April 2005

PATENT REFORM: House IP Subcommittee Prepares Sweeping Patent Law Changes

Patent, Patent Legislation

The attached legislative proposal was prepared by the House Subcommittee on Intellectual Property chaired by Congressman Lamar Smith (R Tex).  Although the proposal is merely a discussion draft at this point, it is expected that a parallel Bill will be introduced within the next few days.  The Senate’s newly formed Subcommittee on Intellectual Property is scheduled to hold a hearing on the patent system April [25th].  It is quite possible that this proposal will serve as an agenda for the Senate hearings.

The proposed legislation includes changes to:

Over the past year, the AIPLA, IPO, Microsoft, and others have all been beating the patent reform drum — each with a separate agenda.  This proposal appears to be an amalgamation of all the proposals — with enough controversial points to get most everyone up in arms. 

Over the next few weeks, Marcus Thymian, Jennifer Swartz, and I will discuss the various sections of the proposal in a series of posts.

Case Questions CAFC’s Obviousness Jurisprudence

Patent, Patent Cases 2005

PatentlyOImage025

KSR International v. Teleflex (On Petition for Certiorari)

In January 2005, the CAFC decided Teleflex v. KSR — holding that when combining two or more references in an obviousness finding, there must be a suggestion or motivation to combine the teachings.  This “teaching-suggestion-motivation test” has been a stalwart of Federal Circuit obviousness jurisprudence for twenty years.  During that time, the Supreme Court has not heard a single obviousness case.

Now, KSR has petitioned the Supreme Court for a writ of certiorari.  In its petition, the company makes a couple of interesting points that may push the High Court to accept the case:

  • In Anderson’s-Black Rock (1969) and Sakraida (1976), the Supreme Court held that “a combination which only unites old elements with no change in their respective functions” is precluded from patentability under 103(a).  Under the Sakraida standard, which remains law, the Teleflex patent is arguably obvious.
  • With the emergence of Holmes Group, circuit splits will become more of a possibility in patent law.  On this issue, the Federal Circuit has acknowledged the existence of a circuit split between itself and the Fifth Circuit.  KSR points out that the split extends to other circuits as well.  The other circuits have followed the Sakraisa standard while the CAFC sticks to its requirement of an explicit motivation to combine.

A consortium of five major corporations, including Microsoft, Cisco, and Hallmark have filed as amicus supporting the petition.  Their brief argues that the current structured test for obviousness is too easy a hurdle for patentees and that the formalities of the test undermines courts ability to truly determine whether an invention is obvious to one skilled in the art.

In addition, Teleflex has filed its opposition to the petition — arguing that (1) obviousness is well settled law and need not be revisited; (2) the CAFC’s test is consistent with Graham; and perhaps most importantly (3) this case does not hinge on the obviousness issue.

(more…)

Eli Lilly wins patent ruling on Zyprexa

Patent, ,

PatentlyOImage024Eli Lilly v. Zenith Goldline (N.D. Ill. 2005).

In a much anticipated decision, Judge Richard Young of the Southern District of Indiana has ruled that Eli Lilly’s patent covering the drug Zyprexa is valid, enforceable and infringed.  The patent is not scheduled to expire until 2011.

The well-written 224 page opinion reads like a biography of Patent No. 5,229,382, the Zyprexa patent.  In particular, the court details the prosecution history of the patent and provides a full analysis of the prior art references that the generic manufacturers cited against the patent.  In the end, court determined that the generics could not prove invalidity or unenforceability:  

Defendants have failed to prove by clear and convincing evidence that claims 1, 2, 3, 7, 8, and 15 of the ’382 patent are invalid as anticipated under 35 U.S.C. § 102, as obvious under 35 U.S.C. § 103, under the double patenting doctrine, or as barred by prior public use under 35 U.S.C. § 102. Defendants have further failed to prove by clear and convincing evidence that the ’382 patent is unenforceable for inequitable conduct.

The defendant generic manufacturers had stipulated that if the ’382 patent is valid and enforceable, then their actions constitute infringement. Thus, the court found that their ANDA submissions constituted an act of infringement. 

TechnoLawyer

Patent

For years, the TechnoLawyer community has provided insightful e-newsletters with interesting and helpful content.  Each week, I receive the TechnoLawyer intellectual property newsletter, known as “IP Memes,” that is written by intellectual property attorney Stephen Nipper.  IP Memes is continually filled with important discussions that were often missed by mainstream news organizations.

Now, TechnoLawyer has started its own blog: http://blog.technolawyer.com/.

Links:

 

 

Statements by Patent Examiner to FBI Deemed Frivolous and Not Protected Whistleblowing Activity

Patent, Patent Cases 2005

Jack v. Department of Commerce (Fed. Cir. 2005) (05–3023) (NONPRECEDENTIAL).

Todd Jack is an Examiner at the US Patent Office (PTO).  In 2000 Mr. Jack alleged to the FBI that he had been approached by employees of the PTO who “proposed that he join them in a scheme to sell patents and perform patent searches for persons outside the PTO for cash payments.”  Mr. Jack made several other allegations regarding identity theft and bribe-taking by PTO employees and he brought his case to several agencies, including a congressional office, the Secret Service, Department of Commerce security officers, and the Office of Inspector General.

Later, in 2002, Mr. Jack’s supervisor gave him a written and oral warning that his performance was “unacceptable.”  Another supervisor proposed that Mr. Jack be removed for “(1) Harassing and threatening behavior exhibited toward your supervisor and co-workers; (2) Making false statements concerning another employee; (3) Creating a hostile work environment; and (4) Inappropriate behavior in the workplace.” 

In January 2003, the PTO sustained all the charges against Mr. Jack, but reduced the proposed removal to a 120–day suspension.

Mr. Jack filed an appeal at the PTO Board.  The administrative judge assigned to the appeal held that the Board lacked jurisdiction and that Mr. Jack had failed to make a non-frivolous allegation that would be protected whistle-blowing activity.

On appeal again, the Court of Appeals for the Federal Circuit (CAFC) did not touch the issue of “whistle-blowing activity.”  Rather, the appellate panel found that Mr. Jack’s claims regarding improper procedure at the Board were without merit, and thus, upheld the Board’s decision denying his appeal.

File Attachment: Jack v. Commerce (21 KB)

How (not) to file a Motion for Summary Judgment

Patent

Tel-Lock v. Jasco (N.D. Ill. 2005).

Telephone Jack LockIn her most recent patent opinion, Northern District of Illinois Judge Joan Lefkow took both parties to task for their failure to comply with “the straightforward Local Rules of the U.S. District Court for the Northern District of Illinois.”

Before determining whether a genuine issue of material fact exists with regard to either Tel-Lock’s claims or Jasco’s counterclaims, the court must wade through the parties’ Local Rule 56.1 filings. [Motion for Summary Judgment]. It is apparent to the court that both parties, Tel-Lock in particular, require instruction.

Judge Lefkow proceeded to detail the improper legal conclusions submitted, the failure to cite to supporting evidence, and the submission of affidavits filled with conclusory allegations.

In the end, the court granted partial summary judgment to the defendant, Jasco on the issue of price erosion, but denied its invalidity motion. In addition, the Court granted Tel-Lock’s motion to dismiss Jasco’s trademark counterclaim.

Links:

Merck KGaA v. Integra: Supreme Court Set to Hear FDA Safe Harbor Case

Patent

On April 20, 2005, the Supreme Court will hear Merck KGaA v. Integra to determine boundaries of the statutory safe harbor created by 35 USC 271(e)(1).  The safe harbor immunizes would-be infringing activity when the activity is done while preparing an FDA application for drug approval.  Attorneys for both Merck and Integra as well as for the U.S. Government are expected to present oral arguments.

Merck KGaA has now filed its reply brief that focuses on picking-apart Integra’s answer.  In particular, Merck begins its argument with the statement that “everyone agrees” that “preclinical experiments reasonably related to an IND application are immune from patent infringement claims as clinical trials.”

Importantly, Merck challenged Integra’s procedural argument that the is “no present controversy.”  This issue is one that could allow the High Court to completely avoid deciding the important statutory issues.

The SCOTUS Blog provides an excellent preview of the case here.

Briefs on the Merits:

  • In Support of Merck:
  • In Support of Neither Party:
  • In Support of Integra:

    •  

    CAFC: District Court Improperly Dismissed Infringement Suit for Failure to Serve Defendant

    Patent, Patent Cases 2005

    PatentlyOImage020Bowling v. Hasbro (Fed. Cir. 2005) (04–1364).

    Michael Bowling’s infringement case against Hasbro was dismissed with prejudice by th Arizona district court after Bowling failed to properly serve Hasbro, basing its decision on FRCP 4(m) and 41(b).  The district court then denied Bowling’s motion for reconsideration.

    On appeal, the CAFC applied 9th Circuit law and reversed.

    The CAFC first determined that FRCP 4(m) does not permit dismissal with prejudice:

    Thus, Bowling is correct that the district court’s dismissal with prejudice could not be based on Rule 4(m).

    Regarding FRCP 41(b), the CAFC found that the 9th Circuit “places strong emphasis on warning and consideration of less drastic alternatives.”  Because the district court had only warned as to a Rule 4(m) dismissal, the appellate court determined that the warnings were insufficient to warrant a dismissal with prejudice.

    As an aside, do not attempt to obtain attorney’s fees by citing a non-existent rule:

    Hasbro argues that it is entitled to attorney’s fees and expenses incurred in this appeal under Federal Circuit Rule 47.7(1), even though it chose not to submit any substantive argument in support of the district court’s dismissal. Because no such rule exists, we assume that Hasbro is asserting an entitlement to attorney’s fees under Federal Circuit Rule 47.7(a)(1). In view of our disposition of this case, we see no reason to award Hasbro its attorney’s fees and expenses for this appeal. (Emphasis added).

    Links:

    It is proper to limit the scope of the claims according to the specification

    Patent,

    PatentlyOImage022Rhodia Chimie v. PPG Industries Inc., (Fed. Cir. 2005)

    By Baltazar Gomez, Ph.D.

    Rhodia is an international chemical company and the assignee of U.S. Pat. No. 6,013,234 (“the ‘234 patent”). The patent discloses and claims certain essentially spheroidal precipitated silica particulates. Rhodia markets “Micropearl” which is a silica particulate covered by the patent. PPG also makes three silica products, namely, Hi-Sil SC60M, SC72 and SC72C. Rhodia alleges that these products infringe claim 1 of the ‘234 patent.

    The district court granted summary judgment for noninfringement in favor of PPG. On appeal, Rhodia argued that the district court erred in interpreting claim 1. The CAFC, however, affirmed the district court’s construction.

    Claim 1 of the ‘234 patent partly reads as follows: Dry, dust-free and non-dusting, solid and homogeneous atomized precipitated silica particulates essentially spheroidal in geometrical configuration… (emphasis added)

    In addition, the specification included examples tested both for flowability and dusting properties. Flowablity tests were performed by a pour test which compared the flowability of Micropearl with the prior art. The dusting tests were measured by the German DIN 53 583 standard (the “DIN test”).

    During the district court’s claim construction hearing, PPG asserted that the phrase “dust-free and non-dusting” should be interpreted literally to mean “no dust cloud whatsoever.” Conversely, Rhodia argued that such a meaning was improper in view of the results of the pour test that showed production of some dust. Accordingly, Rhodia advocated construing “dust-free and non-dusting” to mean “very low dust.”

    The district court was concerned, however, that Rhodia’s proposed definition of the phrase was relative and that such a definition would not meet the statutory requirement that the claims particularly point out and distinctly claim the invention. Thus, to resolve the perceived ambiguity of the phrase, the district court adopted a construction based upon the only meaningful guidance provided in the patent, namely the DIN test.

    On appeal, Rhodia argued that the DIN test was not the only means by which to assess the amount of dust produced by the invention. Rhodia asserted that the pour test could also be used to determine the level of dustiness, and therefore, it is inappropriate for the district court to limit the phrase “dust-free and non-dusting” to the DIN test. Further, Rhodia cited statements made during prosecution of the ‘234 patent explaining that the pour test could be used to show the non-dusting and free-flowing properties of the ‘234 patent.

    In affirming the district court’s construing of “dust-free and non-dusting”, CAFC noted that although the pour test may also provide evidence of dustiness, the results of the pour tests presented in the ‘234 patent were only identified as evidence of the products’ flowability.  The CAFC further noted that there is no language in either the claims or the written description that taught the application of the pour test to determine the level of dustiness.  Finally, CAFC stated that Rhodia’s statements made during prosecution cannot serve to fill such a gap.  Thus, the CAFC concluded that the district court did not erred in limiting the scope of the claims by defining the phrase “dust-free and non-dusting” to the only disclosure in the patent.

    Note: Dr. Baltazar Gomez is a scientific advisor at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. Dr. Gomez obtained his PhD in biochemistry from the University of Texas and researched retrovirology as a PostDoc at Cornell University.

    File Attachment: Chimie v. PPG.pdf (98 KB)

    Appeals Court Dismisses Apotex Case Against Pfizer’s Quinapril Patent

    Patent

    QuinaprilApotex v. Pfizer (Fed. Cir. 2005) (NONPRECEDENTIAL)

    Apotex filed an ANDA to begin manufacturing a generic version of Pfizer’s patented drug quinapril.  After Pfizer refused to file an infringement suit, Apotex filed a declaratory judgment action — hoping to prove that the patent was invalid. 

    At the district court level, this case fell in line with the recent CAFC decision Pfizer v. Teva holding that an ANDA filing does not, by itself, create a reasonable apprehension of suit. In dissent in Teva, Judge Mayer argued that the statute does provide that an ANDA filing constitutes an act of infringement sufficient to trigger a justiciable controversy.  As it turns out, Judge Mayer was also a panel member for the Apotex v. Pfizer appeal, along with Judges Plager and Gajarsa.

    Less than one week before oral argument, and after learning that Judge Mayer would be a panel member, Pfizer covenanted not to sue Apotex for infringement of U.S. Patent No. 4,743,450.  In their decision, the Appellate Panel unanimously found that the covenant not to sue was determinative:

    A covenant not to sue, such as that provided by Pfizer, moots an action for declaratory judgment. . . . As a result, the judgment and opinion of the district court are vacated and the case is remanded with instructions to dismiss for lack of jurisdiction.

    During oral arguments, the Judges were clearly displeased with Pfizer’s litigation strategy.  Although Pfizer won the day, the court did award costs to Apotex.

    Links:

    CAFC: District Court Failed to Construe Terms in Sufficient Detail for Appellate Review

    Patent, Patent Cases 2005

    Java Accelerator

    Nazomi Communications v. ARM Holdings (Fed. Cir. 2005)

    In a dispute over a patented “Java hardware accelerator” for translating Java bytecode into native instructions for a CPU, the district court construed the claim term “instruction” and found that ARM’s accused device did not infringe.

    On appeal, the Federal Circuit found that the lower court had not been detailed enough in its claim construction ruling:

    This court’s review of a district court’s claim construction, albeit without deference, nonetheless is not an independent analysis in the first instance. Moreover, in order to perform such a review, this court must be furnished "sufficient findings and reasoning to permit meaningful appellate scrutiny." Gechter v. Davidson, 116 F.3d 1454, 1458 (Fed. Cir. 1997). This requirement for sufficient reasoning applies with equal force to issues of law, such as claim construction, and issues of fact, such as infringement. Id.

    This opinion was written by Judge Rader and the panel members include Chief Judge Michel and Judge Proust.  Harold Wegner has noted, and I tend to agree, that this opinion appears to be written as a foreshadow of where Rader would take the Phillips decision — a decision that not expected until late this summer.

    Links:

    SmithKline Beecham v. Apotex part VI

    Patent, Patent Cases 2005,

    PatentlyOImage017In the CAFC’s April 8 decision of SmithKline Beecham v. Apotex, the en banc panel vacated the original appellate court’s opinion relating to the experimental use exception to the public use bar of 102(b). The lower court had, somewhat controversially, found that experimental use may only be used to negate a 102(b) public use if the purpose of the experimental use was to assist in designing or testing of a claimed feature. Thus, because the “clinical trials tested only the safety and efficacy of PHC hemihydrate as an anti-depressant,” the original appellate panel found that those trials were not an experimental use of the chemical compound as claimed in claim 1.

    Rather than offering any opinion, the CAFC en banc decision simply vacated the court’s decision.  At the same time that the en banc order was released, the three-member appellate panel released their rewritten opinion that avoided the experimental use issue entirely by finding an alternative grounds for finding the patent invalid.  Specifically, the court (J. Rader) found that the patent was “inherently anticipated.”

    What makes the case even more odd is that, Judge Newman’s dissent from the order declining to hear the case en banc was essentially a written as a dissent from the new Rader decision.  Judge Newman criticized the new opinion’s expansion of the doctrine of inherent anticipation, arguing that the “breadth of the panel’s theory of inherent anticipation contravenes long-established precedent.”  According to the dissent, if a compound’s existence “is not reasonably known to persons of skill in the field, its later discovery cannot be retrospectively ‘inherently anticipated.’”

     According to the new decision, however, inherent anticipation does not require a person of ordinary skill in the art to recognize the inherent disclosure in the prior art at the time the prior art is created.  Thus, it appears that a defendant, in order to invalidate a patent, must simply show that, more likely than not, a natural result flowing from an operation taught in the prior art would result in the claimed product.

    In this case, the recreated panel found that the prior art was sufficient because it disclosed the manufacture of PHC anhydrate that naturally results in the production of the claimed compound (PHC hemihydrate).  However, the court stated that a mere possibility of inherency is not sufficient for anticipation. (Citing Schering Corp.).

    In concurrence, Judge Gajarsa found that the manufacture of PHC hemihydrate could be “a natural physical process” occurring “under normal climactic conditions and with no human intervention,” and thus found that it was an unpatentable process of nature.

    In short, patent claims drawn broadly enough to encompass products that spread, appear, and “reproduce” through natural processes cover subject matter unpatentable under Section 101–and are therefore invalid.

    Gajarsa’s concurrence is a foreshadow to the next few years where patentable subject matter will become a controversial area once again.

    Links:

    Federal Circuit Makes En Banc Decision in Paxil Case: Patent Inherently Anticipated

    Patent, Patent Cases 2005, ,

    SmithKline Beecham Corp. v. Apotex Corp. (Fed. Cir. 2005) (en banc order)

    Paxil(R) is a blockbuster drug sold by SmithKline Beecham (SKB).  SKB’s patent covering the drug was initially invalidated in an opinion by 7th Circuit Judge Richard A. Posner who sat by designation as a district court judge.  On appeal, a Federal Circuit panel (J. Rader) rejected almost all of Judge Posner’s reasoning, but affirmed the invalidation decision on other grounds. 

    Now, the CAFC issued an en banc decision to vacate the panel’s original decision with regard to the issue of experimental use, and the panel (J. Rader) has issued its new decision.

    This case involves involved PHC anhydrates (without water) and PHC hemihydrates (some water). In the 70’s PHC anhydrates were invented in the UK. In 1984, SKB invented PHC hemihydrates and eventually patented a PHC hemihydrate compound. (U.S. Patent No. 4,721,723).  In 1998, Apotex filed an ANDA to market a prior art PHC anhydrate.  The question of experimental use arises because SKB performed clinical trials that occurred more than one year prior to filing of the patent application.  Normally, a public use of a patented invention more than a year before filing invalidates the patent under 35 U.S.C. §102(b).  However SKB has argued that the clinical trials were a form of experimental use. 

    In its new decision, the CAFC majority simply avoided the issue of experimental public use in totality.  Rather, they found alternative grounds to invalidate the patent, holding that the asserted claims “invalid for inherent anticipation by the ’196 patent under § 102(a).”

    Judge Posner had rejected this argument because Apotex “did not prove by clear and convincing evidence that it was impossible to make pure PHC anhydrate in the United States before the critical date.”  The appellate panel, however, found that Judge Posner erred by requiring Apotex to meet this standard of proof, “which is too exacting.”

    Apotex did not need to prove that it was impossible to make PHC anhydrate in the United States that contained no PHC hemihydrate, but merely that “the disclosure [of the prior art] is sufficient to show that the natural result flowing from the operation as taught [in the prior art] would result in” the claimed product.

    Links:

    Children Rejoice — Peanut Butter and Jelly Patent Rejected on Appeal

    Patent

    PatentlyOImage012In what may be rival as the swiftest justice in the history of the Court of Appeals for the Federal Circuit.  On April 8, only two days after hearing oral arguments, the CAFC rejected Smuckers appeal.  The case, in re Kretchman, was widely covered media and involved Smuckers attempt to obtain a broad patent on its Uncrustables(TM).

    Rather than issuing an opinion, the court issued a per curium Rule 36 decision without opinion.  Generally Rule 36 decisions are reserved for cases that are so clearly on one side of standing precedent that a written opinion is deemed unnecessary. 

    Link:

    CAFC: Claims should be interpreted according to the specification and the pertinent art

    Patent, Patent Cases 2005

    PatentlyOImage016

    Nellcor Puritan Bennett, Inc. v. Masimo Corp. (Fed. Cir. 2005)

    by Baltazar Gomez

    Appellant Nellcor owns U.S. Patent No. 4,934,372 (“the ‘372 patent”), which covers a pulse oximeter and method for using signals from red and infrared light, and processing the signals to measure blood oxygen saturation noninvasively. Appellee Masimo also makes pulse oximeters of the same type as Nellcor.

    Nellcor filed suit in the U. S. District Court for the Central District of California alleging that Masimo products infringed the ‘372 patent. The district court granted summary judgment of noninfringement. On appeal, CAFC vacated and remanded for further proceeding because the district court erred in interpreting the claims.

    Claim 1 of the ‘372 patent covers a method for detecting, digitizing, and processing the signals, separating much of the aperiodic noise from the signal, and calculating the oxygen saturation from the processed signal. Claim 1 describes the processing and separating step as follows:

    processing the time-measure collectively to determine a composite waveform having a relative maximum and minimum amplitude corresponding to a composite periodic waveform of the periodic information in the time-measure so that the aperiodic information present in the time-measure is attenuated and filtered from the composite; (emphasis added)

    The district court construed the phrase “attenuated and filtered” to mean “reduced and removed,” and concluded that Masimo did not infringe the ‘372 patent.

    On appeal, Nellcor argued that the district court erred by construing “filtered” to mean removal rather than simply reduction. In determining the meaning of the phrase “attenuated and filtered,” CAFC examined the meaning the patentee used in the specification of the ‘372 patent. The ‘372 patent describes the relative reduction of the impact of the aperiodic noise by the small relative weight assigned to it that results in it being “quickly and effectively attenuated, and thus filtered out.” The ‘372 patent further describes that the claimed phrase “attenuated and filtered from the composite” is used to refer to “effective removal” of data, rather than the absolute removal of unwanted data. Further, CAFC also looked at the meaning of “filter” in the IEEE standard dictionary which defines “filter” as separation of data, signals, or material in accordance with specified criteria and elimination of certain portions of a signal. The CAFC agreed that the definition from the IEEE dictionary was consistent with the meaning given in the specification of the ‘372 patent. Thus, the CAFC concluded that the district court misinterpreted the claims of the ‘372 patent because the phrase “attenuated and filtered from the composite” means “reduced in comparison to the desired information.”

    Vacated and remanded to evaluate whether Masimo infringes based on the new claim construction

    Note: Dr. Baltazar Gomez is a scientific advisor at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago. Dr. Gomez obtained his PhD in biochemistry from the University of Texas and researched retrovirology as a PostDoc at Cornell University.

    Links:

    Federal Circuit Judge Admits that Family Member is Infringing PBJ Claims

    Inventors, Patent

    PB&JIP Law Bulletin has a nice follow-up article on Smuckers’ Peanut Butter & Jelly patent appeal at the Federal Circuit.  According to their report, the judges on the panel were somewhat hostile to the applicant:

    Judge Arthur Gajarsa noted that his wife often squeezes together the sides of their child’s peanut butter and jelly sandwiches to keep the filling from oozing out. “I’m afraid she might be infringing on your patent!” he said.

    Smuckers is appealing the USPTO’s rejection of its patent application on its crustless sandwich making process.  Smuckers already holds one patent on the technology, but is hoping to capture a broader claim-set with this appeal.

    A decision is expected within about four months.

    Links:

    Re-announcement: Patently-O Patent Law Blog Daily Newsletter

    Patent

    PatentlyOImage014Several months ago, I implemented an e-mail newsletter to provide updates to the Patently-O patent law blog.  Like the blog, the newsletter is free.  List members receive a daily e-mail (usually between 1 and 4 a.m. EST) that contains any new articles from the previous 24 hours.  By all accounts, the newsletter is a smashing success — one reader recently wrote in that she loves reading Patently-O every morning.  “I don’t drink coffee,” she writes, “so you are my caffeine kick.”

    I often include images and pdf files on the blog.  However, to save everyone’s bandwidth the e-mailer only contains a snippet of the text of each post.  HTML links are provided for readers to click-through to the full version of the articles.

    PatentlyOImage015If you have not yet signed up, why not give it a try today? If you decide that you do not like getting the e-mail, you can unsubscribe quite easily.  Each daily e-mail includes an “unsubscribe” link.  All that you have to do is click on the link and your subscription will be canceled.

    In the upper right corner of the site, there is a newsletter subscription box, add your e-mail address and click "subscribe" to sign up for the Patently-O Daily Newsletter.

    — Dennis Crouch

    ps. Most new Patently-O readers arrive via word-of-mouth referrals.  I have no marketing budget and instead of marketing the blog, I would rather spend my time providing daily posts that are both useful and enjoyable.  If you enjoy the blog, chances are that your colleagues and associates would as well. . . .

    What Does it Take to Become a Patent Attorney?

    Conference or CLE, Patent

    The Practicing Law Institute is hosting a free audio webcast IP Career Series directed to young lawyers, law students, and people thinking about law school.  Their next audio briefing is titled “So You Want to Be a Patent Lawyer…," and will be held on April 18th from 1:00-2:00 p.m. EST.  John White (who helped me learn patent law) and Katharine Patterson will present topics that include:

    • What does it take to become a patent attorney?
    • What does it mean to say you’re a patent attorney?
    • What is life like as a patent attorney?

    In answering the general questions, White & Patterson expect to delve into how to decide between a prosecution or a litigation career and other sub-topics such as: The distinction between patent agents and patent attorneys; Hot undergraduate technical degrees; Whether and when a PhD is important; Geographical areas; and how to find a firm that wants to hire you.

    Registration info:

    Antitrust: Court Should Not Consider Potential Patent Validity in Sherman Act Analysis

    Patent

    PatentlyOImage013In re Ciprofloxacin Hydrochloride Antitrust Litigation (E.D.N.Y. March 31, 2005)

    Bayer produces Cipro® (ciprofloxacin hydrochloride) and is assignee of U.S. Patent No. 4,670,444, which claims the active ingredient and its generic equivalents.

    Hoping to produce a generic version, Barr Labs filed an ANDA requesting permission to produce the drug before the expiration of the patent — arguing that the patent was invalid and unenforceable. (Paragraph IV certification). Bayer then sued Barr for infringement.  The two companies eventually settled.  Under the settlement agreement Bayer paid Barr $398 million and Barr agreed to amend its ANDA to a Paragraph III certification, which would permit it to market the drug only after the patent expires.  The settlement agreement included an “out” for Barr in the case that the patent was subsequently declared invalid or unenforceable.

    In the wake of the settlement, a class of buyers sued Bayer and Barr for antitrust violations under the Sherman Act, arguing that the exclusion-payment scheme is a form of anti-competitive conduct falling under Section 1 of the Act using a rule of reason analysis.  The district court, however, sided with Bayer, finding that there was no impermissible anticompetitive effect because the agreement did not extend beyond the “zone of exclusion” of the patent. 

    Here, plaintiffs have failed to demonstrate anticompetitive effects in the market for ciprofloxacin because, although the Agreements undoubtedly restrained competition, they did not do so beyond the scope of the claims of the ‘444 Patent. The ‘444 Patent allows a zone of exclusion within the bounds of its claims.

    Further, the court held that the “potential invalidity of the claims” could not be used to diminish the protection that the patent offers against Sherman Act claims.

    This result is compelled by the presumption of validity Congress accorded patents and the destabilizing effect on patent law that a contrary decision would work. Any readjustment of the competing interests affected by exclusion payments is a matter better addressed by Congress than the courts.

    Because the plaintiffs were unable to prove the first element in the rule of reason analysis (anticompetitive effect), defendants cannot be liable for the alleged antitrust violations.

    Calvert Crary, a litigation analyst who writes the highly informative LitigationNotes sees this decision as falling in line with the March 8, 2005 11th Circuit decision in Schering-Plough v. FTC, but predicts that these decisions may result in a complete undermining of Hatch-Waxman.

    [T]hese decisions, if broadly adopted, will decimate the statutory mechanisms of the Hatch-Waxman Act that remove barriers to price competition arising from invalid or inapplicable drug patents. (From Crary’s report on Kos Pharma v. Barr Labs).

    < ?xml:namespace prefix ="" o />Mark Lemley is a law professor at Stanford, but he has also been quite involved with a number of patent appeals over the past several years.  In an e-mail, Professor Lemley argues that the Cipro court is “entirely wrong-headed” in this case.  In his view, this decision essentially creates a rule that allows obvious cartels regardless of the strength of the patent.

    [The court] cites the 6th Circuit and [Schering-Plough v. FTC] for the proposition that we don’t want to enquire into patent validity in an antitrust case.  That’s true enough.  But those courts found the exclusion payment illegal without having to inquire into patent validity.  By rejecting the per se approach, and also rejecting any inquiry into the merits, the court has essentially created a rule of per se legality for a pretty obvious cartel.  No matter how weak the patent claim is, or how obviously the payment is a means of artificially maintaining a monopoly, under the court’s reasoning it will be permissible.  This is an abdication of antitrust responsibility.

    In a recent paper, Lemley, along with Professors Herbert Hovenkamp and Mark Janis argue that “exclusion payments that exceed litigation costs should be deemed illegal per se.”  According to their analysis, there is “no legitimate reason for such payments, and the most likely reason . . . is anticompetitive.”  The three professors book, entitled IP and Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law is available at Amazon.com.

     

     

    Links:

    Federal Circuit to Decide Patentability of Crustless Sandwich

    Patent

    PatentlyOImage012On April 6 at 2:00 pm, Judges Clevenger, Gajarsa & Prost will hear in re Kretchman (Case No. 04–1448) that involves peanut butter and jelly sandwich technology.  Smuckers has already received one patent on its highly profitable “Uncrustables,” and is now appealing a patent office rejection of a second, broader set of claims. Adam Jaffe was quoted in today’s Wall Street Journal poo-pooing the effort.

    "People think it is amusing to talk about patents on a peanut butter and jelly sandwich, but it is a patent that never should have been issued," laments Adam Jaffe, professor of economics at Brandeis University in Waltham, Mass., and a co-author of a book on the U.S. patent system. "This is a technology — if you can call it that — that has been around in many forms for many years."

    I have not examined the proposed claims or the prior art, but it seems that the comments by Jaffe & his co-author Josh Lerner appear to be directed toward whether food packaging should be patentable subject matter.

    Link:

    (Thanks to TechLawAdvisor for the tip.)