Patent Docs

CPI Issues Report on Biotech/Pharma Lobbying

July 2, 2008

By Donald Zuhn —

Last week, the mainstream media turned its attention to the lobbying efforts of biotechnology and pharmaceutical companies. The impetus for this increased coverage was a report on lobbying issued by the Center for Public Integrity (CPI).

The CPI, which describes itself as a nonprofit, non-partisan, and non-advocacy organization dedicated to producing original, responsible investigative journalism on issues of public concern, concluded that "Washington’s largest lobby, the pharmaceutical industry, racked up another banner year on Capitol Hill in 2007, backed by a record $168 million lobbying effort." According to the CPI report, this represented a 32% increase from the industry’s lobbying expenditures in 2006. The report also noted that more than 90% of the $168 million total came from 40 companies and three trade groups – the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Industry Organization (BIO), and the Advanced Medical Technology Association.

As for the cause of the increase in lobbying spending, the report pointed to "a busy legislative calendar dominated by issues critical to the industry" (e.g., the House passed a patent reform bill, the Senate patent reform bill made it onto the calendar, a Senate follow-on biologics bill passed out of committee, and two House follow-on biologics bills were proposed). In addition, the report noted that:

The spending binge last year may have also been fueled by the previous November’s Democratic takeover of Congress. After the Democratic sweep of the House of Representatives, several long-standing critics of the industry, such as Representative Henry Waxman of California, assumed leadership roles of powerful committees.

A list of the top twenty lobbying spenders in the industry (see below), as assembled by the CPI, placed PhRMA in the top spot with $22.7 million in spending. The top spender among companies was Amgen Inc. with $16.3 million in spending. Pfizer Inc. also topped $10 million mark with $13.8 million in spending.

So far this year, PhRMA again leads the industry with $3.61 million spent on lobbying during the first quarter of 2008. According to the CPI, this places PhRMA 11th amongst all organizations in terms of lobbying expenditures. The CPI also reported that the pharmaceuticals and health care products industry exceeded all others in lobbying spending, with $52.8 million in the first quarter of 2008 (the insurance industry was a distant second with $40.53 million in lobbying spending). It should be noted, however, that the CPI did not indicate the portion of lobbying spending that was attributable solely to pharmaceutical companies and organizations.

With respect to the follow-on biologics bills being discussed in both the House and Senate, a BioWorld report observed that pharmaceutical and biotech lobbying efforts have been aimed at the ongoing battle over the number of years of data exclusivity. BioWorld indicated that innovator (or branded) drugmakers favor at least 12 years of data exclusivity, while the generic drug industry is pushing for only five.

For additional information regarding the CPI report, please see:

• Baltimore Business Journal
• BioWorld
• The Business Review
• FiercePharma
• IndyStar.com
• PharmaTimes (requires registration for free access)
• TechJournal South
• Washington Business Journal
Congressmen Criticize U.S. Trade Representative over Special 301 Report

July 1, 2008

By Kevin E. Noonan —

Four Congressman recently stepped into the crisis in world drug pricing, sending a letter
to U.S. Trade Representative Susan Schwab last Thursday. The letter, signed by Congressman Charles Rangel (NY-15th Dist.), Congressman Rahm Emanuel (IL-5th Dist.), Congressman Sander Levin (MI-12th Dist.), and Congressman Chris Van Hollen (MD-8th Dist.), criticizes Ms. Schwab for a statement in the 2008 Special 301 Report regarding Thailand’s granting of compulsory licenses for patented drugs (see "U.S. Continues Efforts to Protect Patent Rights Abroad").

The criticism seems to be based on the Congressmen’s concern over unequal distribution of drugs globally, and asserts that the capacity of government to grant compulsory licenses is a "right" under the TRIPS agreement. The Congressmen cite statistics, such as "15 percent of the world’s population consumes 90 percent of the world’s medicines" to illustrate what’s wrong with the Trade Representative’s position. They also make some strange predictions, such as "[i]mproving access to medicines in developing countries . . . has the potential to expand opportunities for innovative U.S. pharmaceutical companies" without any rational explanation for their statement. The letter evinces understanding about how facially neutral policies of governments overseas — such as price controls, reference pricing, and certain reimbursement policies — can be applied in a discriminatory manner, and the Congressmen assert that they have "long advocated a proactive approach to address discriminatory measures" (without detailing what this "proactive approach" has or would entail). The Congressmen believe that U.S. trade policy has been hurt — an "existing imbalance" — by limitations in the participation of public health experts in trade negotiations, and urge that the Trade Representative "take steps," including the creation of a trade advisory committee system comprising public health representative, to remedy this deficiency.

The letter, to be kind, is naïve with regard to the state of intellectual property protection remaining in the TRIPS agreement after the Doha declaration. The problem is not a misguided policy by the U.S. Trade Representative; it is the inability of governments throughout the world to work out a drug pricing regime that adequately balances the needs of innovator pharmaceutical companies for sufficient return on investment to obtain the capital needed to develop new drugs, and the humanitarian need to provide drugs for the world’s poor who cannot afford them. Instead, TRIPS, as modified by the Doha Declaration, has degenerated into another East-West, First World-Third World contest, and an accurate assessment of the contest is that the innovator pharmaceutical companies are not "winning."

The letter urges a "new course" in trade negotiations that will "promote both pharmaceutical innovation and the health of patients in developing countries." While these are noble sentiments, it may be that the two goals are not completely compatible. The question then arises whether their constituents would be happy to know that, if the two options are not compatible, these Congressmen seem to believe the interests of patients in developing countries are at least as important as the pharmaceutical innovation that improves the lives of their constituents. In fact, the type of compulsory license granted by Thailand is a misuse of the TRIPS provisions (more accurately, the provisions of the Doha declaration that fundamentally changed the TRIPS agreement). Doha at best was intended to permit governments to avoid high drug prices that would otherwise prevent their citizens from having access to life-saving drugs during a medical crisis, such as the AIDS pandemic. Thailand has granted compulsory licenses for such drugs, but is has also granted a compulsory license for Plavix®, a drug that benefits Thailand’s wealthy elite. The Congressmen appear to be ignorant of these facts, and as a consequence have chosen a particularly inapt "victim" of U.S. trade policies as their poster child for advocating a "new course." And they do so to the detriment of any discussion of what is really needed, a truly new course that will address the world drug pricing crisis.

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

• "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008
• "Thailand Continues Its Compulsory Licensing Practices," March 11, 2008
• "More on the Global Drug Patenting Crisis," August 14, 2007
• "EU Trade Commissioner Sends Warning Letter to Thailand," August 13, 2007
• "Trying to Find a Solution to the Global Drug Pricing Crisis," July 16, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
CBO Releases Report on Senate Follow-on Biologics Bill; BIO Calls for Congress to Pass Biologics Bill in 2008

July 1, 2008

By Donald Zuhn —

Last week, the Congressional Budget Office (CBO) released a report on the Biologics Price Competition and Innovation Act (S. 1695), which would establish a pathway for the FDA to approve follow-on biologics. The report was commissioned last summer by the Senate Committee on Health, Education, Labor & Pensions, which announced on June 27, 2007 that it had passed the bill (see "Senate Committee Passes Biologics Legislation"). The Senate bill has not yet been taken to the floor for a vote.

The 11-page CBO report states that:

Enacting S. 1695 would reduce total expenditures on biologics in the United States by $0.2 billion over the 2009-2013 period and by about $25 billion over the 2009-2018 period. (Over that 10-year period, such savings would equal roughly 0.5 percent of national spending on prescription drugs, valued at wholesale prices.)

The CBO report also concludes that "enacting the bill would reduce budget deficits (or increase surpluses) by a total of $52 million over the 2009-2013 period and by $6.6 billion over the 2009-2018 period." The report notes that its savings estimates were determined by predicting spending on "a select group of biologics likely to experience competition over the next 10 years." The report does not, however, specifically identify the biologics that were analyzed in developing its S. 1695 cost estimate.

According to the CBO report, key provisions of S. 1695 include:

• A one-year period of market exclusivity for the first interchangeable follow-on biologic (FOB) that references a particular innovator, or branded, drug (wherein "market exclusivity" means that the FDA would be prohibited from approving a subsequent interchangeable product during that period, and "references" means to rely on data from the innovator’s original FDA application).

• A twelve-year period of data exclusivity for the innovator drug beginning with the FDA’s licensing of the innovator drug (wherein "data exclusivity" means that the FDA would be prohibited from approving an FOB that references a particular innovator drug).

The Biotechnology Industry Organization (BIO) wasted little time in releasing a statement regarding the CBO report. Noting that the CBO report determined that most of the cost savings from the creation of a follow-on biologics regulatory pathway would be realized at least five years after such a pathway was established, BIO stated that this only reinforced the need for Congress to develop and pass a responsible pathway this year.

BIO also has expressed no particular preference for any of the pending follow-on biologics bills, stating that H.R. 1956 (the Patient Protection and Innovative Biologic Medicines Act of 2007), H.R. 5629 (the Pathway for Biosimilars Act), and S. 1695 all would "come close" to striking a balance between meaningful cost savings for biologics spending and providing needed protections for innovator drug makers. However, the BIO release warned that "Congress must ensure proper incentives for continued biomedical innovation in any follow-on biologics pathway so that we don’t achieve relatively minor savings as a percentage of overall health care spending at the cost of continued innovation."

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

• "Follow-on Biologic Drugs and Patent Law: A Potential Disconnect?" March 25, 2008
• "New Follow-on Biologics Bill Introduced in the House," March 18, 2008
• "Dr. Robert Shapiro Discusses Follow-on Biologics Report," February 19, 2008
• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation – Part II," February 14, 2008
• "Senate Committee Passes Biologics Legislation," July 5, 2007
Biotech/Pharma Lobbying Scoreboard – Part II

June 30, 2008

By Donald Zuhn —

For the past few months, Patent Docs has been following and reporting on biotech and pharma lobbying efforts. Our interest in this topic stems from the push by Congress over the past year to pass patent reform and follow-on biologics legislation, and corresponding efforts by corporations and organizations during that time to lobby on this legislation. In previous reports, we noted that a handful of biotech/pharma companies spent significant amounts of money lobbying the federal government in the first quarter of 2008, including:

• Abbott Laboratories — $880,000
• Amgen Inc. — $2.5 million
• Cephalon, Inc. — $512,000
• Genentech, Inc. — $591,000
• Monsanto Co. — $1.3 million
• Novartis AG — $1.3 million

Throughout the month of June, a number of additional reports have expanded the above list of biotech/pharma companies to include AstraZeneca PLC, Barr Pharmaceuticals, Biogen Idec Inc., Bristol-Myers Squibb Co., Endo Pharmaceuticals, Pfizer Inc., Sanofi-Aventis, Schering-Plough Corp., Syngenta, Teva Pharmaceutical Industries Ltd., and Wyeth, as well as the Biotechnology Industry Organzation, Generic Pharmaceutical Association, and the Pharmaceutical Research and Manufacturers of America. The lobbying activities and expenditures of these companies and organizations are as follows:

• AstraZeneca PLC spent $770,000 on first quarter lobbying (see Forbes.com report). According to the company’s filing with the House clerk’s office, the drug maker’s lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Barr Pharmaceuticals, Inc. spent nearly $1.7 million on first quarter lobbying (see Forbes.com report). According to the company’s filing with the House clerk’s office, the generic drug maker’s lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Biogen Idec Inc. spent $200,000 on first quarter lobbying (see Forbes.com report). According to the company’s lobbying disclosure, the biotech drug maker’s lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Bristol-Myers Squibb Co. spent $840,000 on first quarter lobbying (see Forbes.com report). According to Bristol-Myers Squibb’s filing with the House clerk’s office, the biopharmaceutical company’s lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• Endo Pharmaceuticals spent $410,000 on first quarter lobbying (see Forbes.com report). According to the company’s lobbying disclosure, Endo lobbied on a number of bills, including taking a stance against the Senate patent reform bill.

• Pfizer, Inc. spent $2.8 million on first quarter lobbying (see Forbes.com report). According to the company’s lobbying disclosure, the drug maker’s lobbying efforts were directed in part at follow-on biologics legislation and legislation directed at protecting pharmaceutical patents internationally.

• Sanofi-Aventis spent over $1.2 million on first quarter lobbying (see Forbes.com report). According to Sanofi-Aventis’ filing with the House clerk’s office, the pharmaceutical company’s lobbying efforts were directed in part at follow-on biologics legislation.

• Schering-Plough Corp. spent $520,000 on first quarter lobbying (see Forbes.com report). According to the company’s lobbying disclosure, the drug maker’s lobbying efforts were directed in part at patent reform and follow-on biologics legislation.

• Syngenta AG spent $400,000 on first quarter lobbying (see Forbes.com report). According to Syngenta’s filing with the House clerk’s office, the agrochemical company’s lobbying efforts were directed in part at patent reform legislation.

• Teva Pharmaceutical Industries Ltd. spent $640,000 on first quarter lobbying (see Forbes.com report). According to the company’s lobbying disclosure, the generic drug maker lobbied on a number of bills, including taking a stance in favor of follow-on biologics legislation.

• Wyeth spent almost $700,000 on first quarter lobbying (see Forbes.com report). According to Wyeth’s lobbying disclosure, the drug maker’s lobbying efforts were directed in part at follow-on biologics and patent reform legislation.

• The Biotechnology Industry Organization (BIO) spent over $1.9 million on first quarter lobbying (see Forbes.com report). The biotech industry trade group, which includes Amgen and Biogen Idec among its members, lobbied on, inter alia, patent reform and follow-on biologics legislation. According to Forbes, the biotech industry has resisted efforts to create a follow-on biologics pathway for nearly a decade, but "with Democrats poised to pick up more seats in Congress this November, they are now pushing for a compromise before the political tide in Washington turns further in favor of their generic rivals."

• The Generic Pharmaceutical Association (GPhA) spent $434,495 on first quarter lobbying (see CNNMoney.com report). The trade group, which includes Barr Pharmaceuticals and Mylan as members, lobbied on, inter alia, patent reform and follow-on biologics legislation.

• The Pharmaceutical Research and Manufacturers of America (PhRMA) spent more than $3.6 million on first quarter lobbying (see Forbes.com report). The pharmaceutical industry trade group, which includes Pfizer and Amgen among its members, lobbied on, inter alia, patent reform and follow-on biologics legislation. According to Forbes, the generic industry is seeking no more than five years of market exclusivity, while branded drug makers want at least 12 years of exclusivity.

For additional information regarding this topic, please see:

• "Biotech/Pharma Lobbying Scoreboard" June 6, 2008
• "Lobbying Spending Spree Continues," May 20, 2008
• "Abbott’s First Quarter Lobbying Tab Hits $880,000," May 2, 2008
University of Pittsburgh v. Hedrick (C.D. Cal. 2008)

June 29, 2008

By Kevin E. Noonan —

On June 9, 2008, the University of Pittsburgh obtained a judgment correcting inventorship of U.S. Patent No. 6,777,231 under 35 U.S.C. § 256. The U.S. District Court for the Central District of California determined that several of the inventors, who had assigned their rights to the Regents of the University of California, were not properly named as inventors, thus extinguishing the Regents’ rights and nullifying a license from the University of California to Cytori Therapeutics, Inc. As a consequence, the Pittsburgh licensee, Artecel Inc., became the sole licensee of the ‘231 patent.

The ‘231 patent is directed to adipose-derived stem cells. Claim 1 of the ‘231 patent reads as follows:

1. An isolated adipose-derived stem cell that can differentiate into two or more of the group consisting of a bone cell, a cartilage cell, a nerve cell, or a muscle cell.

As granted, the ‘231 patent named Adam J. Katz, Ramon Llull, William J. Futrell, Marc H. Hedrick, Prosper Benhaim, Hermann Peter Lorenz, and Min Zhu as inventors, and the patent is assigned to both the University of Pittsburgh and the Regents of the University of California. The District Court determined in its findings of fact that Katz, Llull, and Futrell worked only at the University of Pittsburgh; Benhaim, Lorenz, and Zhu worked only at UCLA; and Hedrick worked first at Pittsburgh and later at UCLA.

The University of Pittsburgh filed suit to remove the UCLA inventors from the ‘231 patent under 35 U.S.C. § 256, and the UCLA inventors counterclaimed to remove the University of Pittsburgh inventors. (Curiously UCLA does not seem to be a party to the suit even though a determination that the Defendants were not inventors would destroy any rights UCLA has in the ‘231 patent.)

On June 9th, Judge Consuelo B. Marshall issued the District Court’s Findings of Fact and Conclusions of Law; the Court had earlier granted summary judgment that Drs. Katz and Llull were properly named as inventors. The Court found that Dr. Katz had isolated adipose-derived stem cells, and that Drs. Katz and Llull conceived that these cells could be induced to differentiate into cells from multiple mesodermal lineages, "including bone, cartilage, fat and muscle." The Court credited evidence from laboratory notebooks that Drs. Katz and Llull showed their adipose-derived stem cells could differentiate into several different cell types, including adipose cells, nerve cells, and muscle cells. Dr. Katz also "appreciated" the capacity of these adipose-derived stem cells for self-renewal, according to the Court. The Court found that the earliest date of conception for the invention claimed in the ‘231 patent was several years before work began at UCLA.

Based on these factual findings, the District Court concluded that the University of Pittsburgh had carried its burden of showing by clear and convincing evidence that the UCLA inventors (Benhaim, Hedrick, Lorenz, and Zhu) were not inventors of the invention claimed in the ‘231 patent. According to the Court, the evidence established that Dr. Hedrick’s work regarding differentiation of adipose-derived stem cells into nerve cells occurred after Drs. Katz and Llull conceived of the claimed invention, i.e., adipose-derived stem cells that could be induced to differentiate into multiple cell types (adipose and muscle cells). The Court concluded that the UCLA inventors’ work merely "confirmed the operability of the invention." Thus, only Drs. Katz and Llul are properly named as inventors of the ‘231 patent.

The UCLA inventors had previously attempted to correct inventorship during prosecution of the corresponding application, asserting that the inventors were properly named upon filing but that claim amendments had changed inventorship. The first petition, filed before the ‘231 patent issued, was never acknowledged by the Office, while the second (accompanied by a Certificate of Correction) was denied. Also denied was another petition supported by a copy of Pittsburgh’s complaint. The Court did not rule on the question of whether filing any of these petitions constituted inequitable conduct; this question should be mooted as to the UCLA scientists by the inventorship determination (since if the inventors were not inventors, Rule 56 should not apply). The question of the culpability of Defendants’ patent counsel is another matter, including an allegation on Arcetel’s website that the last filed petition was filed during the litigation and without notice to Pittsburgh or its named inventors. These activities could provide one avenue for an accused infringer to challenge the enforceability of the ‘231 patent.

Cytori Therapeutics, the University of California’s licensee, had this to say on its website regarding the District Court’s decision:

Cytori believes the recent decision on the ‘231 patent is in error and that work completed at the University of California was critical to obtaining this patent. Cytori recognizes that [the] ‘231 [patent] may have value in the long term in areas unrelated to the Company’s existing product pipeline, and consequently Cytori and the UC Regents are reviewing their legal alternatives to this ruling, including that of appealing this decision to the Federal Circuit. It is Cytori’s intention to aggressively protect its business, its intellectual property and its investors.

However, the company also asserts that losing its rights to the technology claimed in the ‘231 patent is not critical to its business:

The Court’s decision [in the ‘231 inventorship lawsuit] does not impact Cytori’s primary ongoing business activities or product development pipeline because Cytori’s products do not practice the ‘231 patent. Cytori’s Celution® System yields an output comprising a diverse mixture of cells found in adipose tissue whereas the ‘231 patent covers a narrowly defined population of adipose derived adult stem cells in an environment substantially free of other cellular materials found in adipose tissue. The output that is covered by the ‘231 patent requires different isolation or processing techniques, which are unnecessary for therapeutic efficacy, and which the Celution System, by design, does not perform.

Cytori’s Celution® System device is protected, according to the company, by U.S. Patent No. 7,390,484.
Court Report

June 29, 2008

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.

Eli Lilly and Company et al. v. APP Pharmaceuticals LLC
1:08-cv-00384; filed June 25, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 5,344,932 ("N-(pyrrolo(2,3-d)pyrimidin-3-ylacyl)-Glutamic Acid Derivatives," issued September 6, 1994), licensed to Eli Lilly, following a paragraph IV certification as part of APP’s filing of an ANDA to manufacture a generic version of Lilly’s Alimta® (pemetrexed for injection, used to treat malignant pleural mesothelioma and locally advanced or metastatic non-small cell lung cancer). View the complaint here.

Dey LP et al. v. Sepracor Inc.
1:08-cv-00372; filed June 20, 2008 in the District Court of Delaware

Declaratory judgment of non-infringement and invalidity of U.S. Patent No. 6,451,289 ("Albuterol Formulations," issued on September 17, 2002) in conjunction with Dey’s filing of an ANDA to manufacture a generic version of Sepracor’s Xopenex® (levalbuterol hydrochloride inhalation solution, used to treat bronchospasm caused by asthma and chronic obstructive pulmonary disease). View the complaint here.

Hoffman-La Roche Inc. v. Apotex Inc. et al.
2:08-cv-03065; filed June 16, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 4,927,814 ("Diphosphonate Derivatives, Pharmaceutical Compositions and Methods of Use," issued May 22, 1990) following a paragraph IV certification as part of Apotex’s filing of an ANDA to manufacture a generic version of Roche’s Boniva® (150 mg once-monthly tablets) (ibandronate sodium, used to treat post-menopausal osteoporosis). View the complaint here.
BIO Announces Venues and Dates for Upcoming Conventions

June 29, 2008

On June 20th, the Biotechnology Industry Organization (BIO) concluded its 2008 International Convention. More than 20,000 attendees from over 2,100 biotech companies, organizations, and institutions — including Patent Docs authors (and MBHB attorneys) Donald Zuhn, Sherri Oslick, and Kevin Noonan (below) — were in attendance at this year’s International Convention in San Diego.

In addition to the BIO Exhibition, where biotech exhibitors set up shop in a BIO-record 208,000 square feet of exhibition space, the Convention included 175 breakout sessions in 21 educational tracks featuring more than 1,000 speakers (see "2008 BIO International Convention Draws Global Industry Leaders and Public Officials for Networking, Deal Making and Partnering"). Patent Docs has since presented a series of reports on a number of the Convention’s breakout sessions (see links below).

At the conclusion of this year’s Convention, BIO announced that the next five Conventions would take place in:

• Atlanta — May 18-21, 2009,
• Chicago — May 3-6, 2010,
• Washington, DC — June 26-30, 2011,
• Las Vegas — June 25-28, 2012, and
• Chicago — April 22-25, 2013.

The 2014 and 2015 Conventions have been tentatively scheduled for San Diego (June 24-27, 2014) and Boston (June 22-25, 2015). The BIO press release noted that all seven of the upcoming Conventions would begin on a Monday and close on a Thursday (as opposed to the Tuesday through Friday schedule of BIO 2008).

Looking forward to BIO 2009 in Atlanta, BIO President and CEO Jim Greenwood stated that the Convention "will help showcase the regional biotechnology community and drive further biotech investment throughout the Southeastern United States." Mr. Greenwood also noted that the Convention "has grown from an intimate industry gathering to a major global event, with more than one-third international attendance, including the most prominent industry leaders and public officials from around the world."

Founded in 1993, BIO is a nonprofit association seeking supportive biotechnology policies on behalf of more than 1,200 biotechnology companies, academic institutions, state biotechnology centers, and related organizations across the United States and in more than 30 other nations, as well as providing business development services for many emerging biotech companies.

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

• "Docs at BIO: Panel Discusses IP Strategies after KSR," June 26, 2008
• "Docs at BIO: "Gotcha" Games Continue at USPTO," June 25, 2008
• "Docs at BIO: Panel Discusses Impact of USPTO Rules Changes and Patent Reform Legislation on Biotech Patenting," June 23, 2008
• "Docs at BIO: Representatives from JPO, EPO, SIPO, and USPTO Discuss Recent Developments in Japan, Europe, China, and the U.S.," June 22, 2008
• "Docs at BIO: Steve Burrill’s State of the Biotechnology Industry Report 2008," June 19, 2008
Conference & CLE Calendar

June 29, 2008

July 1, 2008 – Prior Art & Obviousness 2008: The PTO and CAFC Perspective on Patent Law Sections 102 & 103 (Practising Law Institute) – New York, NY

July 9, 2008 – Quanta v. LG: What You Should Know (ALI-ABA) – 12:00-1:00 PM (EST) webcast

July 9-11, 2008 – Fundamentals of Patent Prosecution 2008: A Boot Camp for Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

July 16, 2008 – Patent Claim Construction Workshop (Law Seminars International) – Seattle, WA

July 24-25, 2008 – Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) – New York, NY

August 11-12, 2008 – Advanced Patent Prosecution Workshop 2008: Claim Drafting & Amendment Writing (Practising Law Institute) – San Francisco, CA

August 10-15, 2008 – Advanced Courses (Patent Resources Group) – Washington, DC

September 11, 2008 – Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) – New York, NY

September 11-12, 2008 – Current Issues in Complex IP Licensing (Law Seminars International) – Philadelphia, PA

September 15-16, 2008 – Biotech Patents*** (American Conference Institute)

September 22-23, 2008 – USPTO Boot Camp: Patent Edition*** (American Conference Institute) – Alexandria, VA

September 22-23, 2008 – FDA Boot Camp*** (American Conference Institute)

September 22-23, 2008 – Patent Litigation 2008 (Practising Law Institute) – San Francisco, CA

October 6-7, 2008 – Patent Litigation 2008 (Practising Law Institute) – McLean, VA

October 15, 2008 – Developments in Pharmaceutical and Biotech Patent Law (Practising Law Institute) – San Francisco, CA

October 15-17, 2008 – Maximizing Pharmaceutical Patent Lifecycles*** (American Conference Institute) – New York, NY

October 23-24, 2008 – Patent Litigation 2008 (Practising Law Institute) – Chicago, IL

November 10-11, 2008 – Patent Litigation 2008 (Practising Law Institute) – Atlanta, GA

November 17-18, 2008 – Patent Litigation 2008 (Practising Law Institute) – New York, NY

***Patent Docs is a media sponsor of this conference or CLE
House Passes Patent Term Extension Bill

June 27, 2008

By Kevin E. Noonan —

In 2001, The Medicines Company failed to file a patent term extension application for its anticoagulant drug Angiomax® (bivalirudin) within the 60-day time limit set forth under 35 U.S.C. § 156(d)(1); the application was filed one day late. Since that time, there have been efforts to remedy this deficiency by legislation (including H.R. 5120; S. 1785; and provisions of S. 1145, the patent "reform" act; as well as an earlier "stand alone" version of the bill introduced as H.R. 1778 earlier in this Congress). Last Monday, the House finally passed a bill containing the necessary provisions.

The bill, H.R. 6344, sets forth the changes in patent term extension law in Section 4:

SEC. 4. AUTHORITY OF DIRECTOR OF PTO TO ACCEPT LATE FILINGS.

(a) Authority — Section 156 of title 35, United States Code, is amended by adding at the end the following new subsection:
(i) Discretion to Accept Late Filings in Certain Cases of Unintentional Delay —

(1) IN GENERAL — The Director may accept an application under this section that is filed not later than three business days after the expiration of the 60-day period provided in subsection (d)(1) if the applicant files a petition, not later than five business days after the expiration of that 60-day period, showing, to the satisfaction of the Director, that the delay in filing the application was unintentional.
(2) TREATMENT OF DIRECTOR'S ACTIONS ON PETITION — If the Director has not made a determination on a petition filed under paragraph (1) within 60 days after the date on which the petition is filed, the petition shall be deemed to be denied. A decision by the Director to exercise or not to exercise, or a failure to exercise, the discretion provided by this subsection shall not be subject to judicial review.

(b) Fee for Late Filings —

(1) IN GENERAL — In order to effect a patent term extension under section 156(i) of title 35, United States Code, the patent holder shall pay a fee to the United States Treasury in the amount prescribed under paragraph (2).
(2) FEE AMOUNT —

(A) FEE AMOUNT — The patent holder shall pay a fee equal to —
(i) $65,000,000 with respect to any original application for a patent term extension, filed with the United States Patent and Trademark Office before the date of the enactment of this Act, for a drug intended for use in humans that is in the anticoagulant class of drugs; or
(ii) the amount estimated under subparagraph (B) with respect to any other original application for a patent term extension.
(B) CALCULATION OF ALTERNATE AMOUNT — The Director shall estimate the amount referred to in subparagraph (A)(ii) as the amount equal to the sum of —
(i) any net increase in direct spending arising from the extension of the patent term (including direct spending of the United States Patent and Trademark Office and any other department or agency of the Federal Government);
(ii) any net decrease in revenues arising from such patent term extension; and
(iii) any indirect reduction in revenues associated with payment of the fee under this subsection.
The Director, in estimating the amount under this subparagraph, shall consult with the Director of the Office of Management and Budget, the Secretary of the Treasury, and either the Secretary of Health and Human Services or (in the case of a drug product subject to the Act commonly referred to as the 'Virus-Serum-Toxin Act'; 21 U.S.C. 151-158) the Secretary of Agriculture.

(3) NOTICE OF FEE — The Director shall inform the patent holder of the fee determined under paragraph (2) at the time the Director provides notice to the patent holder of the period of extension of the patent term that the patent holder may effect under this subsection.
(4) ACCEPTANCE REQUIRED — Unless, within 15 days after the Director provides notice to the patent holder under paragraph (3), the patent holder accepts the patent term extension in writing to the Director, the patent term extension is rescinded and no fees shall be due under this subsection by reason of the petition under section 156(i)(1) of title 35, United States Code, pursuant to which the Director provided the notice.
(5) PAYMENT OF FEE — The extension of a patent term of which notice is provided under paragraph (3) shall not become effective unless the patent holder pays the fee required under paragraph (2) not later than 60 days after the date on which the notice is provided.
(6) FEE PAYMENT NOT AVAILABLE FOR OBLIGATION — Fees received under this subsection are not available for obligation.
(7) DIRECTOR DEFINED — Except as otherwise provided, in this subsection, the term 'Director' means the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.

(c) Applicability —

(1) IN GENERAL — This section and the amendments made by this section shall apply to any application —

(A) that is made on or after the date of the enactment of this Act; or
(B) that, on such date of enactment, is pending before the Director or as to which a decision of the Director is eligible for judicial review.

(2) TREATMENT OF CERTAIN APPLICATIONS — In the case of any application described in paragraph (1)(B), the 5-day period prescribed in section 156(i)(1) of title 35, United States Code, as added by subsection (a) of this section, shall be deemed to begin on the date of the enactment of this Act.

These terms are reminiscent of so-called "private bills" that have long been introduced in Congress to address specific changes in the law targeted at particular constituents. An early use of such bills occurred in the aftermath of the Civil War, where patent terms were extended for patents that had been suppressed by the Northern government as part of the war effort. This tactic was famously employed by G.D. Searle & Co. in the early 1980's to extend the term of its patent for aspartame (NutraSweet®) at a time prior to the existence of the Hatch-Waxman regime for pharmaceutical patents. (The bill was introduced by Congressman Donald Rumsfeld, who represented Searle’s home district.) H.R. 6344 was introduced by Rep. William Delahunt (10th District, MA), but also includes seven co-sponsors, including John Conyers of Michigan (who moved to suspend the rules and permit the bill to be passed without amendment by voice vote, thereby avoiding the need for the position of each of the members of Congress to be on the record).

Here, The Medicines Company will pay a hefty price ($65 million) for its extension, but the amount of the extended term (1,773 days, or until December 15, 2014) and the expected market for Angiomax ($500 million by 2010) clearly justify the cost. It remains to be seen, however, if the Senate will acquiesce to a solution to one company's problem that will impose additional costs on the American health care system. On the one hand, Senator Kennedy reportedly introduced a version of the PTE "savings" provisions into S. 1145 (and Senator Leahy reportedly incorporated Senator Session's gift to the banking industry as part of the patent "reform" bill with little debate). On the other hand, Senator Leahy evinced great concern over the cost to Medicare occasioned by Genentech's intention to prevent pharmaceutical formularies from reformulating its Avastin® VEGF monoclonal antibody as a lower-cost alternative to its AMD drug Lucentis®; his veiled threat to "look into" the matter may have been instrumental in resolving the pricing crisis over these drugs (see "Finally, Some Good News for Genentech on Avastin®"). Lobbying against the bill is sure to ensue, by generic drug companies, consumer advocates, and "watchdog" groups. Already, Elizabeth Wright, Vice President of Government Relations for Citizens against Government Waste was quoted by CBS News as saying "[w]e call this the dog-that-ate-my-homework act. It's outrageous and very sneaky. This could develop into a game that many companies end up playing." (Ms. Wright opines more extensively on the bill on the group's blog, The Swine Line.) Expect similar rhetoric from other stakeholders, with uncertain results in this election year.
CLE on Quanta Computer, Inc. v. LG Electronics, Inc.

June 27, 2008

The American Law Institute and American Bar Association (ALI-ABA) will be offering a webcast entitled: "Quanta v. LG: What You Should Know" on July 9, 2008 from 12:00-1:00 PM (EST). The Honorable Susan G. Braden of the United States Court of Federal Claims, John W. Olivo, Jr. of Ward & Olivo, and B. Todd Patterson of Patterson & Sheridan, LLP will discuss the degree to which Quanta Computer relaxes the grip of the patent owner on downstream uses, how the decision applies to other types of patented products, and what the case says about the Supreme Court’s direction in the area of patent law. According to the WestLegalEdCenter, the program will touch upon the following questions:

• How much does Quanta Computer relax the grip of the patent owner on downstream uses, especially in light of today’s complicated products?
• Has this ruling effectively limited the scope of the patent (and the patent-owner’s rent-seeking behavior) to encourage innovation/competition?
• Will the decision require patent owners to carefully select the first licensee and to drive a hard bargain to get top dollar up front?
• Will doing so exclude small companies from obtaining access to a patent on which they could improve the art, thus limiting the "winners" in technology acquisition to those with the deepest pockets?
• Might the practical result of this case be to raise technology prices and exclude competitors — the exact opposite of what the Supreme Court intended?

The webcast will also examine the following topics:

• The impact of patent exhaustion doctrine on post sale use of components substantially embodying a claimed invention.
• The scope of the "substantially embodying" test.
* Controlling downstream use via contract (as applied to and in view of antitrust issues that may stem from such contracts).
• What Quanta Computer says about the Supreme Court’s mindset in relation to patent law.

The registration fee for this webcast is $149. Those interested in registering for the webcast, can do so here.

For additional information regarding the Quanta Computer decision, please see:

• "Quanta Computer, Inc. v. LG Electronics, Inc. (2008)," June 9, 2008

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