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  • Court Report

        By Sherri Oslick —

    Gavel_24
    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.


    Boehringer Ingelheim Pharma GmbH & Co. KG et al. v. Barr Laboratories Inc. et al.
    1:07-cv-00432; filed July 11, 2007 in the District Court of Delaware

    Infringement of U.S. Patent No. 6,015,577 ("Pharmaceutical Compositions Containing Dipyridamole or Mopidamol and Acetylsalicylic Acid or the Physiologically Acceptable Salts Thereof, Processes for Preparing Them and Their Use in Treating Clot Formation," issued January 18, 2000) following a paragraph IV certification as part of Barr’s filing of an ANDA to manufacture a generic version of Boehringer’s Aggrenox® (extended-release dipyridamole/acetylsalicylic acid, used to reduce the risk of stroke in patients who have had transient ischemia of the brain or completed ischemic stroke due to thrombosis).  View the complaint here.


    Wyeth v. Mylan Pharmaceuticals Inc.
    1:07-cv-00091; filed July 9, 2007 in the Northern District of West Virginia

    Infringement of U.S. Patent Nos. 6,274,171 ("Extended release formulation of venlafaxine hydrochloride," issued August 14, 2001), 6,403,120 (same title, issued June 11, 2002), and 6,419,958 (same title, issued July 16, 2002) following a paragraph IV certification as part of Mylan’s filing of an ANDA to manufacture a generic version of Wyeth’s EFFEXOR XR® (venlafaxine hydrochloride, extended release, used to treat depression).  View the complaint here.


    Sanofi-Aventis U.S. LLC et al. v. Actavis Totowa LLC et al.
    3:07-cv-03142; filed July 6, 2007 in the District Court of New Jersey

    Sanofi-Aventis U.S. LLC et al. v. Pharmachemie B.V. et al.
    3:07-cv-03144; filed July 6, 2007 in the District Court of New Jersey

    Sanofi-Aventis U.S. LLC et al. v. Abraxis Bioscience, Inc.
    3:07-cv-03163; filed July 9, 2007 in the District Court of New Jersey

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent No. 5,338,874 ("Cis oxalato (trans 1-1,2-cyclohexanediamine) PT(II) Having Optically High Purity," issued August 16, 1994) following a paragraph IV certification as part of defendants’ filing of an ANDA to manufacture a generic version of plaintiffs’ Eloxatin® (oxaliplatin for injection, used to treat colorectal cancer).  View the Actavis complaint here.


    Sanofi-Aventis U.S. LLC et al. v. Mustafa Nevzat Ilac Sanayh A.S. et al.
    3:07-cv-03143; filed July 6, 2007 in the District Court of New Jersey

    Sanofi-Aventis U.S. LLC et al. v. Ebewe Pharma GES M.B.H. NFG.KG
    3:07-cv-03164; filed July 9, 2007 in the District Court of New Jersey

    Sanofi-Aventis US LLC et al. v. Ebewe Pharma GES M.B.H. NFG.KG
    3:07-cv-01756; filed July 10, 2007 in the District Court of South Carolina

    The complaints in these cases are substantially identical.  Infringement of U.S. Patent Nos. 5,338,874 ("Cis oxalato (trans 1-1,2-cyclohexanediamine) PT(II) Having Optically High Purity," issued August 16, 1994) and 5,716,988 ("Pharmaceutically Stable Preparation of Oxaliplatinum," issued February 10, 1998) following a paragraph IV certification as part of defendants’ filing of an ANDA to manufacture a generic version of plaintiffs’ Eloxatin® (oxaliplatin for injection, used to treat colorectal cancer).  View the Mustafa complaint here.

  • The Continuing Assault on Innovation at The New York Times

        By Kevin E. Noonan —

    New_york_times
    It’s beginning to seem like a week cannot go by without The New York Times publishing an article, frequently not on the Op-Ed page but with its news stories, purporting to show that patents are a bad thing – for business, for the country, and sometimes, it seems, for our souls.

    This week, it is an article by Michael Fitzgerald, a Boston journalist, touting the not-yet-published results of a study by James Bessen, a lecturer at Boston University Law School, and his colleague, Michael J. Meurer.  Having "crunched the numbers," Mr. Bessen and Mr. Meurer have concluded that the cost of patenting (actually, patent litigation) is greater than the profits made by companies with patents.  Although they reviewed statistics between 1976 and 1999, the article provides only a few snapshots of the data, including the assertion that "global profits" in publicly-traded companies coming "directly from patents" amounted to $8.4 billion, and that these numbers increased to $9.4 billion in 1999.  At the same time, according to the article, domestic litigation costs "alone" were $8 billion in 1997, "soaring" to $16 billion in 1999.  Not mentioned in the article was whether the litigation costs were for both parties (in which case the cost to the patentee plaintiffs were about half the quoted number), or whether the monies recovered as damages were included in the profits from patents.  For that we’ll have to wait for their book, "Do Patents Work," coming in 2008.

    Mr. Fitzgerald’s article trots out the usual suspects of the argument, that most patents are not worth very much (as are most lottery tickets).  However, this opinion is at odds with the results of a study by the European Commission reported in 2005 and directed to the very question of the economic value of patents in Europe (the study was entitled "Study on Evaluation the Knowledge Economy – What are Patents Actually Worth?").  The study was comprehensive, surveying 9,000 patent owners who had used the European Patent Office to obtain patents between 1993 and 1997.  The study showed that the median value (half the respondents reporting more and half less) of the patents produced was €300,000, and 10% of the respondent patent owners reported values of €10 million or more.

    The second negative allegation in the article is that innovation is damaged by patenting.  It is certainly true that patents can be the source of mischief in the information technology field, but that doesn’t mean the system is the problem.  It is ironic that some of the same voices that cheered the government’s prosecution of Microsoft for its alleged anticompetitive activities seem no less predisposed to wanting to reap the benefits of others’ inventive contribution without paying a price.  The fact that the investment costs for IT inventions can be low may mean IT inventions are more amenable to a different type of protection (see "Could Creating a U.S. ‘Utility Model’ Patent Fulfill the ‘Need’ for Patent Law Reform?").  And while it is unfortunate that Mr. Bessen neglected to protect inventions of his own during the 1980’s (due to the misapprehension that "software can’t be patented"), that fact isn’t evidence that the system doesn’t work or shouldn’t apply to IT (although it may provide some insight into the motivations for his study).

    The facts are that most technology companies invest in patents, both to protect their own technology and to use as bargaining chips with other companies in negotiations, and Mr. Fitzgerald’s article acknowledges these facts.  More importantly, patents provide leverage for inventors not backed by the resources of multinational corporations for whom there would otherwise be no disincentive to appropriating new technology.  The professional naysayers regarding patents tend to be economists, whose track record in accurately modeling the way the world works can be sketchy at best (see, for example, "Freakonomics" and the detractors thereof); economists, when they are being honest, will admit that if the patent system didn’t exist they could not justify creating one, but on the other hand it would be "irresponsible" to recommend abolishing it.  Economics cannot prove or disprove that the system doesn’t do exactly what it’s supposed to do – promote innovation, although there may indeed be differential effects on different technologies in the way patents are used.  As the article acknowledges, for some industries, like pharmaceuticals and biotechnology, patent protection is the sine qua non of investment, in view of its costs and uncertainties.

    Chp_constitution1
    More importantly, the patent system promotes disclosure of new inventions, which is the Constitutional purpose of Congress’s power to grant patents in the first place ("To promote the Progress of Science and the useful Arts…").  The debate focuses all too often on the rights bestowed in the patentee without recognizing the countervailing (and much more significant) benefits garnered by the public.  Indeed, so what if most patents are not worth very much to the inventors or their assignees?  Such patents cannot be a drain on the economy since there is little warrant for infringement or litigation over them.  But their disclosures add to the body of knowledge that can support the next generation of tinkerers and inventors who can build upon the earlier work for their inventions.  So long as the system encourages this type of disclosure with these results, it fulfills its Constitutional mandate and should be preserved against those who would irresponsibly advocate abolishing it.

    It can only be evidence of how far we have traveled through the looking-glass in this debate that the article seriously suggests the creation of additional courts of appeal for patent cases.

    Roicon
    Editor’s note: James Bessen, Michael J. Meurer, and Cecil D. Quillen, Jr. are members of the non-profit organization Research on Innovation, which according to the organization’s website was "created to conduct, sponsor and promote research on technological
    innovation and to disseminate the results of this research to a broad
    audience, both in academia and in industry."

  • USPTO Posts Comments on Patent Harmonization

        By Donald Zuhn —

    Uspto_seal
    As we reported
    on May 9, 2007, the United States Patent and Trademark Office (USPTO)
    asked for comments on ten topics related to international patent law
    harmonization.  On Wednesday, the USPTO posted the 48 submissions it received, including comments from the Biotechnology Industry Association (BIO) (here), Intellectual Property Owners Association (IPO) (here and here), Generic Pharmaceutical Association (GPhA) (here), and American Intellectual Property Law Association (AIPLA) (here).

    Biotechnology_industry_organization
    In BIO’s 24-page submission, the biotechnology trade association argues
    that "total and complete harmonization is an unrealistic goal," and
    believes that "[a] more realistic short-term target is a treaty that
    achieves ‘true harmonization’ of those elements of patent systems that
    are necessary to create a streamlined global patent granting system."
    According to BIO, such a treaty would "capture the best elements of the
    U.S., European and Japanese patent systems," and allow "an applicant .
    . . to obtain a patent after a first substantive examination in a major
    examining office (i.e., the USPTO, the EPO or the JPO)."

    With regard to the questions specifically posed in the USPTO’s notice, BIO provided the following comments:

    A.  BIO supports the adoption of a first-to-file system
    provided that such a system incorporates sufficient protections against
    derivation of inventions.

    B.  BIO opposes a treaty requiring the U.S. to exclude subject matter presently eligible to be patented under U.S. law (i.e.,
    plant or animal inventions, human or animal cell lines, process
    inventions related to diagnosis or treatment of humans or animals, or
    any form of chemical compound, e.g., nucleic acids and
    proteins), and opposes an interpretation of the "industrial
    applicability" standard that would require utility in an identified
    "industrial" application or field.

    C.  BIO supports a disclosure requirement consistent with the U.S.
    written description and enablement requirements and opposes the
    inclusion of a best mode requirement.

    D.  BIO supports the minimal U.S. requirements applicable to claiming.

    E.  BIO supports reforming U.S. patent law to recognize a foreign priority date for both priority and prior art purposes (i.e., eliminate the rule established in In re Hilmer).

    F.  BIO supports a treaty provision that confers a prior art effect
    for patents and published patent applications as from the effective
    filing date for both novelty and nonobviousness determinations.

    G.  BIO strongly supports the inclusion of a grace period for prior art determinations that is personal to the applicant (i.e., linked to information emanating from the inventor or applicant).

    H.  BIO supports a definition of prior art as being publicly
    available in the sense of being reasonably and effectively accessible
    to persons of ordinary skill in the art.

    I.  BIO supports a reduction in the number of "loss of right" conditions as compared to U.S. law and practice (e.g., abandonment of the invention or public use or sale of the invention).

    J.  BIO supports a definition of novelty that provides that an
    invention lacks novelty if each element of the invention is disclosed
    in a single item of prior art, and which allows the use of other
    references to interpret the meaning of the prior art reference being
    asserted against an application (e.g., to demonstrate inherent characteristics of subject matter disclosed in the reference).

    K.  BIO supports the use of U.S.-style nonobviousness determinations (i.e., Graham factors) as opposed to the "problem-solution" approach employed in the EPO and JPO.

    L.  BIO supports the more liberal multiple dependent claiming practice followed in the EPO and JPO.

    M.  BIO reserves comment on the issue of claim construction, which BIO believes is not ripe for discussion.

    N.  BIO reserves comment on the issue of the doctrine of equivalents.

    O.  BIO supports conferring on assignees the right to file patent applications owned by those entities.

  • Conference & CLE Calendar

    Calendar_23
    July 16-17, 2007 – Pharma and Biotech Collaborative Agreements Conference (American Conference Institute) – San Francisco, CA***

    September 18-19, 2007 – Pharma/Biotech Patent Boot Camp (American Conference Institute) – San Francisco, IL***

    September 26-27, 2007 – Advanced Forum on Biotech Patents (American Conference Institute) – Boston, MA***

    ***Patent Docs is a media sponsor of this conference or CLE.

  • Daiichi Sankyo Co. v. Apotex, Inc. (Fed. Cir. 2007)

        By Donald Zuhn —

    On Wednesday, the Federal Circuit reversed a District Court judgment that U.S. Patent No. 5,401,741 (the ‘741 patent) was not invalid.  In particular, the Federal Circuit held that the District Court clearly erred in determining the level of one of ordinary skill in the art, and as a result, erred in finding the ‘741 patent valid as nonobvious.

    Daiichi
    Plaintiffs-Appellees Daiichi Sankyo Co., Ltd. and Daiichi Sankyo, Inc. (Daiichi Sankyo) own the ‘741 patent, which relates to a method for treating bacterial ear infections by topically administering the antibiotic ofloxacin into the ear.  Seeking approval to generic ofloxacin ear drops, Defendants-Appellants Apotex, Inc. and Apotex Corp. (Apotex) filed an Abbreviated New Drug Application (ANDA) with the FDA.  In response, Daiichi Sankyo sued Apotex for infringement of the ‘741 patent.

    Apotex_logo
    At trial, Apotex argued that the ‘741 patent was invalid as obvious in view of Ganz, 1986, "Gyrase inhibitor in the local treatment of the chronically infected middle ear following surgery," HNO 34:511-14.  According to Apotex, the Ganz reference taught the use of ear drops containing the gyrase inhibitor ciprofloxacin to treat middle ear infections, and therefore, rendered the use of ofloxacin – also a gyrase inhibitor – obvious.

    In finding the ‘741 patent valid as nonobvious, the District Court first determined the level of ordinary skill in the art – the second of the four Graham factors.  Apotex had argued that one of ordinary skill in the art would be "a person engaged in developing new pharmaceuticals, formulations and treatment methods, or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations."  The District Court, however, concluded that a person of ordinary skill in the art "would have a medical degree, experience treating patients with ear infections, and knowledge of the pharmacology and use of antibiotics," and thus, would be "a pediatrician or general practitioner."  Because the Ganz reference recommended that "[gyrase inhibitors] should be used only in difficult cases and exclusively by the otologist," and because the District Court had concluded that a person of ordinary skill in the art was a pediatrician or general practitioner and not an otologist, the District Court rejected Apotex’ argument that the use of the gyrase inhibitor ofloxacin to topically treat bacterial ear infections was obvious.

    In reversing the District Court’s finding of validity, the Federal Circuit determined that the District Court had clearly erred in determining the level of one of ordinary skill in the art.  The Federal Circuit first observed that the inventors of the ‘741 patent were specialists in drug and ear treatments, and not pediatricians or general practitioners.  The Court also noted that the ‘741 patent described the testing of ofloxacin on animals, and that animal testing was traditionally outside the realm of a pediatrician or general practitioner.  Finally, the Federal Circuit stated that while a pediatrician or general practitioner could prescribe ofloxacin, he or she would not have the training or knowledge to develop the claimed compound.  After determining that the correct level of skill in the art was the one advocated by Apotex, the Federal Circuit concluded that in view of the evidence of record, the ‘741 patent was invalid as obvious as a matter of law.

    Daiichi Sankyo Co. v. Apotex, Inc. (Fed. Cir. 2007)
    Nonprecedential disposition
    Panel: Chief Judge Michel, Senior Circuit Judge Archer, and Circuit Judge Dyk
    Opinion by Senior Circuit Judge Archer

    Additional information regarding this case can be found at the Orange Book Blog.

  • Pharma Sanity Lacks Global Reach

        By Kevin E. Noonan —

    Abbott
    The measure of sanity displayed by Abbott and Brasil last week, when the parties agreed to a pricing scheme that avoided "breaking" Abbott’s patent on its anti-AIDS drug Kaletra® (see "Brasil Prevails in Dispute with Abbott over AIDS Drug Pricing") has not translated to the Eastern hemisphere.  Thailand, which earlier this year announced plans to produce the drug without paying royalties to Abbott, refused to alter its decision even in the face of a more compliant attitude from the drugmaker.

    A different form of Kaletra® (Aluvia®, a heat-stable formulation) is at issue in Thailand; this form is particularly important in Thailand in light of its tropical climate, because the drug does not need to be refrigerated.  The Thai government has demanded that Abbott accept pricing for the drug no greater than 5% over the cost of the generic alternative.  Brasil, in contrast, accepted a 30% reduction in the price of the patented drug, resulting in an annual cost per patient of about $1,000.  Thailand has rejected this same pricing arrangement.  Instead, Thailand will purchase the drug from Matrix Laboratories, an Indian generic manufacturer, at a cost of about $700 per year per patient.

    Sanofiaventis_small
    Thailand is also preparing to purchase a supply of a generic version of the sanofi-aventis heart medicine, Plavix®, at a generic cost that is more than 10-fold lower than the patented drug price.  Although Thailand’s Public Health Minister Mongkol na Songkhla has stated that the government has identified four Indian generic drug companies as a potential source of the drug, the government has not publicly disclosed them.  About five million tablets of the generic drug are expected to be imported into Thailand to meet the needs of heart disease sufferers.

    Thailand is dealing with about 580,000 AIDS sufferers in its population of about 63 million; the government has provided AIDS drugs to about 100,000 of its AIDS patients.  These statistics provide the justification for Thailand invoking the provisions of the Doha Declaration with regard to Kaletra®.  Thailand’s actions have been hailed in many quarters as provoking price reductions for Kaletra® and other drugs in almost 50 other developing countries around the world.  It is important to recognize that this represents only one aspect of global drug pricing economics, no matter how justified Thailand is believed to be in its actions.

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

  • Pharmastem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)

        By Kevin E. Noonan —

    The Federal Circuit invalidated two patents this week on obviousness grounds, overturning a jury verdict that had survived a JMOL motion to the District Court.  Surprising about the decision was that it merely referenced KSR Int’l Co. v. Teleflex Inc. as an affirmation of its own jurisprudence, while arguably ignoring strong evidence below of secondary considerations of non-obviousness that might have dictated a different result under the KSR-reinforced rubrics of Graham v. John Deere Co.  Not surprising is that Judge Newman dissented, once again on the grounds that the majority had contravened both established Federal Circuit and Supreme Court precedent, as well as applying the standards of appellate review improperly.

    The case, PharmaStem Therapeutics, Inc. v. Viacell, Inc., involved hematopoietic stem cells, particularly such cells obtained from umbilical cord blood.  The two patents-in-suit were U.S. Patent No. 5,004,681 ("the ‘681 patent") and U.S. Patent No. 5,192,553 ("the ‘553 patent"), a continuation-in-part of the ‘681 patent; the ‘681 patent was the subject of three re-examinations.  Claim 1 of the ‘681 patent (as amended on re-examination) reads as follows:

    A cryopreserved therapeutic composition comprising viable human neonatal or fetal hematopoietic stem cells derived from the umbilical cord blood or placental blood of a single human collected at the birth of said human, in which said cells are present in an amount sufficient to effect hematopoietic reconstitution of a human adult; and an amount of cryopreservative sufficient for cryopreservation of said cells.

    Claims 13 and 57 of the ‘553 patent read:

    13.  A method for hematopoietic or immune reconstitution of a human comprising:
        (a)  isolating human neonatal or fetal blood components containing hematopoietic stem cells;
        (b)  cryopreserving the blood components;
        (c)  thawing the blood components; and
        (d)  introducing the blood components into a suitable human host,
        such that the hematopoietic stem cells are viable and can proliferate with the host.

    57.  A method for hematopoietic or immune reconstitution of a human comprising introducing into the human a composition comprising human neonatal or fetal hematopoietic stem cells derived from the blood, in which the stem cells have been previously cryopreserved.

    The jury verdict found both patents not invalid (as indefinite, anticipated, or obvious) and infringed, and rejected the Defendants’ inequitable conduct defense and antitrust counterclaims.  The District Court granted the Defendants’ post-trial JMOL motions regarding infringement.  The basis for the reversal with regard to the ‘681 patent was that Plaintiff’s expert witness testimony was incompetent.  Specifically, the District Court found that the testimony was not based on scientific testing of the Defendants’ products but depended on the Defendants’ marketing materials.  Those materials represented that the umbilical cord blood sold by the Defendants contained hematopoietic stem cells in an amount sufficient to re-constitute an adult’s hematopoietic system, a required feature of any product infringing the asserted ‘681 claims.  The District Court held that this reliance could not be the basis for an expert opinion, and in the absence of testing, the expert’s testimony was "well within the jury’s common knowledge, common sense and common experience" and "no more than a lay-person’s interpretation of the defendants’ marketing materials."  This disqualified her testimony as being inadmissible as expert testimony under the Supreme Court’s holding in Daubert v. Merrell Dow Pharm., Inc.  In addition, the District Court found that the weight of the other evidence at trial did not support the conclusion that all single units of cord blood were each sufficient to reconstitute an adult’s hematopoietic system.  Further, PharmaStem had not presented any evidence that any of the Defendants’ cord blood units fulfilled this limitation of the patent claims.  Thus, according to the District Court, there was "no legally sufficient evidentiary basis for a reasonable jury to find that all, or any specific number, of the defendants’ cord blood units infringe the ‘681 patent."

    PharmaStem’s infringement complaint with regard to the ‘553 patent was limited to contributory infringement, since the Defendants merely supplied the cord blood used by physicians in the claimed methods.  The jury’s affirmative verdict of infringement was based on its answers to three "special verdict" questions:  (1) that cryopreserved cord blood has no substantial noninfringing uses; (2) that the Defendants and transplant physicians were acting in concert or working together to complete the process of infringement of the asserted claims of the ‘553 patent; and (3) that the Defendants contributorily infringed "by selling or offering to sell cryopreserved cord blood that was actually used by a third party in the direct infringement" of the asserted claims (special verdict question #5).  Although the District Court found that the jury had sufficient evidence to support its affirmative answers to the first two questions, it found that the Defendants did not sell or offer to sell cord blood.  Instead, the District Court found that the Defendants were bailees to their customers’ cord blood samples, and that they performed the service of storing and maintaining the cord blood under contract, to be returned upon request by their customers.

    Judges Proust and Bryson (writing for the Federal Circuit) affirmed JMOL for both patents, but reversed the District Court’s denial of JMOL of invalidity and found both patents invalid for obviousness.  In affirming the non-infringement decision, the Federal Circuit agreed that the issue with regard to the ‘681 patent depended on whether the cord blood sold (or bailed) by the Defendants contained hematopoietic stem cells "in an amount sufficient to effect hematopoietic reconstitution of a human adult."  The Court held that, although PharmaStem’s strategy of relying on the Defendants’ admissions could, under different circumstances, be sufficient evidence of infringement, here the other facts adduced at trial precluded PharmaStem from carrying its burden in proving infringement.  The Federal Circuit also found unpersuasive PharmaStem’s argument that the Defendants had themselves tested the cord blood samples for hematopoietic stem cell content (so PharmaStem did not need to replicate the determinations), because the testing done by the Defendants did not establish that an adult’s hematopoietic system could be reconstituted using one cord blood unit.  Finally, scientific publications put into evidence by PharmaStem were also held to be insufficient.  Simply put, the Federal Circuit found that the weight of all the evidence did not support PharmaStem’s contention that the Defendants’ cord blood could satisfy the reconstitution limitation of the asserted claims.  It did not help PharmaStem’s case that the Court considered these deficiencies as being the result of an "all or nothing" trial strategy.

    Similarly, the Federal Circuit upheld the District Court’s bailment theory of non-infringement.  The Federal Circuit upheld the District Court’s interpretation of the contributory infringement statute (35 U.S.C. § 271(c)) to require "a sale or an offer of sale of a product; the statute is not satisfied . . . by the provision of a service for compensation."  Here, the Federal Circuit opined that the cord blood remained at all times the property of the families whose infants supplied it, and that the Defendants merely stored and maintained the blood until it was requested under the terms of a contract between the parties.  PharmaStem’s arguments that the Defendants’ provision of this service fell within the ambit of § 271(c) was also not persuasive; according to the Court, such an interpretation was contrary to the language of the statute and its legislative history.

    Turning to the Defendants’ invalidity defenses, the Federal Circuit did not reach the indefiniteness or anticipation issues because it reversed the jury’s non-obviousness determination (and the District Court’s denial of the Defendants’ JMOL motion on the obviousness issue).  The Federal Circuit’s decision was based on its analysis of the prior art, which in its opinion suggested that umbilical cord blood contained hematopoietic stem cells.  Under Third Circuit law (which the Federal Circuit applied here on procedural issues), the Court’s determination was limited to whether there was substantial evidence supporting the jury’s verdict.

    In finding there was not substantial evidence, the Federal Circuit stated that the obviousness standard required a "reason" the skilled worker would make the claimed device or carry out the claimed process, and have a reasonable expectation of success in doing so.  The Court found strong evidence in the prior art that the first prong of this test was satisfied.  As to the second prong, the Federal Circuit was not persuaded by evidence that it was unknown in the art that cord blood contained hematopoietic stem cells.  The Court cited portions (as characterized by Judge Newman’s dissent, by "simply reweigh[ing] selectively extracted evidence") of the art to show that cord blood was known to contain such stem cells.  It appears that the Federal Circuit interpreted the art based on its understanding that the existence of progenitor cells in the blood was evidence for underlying stem cells, although elsewhere in the opinion the Court appears to conflate the two cell types.  The Federal Circuit’s explication of the biological underpinnings suggests that it believed that a production of such progenitor cells was accompanied by persistence (and thus the presence of) stem cells in the blood.  In discounting PharmaStem’s expert testimony, the Court relied upon what it considered contrary statements made by the inventors, and refused to credit the expert’s explanation that the cited art used the term "stem cell" inaccurately.  In particular, the Federal Circuit cited a portion of the specification:

    A human hematopoietic colony-forming cell with the ability to generate progenitors for secondary colonies has been identified in human umbilical cord blood.  In addition, hematopoietic stem cells have been demonstrated in human umbilical cord blood, by colony formation, to occur at a much higher level than that found in the adult.  The presence of circulating hematopoietic progenitor cells in human fetal blood has also been shown.  Human fetal and neonatal blood has been reported to contain megakaryocyte and burst erythroblast progenitors with increased numbers of erythroid progenitors in human cord blood or fetal liver relative to adult blood.

    The Federal Circuit considered these and other statements to be admissions that were binding on the Patentees, and established that the art recognized that cord blood contained hematopoietic stem cells.  Thus, the Court believed that the skilled worker would have had a reasonable expectation of success in using cord blood to reconstitute an animal’s hematopoietic system.  In response to the argument that the inventors had proven something suspected but not known in the art, and thus had shown that cord blood had utility in reconstituting an animal’s hematopoietic system, the Court said:

    [T]he inventors merely used routine research methods to prove what was already believed to be the case.  Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention.  See KSR, 127 S. Ct. at 1732 ("Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress . . . ."); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1367-69 (Fed. Cir. 2007) (simply because the formation and properties of a new compound must be verified through testing does not mean that the compound satisfies the test for patentability "since the expectation of success need only be reasonable, not absolute"); In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) ("Obviousness does not require absolute predictability.").  Good science and useful contributions do not necessarily result in patentability.

    Finally, the Federal Circuit was not persuaded by the secondary considerations proffered by PharmaStem, including commercial success, long-felt need, and recognition in the art, including testimonials from the Defendants, nor the fact that the six Defendants were the exception to the rest of the industry, who had licensed the patents.

    In her dissent, Judge Newman objected to the Federal Circuit’s failure to rule on the anticipation and indefiniteness issues, and disagreed with the Court’s determination that the patents were obvious.  For Judge Newman, the evidence of secondary considerations was unrebutted, and was sufficient to rebut the interpretation of the art by the Defendants and the Court majority.  She would also have overturned the District Court’s grant of the Defendants’ JMOL motion of infringement as to both patents.

    Pharmastem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)
    Panel: Circuit Judges Newman, Bryson, and Prost
    Opinion by Circuit Judge Bryson; dissenting opinion by Circuit Judge Newman

    Additional information regarding this case can be found at Patently-O.

  • USPTO News: JPO to Join USPTO and EPO in Priority Document Exchange Program

        By Christopher P. Singer —

    Uspto_seal
    In a July 10, 2007 announcement, the USPTO announced that the Japan Patent Office (JPO) will become the second foreign office to participate in the priority document exchange program, as of July 28, 2007.  As previously reported on Patent Docs, this program allows for the exchange of priority documents between the USPTO and the European and Japan Patent Offices in order to perfect a priority claim based on a foreign patent application, at no cost to the applicant.  For U.S. applications filed on or after July 28, 2007 under 35 U.S.C. § 111(a), the USPTO will automatically attempt to retrieve an electronic copy of any Japanese priority document, without requiring a request from the applicant.  For U.S. applications filed before July 28, 2007, applicants will need to file the appropriate form (PTO/SB/38) requesting that the USPTO retrieve a copy of the JP priority document.  Similarly, the USPTO will send an electronic copy of a U.S. priority document to the JPO upon making the proper request that permits access to the application by a foreign patent office (PTO/SB/39).  Nevertheless, as is the case in the EPO, the JPO requires a copy of a priority document within 16 months of the priority date, and in light of the fact that U.S. applications do not publish until 18 months after the priority date, applicants will often be required to file the PTO/SB/39 form in order for the USPTO to transmit a copy of the priority document to either of these foreign Offices.

  • Ventana’s Board Urges Stockholders Not to Tender Their Shares; Roche Responds

        By Donald Zuhn —

    As we reported two weeks ago, Roche commenced a cash tender offer on June 27, 2007 to acquire all outstanding shares of Ventana Medical Systems, Inc. common stock.

    Ventana’s Board of Directors announced today (July 11, 2007) that it had reviewed Roche’s "unsolicited tender offer . . . and unanimously determined that the $75 per share cash offer is inadequate in multiple respects and contrary to the best interests of Ventana’s stockholders."  As a result, Ventana’s Board recommended that its "stockholders not tender any of their shares to Roche."

    In a letter to Roche Chairman and CEO Franz Humer, Ventana Chairman of the Board Jack Shuler wrote that "[s]imply put, we believe that Roche is trying to capture value for its stockholders that rightly belongs to Ventana’s stockholders."  In an eight-page press release, Ventana set forth nine reasons cited in its Schedule 14D-9 response for recommending that its stockholders reject the Roche offer.

    In response to Ventana’s announcement, Roche issued a statement noting that "Ventana’s Board of Directors remains unwilling to discuss Roche’s all-cash offer for Ventana," and maintaining that "its offer of $75 per share in cash is a full and fair offer."  According to its release, Roche remains "committed to bringing [the] companies together and continue[s] to prefer to commence discussions with Ventana to effect a negotiated transaction."  In a letter to Mr. Schuler, Mr. Humer wrote that Roche preferred to "enter into a negotiated transaction with Ventana," but "[i]f Ventana refuses to negotiate, [would] continue to pursue a transaction unilaterally."

    For additional information regarding this topic, please see:

  • New Source for Perusing NIH Technologies

        By Jason Derry —

    National_institutes_of_health
    The National Institutes of Health (NIH) has announced the creation of a new resource to help promote NIH licensed technologies and technologies supported by funds from the NIH Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.  The resource is Web-based and referred to as the NIH Pipeline to Partnerships (P2P).  According to the NIH, the site provides "virtual space for NIH licensees and NIH SBIR/STTR awardees to showcase technology and product development for an audience of potential strategic partners and investors."  The NIH hopes this resource will enable its technologies and those technologies for which it provided funding to move along through the development stages and eventually be commercialized.

    Jason Derry, Ph.D., who graduated with honors from DePaul University
    College of Law, is a molecular biologist and founding author of Patent Docs.