Patent Docs

Follow-on Biologic Drugs and Patent Law: A Potential Disconnect?

March 25, 2008

By Kevin E. Noonan —

Biologic drugs, the pharmaceutical embodiments of biotechnology, are an important part of the current pharmaceutical armamentarium, and this is only expected to increase. There are 150 approved biologic drugs in the U.S., contributing $40 billion to U.S. drug costs in 2005; these costs are expected to increase to $90 billion by 2009. Thus, they have become a target for legislation to reduce the costs by promoting generic (more properly, follow-on) drugs at (presumably) reduced costs.

Biologic drugs are generally peptides and proteins, particularly monoclonal antibodies, but can also include vaccines. Currently-available biologic drugs include Humulin® (recombinant human insulin); Epogen® (recombinant human erythropoietin); Herceptin® (anti-Her2/neu monoclonal antibody); beta-interferon (for treating multiple sclerosis); Cerezyme® (for treating Gaucher’s disease); Enbrel® (soluble TNF receptor); and Gleevac® (anticancer monoclonal antibody). The average costs of biologic drug treatment is about $72,000/year (compared to about $1,000 for conventional "small molecule" pharmaceuticals). Part of the difference in costs reflects the difficulties in bringing these drugs to market. And some of these differences in costs has to do with the increase complexity of biologic drugs and the methods by which they are produced.

Conventional "small molecule" drugs typically comprise about 20-100 atoms (for example, omeprazole, the active ingredient in Prilosec®, contains 42 atoms), while biologic drugs comprise 5,000 to 50,000 atoms. Moreover, peptide and protein embodiments (including monoclonal antibodies) are complex polymeric chains that can adopt secondary and tertiary structure beyond their simple linear formulae. In addition, biologic drugs can be heterogeneous: besides the protein components, biologic drugs can comprise carbohydrates (by glycosylation), lipids and occasionally small molecule cofactors. This chemical heterogeneity also complicates formulation of biologic drugs, wherein excipients and other components must be compatible with the physicochemical differences between biologic drug components.

Biologic drugs are regulated under the Public Health Service Act (rather than the Food, Drug and Cosmetic Act), because the first biologic drugs to be regulated were vaccines in the early Twentieth century. Although administered by the Food and Drug Administration (specifically, the Center for Biologics Evaluation and Research), approval for biologic drugs is sought by submitting a Biologics Licensing Application (BLAs), rather than a New Drug Application. Legislation directed towards facilitating approval of "follow-on" biologic drugs seek to amend the section of the PHSA concerning BLAs. There have been three bills introduced in Congress relating to follow-on biologics: H.R. 1038, the "Access to Life-saving Medicine Act" (introduced by Congressman Waxman); H.R. 1956, the "Patient Protection and Innovative Biologics Medicines Act" (introduced by Congressman Inslee); and H.R. 5629, the "Pathway for Biosimilars Act" (introduced by Congresswoman Eshoo). None of these bills have been acted upon, in the face of intensive lobbying from both sides of the "follow-on" debate.

The bills are different, but have in common leaving with FDA the responsibility to approve follow-on biologic drugs that are "comparable" or "biosimilar" to the innovator biologic drug. The bills also share the goal of requiring follow-on biologic drugs to show "comparability" or "biosimilarity" prior to approval, coupled with post-approval surveillance. They also each provide for some amount of market and data exclusivity for the innovator.

The bills differ in the requirements for showing biosimilarity. The Waxman bill provides a number of different types of evidence that can be required to establish such similarity, but also contains provisions that would permit a wider range of differences between the follow-on and the innovator drug (including amino acid sequence variants). The Inslee bill entrusts the Secretary of Health and Human Services with substantially more discretion as to the requirements for biosimilarity on a case-by-case basis, coupled with a requirement that the Secretary promulgate "guidances" for its criteria that are subject to public comment. The Eshoo bill is some ways is a compromise, having a regime of analytical testing, animal experiments, and human clinical trials for gaining approval, but giving the Secretary the discretion to waive the requirements on a case-by-case basis (limited, as with the Inslee bill, by published guidances that have been subjected to public comment).

The scientific issue behind the concern for biosimilarity is the capacity for a follow-on biologic to be equivalent to the innovator drug; actually, the concern is how difficult it may be to make such a follow-on biologic drug. The innovators maintain that it is virtually impossible to make a true "generic" biologic, due in part to how such drugs are made. Unlike conventional pharmaceuticals that are made using well-defined and controlled chemical reactions, biologic drugs are almost always made by a living cell (bacterial, yeast, or mammalian), and the cells used by the innovators are rarely available. Cells, even cells of the same type, are expected to have phenotypic variability that can influence the structure of the biologic drug product made by them. These differences can include differences in primary amino acid sequence (although this type of variability should be rare, in view of the possibility for significant changes in the biologic properties of such variants). The differences are more likely to be in post-translational processing, particularly in glycosylation patterns that are known to differ between different cell types (and may even differ between different strains or populations of the same cell type). It can also be expected that different formulations may have different properties. Potential consequences of this type of variability include changes in biovailability, biological activity, solubility (including the propensity for agglomerization), and immunogenicity.

These are not merely theoretical problems. In one instance, changing the cell line used to produce the experimental biologic CNT085 resulted in changed pharmacokinetics of the drug. An innovator’s new production facility (expressly designed to minimize differences in the production protocol) produced drug product that had 40% lower drug levels in patients’ blood. Changing formulation to reduce detergent levels led to an increase in microclumping that affected bioavailability. And in perhaps the most significant event, administration of a recombinant blood cell growth factor produced an immunological response that not only inhibited bioactivity of the recombinant but also the endogenous species of the factor.

These occurrences support the position of innovator biologics companies and their representatives (such as the Biotechnology Industry Organization, see "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation – Part II") to insist that public safety requires human clinical trials to establish the safety and efficacy of follow-on biologic drugs, with strict post-approval surveillance. The "generic" biologics industry opposes these strict requirements, maintaining that the requirements should be tailored to fit the particular biologic drug and to give FDA the flexibility needed to make such a determination on a case-by-case basis. Other factors in dispute involve the increased barriers to entry occasioned by requiring human clinical trials, in both time and expense, as well as the ethical difficulties in requiring human clinical trials that may not be necessary (although the necessity vel non of such trials will only be known after the fact).

Patents and the requirements for patentability must be considered in this climate. There are no more stringent requirements for patentability for biologic drugs (more properly, pharmaceutical composition claims comprising a biologic compound) than for conventional drugs, nor does U.S. patent law require disclosure of clinical trials or safety and efficacy data for pharmaceutical composition claims. However, the extent of disclosure required for a claim depends on claim scope, since 35 U.S.C. § 112, first paragraph, has been interpreted to require disclosure of how to make and use an invention throughout the full scope of the claim. It is not unreasonable to expect that pharmaceutical composition claims will be required to be supported by disclosure that would enable one of ordinary skill in the art to produce a useful biologic drug (see In re Wands, 858 F.2d 731 (Fed. Cir. 1988)). Indeed, the trial court in Amgen Inc. v. Hoechst Marion Roussel, Inc. disqualified prior art (that also must satisfy an enablement requirement) relating to purification of human urinary erythropoietin based on testimony that the method did not yield uEPO in sufficient quantities or purity to have a biological effect. And the Federal Circuit has shown a penchant recently to give significantly closer scrutiny to the correspondence between claim scope and disclosure. Examples include:

• Pharmaceutical Res. Inc. v. Roxane Labs, Inc., where the patent was invalidated on non-enablement grounds for claiming formulations of megastrol acetate with a flocculating agent, supported by disclosure of only three flocculating agents;
• Monsanto Co. v. Syngenta Seeds Inc., invalidating a patent to methods for transforming "plant cells" in view of uncontroverted testimony that at the time the application was filed the art recognized methods for transforming dicotyledenous but not monocotyledonous plants;
• Sitrick v. DreamWorks, LLC, where a patent directed to methods for adding voice-overs to video did not enable overdubbing methods used by defendants;
• Automotive Tech. Int’l, Inc. v. BMW of North America, Inc., invalidating a patent that disclosed mechanical airbag sensors but claimed both mechanical and electronic sensors;
• Liebel-Flarsheim Co. v. Medrad, Inc., where disclosure of jacketed needle holders did not enable claims to unjacketed needle holders.

This trend, part of more than a decade of Federal Circuit jurisprudence in areas such as the written description requirement and the application of prosecution history estoppel to limit the scope of the doctrine of equivalents, is unlikely to be forestalled (as so much of the Federal Circuit’s jurisprudence has been lately) by the Supreme Court, since it is in line with the Court’s inclination that patents should be parsimoniously granted.

In this climate, conventional claims to pharmaceutical compositions may be at risk. In the biologics area, patent disclosures typically contain specific information relating to isolating a gene encoding the biologic compound and methods for producing a sufficient amount of the protein to determine its properties. Disclosure relating to producing a pharmaceutical from such a biologic compound tends to be more generic. In addition, biological deposits of functional cell lines for producing the biologic are rarely made, in part to protect against a competitor, especially a foreign competitor, obtaining a sample of the cells once a patent is granted in the U.S.

The capacity for a skilled artisan to use the patent disclosure to produce a biologic drug implicates the "quid pro quo" nature of the patent grant. The inventor obtains the exclusive right only because she fully discloses her invention, with the expectation that the skilled worker will be able to practice the claimed invention throughout its full scope once the patent has expired. Assertions (or worse, circumstances) to the effect that a skilled worker could not practice a pharmaceutical composition claim to a biologic, either because of the inherent complexity of the drug, differences in cell lines used to produce the drug, or failure to disclose necessary methods for producing or formulating the drug, could result in invalidating such claims. And as the number of "position papers" and other publicly-available sources of such claims increase, so does the potential for savvy Examiners to use such statements to make procuring pharmaceutical composition claims for biologic drugs harder to obtain.

Since the assertions are based on real complexities in producing biologic drugs, and these complexities impact safety and efficacy, the solution is not to stop raising the issues. Rather, perhaps it would make more sense to focus on whether follow-on biologic drug producers are of "ordinary skill" in the art. Alternatively, patent claims may more productively be directed toward the biologic agent per se rather than to pharmaceutical compositions. Although it is unlikely that a particular commercial strain or cell line will be available prior to patenting, deposit of an equivalent (or at least sufficient) cell line may be considered (although this will risk a competitor obtaining the cells). As with some conventional pharmaceuticals, it may be possible to patent particularly advantageous synthesis or formulation methods, or to simply increase the extent of patent disclosure relating to actual production of a biologic drug.

No matter how it is done, such disclosure will be important for a number of sound policy reasons. Post patent expiry, disclosure is in the public interest and satisfies the patent quid pro quo. Innovators are protected by data exclusivity, since the patent disclosure is the floor, the minimum that is required, and there is a wealth of information relating to the regulatory process that is not required to be contained in a patent specification. Also, providing increased disclosure can be used as leverage for obtaining political concessions, such as increased market and data exclusivity. And finally, it is just good corporate citizenship, at a time when many voices are inclined to blame drug companies for the reality that producing new drugs, particularly biologic drugs, is a capital-intensive enterprise requiring sufficient return on investment to obtain the necessary capital. Such efforts to convince policymakers of these economic realities, in the face of the political clarion call for lower drug costs at any price, will be more and more important as the cost for new drugs increases.
Patent Profile: Redpoint Bio Announces Issuance of Patent for Identifying Taste Signaling Modulators

March 24, 2008

By Donald Zuhn —

Redpoint Bio Corp. announced earlier this month that the U.S. Patent and Trademark Office has issued U.S. Patent No. 7,341,842, which is directed to methods of methods for identifying modulators of the TRP8-mediated taste response. Such modulators can be used as flavor enhancers in foods, beverages, or pharmaceuticals to either inhibit or promote the perception of bitterness or sweetness. While the ‘842 patent is assigned to the Mount Sinai School of Medicine, Redpoint Bio notes that it has exclusively licensed the patent.

According to Redpoint Bio’s statement, the ‘842 patent covers assay technology that can be used to identify modulators of the TRPM5 (formerly TRP8) ion channel). The TRPM5 ion channel, which is highly expressed in taste receptor cells, is associated with the perception of bitter, sweet, and savory (umami) tastes. Redpoint Bio CEO Dr. Raymond Salemme stated that the ‘842 patent would significantly strengthen the Ewing, N.J-based biotech company’s intellectual property position with respect to taste modulators of TRPM5. Redpoint Bio’s pharmaceutical program uses a biochemical approach aimed at suppressing the bitterness of medicines, which has the potential to expand the range of formulation options and increase patient compliance.

Figure 14 of the ‘842 patent shows potential signal transduction pathways in the taste receptor cells of taste buds that involve TRPM5 (TRP8). The ‘842 patent explains that responses to bitter compounds are initiated by binding to one or more gustducin-coupled receptors of the T2R/TBR family, which results in the release of that molecule’s beta-gamma moiety, which in turn stimulates PLC-beta2, resulting in the production of inositol triphosphate (IP) and diacylglycerol (DAG). IP binds to its receptors and causes the release of Ca++ from intracellular stores, triggering activation of TRP8 channels, which ultimately leads to the influx of Ca++ through TRP8 channels. DAG may act directly on TRP8 to lead to Ca++ influx.

The ‘842 patent issued from U.S. Application No. 11/405,097, filed April 17, 2006, which is a divisional of U.S. Application No. 09/834,792, filed April 13, 2001, which claims the benefit of U.S. Provisional Application No. 60/197,491, filed April 17, 2000. Representative claim 1 of the ‘842 patent recites:

1. A method for identifying a compound that modulates TRP8 activity, said method comprising:
(i) contacting a cell expressing the TRP8 channel protein of SEQ ID NO: 4 with a test compound and a compound or molecular complex that results in TRP8 activation, and measuring the level ofTRP8 activation;
(ii) in a separate experiment, contacting a cell expressing the TRP8 channel protein of SEQ ID NO: 4 with a compound or molecular complex that results in TRP8 activation and measuring the level of TRP8 activation, where the conditions are essentially the same as in part (i); and
(iii) comparing the level of TRP8 activation measured in part (i) with the level of TRP8 activation measured in part (ii),
wherein said measuring the level of TRP8 activation comprises measuring the membrane potential of the cell, and
wherein a decrease in the level of TRP8 activation in the presence of the test compound indicates that the test compound is a TRP8 inhibitor, and an increase in the level of TRP8 activation in the presence of the test compound indicates that the test compound is a TRP8 activator.
Court Report

March 23, 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.

Forest Laboratories, Inc. et al. v. Synthon Pharmaceuticals, Inc. et al.
5:08-cv-00150; filed March 20, 2008 in the Eastern District of North Carolina

Infringement of U.S. Patent No. 5,061,703 ("Adamantane Derivatives in the Prevention and Treatment of Cerebral Ischemia," issued on October 29, 1991), following a paragraph IV certification as part of Synthon’s filing of an ANDA to manufacture a generic version of Forest’s Namenda® (memantine hydrochloride, used for the treatment of moderate to severe dementia of the Alzheimer’s type). View the complaint here.

Sanofi-Aventis et al. v. Wockhardt Limited et al.
1:08-cv-00150; filed March 14, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 6,149,940 ("Tablet with Controlled Release of Alfuzosine Chlorhydrate," issued November 21, 2000) following a paragraph IV certification as part of Wockhardt’s filing of an ANDA to manufacture a generic version of Sanofi-Aventis’ Uroxatral® (alfuzosin hydrochloride, used to treat benign prostatic hyperplasia). View the complaint here.

Ortho-McNeil Pharmaceutical, Inc. v. Mylan Pharmaceuticals Inc. et al.
1:08-cv-01343; filed March 5, 2008 in the Northern District of Illinois

Infringement of U.S. Patent No. RE39,221 ("Composition Comprising a Tramadol Material and Acetaminophen and Its Use," issued August 1, 2006) following a paragraph IV certification as part of Apotex’s filing of an ANDA to manufacture a generic version of Ortho-McNeil’s Ultracet® (tramadol hydrochloride and acetaminophen, used to treat acute pain). View the complaint here.
Conference & CLE Calendar

March 23, 2008

March 30-April 1, 2008 – Advanced Courses (Patent Resources Group) – Bonita Springs, FL

March 31-April 1, 2008 – Document Management, E-Discovery, and Litigation Readiness (American Conference Institute) – New York, NY

April 1-2, 2008 – IP Summit (Ocean Tomo) – San Francisco, CA

April 3-5, 2008 – Advanced Courses (Patent Resources Group) – Bonita Springs, FL

April 7, 2008 – Successful Mulitlateral Patents (Law Seminars International) – Arlington, VA

April 10-12, 2008 – 23rd Annual Intellectual Property Law Conference (American Bar Association) – Arlington, Virginia

April 25, 2008 – Patent Claim Construction (Law Seminars International) – Atlanta, GA

April 30-May 1, 2008 – Pharma/Biotech Collaborative Agreements (American Conference Institute) – San Francisco, CA

May 15, 2008 – The Federal Circuit: A National Court of Appeals: Addressing New Challenges (U.S. Court of Appeals for the Federal Circuit) – Washington, DC

May 28-30, 2008 – PharmaBiotech IP Summit (Worldwide Business Research) – Philadelphia, PA

June 17-20, 2008 – BIO International Convention (Biotechnology Industry Organization) – San Diego, CA

***Patent Docs is a media sponsor of this conference or CLE
CAFC Judicial Conference

March 21, 2008

The U.S. Court of Appeals for the Federal Circuit will be holding a Judicial Conference entitled "The Federal Circuit: A National Court of Appeals: Addressing New Challenges" on May 15, 2008 in Washington, DC. Topics and speakers at the conference will include:

• State of the Court — Chief Judge Paul Michel
• Federal Circuit Rules Update — Jan Horbaly, Circuit Executive and Clerk of the Court
• Mediation Program Update — James Amend, Chief Circuit Mediator
• Litigation Today: The View from the Trial Court — panel moderated by Senior Circuit Judge S. Jay Plager, and including Roderick McKelvie, Covington & Burling LLP; District Judge Kathleen O'Malley; Judge Donald Pogue; Judge Mary Ellen Coster Williams; and District Judge William Young
• Litigation Today: The View from the Parties — panel moderated by Senior Circuit Judge Raymond Clevenger, and including Andrew Cadel, JP Morgan Chase & Co.; Shelia Cheston, BAE Systems; Jeanne Davidson, U.S. Department of Justice; James Johnson, Procter & Gamble; and David Kappos, IBM Corp.
• En Banc Session of the U.S. Court of Appeals for the Federal Circuit — moderated by Senior Circuit Judge Daniel Friedman, and including Chief Judge Paul Michel and Circuit and Senior Circuit Judges Pauline Newman, Haldane Robert Mayer, S. Jay Plager, Alan Lourie, Raymond Clevenger, Randall Rader, Alvin Schall, William Bryson, Arthur Gajarsa, Richard Linn, Timothy Dyk, Sharon Prost, and Kimberly Moore
• Luncheon Speaker Paul Clement, U.S. Solicitor General
• The Circuit Mediation Program — James Amend, Chief Circuit Mediator and Wendy Dean, Circuit Mediator Officer
• Patent Issues Ripe for Judicial Clarification — panel moderated by Professor Lisa Dolak, Syracuse University College of Law, and including District Judge Patti Saris; District Judge Liam O'Grady; Meredith Martin Addy, Brinks Hofer Gilson & Lione; Morgan Chu, Irell & Manella LLP; William Lee, WilmerHale; Professor Margo Bagley, University of Virginia School of Law; and Associate Professor Joseph Miller, Lewis & Clark Law School.

The program for the conference can be found here. The registration fee ranges from $225 (for government employees) to $275 (general registration). Those interested in registering for the conference can do so here.
Amgen Inc. v. International Trade Commission (Fed. Cir. 2008)

March 20, 2008

Federal Circuit Gives Amgen a Mixed Decision on Its ITC Complaint against Roche’s Mircera®

By Kevin E. Noonan —

The Federal Circuit in a decision handed down on Wednesday affirmed the International Trade Commission’s grant of summary judgment against Amgen in its attempts to block importation of Roche’s Mircera® peglylated erythropoietin product. In so doing, the Federal Circuit continued its parsing of the expansive scope of the "safe harbor" provisions of 35 U.S.C. § 271(e)(1) established by the Supreme Court in Merck KGaA v. Integra Lifesciences I, Ltd. and Eli Lilly and Co. v. Medtronic, Inc.

Amgen requested the ITC to ban importation of Mircera® under the provisions of 19 U.S.C. § 1337(a)(1)(B)(ii):

19 U.S.C. 1337(a)(1) Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section:

* * *

(B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that–
(i) infringe a valid and enforceable United States patent or a valid and enforceable United States copyright under title 17, United States Code; or
(ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.

Amgen’s complaint was based on alleged infringement of the following patents: U.S. Patent Nos. 5,411,868 (claims 1 and 2); 5,547,933 (claims 3, 4, 5, and 11); 5,618,698 (claims 4-9); 5,621,080 (claims 4 and 6); 5,756,349 (claim 7); and 5,955,422 (claim 1). (These patents also formed the basis for Amgen’s successful patent infringement action against Roche in the District Court of Massachusetts.)

Roche countered that its Mircera® drug product was exempt from infringement under the "safe harbor" provisions of 35 U.S.C. § 271(e)(1):

35 U.S.C. §271(e)(1) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.

The ITC agreed with Roche, that the imported Mircera® was exempt from infringement under the safe harbor provisions of § 271(e)(1). The ITC made this determination on summary judgment, despite allegations by Amgen that: (1) the importation at issue occurred after Roche had submitted its Biologic License Application to the U.S. Food and Drug Administration; (2) the imported Mircera® drug product was used for marketing surveys, infringement analysis, and activities related to Amgen’s patent infringement litigation with Roche and not for activities "reasonably related to the development and submission of information" to the FDA; and (3) these activities were not protected under the safe harbor provisions of § 271(e)(1).

In addition to granting summary judgment on the safe harbor issues, the ITC also determined that it lacked jurisdiction to "investigate and resolve" Amgen’s charges of infringement, since its jurisdiction was limited to acts of importation and sale of infringing articles (or articles made by using an infringing process) and there was no evidence that any of Roche’s Mircera® drug product had been sold or the subject of a contract for sale in the U.S. (which was true, since Roche had not yet received FDA approval for Mircera®).

The Federal Circuit (in an opinion by Judge Newman, joined by Judge Lourie and in part by Judge Linn) affirmed the ITC’s interpretation of the interactions of 19 U.S.C. § 1337, 35 U.S.C. § 271(e)(1) and § 271 (g), but reversed and remanded on the jurisdictional issue. The CAFC rejected Amgen’s argument that the ITC, pursuant to § 1337, had the authority to bar importation of any product made by the infringing use of a patented process, regardless of any exemption from infringement that may apply to the product. Amgen’s argument was that the exemption vel non of Roche’s Mircera® drug product under § 271(e)(1) was irrelevant, since the act of importing a product made using an infringing method was sufficient. The Federal Circuit refused to adopt this rationale, since to do so would have permitted Amgen to use the ITC to prevent Roche from importing Mircera® solely for purposes falling within the safe harbor provisions of § 271(e)(1). This outcome would contravene the Supreme Court’s determination that § 271(e)(1) should be read broadly to prevent a patentee from any action that would prevent or inhibit another from using a patented invention for activities (even otherwise infringing ones) that are "reasonably related" to producing information for submission in support of obtaining regulatory approval (e.g., for a generic version of a patented drug).

In making this decision, the Federal Circuit distinguished its decision from the rationale for the Court’s decision in Kinik Co. v. International Trade Comm’n. In the Kinik case, the Federal Circuit held that the accused infringer could not avail itself of the exceptions set forth in 35 U.S.C. § 271(g)(1) or (2):

35 U.S.C. §271(g) Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. . . . A product which is made by a patented process will, for purposes of this title, not be considered to be so made after–
(1) it is materially changed by subsequent processes; or
(2) it becomes a trivial and nonessential component of another product.

But in that case, the Court recognized that the act constituting infringement (using a process abroad that is patented in the U.S., and then importing the product of that process) was being newly established as a basis for patent infringement in U.S. district courts. However, such activities for many years had been a basis for instituting an ITC action under 19 U.S.C. § 1337(a)(1)(B)(ii). Taking into consideration this statutory situation in view of statements from § 271(g) and the legislative history to the effect that the statute was not intended to affect already-existing causes of action under, inter alia, the ITC, the Court in Kinik held that § 271(g) did not confer the two exemptions onto acts forming the basis for ITC action under 19 U.S.C. § 1337(a)(1)(B)(ii).

In the instant case, the Federal Circuit found that Congressional purposes for § 271(e)(1), as interpreted by the Supreme Court in Merck and Eli Lilly, would be thwarted should the ITC be able to ban importation of articles falling within the safe harbor provisions of the statute that were made using an infringing method. Accordingly, the CAFC affirmed the ITC’s judgment not to impose a ban on Roche’s importation of its Mircera® drug product to the extent that the imported drug was used for activities "reasonably related" to obtaining FDA approval for the drug.

The Court reversed the ITC on the question of its jurisdiction to determine whether any portion of the imported Mircera® drug product had been used for activities other than those "reasonably related" to obtaining FDA approval for the drug, however. Citing Merck, the Federal Circuit held that the Supreme Court expressed the view that its textual reading of the statute should give an expansive scope to the activities falling within the safe harbor. However, the Federal Circuit asserted that the Supreme Court did not intend to give carte blanche to an accused infringer for all activities using an otherwise infringing product. Rather, the CAFC found Supreme Court guidance that the accused activities must be scrutinized to determine whether they properly could be said to be "reasonably related" to obtaining FDA approval for the drug. As for the ITC’s contention that the absence of a sale or contract for sale thwarted its jurisdiction, the Federal Circuit held that the ITC had the power to use prophylactically its authority to ban importation, so as to prevent harm to American industry "in its incipiency." The CAFC reasoned that the purpose of ITC actions were to prevent infringing articles from getting into the stream of commerce, and to unify actions against an accused infringer before commercial activities required a profusion of individual suits to prevent infringement.

Judge Linn dissented from affirming summary judgment regarding the safe harbor to ITC actions. While acknowledging that the majority’s interpretation was consistent with Supreme Court teachings on the scope of § 271(e)(1) and with the extant Congressional record, he opined that consistency was not enough: it was up to Congress not the Court to say unambiguously that its intention was to extend safe harbor protection to activities that would otherwise fall within the scope of the ITC’s authority to ban under 19 U.S.C. § 1337(a)(1)(B)(ii).

Amgen Inc. v. International Trade Comm’n (Fed. Cir. 2008)
Panel: Circuit Judges Newman, Lourie, and Linn
Opinion by Circuit Judge Newman, opinion concurring-in-part and dissenting-in-part by Circuit Judge Linn

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.
Roche Agrees to Court’s Conditions for Modifying Preliminary Injunction

March 20, 2008

By Kevin E. Noonan —

On Tuesday, Roche filed its brief in support of U.S. District Court
for the District of Massachusetts (Judge William G. Young, presiding)
modifying its preliminary injunction granted on February 28th, barring
Roche from launching its FDA-approved Mircera® drug product. The
Court’s preliminary injunction was entered pursuant to a jury judgment
on October 23, 2007 that Mircera® infringed several Amgen patents. That verdict found Roche’s Mircera® infringed claims 3, 7, and 8 of
Amgen’s U.S. Patent No. 5,547,933 (claim 12 was found not to be
literally infringed but infringed under the Doctrine of Equivalents);
claims 1 and 2 of U.S. Patent No. 5,441,868; and claims 6 through 9 of
U.S. Patent No. 5,618,698. Amgen’s infringed claims were directed to
recombinant methods and recombinant EPO protein, and Roche’s Mircera®
drug product is a form of recombinant EPO that has been covalently
linked to polyethylene glycol. In addition, the jury found that Roche
had not sustained its burden of establishing that any of Amgen’s
asserted claims were invalid (see "Amgen Survives Another EPO
Challenge").

Absent this jury verdict, Roche would be in a position
to launch Mircera®, because the U.S. Food and Drug Administration
granted approval for Roche to market Mircera® last Novmber (it has
already been approved in Europe and is sold in Austria, Sweden,
Germany, the United Kingdom, and Norway). Judge Young foreclosed
this option when he imposed the preliminary injunction on February
28th. However, Judge Young also left open the possibility that he
would modify his order under certain circumstances. He assessed
whether Amgen was entitled to an injunction using the four-factor test
set forth by the Supreme Court in eBay Inc. v. MercExchange, L.L.C.,
expressly finding that Amgen satisfied three of the four requirements
(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). More difficult was 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 Court put the parties on notice that, in the absence of
appellate jurisdiction by the Federal Circuit, it was inclined to at
least consider modifying the injunction within 30 days (i.e., by March
30th), provided that Roche was willing to agree to the following
conditions. First, Roche would pay Amgen a royalty of 22.5% (Amgen
having already rejected an offer for a 20% royalty from Roche (see
"Amgen Rejects Roche’s Micera [sic] License Payment Offer"). Second,
Roche could be introduced to the Medicare patient population at a cost
no more than the average sales price of Amgen’s EPO products (sold
under the names Epogen® and Aranesp®) (a requirement that would prevent
Roche from passing its royalty obligations onto patients, but would not
prevent Roche from selling Mircera® at a bargain price relative to
Epogen®). Third, Roche would have to provide clinical evidence to
permit the Court to determine a "dosage conversion factor" between
Mircera® and Epogen®. Fourth, Roche would pay for an independent
agency to monitor sales and determine royalty payments owed to Amgen. Finally, Roche would agree to supply Mircera® to any patient needing
it, at or below the authorized price (presumably, this is a provision
that would prevent Roche from abandoning the Medicare market once it
has entered it).

Roche agreed to these conditions in its court
filing today, and took the occasion to present two arguments to the
Court in support of lifting the injunction. First, Roche argued
strenuously that Mircera® was not simply a generic version of Epogen®
but rather was an independently developed (and patented) "new molecule"
having significant advantages over Amgen’s products. Roche
particularly argued that Mircera® had dosing and cost advantages that
should be considered to be in the public interest, including a better
dosing schedule (according to Roche, the difference between 12 (for
Mircera®) and 156 (for Epogen®) injections per year for dialysis
patients), concomitant reduced Medicare and Medicaid costs, and fewer
adverse effects as well as meeting unmet medical needs (relating to
Amgen’s failure to secure FDA approval for monthly dosing for certain
indications). Roche also argued that Amgen’s commercial activities in
promoting its erythropoiesis-stimulating agents (ESAs) constituted
patent misuse and "unclean hands" that should discount whatever private
equities cut in favor of making the injunction permanent. Roche also
argued that Amgen had enjoyed an effective patent life of 28 years from
its earliest filing date, and that this term was contrary to current
public policy that limited patent term to 20 years from the earliest
filing date.

For its part, Amgen countered by casting the proposed
modification as a compulsory license in favor of Roche. Amgen argued
that it would be inequitable to "reward" Roche, an adjudged infringer,
with such a license. Moreover, Amgen argued that compulsory licensing
was not within the province or the power of the Court to impose, but
that it could either grant or deny the injunction and nothing more. Congress, Amgen argued, had several times considered introducing
compulsory licensing provisions into the patent statute but had not,
and Amgen argued that the Court did not have the power to impose such a
license in the face of Congressional disapproval, citing in support of
this argument the Federal Circuit’s decision in Biotechnology Industry Organization v. District of
Columbia, which struck down restrictions on drug pricing as being
contrary to the balancing of consumer costs and patent incentives that
were Congress’ prerogative to make. Amgen argued that the Court must
also consider as part of the public harm the harm to innovation that
would be caused by the precedent of having an infringer rewarded with a
compulsory license, and contrasted this harm with what it termed the
speculative medical and financial benefits (which it proffered evidence
from the trial record to refute) that Roche used in support of its
public interest argument. Amgen countered these claims with argument
citing harm to the American economy, jobs, and tax base that would be
occasioned by permitting Roche to produce Mircera® overseas and import
it into the U.S. for sale in competition with Amgen’s ESA products. Amgen also asserted its right to a trial by a jury to determine the
extent of damages it would be 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 (which were 2-4 fold higher
than the Court’s 22.5% royalty), as well as treble damages for willful
infringement.

Amgen also submitted evidence from "secondary
sources," including economic analyses, academic studies, Congressional
Budget Office data, and policy papers in support of its argument that
innovator drug companies rely on market exclusivity provided by
patenting to support research and development of blockbuster drugs, and
that the compulsory license occasioned by the Court’s proposed
modification of its injunction would endanger Amgen’s ability to obtain
the financing required for new drug discovery. Amgen also noted that
Congress had recently considered but did not pass compulsory licensing
bills introduced in anticipation of a possible "bird flu" epidemic, and
for the antibiotic Cipro® in the wake of the anthrax bioterrorism scare
following the September 11, 2001 attacks. Both situations were more
compelling than the evidence adduced by Roche in support of a
compulsory license for Mircera®, according to Amgen, and Congress’
failure to so enact compulsory licensing provisions should inform the
Court’s decision not to modify its injunction into a compulsory license.

The
Court having said it would "consider" modifying its injunction, its failure
to do so by March 30th would provide Roche with ample time to appeal;
Amgen has said in its pleading that it will ask the Court to stay any
modification to permit it time to appeal the modified injunction to the
Federal Circuit.

For additional information regarding this topic, please see:

• "Roche’s Mircera® Remains Off the Market (For Now)," March 2, 2008
• "Amgen Survives Another EPO
Challenge," October 28, 2007
Patent Profile: OPKO Health Announces Issuance of VEGF siRNA Patent

March 19, 2008

By Donald Zuhn —

OPKO Health, Inc. announced yesterday that the U.S. Patent and Trademark Office has issued U.S. Patent No. 7,345,027, which is directed to methods of inhibiting the expression of human vascular endothelial growth factor (VEGF), degrading VEGF mRNA, inhibiting angiogenesis, or treating an angiogenic disease using a specific short interfering ribonucleic acid (siRNA) molecule. While the ‘027 patent is assigned to the Trustees of the University of Pennsylvania, OPKO states that it has exclusively licensed the patent on a worldwide basis.

According to OPKO’s statement, the ‘027 patent covers the Miami-based healthcare company’s siRNA drug candidate, bevasiranib, which is currently in a Phase III trial for the treatment of wet age-related macular degeneration (AMD). In addition, the ‘027 patent covers the use of the recited siRNA molecule for treating VEGF-related angiogenic disorders such as diabetic retinopathy and cancer. OPKO Executive Vice President Samuel Reich stated that the issuance of the ‘027 patent "marks another important step in establishing OPKO’s leadership position in the promising field of siRNA-based therapeutics," observing that "Bevasiranib was the first siRNA to enter human trials, the first siRNA to demonstrate clinically relevant activity in patients, the first siRNA to enter a Phase III pivotal trial and now, one of the first siRNAs to receive a U.S. patent covering its broad therapeutic use." OPKO’s release also noted that the multi-national Phase III COBALT (Combining Bevasiranib And Lucentis Therapy) clinical trial of bevasiranib for the treatment of wet AMD is currently enrolling patients at multiple clinical sites, and that more information about the COBALT trial could be obtained here.

The ‘027 patent issued from U.S. Application No. 11/422,932, filed June 8, 2006, which is a divisional of U.S. Application No. 10/294,228, filed November 14, 2002, which issued as U.S. Patent No. 7,148,342, which claims the benefit of U.S. Provisional Application No. 60/398,417, filed July 24, 2002. Representative claims 1, 24, 29, and 40 of the ‘027 patent recite:

1. A method of inhibiting expression of human vascular endothelial growth factor (VEGF) comprising:
administering to a subject an effective amount of a short interfering ribonucleic acid (siRNA) comprising a sense RNA strand and an antisense RNA strand, wherein the sense and the antisense RNA strands form an RNA duplex, and wherein the sense RNA strand comprises a nucleotide sequence identical to a target sequence of about 19 to about 25 contiguous nucleotides in human vascular endothelial growth factor (VEGF) mRNA and wherein the sense RNA strand comprises SEQ ID NO:77, and the antisense strand comprises SEQ ID NO:78.

24. A method of inhibiting angiogenesis in a subject comprising:
administering to the subject an effective amount of a short interfering ribonucleic acid (siRNA) a sense RNA strand and an antisense RNA strand, wherein the sense and the antisense RNA strands form an RNA duplex, and wherein the sense RNA strand comprises a nucleotide sequence identical to a target sequence of about 19 to about 25 contiguous nucleotides in human vascular endothelial growth factor (VEGF) mRNA and wherein the sense RNA strand comprises SEQ ID NO: 77 and the antisense strand comprises SEQ ID NO: 78.

29. A method of treating an angiogenic disease in a subject comprising:
administering to a subject an effective amount of a short interfering ribonucleic acid (siRNA) comprising a sense RNA strand and an antisense RNA strand, wherein the sense and the antisense RNA strands form an RNA duplex, and wherein the sense RNA strand comprises a nucleotide sequence identical to a target sequence of about 19 to about 25 contiguous nucleotides in human vascular endothelial growth factor (VEGF) mRNA, and wherein the sense RNA strand comprises SEQ ID NO: 77 and the antisense strand comprises SEQ ID NO: 78, such that angiogenesis associated with the angiogenic disease is inhibited.

40. A method of degrading human vascular endothelial growth factor (VEGF) mRNA comprising:
administering to a subject an effective amount of a short interfering ribonucleic acid (siRNA) comprising a sense RNA strand and an antisense RNA strand, wherein the sense and the antisense RNA strands form an RNA duplex, and wherein the sense RNA strand comprises a nucleotide sequence identical to a target sequence of about 19 to about 25 contiguous nucleotides in human vascular endothelial growth factor (VEGF) mRNA and wherein the sense RNA strand comprises SEQ ID NO: 77, and the antisense strand comprises SEQ ID NO: 78.
New Follow-on Biologics Bill Introduced in the House

March 18, 2008

By Donald Zuhn —

Last Thursday, Rep. Anna Eshoo (D-CA; at right) introduced a new biologics bill in the House. The bill (H.R. 5629), which would amend Section 351 of the Public Health Service Act to create a regulatory pathway for biosimilars, has been referred to the Committee on Energy and Commerce and the Committee on the Judiciary for consideration.

Rep. Eshoo’s bill would specify an exclusivity period of 12 years (i.e., a generic company would have to wait 12 years after the innovator biologic is first licensed before the generic’s own follow-on biologics application could be approved). The exclusivity period specified in H.R. 5629 can be contrasted with that of H.R. 1956, which was introduced by Rep. Jay Inslee (D-WA) last April, and which specifies a 14 year period of exclusivity for the innovator product.

We first learned of Rep. Eshoo’s bill last month during a conference call with Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood (at left) (see "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation – Part II"). During the conference call, Mr. Greenwood expressed a preference for Rep. Inslee’s bill, in part because the details of Rep. Eshoo’s bill were not yet known.

On Friday, BIO released a statement regarding Rep. Eshoo’s bill, in which Mr. Greenwood commended Rep. Eshoo and Rep. Joe Barton (R-TX), a co-sponsor of the bill and the top Republican on the House Energy and Commerce Committee, for "taking a strong, bipartisan step forward toward developing a pathway for the approval of follow-on biologics." Mr. Greenwood noted that the regulatory pathway defined by H.R. 5629 contained "essential elements" needed to protect patient safety and ensure continued innovation. Among these essential elements are provisions of the bill that call for generic companies to submit clinical and immunogenicity studies, and that allow the FDA to make determinations on the interchangeability of follow-on biologics.

While Mr. Greenwood observed that Rep. Eshoo’s bill "falls short of the base 14 years that has been demonstrated to be the needed period required to strike the right balance between providing incentives for innovation and follow-on product entry," he urged Congress to "pass the right bill as soon as possible." (Mr. Greenwood did not specify which of the two bills was the "right" one, but one presumes he would favor the 14 year exclusivity period of H.R. 1956.) Arguing that it was "time to place patient needs before political gamesmanship," Mr. Greenwood called for passage of a "pro-patient, pro-innovation, pro-science follow-on biologics bill."

One of The Wall Street Journal blogs also chimed in last Friday concerning H.R. 5629. Unfortunately, the Journal got a few things about the bill wrong. First, the Journal reported that the exclusivity period in the Eshoo bill was 14.5 years, rather than 12 years. Second, the article appears to have implied that the exclusivity period would run from the time the bill became law, rather than from the time the innovator biologic was approved for use. A clarification was subsequently added to the article after its author received word from Rep. Eshoo’s Chief of Staff regarding the errors.

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

• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation – Part II," February 14, 2008
• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007
Amendments to S. 1145

March 17, 2008

By Kevin E. Noonan —

Senator Leahy (at right), reportedly determined to bring S. 1145, the Senate’s patent "reform" bill to the Senate floor for a vote after the spring recess, on Friday released a number of proposed amendments to the bill. Rather than evincing an appreciation of the seriousness of the opposition building against the bill or a willingness to address the sound objections to it, these amendments seem either to be merely cosmetic, or to illustrate again how deeply committed (or indebted) to certain special interests Senator Leahy has become.

The cosmetic aspects include the following amendments:

• To Section 6 relating to the new Patent Trial and Appeal Board:

(b) Duties — The Patent Trial and Appeal Board shall —
(1) on written appeal of an applicant, review adverse decisions of examiners upon application for patents;
(2) on written appeal of a patent owner, review adverse decisions of examiners upon patents in reexamination proceedings under chapter 30;
(3) ~~determine priority and patentability of invention in~~ conduct derivation proceedings under subsection 135(a); and
(4) conduct post-grant opposition proceedings under chapter 32.

Each appeal and derivation proceeding shall be heard by at least 3 members of the Patent Trial and Appeal Board, who shall be designated by the Secretary of Commerce, in consultation with the Director. Only the Patent Trial and Appeal Board may grant rehearings. The Director shall assign each post-grant review proceeding to a panel of 3 administrative patent judges. Once assigned, each such panel of administrative patent judges shall have the responsibilities under chapter 32 in connection with post-grant review proceedings.

(c) AUTHORITY OF THE SECRETARY. — The Secretary of Commerce may, in his or her discretion, deem the appointment of an administrative patent judge who prior to the date of enactment of this subsection held office pursuant to an appointment by the Director to take effect on the date that the Director initially appointed the administration patent judge.

(d) DEFENSES TO CHALLENGE OF AN APPOINTMENT. – It shall be a defense to a challenge to the appointment of an administrative patent judge originally appointed by the Director that the administrative patent judge was acting as a de facto officer.

(There is a parallel provision relating to the Secretary’s capacity to appoint members of the Trademark Trial and Appeal Board);

• To Section 2, Right of the First Inventor to File:

(i) Action for Claim to Patent on Derived Invention — Section 135(a) of title 35, United States Code, is amended to read as follows:

(b) SETTLEMENT. — Parties to a derivation proceeding may terminate the proceeding by filing a written statement reflecting the agreement of the parties as to the correct inventors of the claimed invention in dispute. Unless the Patent Trial and Appeal Board finds the agreement to be inconsistent with the evidence of record, it shall take action consistent with the agreement. Any written settlement or understanding of the parties shall be filed with the Director. At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents or applications, and shall be made available only to Government agencies on written request, or to any person on a showing of good cause.

(c) ARBITRATION. — Parties to a derivation proceeding, within such time as may be specified by the Director by regulation, may determine such contest or any aspect thereof by arbitration. Such arbitration shall be governed by the provisions of title 9 to the extent such title is not inconsistent with this section. The parties shall give notice of any arbitration award to the Director, and such award shall, as between the parties to the arbitration, be dispositive of the issues to which it relates. The arbitration award shall be unenforceable until such notice is given. Nothing in this subsection shall preclude the Director from determining patentability of the invention involved in the derivation proceeding.

(j) Elimination of References to Interferences —

(10) Certain Appeals- Section 1295(a)(4)(A) of title 28, United States Code, is amended to read as follows:

(A) the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to patent applications, interference proceedings (commenced before the date of enactment of the Patent Reform Act of 2008), derivation proceedings, and post-grant review proceedings, at the instance of an applicant for a patent or any party to a patent interference (commenced before the effective date of the Patent Reform Act of 2007), derivation proceeding, or post-grant review proceeding, and any such appeal shall waive any right of such applicant or party to proceed under section 145 or 146 of title 35;

• To Section 5, Post-grant Procedures and Other Quality Enhancements:

Sec. 337. Effect of decisions rendered in civil action on future post-grant review proceedings
~~If a final~~ (a) IN GENERAL. — If a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28 establishing that the party has not sustained its burden of proving the invalidity of any patent claim —
(1) that party to the civil action and the privies of that party may not thereafter request a post-grant review proceeding on that patent claim on the basis of any grounds under section 322; and
(2) the Director may not thereafter maintain a post-grant review proceeding on that patent claim previously requested by that party or the real parties in interest of that party.
(b) FINAL DECISION DEFINED. — For purposes of this section, the term "final decision" means a final decision issued by a United States district court or by the United States International Trade Commission.

On the other hand, amendments to other sections continue the pattern of favoring the same special interests that have supported "reform" (and, according to some reports, Senator Leahy)

• To Section 8, Venue and Jurisdiction:

(b) Interlocutory Appeals — Subsection (c)(2) of section 1292 of title 28, United States Code, is amended by adding at the end the following:

(3) of an appeal from an interlocutory order or decree determining construction of claims in a civil action for patent infringement under section 271 of title 35. Application for an appeal under paragraph (3) shall be made to the court within 10 days after entry of the order or decree. The district court shall have discretion whether to approve the application and, if so, whether to stay proceedings in the district court during the pendency of such appeal. The district court, in its discretion, can approve an interlocutory appeal of a claim construction order if (i) there was a reasonable ground for difference of opinion and (ii) such an appeal may advance the ultimate termination of the litigation. For the first interlocutory appeal of a claim construction order in a given case, the United States Court of Appeals for the Federal Circuit shall accept the appeal if so ordered by the district court. After the first interlocutory appeal, the United States Court of Appeals for the Federal Circuit has the discretion as to whether or not to accept the appeal of a subsequent claim construction order in the same case.

This provision not only establishes a right to interlocutory appeal of claim construction issues, but makes the gatekeeper the district court, not the Federal Circuit, which appears to turn on its head the jurisdictional prerogatives of the two courts.

• To Section 4, Right of Inventor to Obtain Damages:

~~(c) Limitation on Damages and Other Remedies; Marking and Notice — Section 287(a) of title 35, United States Code, is amended to read as follows:~~

(a)(1) Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word ‘patent’ or the abbreviation ‘pat.’, together with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein 1 or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
(2) In the case of a patented invention not covered under paragraph (1), no recovery shall be had for any infringement committed more than 2 years prior to the filing of the complaint or counterclaim for infringement in the action, except upon proof that the infringer was notified of the infringement by the patentee. Upon such proof, the patentee may recover damages for infringement for up to 2 years prior to such notice, as well as for infringement after such notice. In no event may damages be recovered for more than 6 years prior to the filing of the complaint or counterclaim for infringement in the action.

(e) Willful Infringement —
(1) INCREASED DAMAGES — A court that has determined that an infringer has willfully infringed a patent or patents may increase damages up to 3 times the amount of the damages found or assessed under subsection (a), except that increased damages under this paragraph shall not apply to provisional rights under section 154(d).
(2) PERMITTED GROUNDS FOR WILLFULNESS — A court may find that an infringer has willfully infringed a patent only if the patent owner presents clear and convincing evidence that acting with objective recklessness —

(A) after receiving written notice from the patentee —
(i) alleging acts of infringement in a manner sufficient to give the infringer an objectively reasonable apprehension of suit on such patent, and
(ii) identifying with particularity each claim of the patent, each product or process that the patent owner alleges infringes the patent, and the relationship of such product or process to such claim, the infringer, after a reasonable opportunity to investigate, thereafter performed 1 or more of the alleged acts of infringement;
(B) the infringer intentionally copied the patented invention with knowledge that it was patented; or
(C) after having been found by a court to have infringed that patent, the infringer engaged in conduct that was not colorably different from the conduct previously found to have infringed the patent, and which resulted in a separate finding of infringement of the same patent.

(3) LIMITATIONS ON WILLFULNESS —

(A) IN GENERAL — A court may not find that an infringer has willfully infringed a patent under paragraph (2) 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.
(B) GOOD FAITH ESTABLISHED- An informed good faith belief within the meaning of subparagraph (A) may be established by —
(i) reasonable reliance on advice of counsel;
(ii) evidence that the infringer sought to modify its conduct to avoid infringement once it had discovered the patent; or
(iii) other evidence a court may find sufficient to establish such good faith belief.
(C) RELEVANCE OF NOT PRESENTING CERTAIN EVIDENCE — The decision of the infringer not to present evidence of advice of counsel is not relevant to a determination of willful infringement under paragraph (2).

(4) LIMITATION ON PLEADING — Before the date on which a court determines that the patent in suit is not invalid, is enforceable, and has been infringed by the infringer, a patentee may not plead and a court may not determine that an infringer has willfully infringed a patent. The court’s determination of an infringer’s willfulness shall be made without a jury.

These provisions eliminate changes in the marking requirement and codify the Federal Circuit’s recent In re Seagate decision requiring "objective recklessness" for a finding of willful infringement.

In addition, third party-initiated re-examination proceedings, deleted in the original version of the bill in favor of the new derivation proceedings, have been reinstated. This action seems to be a direct response to a letter from Dan Ravetcher and the Public Patent Foundation who complained that the public needed to be able to challenge a patent throughout its term rather than being limited to the twelve months after grant. While there is some substance to Mr. Ravetcher’s position, these amendments illustrate which side of the patent "reform" debate continues to have the Senator’s ear.

• New Section 18 is added, modifying the best mode requirement:

Section 282(b) (as designated by section 16(f) of this Act) is 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, other than the requirement that the specification shall set forth the best mode contemplated by the inventor of carrying out his invention; or
(B) any requirement of section 251 of this title.

These provisions paradoxically retain the best mode requirement of 35 U.S.C. § 112, first paragraph, for patentability, but eliminate the requirement as a basis for finding invalidity. This amendment has been described as incorporating a similar provision of the bill passed last September by the House of Representatives (H.R. 1908). However, it is hard to see how the best mode requirement survives without the capacity to use its violation to invalidate a patent.

The final provision may indicate that the Senator is aware of efforts by patent stakeholders to resist the ill-advised "new rules" currently enjoined by Judge Cacheris of the District Court for the Eastern District of Virginia:

SEC. 18. Severability.

If any provisions of this Act or of any amendment or repeals made by this Act, or the application of such a provision to any person or circumstance, is held to be invalid or unenforceable, the remainder of this Act and the amendments and repeals made by this Act, and the applications of this Act and such amendments and repeals to any other person or circumstance, shall not be affected by such holding.

No doubt the Senator believes it will be too burdensome for the Act to be invalidated in a piecemeal fashion.

Glaringly missing from these amendments are any that address the legitimate concerns of those patent stakeholders — universities, sole inventors and other small entities, and biotechnology and pharmaceutical patentees and patent applicants — with regard to the damages provisions, venue restrictions, and imposition of Applicant Quality Submissions. Also untouched are the "get out of jail free" card provisions (Sections 13 and 14) introduced by special interests to transfer patent infringement liability from the banking industry onto the American taxpayer, and to permit patent term extension in instances where the statutory deadline has been inadvertently missed.

It remains to be seen whether Senator Leahy will be able to garner the votes needed to close debate and bring the bill a floor vote. The oxymoronically- named Coalition for Patent Fairness has renewed its publicity campaign in support of the bill, saying on Friday that this "package of bipartisan amendments represents yet another major step for the Patent Reform Act" and "clears the way for final negotiations on the few remaining issues and builds critical momentum that will bring the bill to the Senate floor." While it seems that the the patent "reform" crowd have the only voices Senator Leahy is hearing (or listening to), time remains to ensure that voices in opposition to the bill are heard by the rest of the Senate.

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