Patent Docs

The Continuing Threat to Human Gene Patenting

October 16, 2007
By Kevin E. Noonan —

Reliable sources inform Patent Docs that the House of Representatives, having finished its summer portion of mischief by passing H.R. 1908 "reforming" U.S. patent law into unrecognizability, is set to turn its attention to the bill, introduced by Congressman Becerra (31st Dist., Cal.) (at right), that would ban human gene patenting. Although initially thought to be so wrong-headed that the House would not seriously consider the bill, it now appears that – like patent "reform" – the House political majority may be content in continue meddling in patent law in the absence of their ability to garner a majority (a veto-proof majority, in any event) in support of solutions to more pressing national concerns.

To review, the bill as introduced on February 7, 2007 reads as follows:

A BILL

To amend title 35, United States Code, to prohibit the patenting of human genetic material.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ”Genomic Research and Accessibility Act”.

SEC. 2. PROHIBITION ON PATENT OF HUMAN GENETIC MATERIAL.

(a) IN GENERAL. — Chapter 10 of title 35, United States Code, is amended by adding at the end the following new section:

"§ 106. Prohibition on patent of human genetic material

"Notwithstanding any other provision of law, no patent may be obtained for a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies.”.

(b) TABLE OF CONTENTS. — The table of sections of Chapter 10 of title 35, United States Code, is amended by adding at the end the following:

"106. Prohibition on patent of human genetic material.”.

(c) APPLICABILITY. — The amendment made by subsection (a) shall not apply to a patent issued before the date of the enactment of this Act.9

There are a number of problems with the scope of this bill. First, it is not limited to banning DNA patenting. The prohibition is to "a nucleotide sequence, or its functions or correlations, or the naturally occurring products it specifies" If passed, this bill would ban not only DNA patenting itself but also a patent on "the naturally-occurring products [a nucleic acid] specifies." This would ban patenting of all naturally-occurring proteins produced by any means. This would include proteins such as blood clotting Factor VIII, erythropoietin, hemoglobin, albumen, and human growth hormone, to name only a few. It would also ban any diagnostic assay depending on the identification of genetic polymorphisms such as single nucleotide polymorphisms (SNPs), no matter how deduced. This would render unpatentable not only existing polymorphism-based assays but those yet to be developed. In short, the bill would eliminate patent protection for the molecules that are expected to provide the "pipeline" of new drugs for the next twenty years. (It would not, paradoxically, render unpatentable recombinant cells and
organisms used to produce useful quantities of these gene products that
could otherwise not be obtained in useful quantities.)

In addition to these practical reasons to defeat the bill, it is based on a flawed understanding of the science underlying biotechnology. This issue has been the subject of prior Patent Docs posts, but let’s recap:

1. No one owns "your" genes. Indeed, no one would want to: it has been known for more than forty years that any particular copy of a gene in an individual in a population is likely to contain at least one polymorphism that does or could (under the right environmental conditions) affect its function. This was illustrated recently in reports of the complete diploid genomic DNA sequence of J. Craig Venter’s (at right) DNA, where more than 4 million nucleotide variants were detected (see "A Complete Diploid Human Genome Reveals Some Surprises"). More importantly, claims to nucleic acids require that they are "isolated" or "isolated and purified," and thus "your" DNA is outside the scope of any such claims.

2. There is nothing unique about DNA. Indeed, "a gene is but a chemical, albeit a complex one." Amgen Inc. v. Chugai Pharmaceutical Co. Rhetoric to the contrary is nothing less than an attempt to return to vitalism, the quasi-religious notion that natural products isolated from living things are somehow different from what can be found or produced from the inorganic world. This notion was disproven more than 100 years ago by Friedrich Wohler’s demonstration that urea (produced in mammalian urine) was in fact merely a chemical compound that could be produced from non-living chemicals in a laboratory.

3. The types of patent protection given to nucleic acids are no different than protection for other types of chemical inventions. Indeed, there is no basis for distinguishing nucleic acid patents from any other type of chemical compound (see "A DNA Patenting Thought Experiment").

4. DNA patents do not only claim nucleic acids but disclose them, and this aspect – the information that is the nucleotide sequence of the gene and an accurate deduced amino acid sequence – is not protected; indeed, the information is placed in the public domain and can be used as information for database searching, interspecies comparisons, and any other academic endeavor.

5. DNA patents have had no appreciable affect on scientific research, despite fears (ultimately shown to be baseless) that they would create a "tragedy of the anticommons" (see "The True Tragedy of the Anti-Commons"). Ironically, banning gene patenting would likely create a "tragedy of the commons" because no one would have sufficient protection for the intellectual property that would justify investment in the technology.

6. Although the bill excludes already-issued patents from the scope of the ban, it does not exclude already-filed applications which form the bulk of the nascent patent rights of DNA patents (including the provisional rights created by publication of U.S. applications disclosing and claiming these genes). Applicants, having had certain property rights attach by the filing and publication of these sequences (as opposed to, for example, keeping them as trade secrets), passage of the bill would violate the prohibition against ex post facto lawmaking set forth in Article I, section 9 of the Constitution and would also be a unconstitutional taking. It might also violate the Due Process Clause of the 14th amendment.

7. Banning gene patenting would reduce the advantages the U.S. has enjoyed for the past 20 years over the rest of the world, that was slow to permit patenting of genes and other products of biotechnology. The U.S. biotechnology industry has resulted in U.S. dominance in the pharmaceutical industry, to the detriment of the very European and Japanese companies poised to overtake this country economically in the past (see "The Continuing Value of Biotech Patenting"). Patent policies abroad already permit those countries to "free-ride" on American innovation. Why should we adopt their failed policies here? And who will create the next generation of drugs based on biotechnology if we do?

We have seen ample evidence of the harm that can be wrought on the patent system when extreme policies are adopted in response to a perceived problem supported by faulty logic and incorrect "evidence:" the recent changes in patent practice occasioned by U.S. Patent and Trademark Office rules limiting continuation applications and claims are but one example. Twisting U.S. patent law to ban DNA patenting begs the question of when will another special interest group attempt to influence legislators into enacting their particular special interest into law so they can infringe on the intellectual property of others with impunity. Biotech patenting has allowed a generation of (predominantly) U.S. companies to bring diagnostic tests and therapeutic agents to market and to attack diseases that were death sentences just a few short years ago. Political Cassandras and opportunists do us no service with their misinformed cries that the sky is falling; we listen to them at our peril.

For additional information on this topic, please see:
- "The Anti-Patent Beat Goes on at The New York Times," July 1, 2007
- "The Future of DNA Patenting," February 20, 2007
- "A DNA Patenting Thought Experiment," February 16, 2007
- "Science Fiction in The New York Times," February 13, 2007
- "The Continuing Value of Biotech Patenting," February 4, 2007
- "Anti-Patent (Sullivan?) Malice by The New York Times," January 29, 2007
- "In Support of Gene Patents," December 7, 2006
- "The ‘Anti-Commons’ Aren’t So Tragic After All," October 27, 2006
- "Gene Patenting in the News Again," December 5, 2006
PTO “Flagging” Pending Applications that Exceed 5/25 Claim Limits

October 16, 2007
By Jason Derry —

Patent Docs has learned from posts to the "EFS-Web" list that the U.S. Patent and Trademark Office is now identifying applications in private PAIR as failing to comply with the new 5/25 claim limitation rules. Users of Partridge, a free program developed by the Oppedahl Patent Law Firm LLC to help monitor status changes in PAIR, have reported that several of their pending applications that have more than 5 independent claims and more than 25 total claims are now shown in PAIR as "flagged for 5/25" or "Request for SIR — Recorded." The last identifier is a bit of a mystery, since the users reported that they had not requested SIRs.

The Patent Office seems to be actively identifying pending applications in which a notice of non-compliance with 37 C.F.R. § 1.75(b) needs to be issued. Thus, applicants should be identifying their applications that are destined to receive a notice under Rule 75(b)(3), and should decide how to place those applications into compliance with the new claim limitation rules. Otherwise, applicants will be forced to comply with the new 5/25 claim limits within a two-month, extendable time limit imposed by a notice under Rule 75(b)(3). Unless the notice accompanies a requirement for restriction from the Examiner, options for responding to the notice include: (1) filing an Examination Support Document (ESD); (2) filing a new set of claims that comply with the 5/25 limits; or (3) filing a Suggested Requirement for Restriction (SRR).

For additional information regarding this topic, please see:
- "Patent Office Has Stopped Examining Patents with 25+ Claims," Patently-O
Jason Derry, Ph.D., who graduated with honors from DePaul University
College of Law, is a molecular biologist and founding author of Patent Docs.
Patent Profile: Immunomedics Awarded Patent Covering Pancreatic Cancer Therapeutic

October 16, 2007

By Sherri Oslick —

Immunomedics, Inc. of Morris Plains, NJ has been awarded U.S. Patent No. 7,282,567 ("Monoclonal antibody hPAM4," issued October 16, 2007) covering a humanized monoclonal antibody to a particular epitope in the MUC1 antigen expressed in most pancreatic cancers. The patent also covers therapeutic and diagnostic derivatives of hPAM4 for treating pancreatic cancer.

The newly issued patent covers Immunomedics’ product Y-90 hPAM4, which is a yttrium-90-labeled hPAM4 currently in Phase I clinical trials. Y-90 hPAM4 has received Orphan Drug Status from the FDA.

The ‘567 patent issued from U.S. Application No. 10/461,885, which was filed on June 16, 2003 and which claims the benefit of U.S. Provisional Application No. 60/388,314, filed June 14, 2002. Independent claim 1 recites:

1. A humanized antibody or an antigen binding fragment thereof, comprising the complementarity-determining regions (CDRs) of a murine PAM4 monoclonal antibody (MAb) and the framework (FR) regions of the light and heavy chain variable regions of a human antibody and the light and heavy chain constant regions of a human antibody, wherein the CDRs of the light chain variable region of the humanized PAM4 Mab comprise CDR1 (SASSSVSSSYLY, SEQ ID NO:1); CDR2 (STSNLAS, SEQ ID NO:2); and CDR3 (HQWNRYPYT, SEQ ID NO:3); and the CDRs of the heavy chain variable region of the humanized PAM4 Mab comprise CDR1 (SYVLH, SEQ ID NO:4); CDR2 (YINPYNDGTQYNEKFKG, SEQ ID NO:5)and CDR3 (GFGGSYGFAY, SEQ ID NO:6), wherein said antibody or fragment thereof binds to a domain located between the amino terminus and the start of a repeat domain of MUC1.
Strafford CLE on New Continuation and Claims Rules

October 16, 2007
Strafford CLE Teleconferences will be offering a telephone conference entitled: "Sweeping USPTO Patent Rule Changes for Continuations and Claims: Strategies to Meet the New Obligations under the Complex Rules" on October 24, 2007 from 1:00-2:30 PM (EST). Speakers Marc E. Brown and Bernard Codd of McDermott Will & Emery and Stephen G. Kunin of Oblon Spivak McClelland Maier & Neustadt will address questions such as:
- What should counsel and IP owners know about the most significant changes the USPTO put into place?
- What will be the practical and immediate impact of the new rules for IP owners and counsel?
- What new strategies should counsel consider and implement in dealing with the USPTO under the new rules?
An interactive Q&A session will follow the speaker presentations. The registration fee for this telephone conference is $297. A program outline for the teleconference can be obtained here. Those interested in registering for the teleconference, can do so here, or by calling 800-926-7926.
Abbott Labs. v. Torpharm, Inc. (Fed Cir. 2007)

October 15, 2007

ANDA Filing Not Violation of Express Terms of Injunction

By Sherri Oslick —

In an opinion authored by Chief Judge Michel and issued late last week, the CAFC reversed the United States District Court for the Northern District of Illinois, finding Apotex not to have violated an injunction prohibiting it from manufacturing, using, selling, offering for sale, or importing into the United States generic divalproex sodium until the expiration of U.S. Patent Nos. 4,988,731 and 5,212,326. Divalproex sodium (an oligomer of units of sodium valproate and valproic acid) is marketed by Abbott as Depakote®, and is an anti-seizure medication. The claims of the ‘731 and ‘326 require that the oligomer contain 4-6 units.

The present holding represents round 3 at the CAFC for the parties. In 1997, Apotex filed an ANDA seeking approval to market generic Depakote®; the ANDA included a Paragraph IV certification of invalidity against the ‘731 and ‘326 patents, the two patents listed in the Orange Book for Depakote®. Abbott filed suit against Apotex for infringement of the ‘731 and ‘326 patents, and obtained a favorable ruling on summary judgment on both validity and infringement. Apotex appealed; the CAFC affirmed the ruling on validity but remanded for a trial on infringement. Following a bench trial, Judge Posner (sitting by designation) determined that Apotex’s filing of an ANDA infringed Abbott’s patents as Abbott had proved by a preponderance of the evidence that Apotex’s product was a 4-6 unit oligomer of divalproex sodium. As such, the District Court entered an injunction prohibiting Apotex from "commercially manufacturing, using, selling, or offering to sell generic divalproex sodium which the Court has found to be infringing within the United States, or from importing such product into the United States, until Abbott’s U.S. Patent Nos. 4,988,731 and 5,212,326 expire and defendants have received final approval from FDA to market generic divalproex sodium." Apotex appealed the judgment and the CAFC affirmed without opinion.

Subsequently, Apotex attempted to prepare a design-around having greater than 6 units of divalproex sodium, and entered into an agreement with Nu-Pharm (formerly owned by Apotex’s parent company) whereby Apotex would fund, but Nu-Pharm would file, an ANDA for the design-around. Nu-Pharm’s ANDA was filed in 2005 with a Paragraph IV certification of non-infringement, and Abbott responded by filing suit against Nu-Pharm. After Nu-Pharm filed an amended ANDA directed to additional dosages, and having learned of the defendants’ relationship, Abbott filed a second suit, this time against Nu-Pharm and Apotex. Upon motion by Abbott, the second suit was reassigned to Judge Pallmeyer based on its relatedness to the first case.

On the day that Nu-Pharm moved for summary judgment of non-infringement before Judge Pallmeyer, Abbott moved both to enforce the injunction before Judge Posner and to stay the proceedings in front of Judge Pallmeyer. The stay was granted, and Judge Posner found Apotex in contempt, interpreting the injunction to cover any generic divalproex sodium found to be infringing. Because Posner found no difference (and therefore no "colorable" difference) between Apotex’s prior product and its design-around, he found Apotex’s new product to infringe the claims of Abbott’s patents and extended the injunction to cover the Nu-Pharm ANDA. Apotex appealed.

On appeal, Apotex argued that the District Court had no statutory authority to entertain the contempt proceeding as the Hatch-Waxman Act does not grant such subject matter jurisdiction, and in the alternative, that the proceedings were improper as an infringement inquiry was to be handled only by trial under the Federal Rules of Civil Procedure. Specifically, on the first point, Apotex argued that in a Hatch-Waxman scenario, such a contempt proceeding was unlawful because the underlying suit is filed prior to any "classically infringing" activity (i.e., making and selling an infringing product) and more specifically, that Apotex had not engaged in such activities. In short, asserted Apotex, the "artificial infringement" as a result of their second ANDA filing was not an act subject to scrutiny in a contempt proceeding.

The CAFC dismissed Apotex’s argument, noting that it had held numerous times that, albeit "highly artificial," the filing of a Paragraph IV certification as part of an ANDA was, by statute, an act of infringement and that infringement in a Hatch-Waxman suit was to be analyzed in the same way as any other infringement suit. Moreover, noted the CAFC, the District Court had authority outside of the Hatch-Waxman Act in general principles of equity governing injunctions. The District Court, according to the CAFC, had the authority to enforce its injunction through contempt proceedings, and nothing in the Hatch-Waxman Act ran contrary to this.

Additionally, while the CAFC recognized that it had previously cautioned against contempt proceedings of a summary nature where expert and other testimony would be helpful, such as in an infringement determination, it noted that such caution applied where an alleged infringer made a "good faith effort to modify" a prior infringing product. In this case, however, the lower court concluded that Apotex’s decision to have Nu-Pharm file the second ANDA was nothing more than a "subterfuge intended to give Apotex a crack at another district judge" and a more favorable ruling. The CAFC declined to disturb that finding, and concluded that it was not an abuse of discretion on the part of the lower court to address issues of infringement related to the Nu-Pharm ANDA in a contempt proceeding.

Moreover, the CAFC, in applying its two part test, affirmed the lower court’s finding that the subject of the Nu-Pharm ANDA was an infringing product, and that the extension of the injunction to include this product was not an abuse of discretion. According to the first part of the two part test, the District Court must address whether a contempt proceeding is the proper forum for addressing infringement of the design-around, including an assessment of whether there is more than a colorable difference between the original and new products such that there are substantial issues to be tried. The CAFC found that the lower court, which carefully reviewed the evidence presented, did not abuse its discretion in determining that there was no colorable difference the two products and that contempt proceedings were appropriate. In the second part of the two part test, the lower court must then engage in an infringement determination. Here, the CAFC found, in light of all the evidence, that the lower court did not clearly err in this regard.

With regard to the ultimate finding of contempt, however, the CAFC reversed the District Court, finding an error of law in the lower court’s interpretation of the original injunction to include the mere act of filing an ANDA. The original injunction, noted the CAFC, was limited to commercial acts within the U.S., and as it was undisputed that Apotex’s design-around activities all occurred outside of the U.S., Apotex had not violated the injunction. In short, while the CAFC concluded that the Nu-Pharm ANDA filing was an act of infringement, it was not a violation of the injunction, and the lower court had erred in misinterpreting the injunction as excluding acts beyond its plain terms.

Dissenting-in-part, Judge Dyk asserted that the contempt proceedings were inappropriate as there was "fair ground of doubt" as to whether the injunction applied. Specifically, because the original injunction did not preclude the filing of an ANDA, argued Judge Dyk, there was a "fair ground of doubt" as to whether Apotex’s conduct was wrongful, summary contempt proceedings were therefore inappropriate, and the majority’s use of the "colorable difference" test was a too narrow an application of the more general "fair ground of doubt" test. In a lengthy footnote, the majority countered the dissent by noting that Judge Dyk failed to identify any doubt that would require full litigation rather than a summary proceeding, and more particularly, what was doubtful about the determination that the Nu-Pharm ANDA did not fall within the injunction. Summary determination was appropriate, countered the majority, as there was no doubt in either the infringement determination or the determination that an ANDA filing was outside of the scope of the original injunction. The dissent’s approach of requiring full litigation on infringement, rather than a contempt proceeding, according to the majority, would serve neither Apotex’s due process interests nor judicial economy where the ultimate determination was that the filing of the ANDA was not a violation of the injunction.

Abbott Labs. v. Torpharm, Inc. (Fed. Cir. 2007)
Panel: Chief Judge Michel, Circuit Judge Dyk, and District Judge Otero
Opinion by Chief Judge Michel; opinion concurring-in-part and dissenting-in-part by Circuit Judge Dyk

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.
Federal Circuit Issues Patent Law Malpractice Decisions

October 15, 2007

By Kevin E. Noonan —

Malpractice is an ugly word. But patent practitioners may take some comfort in two precedential decisions today from the Federal Circuit, holding that allegations of malpractice in patent prosecution "arise under" patent law and thus provide subject matter jurisdiction in Federal Court under 28 U.S.C. § 1338.

The first of these cases, Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P., was an appeal from the interlocutory decision of the U.S. District Court for the Western District of Texas denying plaintiffs’ motion to remand the case to state court, on the grounds that the court did not have subject matter jurisdiction on the malpractice cause of action for non-diverse parties. The malpractice claim alleged that counsel "(1) failed to file the initial patent application within the one year ‘on sale bar’ of 35 U.S.C. § 102(b); (2) failed to disclose two prior patents and other facts during the prosecution of the patent applications; (3) failed to file in a timely fashion the application that resulted in the ‘771 patent, which contains the broadest claims to the invention; (4) miscalculated the settlement damages in [a] . . . prior litigation; (5) failed to inform AMT of his mistakes despite his fiduciary duty to do so; (6) failed to inform AMT adequately of the existence of the prior litigant’s defenses of on sale bar and inequitable conduct; and (7) made misrepresentations to AMT." As a consequence, AMT claimed it was forced to settle several malpractice lawsuits for much less than the patents would have been worth "but for" counsel’s malpractice. The claim was originally filed in Texas state court, and had been transferred to federal court on defendants’ motion, and the court earlier denied plaintiff’s motion to remand on the grounds that "in order to prevail, AMT ‘must establish that their infringement claims were otherwise valid, but that Hamilton’s negligence afforded the patent defendants certain defenses under patent law.’" Now, the parties had changed their positions, and the court’s denial of defendants’ motion for remand to state court was the subject of this appeal.

The Federal Circuit affirmed the District Court’s denial of defendants’ remand motion in an opinion written by Chief Judge Michel and joined by Judges Lourie and Rader; in doing so, the CAFC asserted that this was a question of first impression. In his analysis, Judge Michel applied the two-part test recited by the Supreme Court in Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988). According to the Federal Circuit, "Section 1338 jurisdiction extends to any case ‘in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.’" Under the Federal Circuit’s analysis, the question is whether patent law is a "necessary element" of the plaintiff’s malpractice claim. Reviewing the complaint, the CAFC found that seven allegations of error constituting malpractice concerned patent prosecution or litigation. Moreover, in order to prevail, the plaintiffs would have to establish that they would have prevailed on the earlier infringement lawsuits "but for" counsel’s malpractice. Thus, the District Court would have to, "hypothetically," adjudicate the infringement claim on the merits. Thus, patent law comprised a "necessary element" of the malpractice claim. On this record, the Federal Circuit found that the malpractice claim "arose under" patent law, and thus provided federal question jurisdiction under 28 U.S.C. § 1338. Accordingly, the CAFC affirmed denial of defendants’ removal motion.

In the second of these cases, Immunocept, LLC v. Fulbright & Jaworski LLP, the plaintiff appealed a decision of the U.S. District Court for the Western District of Texas on summary judgment that the malpractice claim was barred by the statute of limitations and the claim for damages was too speculative to be recovered under state law. The panel raised sua sponte the question of whether jurisdiction over the malpractice claim (which is clearly a state law matter) could be considered as "arising under" patent law when patent prosecution was basis of the claim. The facts of the case are as follows. The invention involved large pore hemofiltration ("LPHF") technology for treating a number of diseases and disorders, including sepsis, shock, acute renal failure, multiple organ system failure, and systemic inflammatory response syndrome-related diseases. Fulbright and Jaworski was retained to prepare the patent application, which was granted as U.S. Patent No. 5,571,418 on November 5, 1996, Immunocept LLC being named assignee of this patent. Claim 1 of the ‘418 patent reads as follows:

A method of treating a pathophysiological state caused by a toxic mediator-related disease consisting of hemofiltering blood with a filter, wherein said filter has a molecular weight exclusion limit of 100,000 to 150,000 Daltons and allows for passage of molecules with a molecular weight of about 70,000 Daltons in the presence of whole blood.

Importantly, the transitional phrase "consisting of" was added by amendment during prosecution. Immunocept hired another attorney to pursue additional applications while Immunocept pursued licensing opportunities. These efforts were fruitless, however, since the potential licensees assessed the ‘418 patent claims to provide insufficient protection based on the closed claim language "consisting of." Immunocept’s malpractice claim was based on this limitation of the ‘418’s claims. However, the District Court found that the claim was time-barred by the Texas statute of limitations and that Immunocept’s damages claim was too speculative.

The Federal Circuit affirmed in an opinion written by Chief Judge Michel and joined by Judges Lourie and Rader. More important to patent practitioners than the Federal Circuit’s decision on the substantive question presented was its determination that the malpractice claim was one "arising under" U.S. patent law and thus within its (and federal District Courts’) jurisdiction. The Federal Circuit analyzed federal court jurisdiction under the two-part test enunciated by the Supreme Court in Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005). As stated by the Federal Circuit, the test requires that "a state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Id. at 314. The malpractice claim, a tort, requires under Texas law proof of "proof of duty, breach, causation, and damages." In this case, the basis for the malpractice claim was solely that the patent attorney improperly narrowed the scope of the ‘418 claims and thus that the patent was unable to be licensed for value. Thus, according to the Federal Circuit, claim drafting and the question of claim scope were necessary elements of the cause of action. Since claim scope defines the scope of patent protection, the court considered it to be "surely" a substantial question of patent law, citing Johnson & Johnston Assocs. v. R.E. Serv. Co., 285 F.3d 1046 (Fed. Cir. 2002) (en banc). The panel also cited Air Measurement Techs. in support of their decision. The Federal Circuit further justified this outcome on the grounds that "[l]itigants will benefit from federal judges who are used to handling these complicated rules [of claim construction]" and that jurisdiction was consistent with Congressional intent to harmonize U.S. patent law when it enacted the Federal Courts Improvement Act of 1982 (Pub. L. No. 97-164, 96 Stat. 25) that established the Federal Circuit.

Air Measurement Tech., Inc. v. Akin Gump Strauss Hauer & Feld, L.L.P. (Fed. Cir. 2007)
Panel: Chief Judge Michel and Circuit Judges Lourie and Rader
Opinion by Chief Judge Michel

Immunocept, LLC v. Fulbright & Jaworski LLP (Fed. Cir. 2007)
Panel: Chief Judge Michel and Circuit Judges Lourie and Rader
Opinion by Chief Judge Michel

Additional information regarding these cases can be found at Patently-O.
Schwarz Pharma, Inc. v. Paddock Labs., Inc. (Fed. Cir. 2007)

October 14, 2007

By Kevin E. Noonan —

In Schwarz Pharma, Inc. v. Paddock Labs., Inc., the Federal Circuit affirmed a District Court determination that infringement under the doctrine of equivalents was precluded by prosecution history estoppel, and decided whether a patentee is an indispensable party to confer standing on the exclusive licensee.

Schwarz Pharma and its corporate parent, the German company Schwarz Pharma AG, are the exclusive licensees of U.S. Patent No. 4,743,450, owned by Warner-Lambert Co. The patent relates to Angiotensin Converting Enzyme (ACE) inhibitors combined with stabilizers (to prevent degradation) for treating hypertension, marketed by Schwarz Pharma as Univasc®. Specifically, the ‘450 patent teaches use of an alkali or alkaline earth metal carbonate to inhibit cyclization and discoloration.

Claim 1 of the ‘450 patent reads as follows:

A pharmaceutical composition which contains:
(a) a drug component which comprises a suitable amount of an ACE inhibitor which is susceptible to cyclization, hydrolysis, and discoloration,
(b) a suitable amount of an alkali or alkaline earth metal carbonate to inhibit cyclization and discoloration, and
(c) a suitable amount of a saccharide to inhibit hydrolysis.

The suit was initiated in response to a Paragraph IV certification by Paddock as part of its ANDA submission to the FDA for approval of its moexipril hydrochloride (an ACE inhibitor; "MH") and magnesium oxide ("MgO") formulation. The parties stipulated that Paddock’s formulation did not literally infringe the ‘450 patent claims. The District Court granted Paddock’s motion for summary judgment that prosecution history estoppel precluded infringement under the doctrine of equivalents. Specifically, independent claim 1 as filed recited "metal containing stabilizer" and independent claim 16 (a method claim) recited "an alkali or alkaline earth-metal salt." Both were amended to recite "an alkali or alkaline each metal carbonate," and the District Court held that the estoppel raised by that amendment precluded Paddock’s MgO-containing formulation from infringing the composition or method claims.

The Federal Circuit affirmed in an opinion written by Judge Lourie and joined by Judges Michel and Moore. As an initial matter, the Federal Circuit addressed Paddock’s jurisdictional objection that Schwarz Pharma did not have standing to appeal in its own right. The patentee, Warner-Lambert, did not appeal (although it did join the Schwarz Pharma licensees in suing at the District Court). The question was whether Schwarz Pharma had standing to appeal in its own name without participation of the patentee. It is certainly possible to see why a patentee might have a different perspective than its licensee, even an exclusive licensee, on whether an appeal was desirable. In view of the propensity for the Federal Circuit to creatively construe claims, for example, a patentee might be content to exit the litigation with its claims relatively intact based on the District Court’s claim construction. This is particularly the case where under the District Court’s construction the licensee’s activities remain within the scope of the construed claims. On the other hand, under these circumstances a licensee might have no disincentive to appeal, since reversal would provide it with a victory in the infringement action, and further construction of the claims by the Federal Circuit, or invalidation of the patent claims, could free it from its obligations under the license.

Schwarz Pharma made the distinction between the requirement for constitutional standing and prudential standing; the latter, according to Schwarz Pharma, is important in the District Court case to prevent an accused infringer from being subject to multiple lawsuits for the same accused infringing activities. No such concerns are implicated on appeal, and constitutional standing, which Schwarz Pharma asserts it possesses, is thus sufficient.

The Federal Circuit, saying the issue was one of first impression, held that the concerns behind the prudential requirement that a patentee must be joined to avoid the risk of multiple suits by different plaintiffs (the licensee and the patentee, separately) against the same defendant for the same allegedly-infringing acts did not apply on appeal. That risk did not exist on appeal, because the patentee (Warner-Lambert) would be bound by the determination of the District Court as modified vel non on appeal. Moreover, another reason for compelling joinder of the patentee below is to protect the patentee from the risk of having its patent invalidated without the opportunity to participate, another consideration that does not apply (the Federal Circuit neglecting its own claim construction jurisprudence and the effects it can have on a patentee’s property rights). The CAFC also asserted as a basis for its holding that Schwarz Pharma, as plaintiff, was entitled to appeal decisions by the District Court adverse to its interests. However, in making its decision to permit Schwarz Pharma to appeal without joinder by Warner-Lambert, the Federal Circuit chose to value the risk to the accused infringer, and the interests of the licensee, over the patentee’s (legitimate) concerns for its patent rights.

On the merits, Schwarz Pharma argued that prosecution history estoppel did not preclude infringement under the doctrine of equivalents because the patentee "never claimed compositions or processes involving MgO." The specification, according to Schwarz Pharma, supported an interpretation of the terms "metal containing stabilizer" and "alkali or alkaline earth metal salt" to mean only alkali or alkaline earth metal cations and carbonate, borate, or silicate anions, and thus MgO never fell within the scope of the original claims. Alternatively, Schwarz Pharma argued that there were genuine issues of material fact regarding whether MgO was a foreseeable equivalent of an alkali or alkaline earth metal carbonate, and that there was no more than a tangential relationship of the claim limitation and the MgO equivalent.

The Federal Circuit disagreed, finding that the specification disclosed more broadly than Schwarz Pharma contended, and that the plain meaning of "metal containing stabilizer" and "alkali or alkaline earth metal salt" encompassed MgO; thus, amendment of the independent claims to recite "alkaline earth metal carbonate" raised an estoppel for all foreseeable equivalents relinquished by the amendment. The CAFC found that the amendments were made in response to an obviousness rejection and thus were presumptively made for reasons relating to patentability. The Federal Circuit also rejected Schwarz Pharma’s contention that while MgO was known, it was not known to stabilize ACE inhibitors from the type of degradation disclosed in the ‘450 patent. Finally, the CAFC considered Schwarz Pharma’s "tangential relation" argument to mean that rejection over the asserted reference could have been overcome without amendment. The Federal Circuit called this argument irrelevant and merely speculative, and placed upon Schwarz Pharma (as licensee) the consequences of the patentees decisions during prosecution, consistent with more than a decade of Federal Circuit jurisprudence (see Sage Products, Inc. v. Devon Indus., Inc.). The Federal Circuit thus found no reason to disturb the District Court’s judgment below.

Schwarz Pharma, Inc. v. Paddock Labs., Inc. (Fed. Cir. 2007)
Panel: Chief Judge Michel and Circuit Judges Lourie and Moore
Opinion by Circuit Judge Lourie

Additional information regarding this case can be found at Patently-O and the Orange Book Blog.
Court Report

October 14, 2007

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.

Teva Pharmaceutical Industries Ltd. et al. v. Apotex, Inc. et al.
3:07-cv-04897; filed October 10, 2007 in the District Court of New Jersey

Declaratory judgment of infringement of U.S. Patent Nos. 6,699,997 ("Carvedilol," issued March 2, 2004), 6,710,184 ("Crystalline Solids of Carvedilol and Processes for Their Preparation," issued March 23, 2004), 7,056,942 ("Carvedilol," issued June 6, 2006), and 7,126,008 (same title, issued October 24, 2006) based on Apotex’s filing of an ANDA to manufacture and sell a generic version of GSK’s Coreg® (carvedilol, used to treat congestive heart failure). View the complaint here.

Cornerstone BioPharma, Inc. et al. v. Vision Pharma, LLC et al.
5:07-cv-00389; filed October 8, 2007 in the Eastern District of North Carolina

Infringement of U.S. Patent No. 6,270,796 ("Antihistamine/Decongestant Regimens for Treating Rhinitis," issued August 7, 2001) based on defendants’ manufacture and sale of VisRx, allegedly a "generic" version of Cornerstone’s AlleRx® Dose Pack Products (used to treat allergies and symptoms of the common cold). View the complaint here.

Celgene Corporation et al. v. Intellipharmaceutics Corp.
3:07-cv-04854; filed October 5, 2007 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,908,850 ("Method of Treating Attention Deficit Disorders with d-Threo Methylphenidate," issued June 1, 1999), 6,355,656 ("Phenidate Drug Formulations Having Diminished Abuse Potential," issued March 12, 2002, with a reexamination certificate issued March 27, 2007), 6,528,530 ("Phenidate Drug Formulations Having Diminished Abuse Potential," issued March 4, 2003), 5,837,284 ("Delivery of Multiple Doses of Medications," issued November 17, 1998), and 6,635,284 (same title, issued October 21, 2003), all licensed exclusively to Novartis in certain fields of use, following a paragraph IV certification as part of Intellipharmaceutics’ filing of an ANDA to manufacture a generic version of Novartis’ Focalin XR® (extended release dexmethylphenidate hydrochloride, used to treat attention deficit hyperactivity disorder). View the complaint here.

Sanofi-Aventis et al. v. Mylan Pharmaceuticals Inc.
1:07-cv-00139; filed October 5, 2007 in the Northern District of West Virginia

Infringement of U.S. Patent Nos. 4,661,491 ("Alfuzosine Compositions and Use," issued April 28, 1987) and 6,149,940 ("Tablet with Controlled Release of Alfuzosine Chlorhydrate," issued November 21, 2000) following a paragraph IV certification as part of Mylan’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.

Celgene Corporation et al. v. KV Pharmaceutical Company
2:07-cv-04819; filed October 4, 2007 in the District Court of New Jersey

Infringement of U.S. Patent Nos. 5,837,284 ("Delivery of Multiple Doses of Medications," issued November 17, 1998) and 6,635,284 (same title, issued October 21, 2003) (both assigned to Celgene and licensed exclusively to Novartis in certain fields of use) following a paragraph IV certification as part of KV’s filing of an ANDA to manufacture a generic version of Novartis’ Ritalin® LA (methylphenidate hydrochloride extended release capsules, used to treat attention deficit hyperactivity disorder/attention deficit disorder). View the complaint here.

Eli Lilly and Company v. Synthon Laboratories, Inc.
2:07-cv-00450; filed October 3, 2007 in the Eastern District of Virginia

Infringement of U.S. Patent No. 5,658,590 ("Treatment of Attention-Deficit/ Hyperactivity Disorder," issued August 19, 1997) following a paragraph IV certification as part of Synthon’s filing of an ANDA to manufacture a generic version of Lilly’s Strattera® (atomoxetine hydrochloride, used to treat attention-deficit/hyperactivity disorder). View the complaint here.

Adams Respiratory Therapeutics, Inc. et al. v. Perrigo Company et al.
1:07-cv-00993; filed October 2, 2007 in the Western District of Michigan

Infringement of U.S. Patent No. 6,372,252 ("Guaifenesin Sustained Release Formulation and Tablets," issued April 16, 2002) following a paragraph IV certification as part of Perrigo’s filing of an ANDA to manufacture a generic version of Adams’ Mucinex® (guaifenesin, used to treat chest congestion). View the complaint here.
Conference & CLE Calendar

October 14, 2007

October 10-12, 2007 – Stem Cells European Business Summit – Edinburgh, Scotland

October 12, 2007 – Intellectual Property Law Summit 2007 (West LEGALWorks and Intellectual Property Law Association of Chicago) – Chicago, IL

October 16, 2007 – New Patent Rules Update: Implications of Compliance (World Research Group)

October 25-26, 2007 – Biotech and Pharma Public-Private Partnerships Forum (American Conference Institute) – Washington, D.C.***

October 25-27, 2007 – Biotechnology: Patent Prosecution, Licensing, Litigation & Hatch-Waxman (Patent Resources Group) – Palm Springs, CA

November 13-15, 2007 – Pharma and Biotech Collaborative Agreements (American Conference Institute) – New York, NY***

January 30-February 1, 2008 – Pharma/Biotech IP Due Diligence (American Conference Institute) – New York, NY***

***Patent Docs is a media sponsor of this conference or CLE.
ACI Pharma/Biotech IP Due Diligence Conference

October 12, 2007
American Conference Institute (ACI) will be holding the 5th National Conference on Pharma/Biotech IP Due Diligence: Your Complete Guide for M&As, Licensing, and Other Collaborations on January 30-31, 2008 in New York, NY. The conference will provide information about current changes to patent practices, including patent reform efforts that have occurred in the courts, legislature, and U.S. Patent and Trademark Office. In particular, ACI's faculty will offer presentations on the following topics:
- Factoring patent reform, PTO rulemaking, and new case law into due diligence analyses.
- Repositioning diligence strategies in light of recent court decisions.
- Reassessing the strength of the patent portfolio in light of the USPTO rules and the Patent Reform Act of 2007.
- Determining what diligence is due in light of new and increasingly complex multi-party transactions.
- Extracting from the diligence review the factors that will impact valuation.
- Drafting the checklist and selecting/managing the due diligence team based on the structure and business goals of the deal.
- Ferreting out the target's prior contractual obligations, licensing and third party obligations.
- What a company must know to prepare for the diligence review when approached by venture capitalists.
- Managing due diligence when dealing with industry/university collaborations and licenses.
- Evaluating the scope, validity, and enforceability of the target's patents.
- Protecting confidentiality, trade secrets, and attorney client privilege during a diligence review.
- Uncovering issues with ownership rights and Inventorship.
- Freedom to operate: Ensuring the purchaser/licensee has the right to commercialize the IP at issue.
- FDA regulation of small molecule drugs and biologics: Understanding how this affects the diligence review.
- The deliverable: Ascertaining and communicating the results of the analysis.
An additional master class entitled: "Drafting an Effective Due Diligence Report" will be offered on February 1, 2008. The master class will provide strategies and solutions – as well as the advice and tools that practitioners need – to draft a comprehensive report of findings.

The agenda for the Pharma/Biotech IP Due Diligence conference can be found here. A complete brochure for this conference, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee ranges from $1,995 (conference alone) to $2,595 (conference and master class). Those registering on or before November 15, 2007 will receive a $200 discount off the registration fee. Those interested in registering for the conference can do so here, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

Patent Docs is a media sponsor of ACI's Pharma/Biotech IP Due Diligence conference.

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