Paragraph IV challenges
between 2000 and 2009. Perrigo was found
to have a perfect success record, with a single case won and seven settlements,
once again reflecting the author's classification of all settlements as a
successful outcome. Apotex was
found to have the worst success rate at 43%, but was also the least likely to
settle or have a case dropped. All
company data is presented in the table below.

(Exhibit 4: Best Generic Challengers 2000-2009, Greene and Steadman, "Pharmaceuticals: Analyzing Litigation Success Rates," January 15, 2010)

The authors next evaluated which federal districts
and which judges have the best success rates for generics. A few districts have
never found against generics, though these districts have not heard many cases. These include the Central District of California (8/8), the Eastern District of
New York (2/2), Minnesota (2/2), and the Eastern District of Missouri (1/1). However, the most popular districts (New
Jersey, Delaware, and the Southern District of New York),
which heard nearly 70% of all generic challenges, resulted in a generic winning
percentage of only 36% (see table below). This winning percentage is on par with the authors'
analysis of individual judges. For
judges who have issued 5 or more decisions, the winning rate for generics is
37%.

(Exhibit 6: Decisions By Court, Greene and Steadman, "Pharmaceuticals: Analyzing Litigation Success Rates," January 15, 2010)

The authors noticed a small increase in at-risk
launches (defined as any launch without a lower court
ruling) and authorized generics. Further, the authors noticed the number of
non-authorized generic launches doubled from 2008-2009, from 6 to 12, which the
authors hypothesize is due to the increase in settlement agreements a few years
ago.

Finally, the authors
note a trend of increasing settlements from 2003-2009, reaching an all-time
high of 54 in 2009 (see chart below). Teva accounted
for nearly one third of all settlements.
On the brand side, Glaxo and Novartis have settled the most.

(Exhibit 10: Number of Patent Settlements 2003-2009, Greene and Steadman, "Pharmaceuticals: Analyzing Litigation Success Rates," January 15, 2010)

The authors expect
settlements to remain fairly common, despite the passing of the Kohl Bill by
the Senate Judiciary Committee in October 2009. Their prediction is not surprising, since the authors assume
that settlements are always good for the generic company. From an investment
perspective, this assumption may have merit, since settlements provide clarity
for the company (and shareholders) and avoid the expense and risk of
litigation. However, in practice,
there will certainly be settlements that would not be considered a success for
the generic.

James DeGiulio has a doctorate in molecular biology and genetics from Northwestern University and is a third-year law
student at the Northwestern University School of Law. Dr. DeGiulio
was a member of MBHB's 2009 class of summer associates, and he can be contacted at degiulio@mbhb.com.
USPTO and DOJ Will Not Seek Review of Wyeth v. Kappos

January 21, 2010

By
Donald Zuhn —

The
U.S. Patent and Trademark Office has announced that the Office and Department of Justice will not be seeking further review of
the Federal Circuit's decision in Wyeth
v. Kappos. In announcing this decision,
the Office also stated that it is in the midst of "preparing guidance for
expediting requests for recalculation of patent term adjustment by the USPTO in
light of the Wyeth decision," and that such guidance "will be issued
as soon as possible.

As
in its January 10th announcement regarding the Wyeth decision, the Office noted that:

Applicants
and Patent Owners dissatisfied with a patent term adjustment determination by
the agency are reminded of the requirement to seek review of that determination
within 180 days of patent issuance and the time periods set in the implementing
regulations. See 35 U.S.C. sec. 154(b)(4) and 37 CFR 1.705.

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

• "USPTO Posts Notice Regarding Wyeth Decision," January 11, 2010
• "The Federal Circuit's Wyeth v. Kappos Decision," January 10, 2010
• "Wyeth v.Kappos (Fed. Cir. 2010)," January 7, 2010
•
"Patent Term Adjustment: 37 C.F.R. § 1.704(b)'s Three-Month Provision,"
November 17, 2009
•
"USPTO Says Some Requests for PTA Reconsideration Are Premature,"
September 7, 2009
•
"Fish & Richardson Catches Error in Patent Office's PTA Calculation,"
July 30, 2009
•
"More § 154(b)(4)(A) Actions Filed against Director," February 8,
2009
•
"Three More Patentees File § 154(b)(4)(A) Actions against Director Dudas,"
January 12, 2009
•
"More Patentees Follow Wyeth's Lead in Seeking Additional PTA,"
December 3, 2008
•
"USPTO to Appeal Wyeth v. Dudas," December 2, 2008
•
"Two Patentees Follow Wyeth's Lead in Seeking Additional PTA,"
November 12, 2008
•
"Wyeth v. Dudas (D.D.C. 2008)," October 16, 2008
Governors Write President in Support of 12-Year Data Exclusivity Period

January 20, 2010

By
Donald Zuhn —

On
Saturday, reports began to circulate regarding President Obama's recent
interest in "renegotiating" the data exclusivity provisions of the
health care bills that were passed in the House and Senate late last year (see "Snatching Defeat from the Jaws
of Victory?"). In a discussion at the White House, the
President informed Rep. Anna Eshoo (D-CA) that he did not support the 12-year
period in both bills and would prefer that the bills specify a shorter period
instead.

The
President's position was not too surprising, given the Administration's assertion
in a letter to House Energy and Commerce Chairman Henry Waxman (D-CA) last June
that 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"). However, the President's last-minute
efforts to convince the House and Senate to change their bills startled many in
the biotech/pharma industry.
Writing in the congressional daily The
Hill, Jeffrey Young opined that by "jettisoning" the 12-year data
exclusivity period in the bills, President Obama would be "ignoring one of
the few substantive bipartisan amendments approved during committee consideration
of healthcare reform" ("Obama at odds with some Dems on key provision
in healthcare"). In mid-July, the Senate Health,
Education, Labor and Pensions (HELP) Committee rejected an amendment for a
5-year data exclusivity term, and instead voted 16-7 in favor of an amendment
providing a 12-year term (see "Senators
Champion 12-Year Data Exclusivity in Senate"). At the end of July, the House Committee
on Energy and Commerce approved an amendment to its health care bill that would
provide a 12-year data exclusivity period (see
"House Committee Approves Health Care Reform Bill Calling for 12-Year
Exclusivity Period"). While the House health care bill itself
was passed out of Committee by a narrow 31-28 margin, the biosimilar licensure
pathway amendment, including its 12-year data exclusivity provision, sailed
through the Committee in a 47-11 vote.

On
Tuesday, in response to the President's comments last week, six Governors sent
a letter to the President, "to express [their] concern about recent
proposals that have been made to provisions that relate to biosimilars in the
health reform bill." In the
letter, which was sent by Gov. Martin O'Malley (D) of Maryland, Gov. Bill
Ritter (D) of Colorado, Gov. Jack Markell (D) of Delaware, Gov. Deval Patrick
(D) of Massachusetts, Gov. Beverly Perdue (D) of North Carolina, and Gov. Donald
Carcieri (R) of Rhode Island, the signatories told the President that:

We oppose limiting the period of data
exclusivity for developers of biosimilar products as well as any revision to
the "evergreening" language contained in both House and Senate passed
bills. The balance struck by
Congress — both through the Senate Health, Education, Labor and Pensions
Comminee and House Energy and Commerce Comminee — on 12 years of data
exclusivity for biologics and reasonable "evergreening" language
represents a critical element needed to ensure appropriate incentives for continued
biomedical innovation. We urge you
to continue working with the congressional leaders to carefully evaluate the
product of the extensive work that they have already done on this matter and
retain the provisions that were passed in both chambers of Congress.

The
Governors reminded the President about the economic impact of the bioscience
industry, noting that "[t]he biopharmaceutical and life sciences workforce
in this country is nearly 700,000 strong and supports more than 3.2 million
total jobs in associated sectors," and that "employment in the
biopharmaceutical sector grew more than twice as fast as all other sectors
combined between 1996 and 2006."
The Governors also argue that:

The high risk and uncertain nature of biologics R&D, combined with the economic
downturn, underscores the sector's vulnerabilities. Thus this critically important issue has a direct economic
impact on our states, our nation 's public health, our economic success, and our
global leadership in innovation in biomedical research.

In
support of the data exclusivity period in the House and Senate bills, the
letter notes that:

With biotechnology products in
particular, data exclusivity provides a critical incentive for innovation, as
patent protections may be limited by the highly complex nature of these
products, which are produced from living cells. Economic modeling has shown that a provision of at least 12
years of non-patent data exclusivity allows innovator companies to recover
their original investment in the marketed therapy. Equally important, however, revenues from successful marketed
therapies offset the hundreds of millions of dollars spent on drug discovery
R&D on candidates that do not make it to market. Thus, these revenues support pipeline drug candidate development
and investments in costly and complex manufacturing facilities for FDA approved
therapies. In order to assure
these companies continue to make investments in medical innovation and take the
risks necessary to bring these important products to patients, innovators should
be provided with appropriate incentives, including data exclusivity and
protections for their patents.

The
Governors conclude the letter by asking the Administration to "work closely with
Members of Congress to gain a better understanding of the complexity of this
issue before making a decision that could hinder scientific innovation and
jeopardize our nation's role as a leader in the development and delivery of
lifesaving therapeutics."

Tuesday's letter marks the second time these Governors have addressed the issue
of data exclusivity. In a letter sent
to Congressional leaders in September, Governors O'Malley, Ritter, Markell, Patrick, Perdue, and
Carcieri were joined by Gov. M.
Jodi Rell (R) of Connecticut, Gov. Theodore Kulongoski (D) of Oregon, Gov. Luis
Fortuño (R) of Puerto Rico, and Gov. Christine Gregoire (D) of Washington in asserting
that "the balance struck in the Senate Health, Education, Labor and
Pensions Committee on 12 years of data exclusivity for biologics represents a
critical element needed to ensure appropriate incentives for continued
biomedical innovation" (see
"Governors Send Letter to Congressional Leaders in Support of 12-Year Data
Exclusivity Period").

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

• "Data Exclusivity Follow-up: More of the Same," January 18, 2010
• "Snatching Defeat from the Jaws of Victory?" January 17, 2010
•
"Follow-on Biologics News Briefs – No. 11," December 30, 2009

•
"Follow-on Biologics News Briefs – No. 10," November 30, 2009
•
"House Health Care Bill Includes Biosimilar Licensure Pathway,"
November 3, 2009
•
"12 Senators Write in Support of 12-Year Data Exclusivity Period,"
November 3, 2009
•
"Four Senators Write in Support of 12-Year Data Exclusivity Period,"
October 19, 2009
•
"Governors Send Letter to Congressional Leaders in Support of 12-Year Data
Exclusivity Period," October 2, 2009
•
"Follow-on Biologics News Briefs – No. 8," August 19, 2009
•
"House Committee Approves Health Care Reform Bill Calling for 12-Year
Exclusivity Period," July 31, 2009
•
"Follow-on Biologics News Briefs – No. 5," July 19, 2009
•
"House Subcommittee Holds Hearing on Follow-on Biologics," July 14,
2009
•
"Senators Champion 12-Year Data Exclusivity in Senate," July 14, 2009
•
"Senator Kennedy Weighs in on Biosimilar Data Exclusivity Period,"
July 9, 2009
• "White House Recommends 7-Year Data Exclusivity Period for Follow-on
Biologics," June 26, 2009
•
"No One Seems Happy with Follow-on Biologics According to the FTC,"
June 14, 2009
•
"Third Follow-on Biologics Bill Introduced in 111th Congress," April
1, 2009
•
"Second Follow-on Biologics Bill Is Introduced in House," March 18,
2009
•
"Waxman Introduces Follow-on Biologics Bill," March 11, 2009
•
"Congressman Waxman Tells GPhA Meeting that Hatch-Waxman Model Will Work
for Follow-on Biologics," February 25, 2009
USPTO Asks out of Gene Patenting Case (Again)

January 19, 2010

By Kevin E. Noonan —

Several weeks ago, U.S. District Court Judge Robert
W. Sweet denied the U.S. Patent and Trademark Office's motion to dismiss the
ACLU-sponsored lawsuit aiming for a human gene patenting ban (see "BRCA Patent Suit to Continue in Southern District of New York"). Just before Christmas, the Office
filed another motion with the District Court, for judgment on the pleadings (as well as
opposition to Plaintiffs' summary judgment motion).

The brief, by Preet Bharara, U.S. Attorney for the
Southern District of New York and Ross E. Morrison, Assistant U.S. Attorney, is
broadly based on jurisprudential principles of avoiding a constitutional issue
when possible, citing Allstate Ins. Co. v. Serio, 261 F.3d 143, 149-150 (2d Cir. 2001), and Spector Motor Serv. Inc. v. McLaughlin, 323 U.S. 101 (1944) ("'If
there is one doctrine more deeply rooted than any other in the process of
constitutional adjudication, it is that we ought not to pass on questions of
constitutionality . . . unless such adjudication is unavoidable.'")

Accordingly, the brief argues, Plaintiffs' remedy is to prevail against the other
defendants on the grounds that the patents-in-suit are invalid. The Office asserts that the Patent Act
gives plaintiffs' a statutory basis for challenging the patents-in-suit, on the
grounds that the claims do not recite patent-eligible subject matter under § 101. Thus, the brief argues, should the District Court find that the Myriad patents were improperly granted under 35 U.S.C. § 101
(as being subject matter not eligible for patenting), there will be no need to
address the constitutional aspects of the patent-eligibility issue. Moreover, the Office contends it cannot
be haled into court for granting a patent in contravention of the Patent Act,
citing Syntex (USA), Inc. v. U.S. Patent
and Trademark Office, 882 F.2d 1570, 1572-1574 (Fed. Cir. 1989).

The office then argues that for the District Court to reach the constitutional issues
raised in the complaint, it must first decide that the Patent Office properly applied the relevant provisions
of the Patent Act, and thus that the Patent Act itself, not just the Office's
implementation of it, is unconstitutional. With that, the brief turns to the substantive
constitutional questions raised in the lawsuit, identifying two:

1. That granting gene
patents are contrary to Article I, section 8, clause 8 (termed "the IP
Clause" in the brief); and

2. That
granting gene patents violates the First Amendment.

With regard to the IP Clause argument, the brief points
out plaintiffs' unfamiliarity with, or ignorance of, the meaning of the
Constitutional language reciting the copyright and patent clause. Plaintiffs allege in their summary
judgment brief that the claims "impede rather than promote the progress of
science." But the language of
the Constitution that mentions "science" does not refer to patents
but rather to copyrights, since in the 18th Century the term "science"
was associated with "learning or knowledge," and what we think of as
technology (what is eligible for patenting) was termed "the Useful Arts." Thus, the brief contends that allegations
that the Patent Act does not promote "science" are "not relevant"
to the patent system, citing Graham v. John Deere Co., 383 U.S. 1, 5 (1966) (the brief also cites Eldred v. Ashcroft, 537 U.S. 186, 192-92
(2003), which concerned a challenge to revisions to the Copyright Act).

The Office also argues that it is "far from clear"
that the preamble to the IP Clause limits the power of Congress in establishing
the patent laws. The brief cites
the Eldred case for this proposition,
as well as the Supreme Court's Second Amendment decision (District of Columbia v. Heller, 128 S. Ct. 2783, 2789 (2008)), where
the Court held that, outside a "clarifying function, a prefatory clause
does not limit or expand the scope of the operative clause" in the Second
Amendment.

Continuing, the brief further argues that there are
limits to the extent of review the District Court can give to the
constitutional question even if it were to reach it, saying it is well
established that "Congress has the power to establish a patent system as
it [sees] fit." This is
essentially an argument for deference, the brief citing in support Graham as well as Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141
(1989). While this power of
Congress may not be "absolute," the brief contends that at most
Congress' implementation of the IP Clause is subject to rational basis review,
again citing Eldred: "[u]nder
that standard," the brief asserts, "courts 'accord great deference to
Congress's policy determinations,' and judicial review 'is limited to whether
Congress's actions were 'a rational exercise in the legislative authority
conferred by the [Patent] Clause,'" citing Figueroa v. United States, 466 F.3d 1023 (Fed. Cir. 2006).

Answering its own question in this regard, the
Office contends that there is no doubt that Congress had "a rational basis
to believe that a statutory scheme that established broad categories of subject
matter eligible for patenting . . . would promote innovation and research." Further, whether the patents-in-suit
were properly granted does
not implicate the constitutionality of the Patent Act: "[t]he fact that some patents
issued under the patent system can be argued not to 'promote progress' has no
bearing on the question of whether the system as a whole has a rational basis"
and is "simply not relevant," citing Eldred ("In sum, we find that the [Copyright Term Extension Act] is a
rational enactment; we are not at liberty to second-guess congressional
determinations and policy judgments of this order, however debatable or
arguably unwise they may be.")

The
proper question in this regard, the Office contends, is whether
permitting patents on compositions of matter and processes have a rational
relationship to "Congress's legitimate objectives under the IP Clause." Here, the brief asserts, there are
"multiple plausible bases" upon which Congress could have enacted § 101. These include that "[c]hoosing
broad categories of subject matter ensured that the Patent Act would not have
to be repeatedly amended to accommodate new and emerging technologies,"
citing Diamond v. Chakrabarty for
the proposition that the Supreme Court had "specifically found that broad
statutory categories fulfill the constitutional goal." Even limiting the question to the gene
patents at issue, the brief argues that Congress had a rational basis for
permitting patenting in "a field of technology [that] can be expected to
stimulate investment, research and innovation within this area, all to the benefit
of the national economy," citing the House of Representative report on the
Hatch-Waxman Act.

The brief also cites numerous academic sources for
the proposition that biotechnology required intensive investment and thus
patent protection to promote such investment. The brief then cites the benefits of disclosure as a
rational basis for patenting, because "other researchers learn what has
been patented, and therefore are able to focus their research dollars on areas
that have yet to be explored." "Under rational basis
review, the task of performing the 'careful balance between the need to promote
innovation and the recognition that imitation and refinement through imitation
are both necessary to invention itself and the very lifeblood of a competitive
economy,' must be left to Congress," the Office asserts, citing Bonito
Boats, 489 U.S. at 146.

Finally, the brief reminds the District Court that Congress
had recently considered, and did not deign to pass, a bill prohibiting gene
patenting, asserting that this constitutes a suggestion "that courts
should tread lightly in this area."

Regarding the First Amendment argument, the brief
contends that the First Amendment does not provide a substantive limitation on
Congress' authority to enact patent laws. Indeed, the Office argues that the Patent Act actually
supports the concerns motivating the First Amendment, since it "promote[s]
the dissemination of knowledge." Citing Kewanee Oil Co. v. Bicron, 416 U.S. 470 (1974) for support, the
brief asserts that:

[T]he
Patent Act promotes free speech and general dissemination of information
because it grants a temporary exclusive right to an invention in exchange for
disclosure of information that might otherwise have remained secret. By making
the information about the invention available, it creates the possibility for
stimulating further research in a related area as well as for one who wants to
practice the invention to seek a license. If the information were
kept secret — potentially in perpetuity, depending on the nature of the
technology — no such opportunity would arise.

The brief then contends that patents are fully
compatible with free speech rights, noting that Congress enacted the first
Patent Act "in close proximity" to adoption of the First Amendment. Indeed, the Office argues, the Framers did not seem to believe
there was any "tension" between the IP Clause and the First
Amendment, "given the proximity in time between the establishment of the
patent system and the ratification of the First Amendment."

The
Office also argues that any purported impact on free speech is not unique to
the patents-in-suit. The brief mentions
in particular Morse's patent on the telegraph and Bell's patent on the
telephone as patents impacting "free" speech, specifically by
charging a fee for speech: "[i]n each case, individuals wishing to use
these devices to communicate their thoughts or to gain access to new knowledge
could do so only subject to the rights of the patentholder." In a footnote, the brief makes this
point more forcefully:

"Nothing
in the First Amendment requires that the exercise of First Amendment rights be
cost-free. Those who wish to publish must pay for the equipment and labor (or
internet access) required for publication; indeed, even parade demonstrators
may be required to pay to exercise their First Amendment right to march,"
citing Cox v. New Hampshire, 312 U.S. 569, 576-77 (1941) and, more
generally, Eric Neisser, Charging for Free Speech: User Fees and Insurance
in the Marketplace of Ideas, 74 Geo. L.J. 257 (1985).

Even
the portion of the statutes providing for remedies for infringement could, the
brief asserts, "be said to regulate speech and thus, according to
plaintiffs' theory, to violate the First Amendment." Any "incidental limitation" of unfettered speech is just
"a temporary burden on the public that Congress has deemed necessary to
encourage invention and disclosure of inventions that inure to the public
benefit," the brief contends, and it characterizes such limitation as ones on conduct, not speech,
thus not implicating the First Amendment. Making the point more strongly, the Office argues
that "[t]here
are few restrictions on action which could not be clothed by ingenious argument
in the garb of decreased data flow. For example, the prohibition on
unauthorized entry into the White House diminishes the citizen's opportunities
to gather information he might find relevant to his opinion of the way the
country is being run, but that does not make entry into the White House a First
Amendment right. The right to speak and publish does not carry with it the
unrestrained right to gather information," citing Zemel v. Rusk,
381 U.S. 1, 16-17 (1965).

The brief's conclusion is that:

[T]he
free-speech interests here — if any — are subordinate to the interest in a
working patent system that provides complete remedies to patentholders. The
question is not whether any given patent might inhibit more speech than it
promotes, but rather whether in establishing a patent system that awarded such
a patent, Congress somehow violated the First Amendment. Because Congress did not, plaintiffs'
First Amendment claim should be dismissed.

The Office then goes on the offensive in this
regard, stating that the Supreme Court has held the patent statutes to "promote
free speech interests," notably by Supreme Court decisions precluding information
and abstract ideas from being patent-eligible (citing Gottschalk v. Benson). Using Eldred as an
illustration, the brief illustrates the infirmities of plaintiffs' First
Amendment case: the plaintiffs in Eldred raised similar First Amendment
allegations against the 1998 Copyright Term Extension Act, and the Supreme
Court held that the Copyright Act and the First Amendment were compatible on
historical grounds (closeness in time of adoption).

The brief also rebuts the
argument that patenting genes is the same as patenting information, citing Amgen Inc. v. Chugai Pharmacutical Co. ("A gene is a
chemical compound"), and reminding the District Court that chemical compounds have
been patent-eligible subject matter since the first Patent Act. "[P]laintiffs attempt to blur the line between genes, which
are chemical compounds, and genetic sequences, which are human-created
representations that identify one of the gene's properties: the arrangement of
nucleic acids in the gene. . . . Plaintiffs fail to cite — nor is the USPTO
aware of — any case law supporting the notion that a chemical (or machine or
any other physical structure) that is capable of conveying information no
longer qualifies for patent protection based on the fact that it has
informational content." This
distinction between chemistry and information is accommodated by the Office,
according to the brief, citing specifically the Utility Guidelines (wherein the
Office does not grant patents on the nucleotide sequence but on the chemical),
and that use of the sequence per se is not patent infringement. Regarding Plaintiffs' argument that
genes can be represented by "a series of letters" and hence comprise
information, the brief also reminds the court that "[a]ll chemicals
can be described in letter and number format."

The brief provides a good example of the constitutional and
jurisprudential deficiencies in the Plaintiffs' arguments. The risk, of course, is that Judge Sweet
will grant the Office's motion, thus removing any incentive for the Office to
weigh in on the substantive question raised in Plaintiffs' summary judgment
brief — that the patents on the BRCA1 and BRCA2 genes were improperly
granted. No matter what decision
the parties receive from the Judge, the case will be appealed and eventually
reach a petition for certiorari. At that point, it is likely that the Solicitor General will set out the
Administration's position on the patent-eligibility of isolated human DNA. But it could be helpful to have the
Office's arguments before the case gets to that point.

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

•
"Gene Patenting: Australian Potpourri," December 28, 2009
•
"Science Progress Article Examines Impact of Gene Patents on Research,"
December 21, 2009
•
"Gene Patenting Debate Continues – Round Three," December 17, 2009
•
"BRCA Patent Suit to Continue in Southern District of New York,"
November 2, 2009
•
"Empirical Research Fails to Support Gene Patenting Ban," October 22,
2009
•
"The Tragedy of a Bad Idea," August 25, 2009
•
"Gene Patenting Debate Continues – Round Two," August 4, 2009
•
"The Unwanted Consequences of Banning Gene Patenting," June 16, 2009
•
"Falsehoods, Distortions and Outright Lies in the Gene Patenting Debate,"
June 15, 2009
•
"Gene Patenting Debate Continues," June 9, 2009
•
"Association for Molecular Pathology v. U.S. Patent and Trademark Office,"
May 17, 2009
•
"Court Report: Special Edition," May 13, 2009
•
"BIO IP Policy Briefing," May 11, 2009
•
"Gene Patenting and the Wisdom of Judge Lourie," April 12, 2009
•
"The Effects of Intellectual Property Protection on Agricultural Research:
Patents Are Not The Problem," February 3, 2009
•
"Newsweek Joins the Anti-patent Bandwagon," January 26, 2009

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