Patent Docs

Court Report

April 6, 2009

By Sherri Oslick —

About
Court Report: Each week we will report briefly on recently filed
biotech and pharma cases, and a few interesting cases will be selected
for periodic monitoring.

Genzyme Corp. v. Impax Laboratories, Inc.
1:09-cv-00846; filed April 3, 2009 in the District Court of Maryland

Infringement of U.S. Patent No. 5,667,775 ("Phosphate-Binding Polymers for Oral Administration," issued on September 16, 1997) following a Paragraph IV certification as part of Impax's filing of an ANDA to manufacture a generic version of Genzyme's Renvela® (sevelamer carbonate, used for the control of serum phosphorus in patients with chronic kidney disease on dialysis). View the complaint here.

Abbott Laboratories et al. v. Sandoz Inc. et al.
1:09-cv-00215; filed April 1, 2009 in the District Court of Delaware

Infringement of U.S. Patent Nos. 5,246,925 ("19-nor-Vitamin D Compounds for Use in Treating Hyperparathyroidism," issued September 21, 1993), 5,587,497 ("19-nor-Vitamin D Compounds," issued December 24, 1996), 6,136,799 ("Cosolvent Formulations," issued October 24, 2000), and 6,361,758 (same title, issued March 26, 2002) following a Paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Abbott's Zemplar® (paricalcitol, used to treat secondary hyperparathyroidism in patients with kidney failure). View the complaint here.

Shire Canada Inc. et al. v. Natco Pharma Ltd.
1:09-cv-03165; filed April 1, 2009 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,968,976 ("Pharmaceutical Composition Containing Selected Lanthanum Carbonate Hydrates," issued October 19, 1999) and 7,381,428 ("Stabilized Lanthanum Carbonate Compositions," issued June 3, 2008) following a Paragraph IV certification as part of Natco's filing of an ANDA to manufacture a generic version of Shire's Fosrenol® (lanthanum carbonate chewable tablets, used for the reduction of serum phosphate in patients with end stage renal disease). View the complaint here.

Millennium Pharmaceuticals Inc. et al. v. Teva Parenteral Medicines Inc. et al.
1:09-cv-00204; filed March 27, 2009 in the District Court of Delaware

Infringement of U.S. Patent Nos. 5,747,447 ("Stable Polypeptide Composition," issued May 5, 1998) and 5,968,902 ("Platelet Aggregation Inhibitors," issued October 19, 1999), licensed to Schering Corp., following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Schering-Plough's Integrilin® (eptifibatide injection, used to treat acute coronary syndrome). View the complaint here.
In re Kubin (Fed. Cir. 2009)

April 5, 2009

By Kevin E. Noonan —

The sky isn't falling. But it's becoming increasingly clear that when the Supreme Court sneezes, the Federal Circuit gets a cold (if not pneumonia). And the questions continue about whether the Federal Circuit as currently constituted has the institutional fortitude to exercise its Congressional mandate to harmonize patent law in this country.

The case, of course, raising these issues anew is In re Kubin, decided on Friday. In its decision, the Federal Circuit not only affirmed the finding by the Board of Patent Appeals and Interferences that Kubin's invention was obvious, but in the process decided that the Supreme Court had overturned the Federal Circuit's In re Deuel decision. This outcome is sufficiently disappointing in itself; the reasoning is all the more so. But there are lessons to be learned, and some glimmer of hope that this decision has come just too late to make much difference (i.e., harm innovation) for biotechnology patents.

As Patent Docs readers will remember, this case involves a rejection on obviousness grounds for claims to cDNA encoding human NAIL protein, in which the U.S. Patent and Trademark Office asserted two relevant prior art documents: a reference disclosing the existence of a protein, p38, later found to be encoded by the NAIL cDNA invented by Kubin; and Sambrook et al. (aka: the Maniatis cloning manual), that old standby of what was routine in the art. (There was another reference to Matthew regarding cloning of the mouse gene homolog, but while this reference certainly informed the Office's thinking — and, it appears, Judge Rader's — it was not cited in support of the obviousness determination.) In making its obviousness determination, the Patent Office raised a host of factual distinctions between the technology extant when In re Deuel was decided and the technology available today. Of course, the Office is well aware that its best chances for affirmance lay in these factual questions, because the Federal Circuit is bound to give deference to the Office's determination on fact issues (Dickinson v. Zurko; In re Gartside) while it reviews obviousness and other questions of law de novo.

The Office's reliance on these factual issues was prescient, since in many ways the Federal Circuit's decision was based on its misunderstanding of the crucial factual distinctions between the cited art (and even more importantly, the Matthew reference) and Kubin's invention. The Court's opinion, written by Judge Rader in which Judges Linn and Friedman joined, set out the "factual" bases upon which the Board, and the Court, relied in deciding Kubin's claimed cDNA was obvious. The opinion notes that:

This emphasis on similarities or differences in methods of deriving the NAIL DNA misses the main point of this obviousness question. Of note, the record nowhere suggests that the technique in Valiante's Example 12 for isolating NAIL (p38) DNA, even if slightly different than the technique disclosed in the claimed invention, would not yield the same polynucleotide claimed in claim 73. Stated directly, the record shows repeatedly that Valiante's Example 12 produces for any person of ordinary skill in this art the claimed polynucleotide.

This was the Court's first mistake, evidencing that they were not listening (or did not understand, or were too focused on the outcome to be deterred by inconvenient facts) when Kubin's counsel brought up that critical distinction:

Judge Rader (at right): No, it tells one of skill in the art how to produce those libraries, and when you [have] the probe it's not so hard to do.

Rudolph: It does not tell one with skill in the art how to produce a NK cell library, and if you look at the methodology that's recited in the specification, what they [Kubin] used was a specific mixture of resting cells, resting NK cells and NK cells stimulated with a very specific cocktail of activators. That's not disclosed in Sambrook. That's not disclosed in Valiante. That's not disclosed anywhere[.]

The Court then turns the rationale of In re Deuel on it head:

More to the point, however, any putative difference in Valiante's/Sambrook's and appellants' processes does not directly address the obviousness of representative claim 73, which claims a genus of polynucleotides. The difference between Valiante's and the application's techniques might be directly relevant to obviousness in this case if Kubin and Goodwin had claimed a method of DNA cloning or isolation. But they did not. Appellants claim a gene sequence. Accordingly, the obviousness inquiry requires this court to review the Board's decision that the claimed sequence, not appellants' unclaimed cloning technique, is obvious in light of the abundant prior art.

This statement misses, or simply ignores, the evidence that performing the methods of the prior art would not have resulted in production of the claimed genus of polynucleotides.

The point, eloquently made in Deuel (and recognized by Judge Rader in oral argument as the Court's emphasis on "structure, structure, structure" for chemical obviousness) has always been:

The PTO's focus on known methods for potentially isolating the claimed DNA molecules is also misplaced because the claims at issue define compounds, not methods. See In re Bell, 991 F.2d 781, 785, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993). In Bell, the PTO asserted a rejection based upon the combination of a primary reference disclosing a protein (and its complete amino acid sequence) with a secondary reference describing a general method of gene cloning. We reversed the rejection, holding in part that "the PTO's focus on Bell's method is misplaced. Bell does not claim a method. Bell claims compositions, and the issue is the obviousness of the claimed compositions, not of the method by which they are made." Id.

We today reaffirm the principle, stated in Bell, that the existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs. . . . There must, however, still be prior art that suggests the claimed compound in order for a prima facie case of obviousness to be made out; as we have already indicated, that prior art was lacking here with respect to claims 5 and 7. Thus, even if, as the examiner stated, the existence of general cloning techniques, coupled with knowledge of a protein's structure, might have provided motivation to prepare a cDNA or made it obvious to prepare a cDNA, that does not necessarily make obvious a particular claimed cDNA. "Obvious to try" has long been held not to constitute obviousness. In re O'Farrell, 853 F.2d 894, 903, 7 USPQ2d 1673, 1680-81 (Fed. Cir. 1988). A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out. Thus, Maniatis's teachings, even in combination with Bohlen, fail to suggest the claimed invention.

Unfortunately, the panel was able to extract disclosure that supported their hindsight reconstructions of the inventive event:

In particular, appellants' arguments that Valiante and Sambrook are deficient because they do not provide "any guidance for the preparation of cell culture that will serve as a useful source of mRNA for the preparation of a cDNA library," Appellants' Br. 34, are diminished by appellants' own disclosure:

A "nucleotide sequence" refers to a polynucleotide molecule in the form of a separate fragment or as a component of a larger nucleic acid construct. The nucleic acid molecule has been derived from DNA or RNA isolated at least once in substantially pure form and in a quantity or concentration enabling identification, manipulation, and recovery of its component nucleotide sequences by standard biochemical methods (such as those outlined in Sambrook et al., Molecular Cloning: A Laboratory Manual, 2nd ed., Cold Spring Harbor Laboratory, Cold Spring Harbor, NY (1989)).

'859 Application at 16-17 (emphasis added). Thus, Kubin and Goodwin cannot represent to the public that their claimed gene sequence can be derived and isolated by "standard biochemical methods" discussed in a well-known manual on cloning techniques, while at the same time discounting the relevance of that very manual to the obviousness of their claims.

From this, it became a simple matter for the Court to have the question devolve into a factual one, so that the Court can defer to the Board's determination on the facts instead of deciding the issue (as it should) as a matter of law:

For this reason as well, substantial evidence supports the Board's factual finding that "[a]ppellants employed conventional methods, 'such as those outlined in Sambrook,' to isolate a cDNA encoding NAIL and determine the cDNA's full nucleotide sequence (SEQ NOS: 1 & 3)." Board Decision at 5.

In its consideration of the Matthew reference, which the Court characterizes as showing "the relative ease of deriving the claimed sequence following the teachings of the prior art," the Court follows the Board's lead in focusing on whether the reference taught that there would be a human homolog for the 2B4 (mouse) gene. The evidence of Matthew could have strongly supported the Court's reasoning, except for the fact that the gene identified in the Matthew reference was recognized as being the mouse homolog for human NAIL only after Kubin's filing date (which is why the Board found it to be cumulative — it wasn't properly prior art at all). If the evidence established that Kubin had done nothing more that rote recapitulation of Matthew's methods, then the Court's conclusions might have some logical merit. In fact, the evidence was that Kubin (and the worker of ordinary skill in the art) would have been unsuccessful had they merely performed what Matthew (and Valiente and Sambrook) informed them to do. The Court did not seem to appreciate this distinction.

One distinction raised in oral argument that was unavailing was Kubin's emphasis on CD48 binding and the portion of human NAIL involved in this binding. While agreeing that the prior art was silent on these aspects of NAIL biology, it was "a distinction without a difference" to the panel — "the Kubin-Goodwin application itself instructs that CD48 binding is not an additional requirement imposed by the claims on the NAIL protein, but rather a property necessarily present in NAIL." Finding that there was substantial evidence that Valiante's p38 was identical to the NAIL protein encoded by Kubin's disclosed cDNA, the Court found substantial evidence that the CD48 binding
properties were inherent (citing, appropriately, the Supreme Court's decision in General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249 (1945), that "It is not invention to perceive that the product which others had discovered had qualities they failed to detect").

Turning to In re Deuel, the Court focused on its reliance on when "obvious to try" can rise to the level of obviousness; as a starting point, the Court cited this portion of the Deuel decision:

[T]he existence of a general method of isolating cDNA or DNA molecules is essentially irrelevant to the question whether the specific molecules themselves would have been obvious, in the absence of other prior art that suggests the claimed DNAs. . . . "Obvious to try" has long been held not to constitute obviousness. A general incentive does not make obvious a particular result, nor does the existence of techniques by which those efforts can be carried out.

In doing so, the Court expressly followed the Board's lead: in its Ex parte Kubin decision, the Board said:

To the extent Deuel is considered relevant to this case, we note the Supreme Court recently cast doubt on the viability of Deuel to the extent the Federal Circuit rejected an '"obvious to try" test. See KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727, __, 82 U.S.P.Q. 2d 1385, 1394, 1396 (2007) (citing Deuel, 51, F.3d at 1559). Under KSR, it's now apparent "obvious to try" may be an appropriate test in more situations than we previously contemplated. Board Decision at 8.

Ironically, the Patent Office capitulated during oral argument regarding their long-expressed desire for the Court to overturn Deuel. Rather, Janet Gongola, arguing for the Office, distinguished Deuel, citing that portion of the decision that stated "[a] prior art disclosure of the process reciting a particular compound is another matter raising issues of anticipation and obviousness" and saying "[w]e are that other matter." In its decision, however, the Court went much further than the Board, or the Supreme Court, had gone:

Insofar as Deuel implies the obviousness inquiry cannot consider that the combination of the claim's constituent elements was "obvious to try," the Supreme Court in KSR unambiguously discredited that holding.

The key, of course, is in the "insofar": while the Deuel opinion can fairly be interpreted as overstating the principle, that decision did not (and could not) overturn the holding in In re O'Farrell that while sometimes what is obvious to try is also obvious, it is not the case that just because something is obvious to try that it must be obvious (which in fairness was the Patent Office's position in Deuel).

The Court arrived at its misinterpretation of Deuel by equally overestimating the Supreme Court's sneeze in its direction:

In fact, the Supreme Court expressly invoked Deuel as a source of the discredited "obvious to try" doctrine. The KSR Court reviewed this court's rejection, based on Deuel, of evidence showing that a particular combination of prior art elements was obvious because it would have been obvious to one of ordinary skill in the art to attempt such a combination:

The only declaration offered by KSR — a declaration by its Vice President of Design Engineering, Larry Willemsen — did not go to the ultimate issue of motivation to combine prior art, i.e. whether one of ordinary skill in the art would have been motivated to attach an electronic control to the support bracket of the assembly disclosed by Asano. Mr. Willemsen did state that an electronic control "could have been" mounted on the support bracket of a pedal assembly. (Willemsen Decl. at P33, 36, 39.) Such testimony is not sufficient to support a finding of obviousness, however. See, e.g., In re Deuel, 51 F.3d 1552, 1559 (Fed. Cir. 1995) ("'Obvious to try' has long been held not to constitute obviousness.").

Ironically, the Supreme Court illuminated the proper analysis for distinguishing when something is obvious to try is also obvious by restating the standards enunciated (in slightly different form) in O'Farrell:

When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.

i.e., sometimes, but not all the time, something that is obvious to try is also obvious. Whatever effects the Supreme Court's KSR decision has had on patent law, this statement does not represent a major change.

But it certainly had an effect on this panel's judgment. While recognizing the consonance between O'Farrell's teachings on the obvious to try standard and that set forth in KSR, the panel focused on the following statement of the proper analysis under O'Farrell:

Specifically, this court observed that an obviousness finding was appropriate where the prior art "contained detailed enabling methodology for practicing the claimed invention, a suggestion to modify the prior art to practice the claimed invention, and evidence suggesting that it would be successful." 853 F.2d at 902 (emphasis added). Responding to concerns about uncertainty in the prior art influencing the purported success of the claimed combination, this court stated: "[o]bviousness does not require absolute predictability of success . . . all that is required is a reasonable expectation of success." Id. at 903-04 (emphasis added). The Supreme Court in KSR reinvigorated this perceptive analysis.

The panel then found that Kubin's claims fell within this class of situations when something that is obvious to try is also obvious. The Court enumerated the factual predicates for applying this O'Farrell standard to Kubin's claim 73:

[T]he Valiante reference discloses the very protein of appellants' interest — "p38" as per Valiante. Board Decision at 4. Valiante discloses a monoclonal antibody mAb C1.7 that is specific for p38/NAIL, and further teaches a five-step protocol for cloning nucleic acid molecules encoding p38/NAIL using mAb C1.7. Id. In fact, while stating that "[t]he DNA and protein sequences for the receptor p38 may be obtained by resort to
conventional methodologies known to one of skill in the art," '690 Patent at col.7 ll.49-51, Valiante cites to the very same cloning manual, Sambrook, cited by Kubin and Goodwin for their proposition that the gene sequence is identified and recovered "by standard biochemical methods." '859 Application at 16. Moreover, the record strongly reinforces (and appellants apparently find no room to dispute) the Board's factual finding that one of ordinary skill would have been motivated to isolate NAIL cDNA, given Valiante's teaching that p38 is "expressed by virtually all human NK cells and thus plays a role in the immune response." Board Decision at 6. The record shows that the prior art teaches a protein of interest, a motivation to isolate the gene coding for that protein, and illustrative instructions to use a monoclonal antibody specific to the protein for cloning this gene. Therefore, the claimed invention is "the product not of innovation but of ordinary skill and common sense." KSR, 550 U.S. at 421. Or stated in the familiar terms of this court's longstanding case law, the record shows that a skilled artisan would have had a resoundingly "reasonable expectation of success" in deriving the claimed invention in light of the teachings of the prior art. See O'Farrell, 853 F.2d at 904.

Stated this way, and disregarding the factual distinctions to the contrary, it is not hard to see how the panel arrived at its conclusion. And in some ways, this is actually good news for biotechnology inventions: the bases for the Court's decision was not a generic "DNA is obvious" position that the Patent Office has long sought. Instead, the Court set forth a plethora of factual grounds unlikely to be identically (or even substantially) encountered for other genes.

Elsewhere in the opinion is evidence that biotechnology has become the victim of its own success. In discussing whether the skilled worker would have had a reasonable expectation of success in cloning Kubin's cDNA in view of the cited art, the Court opined:

In fact, this record shows that one of skill in this advanced art would find these claimed "results" profoundly "predictable." The record shows the well-known and reliable nature of the cloning and sequencing techniques in the prior art, not to mention the readily knowable and obtainable structure of an identified protein. Therefore this court cannot deem irrelevant the ease and predictability of cloning the gene that codes for that protein. . . .

The record in this case shows that Valiante did not explicitly supply an amino acid sequence for NAIL or a polynucleotide sequence for the NAIL gene. In that sense, Kubin and Goodwin's disclosure represents some minor advance in the art.

The Court may be right, but it would take an attitude studiously ignorant of history not to consider that the promise of biotechnology and its fulfillment was precisely in providing genes that made it possible to produce useful quantities of erythropoietin, tissue plasminogen activator, human insulin, interferon, blood clotting factor VIII, and several other otherwise unavailable proteins. But today, in this panel's perspective, this is but "some minor advance in the art." In the Court's view, this is the equivalent of an electronic accelerator pedal or children's game.

Because the panel was able to affirm the Board's decision of unpatentability on obviousness, it declined to address the rejection based on written description. While consistent with the principle that the Court need not address secondary grounds for invalidity or unpatentability when it has reason to affirm others, the Court also sidestepped an important question on how the Office is applying the Court's rather convoluted written description jurisprudence (wherein certain members of the Court think the time ripe to consider the question en banc). It is particularly puzzling because the panel mentioned its suspicions about how the Office had changed its policies in view of Kubin (see "Kubin Panel Questions Motivation behind Reversal in New Written Description Training Materials"):

Court: I'm quoting almost out of PTO's manual on written description — verbatim — when I give my example there, am I not? The variations plus the activity Y — protein having activity Y — isn't that exactly the PTO's manual on written description?

Gongola: Are you referring to the training materials?

Court: Yes, I am.

Gongola: That language may be found in the training materials, but it is not — it's guidance. It's — each case of written description has to be decided on its own facts.

Court: The Patent Office is guiding applicants on how to do things wrong?

Gongola: No, your Honor, but guidance provided in a training document cannot be taken and applied to each case. Each case has to be decided on its own facts.

Court: So it's just guidance to examiners on how to do it wrong?

Gongola: No, your Honor — respectfully — it is guidance to the public as well, but . . .

Court: But if we take that guidance, we don't get to your result, do we?

Gongola: No, your Honor, I respectfully disagree; we do. In Carnegie Mellon, this Court has explained that when there's substantial variation within a genus, an applicant has to describe a sufficient number of species to reflect the variation. Kubin has not done that here. Kubin hasn't described any variation. If we want to look at the training materials, the Board only . . .

Court: It's interesting that this was revised immediately after Kubin — the Kubin result — wasn't it?

Gongola: That . . .

Court: Which is kind of an admission that the example did track Kubin and was detrimental to your position, wasn't it?

Gongola: No, your Honor.

Court: So, despite your smiling defense, the facts tend to give us a different conclusion.

Gongola: No, your Honor, that's not correct. The training materials were not revised post-Kubin to somehow capture Kubin. The revisions have been in the works for a very long time.

Court: I see, okay.

Gongola: So it's just coincidence that Example 11 may seem to look like the Kubin fact pattern. . . .

The Court's decision in In re Kubin reinforces the impression that, after KSR, what will be dispositive is evidence, not argument. KSR increases the tendency and risk of subjective hindsight reconstruction of an invention, based on a "totality of the circumstances" approach ("I may not know how to define what's obvious but I know it when I see it," to paraphrase Justice Potter Stewart in another context). This "gut reaction" obviousness can be defeated only by evidence refuting the construction that hindsight informs. While there was some such evidence here, the Court did not give it sufficient credence or weight, or simply chose to ignore it altogether. But the outcome here illustrates the importance of pressing these kinds of factual distinctions.

Anoth
er reason the sky will not be falling on biotechnology patenting arises from the time in the history of biotechnology in which the decision was handed down. Many (if not most) of the "known" genes in the art have been cloned and patented (or not) over the past 30 years of gene patenting, and many of these patents have expired or are nearing the ends of their terms. In addition, many of these genes were isolated at a time when the technology was much less well developed and when there are sound factual bases for concluding that there was not a reasonable expectation of successfully cloning a cognate gene even for proteins that were well known and well characterized. Turning to the present day, many (if not most) of the genes patented or that have been attempted to be patented were not known prior to their discovery (usually through homology comparisons) as a result of the Human Genome Project (HGP). A fundamental pillar of the Court's decision in Kubin was that p38 was known; that will not be the case for most of the genes identified since the late 1990's.

This leaves a class of genes and gene patents "in the middle" — granted since (and perhaps because of) the Court's decision in Deuel but prior to identification during the HGP effort. Some of these, no doubt, have been made more open to an obviousness challenge since the Court's decision in this case. However, many (if not most) of these genes will be lacking some if not several of the factual underpinnings of the Kubin decision: the existence of the protein encoded therein was not known, or there was not a commercially-available monoclonal antibody specific for the protein, or expression cloning was ineffective or unpredictable for that gene, or there was no express description in the art on how to isolate the gene, or there did not exist a cell or tissue source reliably expressing the protein. In these and perhaps other ways, the Kubin decision is sufficiently narrow that it should not provoke a sea change in the fortunes of such gene claims. Insofar as it has a tendency to have this effect in the Patent Office, factual challenges, particularly supported by expert declarations, should have the greatest persuasive punch.

As for what this decision says about the current state of the institutional integrity and fortitude at the Federal Circuit, the Court (or at least this panel) clearly believes that the Supreme Court has spoken clearly that their jurisprudence has gone severely awry. There are, no doubt, instances where the Court has struggled (no more mightily than the Supreme Court) in applying patent law principles to ever-changing subject matter. In this, the Court has (as it was intended to have) a unique position in the American federal judicial framework. That makes it all the more important that the Court make its decisions based on direction from the Supreme Court filtered through its own expertise. Indeed, even the Supreme Court, in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., recognized that the Federal Circuit was the best place for the consistent development of patent law in the first instance (subject, of course, to Supreme Court correction). But an uncritical application of Supreme Court precedent, particularly where the Court has not mandated a change (as it did, for example, in eBay Inc. v. MercExchange, L.L.C.) fails to fulfill the Federal Circuit's Congressional mandate and its responsibility to harmonize patent law in this country. In Kubin, once again, the Federal Circuit appears to have reacted to Supreme Court guidance more with what it perceived as strict compliance than with flexibility in applying the Supreme Court's broad principles to particular cases. And in doing so, it took the occasion to unnecessarily overturn a decision that has been the basis for countless decisions made by applicants, investors, and the companies that have developed biotechnology from the laboratory bench to an industry in which America is competitive throughout the world. It is not the Federal Circuit's brief to make decisions based on these considerations, of course. But it would be consistent with their harmonization mandate (as much as it is inconsistent with some of their current jurisprudence, see, e.g., In re Bilski) if the Federal Circuit would keep such considerations in mind.

In re Kubin (Fed. Cir. 2009)
Panel: Circuit Judges Rader, Friedman, and Linn
Opinion by Circuit Judge Rader
Conference & CLE Calendar

April 5, 2009

April 16, 2009 – Biologue Chicago (Biotech Committee of the Intellectual Property Law Association of Chicago) – Chicago, IL

April 20-21, 2009 – 5th International Judges Conference on Intellectual Property Law (Intellectual Property Owners Association) – Washington, DC

April 20-21, 2009 – 6th Annual Freedom to Operate Forum (C5 (UK)) – London, England

April 24, 2009 – Patent Claim Construction (Law Seminars International) – College Park, GA

April 27-28, 2009 – 3rd Annual Paragraph IV Disputes Conference*** (American Conference Institute) – New York, NY

April 29-30, 2009 – Corporate IP Counsel Summit (World Research Group) – New York, NY

May 18-21, 2009 – BIO International Convention (Biotechnology Industry Organization) – Atlanta, GA

June 22-27, 2009 – Innovation Week 2009 (U.S. Patent and Trademark Office) – Arlington, VA

***Patent Docs is a media partner of this conference or CLE
EFS & PAIR News

April 3, 2009

By Christopher P. Singer —

This past week, the Electronic Business Center (EBC) posted two notices on its PAIR and EFS-Web systems. In the notice posted on the opening page of EFS-Web, the Patent Office announced that it is making a minor change to the document description identification of a letter submitted with an information disclosure statement (IDS). As of April 6, 2009, the EBC will discontinue the current "information disclosure statement letter" document description option, and it requests that Applicants begin using the document description "Transmittal Letter" for letters that accompany any IDS forms (SB/08a or 1449).

The EBC also announced that Private PAIR and Public PAIR will be unavailable on Saturday, April 4, 2009 from 12:01 AM to 5:00 AM Eastern Time due to system maintenance.
Federal Circuit Issues Significant Biotech Decisions

April 3, 2009

By Donald Zuhn —

This morning, the Federal Circuit issued decisions in both In re Kubin and Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. In Kubin, the Federal Circuit, with Circuit Judge Rader writing for Circuit Judges Friedman and Linn, affirmed the Board's decision that Kubin's claims were obvious. In Ariad Pharmaceuticals, the Federal Circuit, with Circuit Judge Moore writing for Circuit Judge Linn and Circuit Judge Linn writing a concurring opinion, reversed-in-part, holding the asserted claims of Ariad's U.S. Patent No. 6,410,516 invalid for lack of written description, and affirmed-in-part, holding that the asserted patent was not unenforceable due to inequitable conduct. Patent Docs will provide comprehensive commentary regarding these two decisions in subsequent posts.
Senate “Patent Reform” Bill (S. 515) Voted out of Judiciary Committee

April 2, 2009

By Kevin E. Noonan —

The "tyranny of the majority" has been the bane (or at least the peril) of representational democracy at least since Alexis de Tocqueville coined the term in 1835; more recently, Lani Guinier lost the nomination to be President Clinton's Assistant Attorney General for Civil Rights for her scholarly writings about proportional democracy as a remedy for that particular ill. And from 2002 until 2006, the Republican majority in the White House and both Houses of Congress (and, arguably, the Supreme Court) left opponents of the last administration's policies with few means to oppose them.

That tyranny was exhibited baldly today in the Executive Committee meeting of the Senate Judiciary Committee, compromising the gentility typically (or perhaps only purportedly) exhibited between members of that chamber. The subject matter of the committee's business this morning was, of course, "patent reform," specifically S. 515. One purpose of the meeting was to consider the "compromise" amendments that are part of the agreement between Chairman Patrick Leahy (D-VT), ranking member Senator Arlen Specter (R-PA), and Senator Diane Feinstein (D-CA), whose vocal displeasure with the bill as originally introduced led (at least in part) to some of the amendments considered today. The three amendments earlier circulated by this group were adopted by the committee; these included changes to the damages provisions, willfulness, interlocutory appeals, the best mode requirement and a pilot program for district courts concerning patent matters (Amendment GRA09451), joining amendments earlier adopted by the committee relating to royalty apportionment for universities and other federal grantees (Amendment GRA09400; adopted March 31, 2009), and amendments providing for "virtual" patent marking (Amendment GRA09350; adopted March 26, 2009).

Perhaps more important were the amendments the committee did not adopt. These include amendments by Senator Jon Kyl (R-AZ) directed at making more stringent the standard for post-grant review (Amendment GRA09459), which was affirmatively defeated 4-13, and an amendment by Senator Tom Coburn (R-OK) relating to preventing by statute Congressional appropriators from diverting PTO user fees for other purposes (Amendment GRA09294), which was tabled on a 10-9 vote. However, these parliamentary setbacks paled in comparison to the strong reactions by Senators Orrin Hatch (R-UT) (at left) and Kyl (and to some extent, Senator Specter) at Chairman Leahy's evident determination to make certain that the bill was voted out of committee today. Indeed, after making a statement decrying the failure of the bill to address the real problems of the patent system, particularly inequitable conduct, Senator Hatch left the hearing room, despite Chairman Leahy's entreaties to remain so the Chairman could praise the Senator for his work on patent reform.

While Senators Leahy, Specter, and Feinstein applauded each other for reaching their compromise, and reported that various diverse stakeholders (including the Coalition for Patent Fairness, the Coalition for 21st Century Patent Reform, the AIPLA, PhRMA, and BIO) "strongly supported" the bill, Senator Kyl (most persistently) supported (weakly) by Senator Specter openly questioned the Chairman's insistence that the committee act on the bill today. Senator Kyl pointedly mentioned discrepancies between what the bill purportedly does or is intended to do, and what the language actually means, particularly with regard to willful infringement, which he says reinstates the subjective intent standard for the Federal Circuit's "objective recklessness" standard from the Seagate opinion.

Despite its seriousness, the mechanics of fulfilling the Chairman's purpose was rendered slightly ridiculous when it became necessary to frantically track down committee members to constitute a quorum. Once the committee had a quorum, the outcome was never in doubt — especially because Senator Leahy held the absent Democratic members' proxies and Senator Specter had the absent Republican members' proxies. On the final vote, only Senator Hatch (by proxy), Senator Kyl, Senator Feingold (by proxy), and Senator Coburn voted against reporting the bill, as amended, out of committee.

Now the bill is headed to the Senate floor. There is another venerable phrase in the American political lexicon — "the backroom deal" — and it seems certain that accusations of a backroom deal will be raised regarding the "compromise" hailed by its supporters on the committee. And it remains to be seen whether Chairman Leahy's high-handedness will backfire; as Senator Kyl pointedly remarked more than once, the Senate Majority Leader (Senator Reid, D-NV) may be less inclined to bring the bill to a vote, or even debate on the floor of the Senate, if there are serious objections to it. So once again, we all have the opportunity to exercise one of the great prerogatives of American citizenship: if you care about patent reform, write your Senator.
Anti-Reverse Payment Legislation Introduced in the House

April 2, 2009

By Donald Zuhn —

Last week, Rep. Bobby Rush (D-IL) (at right) introduced the Protecting Consumer Access to Generic Drugs Act of 2009 (H.R. 1706) in the House. The bill, which was co-sponsored by Rep. Diana DeGette (D-CO), John Dingell (D-MI), Michael Doyle (D-PA), Edward Markey (D-MA), Janice Schakowsky (D-IL), Bart Stupak (D-MI), and Henry Waxman (D-CA), is similar to a bill (S. 369) introduced earlier this year in the Senate (see "Bill to Prohibit Reverse Payments Introduced in the Senate"). Like the Senate bill, the House bill is designed to prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market. The House bill would accomplish this objective by making it unlawful to resolve or settle a patent infringement claim by entering into an agreement where "an ANDA filer receives anything of value," and "the ANDA filer agrees not to research, develop, manufacture, market, or sell, for any period of time, the drug that is to be manufactured under the ANDA involved and is the subject of the patent infringement claim." Pursuant to provisions of both the House and Senate bills, a generic drug company found to violate the provisions of the Act would forfeit its 180-day exclusivity period. Interestingly, the two bills have only found Democratic support.
Some (But Not All) Amendments Introduced in “Patent Reform” Bill

April 1, 2009

    By Kevin E. Noonan —

Senator Leahy (D-VT) (at right), chairman of the Senate Judiciary Committee, has circulated several amendments to be proposed to reflect the "compromise" he hopes to have reached with Senators Specter (R-PA) and Feinstein (D-CA) over S. 515, his "patent reform" bill. While there are several minor amendments among them, three (on damages, willful infringement, and interlocutory appeals) are significant.

The proposed damage provision reads as follows:

''§ 284. Damages
(a) IN GENERAL.—
    (1) COMPENSATORY DAMAGES AUTHORIZED.—
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. In determining damages, the court will direct the jury to consider any relevant factors or methodologies, under applicable law, based on the evidence presented.
    (2) USE OF EXPERTS PERMITTED.—The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.
'(b) PROCEDURE FOR DETERMINING DAMAGES.—
    (1) IN GENERAL.—The court shall identify the methodologies and factors that are relevant to the determination of damages, and the court or jury, shall consider only those methodologies and factors relevant to making such determination.
    (2) DISCLOSURE OF CLAIMS.—By no later than the entry of the final pretrial order, unless otherwise ordered by the court, the parties shall state, in writing and with particularity, the methodologies and factors the parties propose for instruction to the jury in determining damages under this section, specifying the relevant underlying legal and factual bases for their assertions.
    (3) SUFFICIENCY OF EVIDENCE.—Prior to the introduction of any evidence concerning the determination of damages, upon motion of either party or sua sponte, the court shall consider whether one or more of a party's damages contentions lacks a legally sufficient evidentiary basis. After providing a nonmovant the opportunity to be heard, and after any further proffer of evidence, briefing, or argument that the court may deem appropriate, the court shall identify on the record those methodologies and factors as to which there is a legally sufficient evidentiary basis, and the court or jury shall consider only those methodologies and factors in making the determination of damages under this section. The court shall only permit the introduction of evidence relating to the determination of damages that is relevant to the methodologies and factors that the court determines may be considered in making the damages determination.

Section (3) represents the statutory basis for Senator Feinstein's "gatekeeper" role for the judge. However, it is much less than the apportionment standard wanted by the IT industry, and leaves almost all of the discretion to the district court judge (whose decisions should be difficult to overturn on appeal).

Other amendments attempt to codify the Federal Circuit's precedent in the Seagate case:

(e) WILLFUL INFRINGEMENT.—

* * *

'(3) LIMITATIONS ON WILLFULNESS.—
    (A) IN GENERAL.—Notwithstanding paragraph (2), an infringer may not be found to have acted with objective recklessness where for any period of time during which the infringer had an informed good faith belief that the patent was invalid or unenforceable, or would not be infringed by the conduct later shown to constitute infringement of the patent, and—
        (i) there was reasonable reliance on advice of counsel;
        (ii) the infringer sought to modify its conduct to avoid infringement once it had discovered the patent; or
        (iii) there is sufficient evidence that the infringer had a good faith belief that the patent was invalid or unenforceable, or would not be infringed by conduct later shown to constitute infringement of the patent.

The proposed amendments contain these provisions for interlocutory appeals:

(b) INTERLOCUTORY APPEALS.—Section 1292(c) of title 28, United States Code, is amended—
    (1) in paragraph (1), by striking ''and'' after the semicolon;
    (2) in paragraph (2), by striking the period and inserting ''; and''; and
    (3) by adding at the end the following:
        (3) of a final order or decree of a district court determining construction of a patent claim in a civil action for patent infringement under section 271 of title 35, if the district court finds that there is a sufficient evidentiary record and an immediate appeal from the order
        (A) may materially advance the ultimate termination of the litigation, or
        (B) will likely control the outcome of the case, unless such certification is clearly erroneous.

There are a variety of other proposals, including pilot programs for designating district court judges "volunteering" to hear patent cases as the "chief judge" of that court for those cases, and permitting judges who don't volunteer to decline to accept patent cases; initially, this pilot program would be limited to six district courts in at least three different judicial circuits, where the designations are based on statistics on which district courts have heard the most patent and plant variety protection cases in the most recent calendar year. There are also provisions for "virtual" patent marking and for changing the relative royalty percentages between university patentees and the Federal government. One of the strangest provisions regards the best mode requirement; instead of amending 35 U.S.C. 112, first paragraph, to remove this provision, the proposed amendments merely vitiate its meaning:

SEC. 15. BEST MODE REQUIREMENT.
Section 282(b), as so designated and amended by section 12(f), is further amended by striking paragraph (3) and inserting the following:
(3) Invalidity of the patent or any claim in suit for failure to comply with—
    (A) any requirement of section 112 of this title, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or
    (B) any requirement of section 251 of this title.

So far, Senator Kyl has not formally introduced any of his expected amendments, including one that would prevent Data Treasury from pursuing patent infringement actions against several large banks (who no doubt are a part of the Senator's contributors list). In an effort to deflect criticism of this provision raised against a similar provision in last year's ill-fated Senate "patent reform" bill (S. 1145), this amendment supposedly will contain a provision that renders it a nullity if a court determines that it constitutes a "taking" requiring the Federal government (read, the taxpayers) to compensate Data Treasury for the billions of dollars to which it would be entitled in damages (keeping in mind that the royalties Data Treasury collects from banks that have settled infringement litigation are on the order of 5¢ out of every $2 the banks charge for electronic check cashing).

These and other amendments are sure to be in
troduced in the days ahead. The next Executive Committee meeting of the Senate Judiciary Committee is scheduled for tomorrow morning at 10 a.m.; a live webcast of the meeting can be viewed here.
Third Follow-on Biologics Bill Introduced in 111th Congress

April 1, 2009

By Donald Zuhn —

Last Thursday, Senator Charles Schumer (D-NY) (at right) introduced the Promoting Innovation and Access to Life-Saving Medicine Act (S. 726), the first follow-on biologics bill to be introduced in the Senate and third follow-on biologics bill to be introduced in the 111th Congress. The new bill is the Senate companion to the bill (H.R. 1427) introduced in the House on March 11 by Representative Henry Waxman (D-CA). On March 18, Representative Anna Eshoo (D-CA) provided an alternative to Rep. Waxman's bill, when she introduced the Pathway for Biosimilars Act (H.R. 1548). As with Rep. Waxman's bill, Sen. Schumer's bill would provide up to 5.5 years of exclusivity, while Rep. Eshoo's bill would provide up to 14.5 years of exclusivity.

Under a subheading stating that the "Measure Would End Brand-Name Drugs' Monopoly By Allowing Cheaper, Generic Versions To Compete," a press release issued on Sen. Schumer's website asserted that S. 726 "would save federal programs like Medicare and Medicaid at least $10 billion dollars by bringing needed competition to the marketplace." The press release noted that the five-year window of exclusivity that brand name biologics would generally receive would begin at the time the brand name biologic was first approved, rather than at enactment of the bill, and therefore, that generic drug manufacturers could "seek approval for more affordable versions [of such biologics] almost right away."

Senator Schumer argued that it was "past time we created a way for generic versions of these expensive drugs to come to market," adding that "[t]he savings reaped from this will be a down payment on health care reform." Pointing to the high cost of biologic drugs in general, and the $100,000 annual cost for administering the cancer drug Avastin in particular, Senator Susan Collins (R-ME), one of the bill's seven co-sponsors, argued that "[p]eople who need [biologic drugs] should not be denied access solely on the basis of cost," and contended that "[u]sing competition to bring generic versions of these medicines to the market will help offer patients, employers, and federal and state health programs cost savings." The press release also notes that Avonex, which is used for the treatment of multiple sclerosis, is "[o]ne of the most popular biotech drugs" despite costing almost $20,000 a year. Interestingly, the release acknowledges that Avonex has been off patent since 2003. Senator Mel Martinez (R-FL), who also co-sponsored the bill, said that "[b]y striking the right balance between competition and rewarding innovation," the new bill would "encourage the development of new treatments while driving down the cost to consumers."

In response to the introduction of S. 726, the Biotechnology Industry Organization (BIO) issued its own press release, in which BIO President and CEO Jim Greenwood stated that the Senate bill "follows its companion bill in the House . . . through the looking glass to a world of biosimilars that would jeopardize patient safety and undermine future medical breakthroughs." According to Mr. Greenwood, S. 726 would "create[] an imbalanced system that could chill investment in research focused on discovering new treatments and cures for devastating diseases," by "unfairly tilt[ing] the playing field toward biosimilars manufacturers." In particular, Mr. Greenwood contended that:

This legislation provides for less data exclusivity than traditional pharmaceutical drugs currently receive under the Hatch-Waxman regime even though every credible study on this issue has found that biologics will need greater data exclusivity than traditional drugs to ensure future medical breakthroughs. Additionally, innovators would be required under the bill introduced today to share detailed information about every applicable patent to biosimilar manufacturers, making it easier for the biosimilar company to bypass valid patents. Innovators, on the other hand, would have no ability to receive relevant information from the biosimilar manufacturer about the molecules, ingredients, and processes they use to create the biosimilar.

For additional information on this and other related topics, please see:
• "Second Follow-on Biologics Bill Is Introduced in House," March 18, 2009
• "Waxman Introduces Follow-on Biologics Bill," March 11, 2009
“Progress” on Senate “Patent Reform” Bill

March 31, 2009

By Kevin E. Noonan —

Today, the Senate Judiciary Executive Committee continued its Executive Business Meeting from last week and announced that "significant" progress had been made in reaching a compromise on S. 515 supported by Committee Chairman Senator Patrick Leahy (D-VT), ranking member Senator Arlen Spector (R-PA), and Senator Diane Feinstein (D-CA) (a webcast of today's meeting is available here). The announcement was short on specifics, Senator Leahy explaining that Senate staffers are still working on the specific language of the amendments. These amendments concern damages provisions (a major source of contention), with there being some form of "gatekeeper" role to be given to judges in patent cases; some modification of the best mode requirement under 35 U.S.C. § 112; and provisions reapportioning the royalties universities would be allow to keep under the Bayh-Dole Act.

The wet blanket in the room was Senator John Kyl (R-AZ) (at left). In addition to pointing out that the amendments have yet to be reviewed by any Senator other than Senators Leahy, Spector, and Feinstein, Senator Kyl voiced some significant caveats about the compromise. The most important was his understanding that the "compromise" bill adopted the language of last year's House bill (H.R. 1938) on post-grant review. The problem, according to Senator Kyl, is that senior Patent Office officials informed Congress last year that the proposed post-grant review provisions of the House bill were completely unworkable. For one thing, he said, the proposed threshold for "first window" post-grant review was too low, so that 90% of such requests would be granted, which would overwhelm the Office and subject patentees to challenges that would cost them hundreds of thousands of dollars. He also complained that patentees could be subjected to harassment by successive proceedings, including review late in infringement lawsuits as a delaying tactic. Worse, according to the Senator, the Patent Office was not consulted regarding adoption of these provisions into amended S. 515.

Senator Kyl also voiced dissatisfaction with provisions regarding interlocutory appeals and willfulness. "Common sense" reforms were lacking, he said, and the proposal does "almost nothing to enhance the rights of patent owners and improve the system." Indeed, he voiced his disappointment at proposals that he thinks could make the system worse.

Senator Kyl also mentioned the procedural prospects for the amendments: they will be introduced in "tranches," two introduced this afternoon and another two tomorrow, in advance of the next Executive Committee meeting scheduled for Thursday, April 2nd at 10:00 am (Eastern) (a live webcast of that meeting will be available here).

Patent Docs will provide further information on the amendments as it becomes available.

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