By Robert Dailey —

Innogenetics and Abbott have agreed to settle their dispute over Innogenetics’ patented methods for genotyping HCV.  Abbott will shell out $9.5 million, including on-going royalty payments for each test sold by Abbott.

We have previously discussed developments in the litigation between Innogenetics and Abbott over U.S. Patent 5,846,704 (see links below).  In January, the Federal Circuit affirmed most of the District Court’s findings of validity and infringement.  Yet the Federal Circuit dissolved the injunction and remanded the case for a mini-trial on anticipation.  We speculated that the dissolution of the injunction could likely expedite settlement negotiations. 

On the news of the settlement, Innogenetics stock jumped from € 3.95 to € 4.25, but has since fallen back to pre-settlement values.  Innogenetics stock has lost about one-third of its value within the past three months.  The Belgian biotech company probably hoped that this week’s settlement would boost share value.  The market appears not to have welcomed the deal, however.

For additional information regarding this topic, please see:

• "Innogenetics, N.V. v. Abbott Labs. (Fed. Cir. 2008)," January 17, 2008
• "Federal Circuit Reinstates Injunction in favor of Innogenetics," March 9, 2007
• "Innogenetics Appeals Its Win over Abbott," January 30, 2007
• "Permanent Injunction Issued against Abbott HCV Genotyping Test Kit," January 12, 2007
• "Innogenetics Wins $7 Million Judgment against Abbott for Infringing HCV Genotyping Method," January 8, 2007

More information can also be found in a report by Reuters.

    By Kevin E. Noonan —

Before Hoffmann-LaRoche filed its Notice of Appeal in the Court of Appeals for the Federal Circuit last week, appealing the preliminary injunction Judge William Young entered that prevents Roche from selling its Mircera® drug product (a form of recombinant EPO that has been covalently linked to polyethylene glycol), Roche filed a brief with the District Court regarding its interpretation of the Federal Circuit’s recent decision in Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc.  This filing was in part a response to Amgen’s brief, filed in the District Court on March 14th regarding the effect of the Federal Circuit’s Pfizer decision on the propriety of the preliminary injunction and the underlying competence of Amgen’s verdict that its claims are not invalid (see Patent Docs report).

Roche’s position is simple:  the Pfizer decision limits the application of the "safe harbor" provisions of 35 U.S.C. § 121 to divisional applications.  Roche’s brief cites the multiple instances where the Court recited this proposition:

• Pfizer argues that the terms "divisional" and "continuation-in-part" are merely labels used for administrative convenience, and that accordingly, although . . . termed a CIP, [its application] is in effect a divisional for purposes of section 121.  In other words, Pfizer contends that the term "divisional application" as it is used in section 121 refers broadly to any type of continuing application filed as a result of a restriction, regardless of whether it is labeled by the PTO, for administrative purposes, as a divisional, a continuation, or a CIP.  We disagree.  Pfizer, 2008 U.S. App. LEXIS 4969, at *14 (emphasis added).

• As the Federal Circuit explicitly held: "We conclude that the protection afforded by section 121 to applications (or patents issued therefrom) filed as a result of a restriction requirement is limited to divisional applications."  Pfizer, 2008 U.S. App. LEXIS 4969, at *21-22 (emphasis added).

• As the Federal Circuit reasoned:

Section 121 explicitly refers to "divisional applications."  [Quoting statute and emphasizing each use of the term "divisional application"] . . . . That safe harbor, by its literal terms, protects only "divisional application[s]" . . . and patents issued on such applications.

The legislative history of section 121, like section 121 itself, refers specifically to "divisional application[s]." . . . There is no suggestion . . . in the legislative history of section 121 that the safe-harbor provision was, or needed to be, directed at anything but divisional applications.  Id. at *14-19.

• Amgen correctly notes that the Federal Circuit "stressed that [the] difference between a divisional application and a CIP application ‘was well known at the time that Congress enacted the 1952 Patent Act,’ and therefore ‘[i]f the drafters wanted to include CIPs within the protection afforded by section 121, they could have easily done so.’"  What Amgen fails to point out, however, is that the difference between a divisional application and a continuation application was equally well known.  Thus, for the identical reason, "[i]f the drafters wanted to include" continuation applications "within the protection afforded by section 121, they could have easily done so."  They did not:  "Despite this awareness . . . the drafters of section 121 chose to refer specifically and only to divisional . . . applications."

• As the text of the opinion makes clear:

Although the legislative history reveals no reason why Congress drafted section 121 only to benefit divisional applications, there are certainly plausible reasons why Congress would have concluded that section 121 should be limited to divisional applications, and not include CIPs.  Pfizer, 2008 U.S. App. LEXIS 4969, at *19.

The argument is straightforward:  the statute only encompasses divisional applications.  This is in direct contradiction to Amgen’s position, which was that this decision has no bearing on the District Court’s decision that Amgen’s patents-in-suit are not invalid under the judicially-created obviousness-type double patenting doctrine.  Amgen argued that its applications were not CIPs, but continuations, and that the Pfizer decision was limited to precluding the § 121 safe harbor from encompassing CIP applications.  Amgen also argued that its patents-in-suit were continuation applications in name only, and satisfied the conditions of the statute for benefiting from the safe harbor ("later application[s] carved out of a pending application," containing claims to "a distinct and independent invention" and "disclosing and claiming only subject matter disclosed in the earlier or parent application").  Roche’s brief does not deign to address these contentions directly, taking the more direct route of asserting sub silentio that Amgen’s arguments were irrelevant in the face of the Pfizer decision’s simple holding.

Roche’s brief does seek to refute Amgen’s contention that the interpretation Roche wishes to have applied to the Pfizer decision — that the § 121 safe harbor is limited to divisional applications — is inconsistent with the Federal Circuit’s earlier decisions in Applied Materials, Inc. v. Advanced Semiconductor Materials Am., Inc., 98 F.3d 1563 (Fed. Cir. 1996) and Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569 (Fed. Cir. 1991).  Amgen argued that any interpretation (such as the one Roche argues here) cannot be correct in view of this purported inconsistency, since three-judge panels of the Federal Circuit are bound by the earlier decisions, citing Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed. Cir. 1988) ("This court has adopted the rule that prior decisions of a panel of the court are binding precedent on subsequent panels unless and until overturned in banc.  Where there is direct conflict, the precedential decision is the first.").  Roche argues that there is no inconsistency, since neither Applied Materials nor Symbol Technologies involved continuation applications, but rather concerned divisional applications (albeit the patents-in-suit were continuations claiming priority to divisional applications).  This approach is consistent with positions Roche asserted before the District Court, to the effect that Amgen was precluded from the safe harbor under § 121 because it designated its applications as continuations rather than divisionals.  Roche does not reach the substance of Amgen’s argument regarding whether the relevant patents-in-suit satisfy the requirements for divisional applications.

Finally, Roche argues that the Pfizer decision also expressly supports its interpretation of the decision in Geneva Pharmaceuticals, Inc. v. GlaxoSmithKline PLC, 349 F.3d 1373 (Fed. Cir. 2003), that the District Court’s determination of whether claims in the patents-in-suit fall within the ambit of obviousness-type double patenting can rely on disclosure in the parent specification as well as the parent’s granted claims.

As noted in an earlier post, the lawyer representing Pfizer before the Federal Circuit, Leora Ben-Ami, Kaye Scholer LLP, is also the lead trial attorney representing Hoffman-LaRoche against Amgen.  Roche’s brief was filed by local counsel, Bromberg & Sunstein LLP.

For additional information regarding this topic, please see:

• "Hoffmann-LaRoche Can’t Wait, Files Notice of Appeal to the Federal Circuit," April 11, 2008
• "Will the Federal Circuit’s Pfizer v. Teva Decision Spell the End of Amgen’s Patent Rights to Recombinant Human Erythropoietin?" March 31, 2008
• "Court Still Cannot Decide on Amgen’s Permanent Injunction," March 26, 2008
• "Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)," March 20, 2008
• "Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction," March 20, 2008
• "Roche’s Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO Challenge," October 28, 2007

    By Kevin E. Noonan —

Perhaps surprisingly, the Biotechnology Industry Organization (BIO) filed an amicus brief last week in In re Bilski, a case under en banc consideration by the Federal Circuit over a Patent Office determination that the claimed subject matter (a method of managing the risk of bad weather through commodities trading) is non-statutory under 35 U.S.C. § 101.

BIO contends that the question of what falls within the province of statutory subject matter is vitally important to the biotechnology industry and argues that the Federal Circuit should construe § 101 broadly, consistent with the Supreme Court’s maxim that "anything under the sun made by man" should be patentable (see Diamond v. Chakrabarty, 447 U.S. 303 (1980)).  BIO’s brief contends that this principle is constrained by the limited number of exceptions noted by the Supreme Court in Chakrabarty (laws of nature, natural phenomena, and abstract ideas):

a new mineral in the earth or a new plant found in the wild is not patentable subject matter.  Likewise Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity.  Such discoveries are "manifestations of . . . nature, free to all men and reserved exclusively to none."

Chakrabarty, 447 U.S. at 309, quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948).

Moreover, the fact that an invention is "an application of a law of nature, natural phenomenon or abstract idea" should not preclude patentability because, in some respects, "all inventions can be reduced to underlying principles of nature" (see Diamond v. Diehr, 450 U.S. 175 (1981)).

This clear teaching has become muddied, according to BIO’s brief, by arguments aimed at excluding specific types of inventions, including mathematical algorithm and business methods, and involving unhelpful concepts such as the presence or absence of "mental steps, physical transformation, machine-implementation, post-solution activity, preemption and the like."  Indeed, the brief cites State Street Bank & Trust Co. v. Signature Financial Group, Inc. for the proposition that the Federal Circuit has recognized the mischief-making potential of cherry-picking certain types of inventions, outside the limited exceptions laid out by the Supreme Court, as being patent-ineligible.  The brief implores the Federal Circuit not to adopt artificial tests of unpatentability, but to conform to the Supreme Court’s expansive interpretation of the scope of statutory subject matter.  And the brief cautions that the Federal Circuit appears to be soliciting answers (specifically, to questions 2, 3 and 4 in the questions presented) that are aimed to limiting statutory subject matter scope in a way inconsistent with Supreme Court precedent.

BIO’s brief goes back to the Telegraph cases to illustrate how the actual deficiency in claims to fundamental processes — such as electromagnetism — are not problems of statutory subject matter but instead stem from overbroad claiming:

And if [Samuel F. B. Morse] can secure the exclusive use by his present patent he may vary it with every new discovery and development of the science, and need place no description of the new manner, process, or machinery, upon the records of the patent office.  And when his patent expires, the public must apply to him to learn what it is.  In fine he claims an exclusive right to use a manner and process which he has not described and indeed has not invented, and therefore could not describe when he obtained his patent.  The court is of the opinion that the claim is too broad, and not warranted by law.

O’Reilly v. Morse, 56 U.S. 15 How. 62, 113 (1853).

BIO contends that, properly understood, the deficiency in Morse’s claims was a matter of a failure to satisfy § 112 rather than patent-ineligibility under § 101 (under the principle of preemption), something the Supreme Court appeared to espouse in the Telegraph cases.  Confusion about this plain reason for the Court’s decision later arose, according to BIO’s brief, because the Supreme Court later characterized the deficiency of the claim as being directed to "a mere principle," citing Risdon Iron & Locomotive Works v. Medart, 158 U.S. 68, 76 (1895).  The better principle is to understand that Morse did not satisfy the extant sufficiency of disclosure requirements (analogous to current 35 U.S.C. § 112, first paragraph) to entitle him to the broad claims he sought.  This is yet another aspect of the issues before that court that the Federal Circuit recognized in State Street, according to BIO.

The brief also suggests that "policy issues," rather than application of the law, is behind challenges to patentability of broad technological sections, such as the challenge to biotechnology in the Chakrabarty case and the challenge to business methods here.  Policy concerns are common, BIO says, in new areas where the examination burden on the U.S. Patent and Trademark Office is greatest, due to the lack of established expertise in new technology areas and the dearth of relevant prior art.  Specifically with regard to business methods, the brief touches on four policy concerns that could be said to mitigate against patent protection for business methods:

• no patent incentive is needed for such methods that, essentially, drive human behavior, because humans inherently figure out new ways of behaving and interacting all the time;
• because such methods may be capable of easy re-invention, society would lose little by denying patent protection and forcing trade secret protection;
• the need for a patent incentive is reduced for such claims because the development of such methods may require little investment that must be recouped through a patent monopoly; and
• such claims would be extremely difficult to enforce because infringement is hard, or impossible, to detect.

Regardless of the force of these concerns, BIO asserts, they are for Congress, not the courts, to address (an argument accepted by the Supreme Court almost thirty years ago in the Chakrabarty case).

Perhaps with an eye to cases like Laboratory Corp. v. Metabolite Labs., Inc. (Labcorp), BIO also contends that it is unnecessary to carve out a preempted category of claims involving "mental steps," since any claim comprising entirely mental steps is already outside the scope of § 101 as being an abstract idea.  And a physical transformation is also not requirement for patentability, according to BIO, asserting a number of patented biotechnology-related patent claims that satisfy § 101 but do not involve such a physical transformation.  Claim 1 of U.S. Patent No. 6,303,324 is a representative example:

1.  A method for making a prognosis of disease course in a human cancer patient, the method comprising the steps of:
    (a) obtaining a sample of a tumor from the human cancer patient;
    (b) determining a level of nuclear localization of p53 protein in the tumor sample and comparing the level of nuclear localization of p53 in the tumor sample with the level of nuclear localization of p53 protein in a non-invasive, non-metastatic tumor sample;
    (c) determining a level of thrombospondin 1 expression in the tumor sample and comparing the level of thrombospondin 1 expression in a non-invasive, non-metastatic tumor sample;
    (d) determining by immunohistochemistry an extent of microvascularization in the tumor sample and comparing the extent of microvascularization in the tumor sample with the extent of microvascularization in a non-invasive, non-metastatic tumor sample;
    wherein said prognosis is predicted from considering a likelihood of  further neoplastic disease which is made when the level of nuclear localization of in the tumor sample is greater than the level of nuclear localization of p53 protein in the non-invasive, non-metastatic tumor sample; the level of thrombospondin 1 expression in the tumor sample is less than the level of thrombospondin 1 expression in the non-invasive, non-metastatic tumor sample; and the extent of microvascularization in the tumor sample is greater than the extent of microvascularization in the non-invasive, non-metastatic tumor sample, and wherein the human cancer patient has breast cancer or prostate cancer.

BIO notes that none of these claims "is limited by a physical transformation of an article or machine implementation.  Nevertheless, they are neither abstract ideas, laws of nature nor natural phenomena but instead each provides a valuable contribution to the pharmaceutical or biotechnological useful arts" and are hence properly considered patentable subject matter.

Finally, BIO’s brief addresses directly Justice Breyer’s (at left) criticism of State Street in his dissent from the Supreme Court’s decision that certiorari was improvidently granted in the Labcorp case.  According to Justice Breyer, the Supreme Court has never held that "transformation of data . . . by a machine . . . into a final share price, constitutes a practical application of a mathematical algorithm, formula or calculation, because it produces ‘a useful, concrete and tangible result’," and that the literal meaning of the statement is inconsistent with Supreme Court precedent in Morse, Flook, and Diehr.  The "difficulty" with Justice Breyer’s analysis, according to BIO, is that "he extended the holding of State Street to all processes, and took it out of the specific factual context in which it was made — machine-implemented data transformation."  BIO also disagrees with the substantive assertion that the Supreme Court has not based patent eligibility holdings on the "useful, concrete and tangible result" standard, citing Mackay Radio & Telegraph Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939) and Funk Bros. Seed Co.

The brief closes with an exhortation that the Federal Circuit decide the patentability issue narrowly as to Bilski, and not take the occasion to make a broad statement of patentability vel non of business method patents:

State Street and AT&T are consistent with the language of § 101 and controlling precedent and should not be revisited on the basis of Justice Breyer’s dissent in LabCorp.  To the extent this Court believes that it must reemphasize the specific factual context in which it reached its holdings in State Street and AT&T (machine-implemented data transformation systems and methods), it can do so in this case without disturbing the earlier holdings — holdings clearly reached after careful consideration of the facts of each case and the applicable law.

This may be an unlikely outcome, however, since the Federal Circuit sua sponte decided to hear the case en banc and solicited the parties and amici to provide briefs directed to precisely the type of broad reconsideration of business method patents BIO cautions against.

    By Kevin E. Noonan —

Hoffmann-LaRoche has apparently given up its attempts to convince Judge William Young to lift an injunction preventing it from selling its Mircera® drug product (a form of recombinant EPO that has been covalently linked to polyethylene glycol), and has filed a Notice of Appeal with the Court of Appeals for the Federal Circuit.

On October 23, 2007, Amgen procured a jury verdict that Mircera® infringed several Amgen patents (see "Amgen Survives Another EPO Challenge"), and the District Court granted Amgen a preliminary injunction on February 28, 2008.  In granting the injunction, Judge Young indicated that Amgen had clearly fulfilled three of the four factors mandated for consideration by the Supreme Court in eBay Inc. v. MercExchange, L.L.C., (Amgen’s asserted claims were infringed and not invalid; Amgen’s injury would not be adequately compensated merely with money damages; and the balance of the hardships weighed in favor of granting the injunction).  However, the District Court did not decide in Amgen’s favor as to the fourth prong, the public interest, particularly in view of Roche’s representations of the advantages of its Mircera® product over Amgen’s version of EPO (including inter alia less frequent dosing; see "Long-Acting Drug for Dialysis Anemia Equivalent to Weekly Agent").

The District Court set five conditions that Roche needed to fulfill before it would lift the injunction, and Roche ultimately agreed to all the Court’s conditions (see "Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction").  Amgen responded by informing the District Court that it intended to pursue its right to a jury determination of the money damages it is entitled to should Roche launch under a modified injunction, stating that the Court did not have the power to deny Amgen its statutorily-defined profits, and that Amgen would also seek treble damages for any Roche sales made pursuant to the Court’s order as constituting willful infringement.  And the District Court further postponed a final decision on lifting the injunction on March 31, 2008, issuing an order that it intended to appoint a special master to consider the question of how dosing and pricing of Amgen’s and Roche’s products should be compared.  The District Court gave the parties 15 days to submit a list of "agreed" candidates to be appointed special master, and then the Court intended to give that candidate another 60 days to make the inquiries necessary to provide his or her findings to the Court.  Only after at least a 75-day delay could the Court be expected to make its ruling.  Presumably, this order has been mooted by Roche’s appeal (since Judge Young originally set a timetable for considering lifting the injunction conditioned on the parties not filing a notice of appeal to the Federal Circuit).

In addition to its public interest argument, Roche can be expected to respond to Amgen’s arguments submitted to the District Court on March 14th (see "Will the Federal Circuit’s Pfizer v. Teva Decision Spell the End of Amgen’s Patent Rights to Recombinant Human Erythropoietin?") regarding the effect of the Federal Circuit’s Pfizer, Inc. v. Teva Pharmaceuticals USA, Inc. decision on the propriety of the preliminary injunction and the underlying competence of Amgen’s verdict that its claims are not invalid.  The Federal Circuit in Pfizer construed the scope of the "safe harbor" provisions of 35 U.S.C. § 121 to be limited to divisional applications and not to include continuation-in-part applications; it did not directly decide the question with regard to continuation applications.

Amgen argued that this decision has no bearing on the District Court’s decision that Amgen’s patents-in-suit are not invalid under the judicially-created obviousness-type double patenting doctrine.  Amgen also argued that its applications were not CIPs but continuations, and that the Pfizer decision was limited to precluding the § 121 safe harbor from encompassing CIP applications.  Amgen further argued that its patents-in-suit were continuation applications in name only, and satisfied the conditions of the statute for benefitting from the safe harbor ("later application[s] carved out of a pending application," containing claims to "a distinct and independent invention" and "disclosing and claiming only subject matter disclosed in the earlier or parent application").  Finally, Amgen argued that the Pfizer decision is inconsistent with Federal Circuit precedent, with regard to continuation applications, in Applied Materials, Inc. v. Adv. Semiconductor Materials Am., Inc., 98 F.3d 1563 (1996) and Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569 (Fed. Cir. 1991), and that the Court is bound by the earlier decisions, citing Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed. Cir. 1988) ("This court has adopted the rule that prior decisions of a panel of the court are binding precedent on subsequent panels unless and until overturned in banc.  Where there is direct conflict, the precedential decision is the first.").  Roche no doubt disagrees, and the controversy adds yet another ground for its attack on Amgen’s patents, its verdict, and its injunction.

For additional information regarding this topic, please see:

• "Will the Federal Circuit’s Pfizer v. Teva Decision Spell the End of Amgen’s Patent Rights to Recombinant Human Erythropoietin?" March 31, 2008
• "Court Still Cannot Decide on Amgen’s Permanent Injunction," March 26, 2008
• "Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)," March 20, 2008
• "Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction," March 20, 2008
• "Roche’s Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO Challenge," October 28, 2007