June 2005

Seed License Agreement Does Not Implicate Plant Variety Protection Act

PatentlyOImage003Showmaker v. Advanta USA (Fed. Cir. 2005)

By Alison Baldwin

Illinois farmer, Edward Showmaker, filed suit against Advanta USA, claiming that the language of the shrinkwrap license agreement on Advanta’s soybean seed violated the misbranding provision of the Plant Variety Protection Act (PVPA). The Advanta’s Garst Brand Seed D445N, Variety 57004 purchased by Mr.. Showmaker was neither patented or PVPA certified. However, the agreement on each of Advanta’s bags stated:

“The soybean seed in this bag contains genetics developed, licensed or owned by Seller. All rights to make, produce or sell seed products derived from this seed reside solely with Seller. Buyer acknowledges this ownership and agrees to the following conditions: … Buyer will not resell or supply any of this seed to any other person or entity. Furthermore, Buyer is strictly prohibited from saving or selling, for seed purposes, any gain products from this seed. Buyer further agrees not to alter, or permit the alteration of the seed … through either genetic engineering, conventional breeding activities or other techniques.”

The United States District Court for the Southern District of Illinois dismissed the case for failure to state a claim upon which relief can be granted because the contractual language in the Agreement did not implicate the PVPA’s misbranding provisions. The Federal Circuit affirmed because Advanta’s shrinkwrap license did not specifically reference the PVPA, any issued PVPA certificates or any pending PVPA applications. Furthermore, Advanta’s shrinkwrap license did not use the terms “Unauthorized Propagation Prohibited” or “Unauthorized Seed Multiplication Prohibited,” which are specifically set forth in PVPA Section 2568(a)(3). The Court stated that Advanta’s contract language did not put the potential purchaser or the public on notice of a plant variety owner’s rights, it merely restricted some activities of the buyer.

NOTE: Alison Baldwin is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Her patent litigation experience has covered a diverse range of topics, from recombinant DNA technology to digital television. In addition to her law degree, Ms. Baldwin holds degrees in biochemistry and plant pathology and has conducted research on the molecular mechanisms involved in plant disease resistance. [Brief Biography].

PTO Board: Disclosure of Sequence Enables at least 5% of Natural Variance.

Blast_equationEx parte Bandman, No. 2004-2319, (BPAI 2005)

By Donald Zuhn

In an appeal from a final rejection, the PTO Board reversed rejections based on both the written description and enablement requirements of 35 U.S.C. § 112, first paragraph, and entered a new ground of rejection under 35 U.S.C. § 112, second paragraph one of the claims. (U.S. Application No. 09/915,694). 

Pointedly, the Board found that claims directed to a naturally occurring amino acid (or polynucleotide) sequence at least 95% identical to the disclosed amino acid (or polynucleotide) sequence were enabled and met the written description requirement.

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Merck v. Integra: Supreme Court Reverses, Broadens Statutory Experimental Use Safe Harbor

Merck v. Integra, 545 U. S. ___  (2005).

In a unanimous decision, the Supreme Court has set aside the Federal Circuit’s holding that narrowly interpreted the statutory safe harbor of §271(e)(1). Writing for the Court, Justice Scalia found that:

As an initial matter, we think it apparent from the statutory text that §271(e)(1)’s exemption from infringement extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA.” (emphasis in original).

This includes:

  • Clinical and Preclinical studies of patented compounds that are appropriate for submission to the FDA;
  • Studies intended to generate pharmacological, toxicological, pharmacokinetic, and biological qualities of the drug in animals;
  • Studies intended to generate information regarding a “risk-benefit assessment of the appropriateness of [a proposed clinical] trial.”; and
  • Safety related tests even if not compliant with FDA regulations.

The court recognized that “scientific testing is a process of trial and error.”  As such, 271(e)(1) must also protect research for which an IND is not ultimately filed.

Congress did not limit §271(e)(1).s safe harbor to the development of information for inclusion in a submission to the FDA; nor did it create an exemption applicable only to the research relevant to filing an ANDA for approval of a generic drug. Rather, it exempted from infringement all uses of patented compounds reasonably related to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs.

Patent Attorney Jason Rantanen points out that the court declined to address two big questions:

The common law experimental use exception and the effect of 271(e)(1) on “research tools.”  The latter issue the Court explicitly declined to address, noting in a footnote that it was not expressing a view about whether 271(e)(1) exempts from infringement the use of “research tools” in the development of information for the regulatory process.

Of course, any future case involving research tools will cite Merck v. Integra as persuasive authority of the proposition that 271(e)(1) covers those as well.  Rather than settling the law, the Court appears to have created an unfortunate uncertainty regarding the value of patents covering research tools.

Case vacated and remanded to determine whether Integra can prove its case under the Court’s new interpretation of the law.

Links:

Janssen Pharmaceutica v. Eon Labs

PatentlyOImage024Janssen Pharmaceutica v. Eon Labs (Fed. Cir. 2005).

Eon filed an ANDA seeking approval to make a generic version of Sporanox® (itraconazole) — an antifungal used to treat toenail fungus.  Janssen brought suit — asserting that Eon’s ANDA infringed Janssen’s patent. (U.S. Patent No. 5,633,015).

After a bench trial, the district court found that a claimed parameter of “about 600 to about 700 µm” should be as measured at the time of manufacture. Based on that finding, the Court determined that Eon did not infringe.

On appeal, the CAFC affirmed, finding that the lower court had correctly defined the terms according to their ordinary meaning and that Eon’s ANDA does not include the same size limitation (no infringement).

Affirmed.

Patent Reform: Redlined Version of Patent Statute

Shashank Upadhye of Eon Labs & I have created a marked-up version of the Patent Act showing changes that would be implemented if the Act was enacted into law.  This document is very useful to help better understand what changes are being made and what sections are left unchanged.

CAFC: Distinguishing Feature of Invention Reflected in Claim Construction

PatentlyOImage020Boss Control v. Bombardier and Sports Cars, Inc. (Fed. Cir. 2005).

In a dispute over a power interrupter, the CAFC affirmed a summary judgment of noninfringement, finding that the patentee had given a special limiting definition to a disputed claim term during prosecution.

Specifically, the court looked to how the patentee had distinguished the invention from prior art and incorporated that distinguishing feature into the claim language.

File Attachment: Boss Control.pdf (56 KB)

 

CAFC: Jury’s conclusions on obviousness reviewed de novo.

PatentlyOImage019Princeton Biochemicals v. Beckman Coulter (Fed. Cir. 2005).

Princeton owns a patent on a capillary electrophoresis device and sued Beckman for infringement.  A jury decided in favor of Princeton on all issues including infringement and nonobviousness.  However, in a post-trial judgment, the district court issued a JMOL setting aside the jury verdict — instead finding all counts in favor of Beckman.

Princeton appealed.

According to the CAFC, a jury’s “conclusions on obviousness” are a question of law — reviewed without deference.  The underlying findings of fact are reviewed for substantial evidence.

The legal conclusion, that a claim is obvious within § 103(a), depends on at least four underlying factual issues: (1) the scope and content of the prior art; (2) differences between the prior art and the claims at issue; (3) the level of ordinary skill in the pertinent art; and (4) evaluation of any relevant secondary considerations. Graham v. John Deere.

In this case, the CAFC agreed with the district court, that there was not substantial evidence to support the jury verdict.

JMOL of obviousness affirmed.

Patent Reform: Patent Act of 2005

ReformOn Wednesday, June 8, 2005, Congressman Lamar Smith (R-TX) introduced the Patent Reform Act of 2005. (H.R. 2795). This proposed legislation includes sweeping reforms to fundamental aspects of the U.S. patent laws and procedures, including:

  • Change to a first-to-file system (including elimination of the 1-year grace period for certain third party public disclosure);
  • Elimination of the best mode requirement;
  • Changes to the duty of candor (violations will be adjudged by the PTO rather than in Federal Court);
  • Damages to be limited to the inventive contribution rather than calculated on the selling price of an entire product;
  • Limitations on damages for willfulness;
  • Adding a factor of “fairness”to the determination of whether to enter an injunction;
  • Automatic stay of injunctions for appeals;
  • Limits on scope of continuation applications (to be made by PTO); and
  • Introduction of a post-grant opposition procedure and submission of prior art by third parties, etc.
Although some of the provisions in the proposed legislation are toned-down from the discussion draft distributed this spring, this version still has something to offend almost every interest. Congressman Smith has called the bill “without question, the most comprehensive change to U.S. patent law since Congress passed the 1952 Patent Act.”
 
The reform is currently enjoying bipartisan support — The nine cosponsors include five Democrats.
Rep Berman, Howard L. [CA-28] – 6/8/2005
Rep Boucher, Rick [VA-9] – 6/8/2005
Rep Cannon, Chris [UT-3] – 6/8/2005
Rep Coble, Howard [NC-6] – 6/8/2005
Rep Conyers, John, Jr. [MI-14] – 6/8/2005
Rep Goodlatte, Bob [VA-6] – 6/8/2005
Rep Issa, Darrell E. [CA-49] – 6/8/2005
Rep Lofgren, Zoe [CA-16] – 6/8/2005
Rep Schiff, Adam B. [CA-29] – 6/8/2005
Resources:

Pain for Purdue Pharma: CAFC affirms inequitable conduct finding

Surprisingly DiscoveredPurdue Pharma L.P. v. Endo Pharms. Inc. (Fed. Cir. 2005).

by Marcus Thymian

The Federal Circuit affirmed a finding by the District Court for the Southern District of New York that Purdue’s Oxycontin patents-in-suit are unenforceable due to inequitable conduct that occurred during prosecution of the patents.  The decision, if it withstands further appeal efforts, would open the door to generic equivalents of Purdue’s popular controlled-release pain treatment medication.  According to various news stories on the Federal Circuit ruling, Purdue has indicated it plans to request en banc review of the 3-judge panel decision by the full 12-judge Federal Circuit. 

The inequitable conduct determination was based primarily on variations of the following Purdue statement:

    It has now been surprising discovered that the presently claimed controlled release oxycodone formulations acceptably control pain over a substantially narrower, approximately four-fold [range] (10 to 40 mg every 12 hours — around the clock dosing) in approximately 90% of patients.  This is in sharp contrast to the approximately eight-fold range required for approximately 90% of patients for opioid analgesics in general.

The district court found that Purdue repeatedly referred to this “surprising discovery” during prosecution, but did not inform the PTO that the “discovery” was based on “insight” without “scientific proof.”  The Federal Circuit decided that the district court did not error in finding the two elements of inequitable conduct: materiality and intent.

Materiality was based on the district court’s examination of the entire record.   Purdue had repeatedly argued that the four-fold dosage range distinguished the invention over prior art, according to the district court.  The district court found that Purdue’s use of language that “implied, if not suggested” experimental results, when in reality the “discovery” was based solely on inventor “insight,” constituted withholding material information from the PTO.

Intent was inferred from the context in which Purdue’s statements were made.  Purdue’s “carefully chosen language suggests that it had obtained clinical results, and that suggestion was left unclarified by any disclosure that discovery of the four-fold dosage range for oxycodone was based on insight.”  The Federal Circuit agreed that Purdue had engaged in a “clear pattern of misdirection throughout prosecution of Purdue’s controlled release oxycodone patents.”

This case is an interesting exercise in standards of review and burdens of proof and persuasion.  Inequitable conduct requires a showing by “clear and convincing evidence,” which is quite high (patent infringement requires only a showing by a “preponderance of the evidence”).  The Federal Circuit conducted a deferential review of the district court’s inequitable conduct ruling.  This heightened standard involves reviewing the materiality and intent factual findings for “clear error” and reviewing the ultimate inequitable conduct conclusion for an “abuse of discretion.”  So, while an initial inequitable conduct showing is a tough burden, if a district court’s ruling is well supported, it may be relatively tough to overturn. 

Marcus Thymian is a partner at McDonnell Boehnen Hulbert & Berghoff LLP in Chicago.  Concentrating primarily on the electrical, software, and mechanical arts, he is experienced in planning, creating, enforcing, and defending against patent portfolios. [Marcus Thymian’s Bio]

[Copyright 2005 – Originally published at www.patentlyo.com]

CAFC affirms evidentiary rulings: Inventor is not Expert

PatentlyOImage018Air Turbine Technology v. Atlas COPCO (Fed. Cir. 2005).

Air Turbine (ATT) sued Atlas for infringement of its patent on pneumatic turbine pencil grinder as well as Lanham Act violations and for unfair competition under Florida law.  The district court dismissed the non-patent claims on summary judgment. At trial, however, the jury returned a verdict against ATT on patent infringement.

On appeal, ATT argued that the court should have granted a new trial on the patent infringement claim because of three “prejudicial evidentiary rulings.”  Specifically, ATT complained that (i) its infringement expert was prevented from fully testifying (about a matter not disclosed under FRCP 37(c)(1)); (ii) certain co-inventor testimony was excluded because the co-inventor was not considered an expert; and (iii) an Atlas employee located in Sweden was not properly produced via teleconference because the court believed it lacked jurisdiction to compel testimony.

Applying 11th Circuit precedent that evidentiary rulings are only reversed for clear abuse of discretion, the CAFC affirmed.  Finding that:

(i) A court may properly exclude expert testimony that is not disclosed in the expert report;

(ii) An inventor is not necessarily an expert — especially an expert on the accused device; and

(iii) Determining whether to allow testimony in open court via contemporaneous transmission from a different location is well within the discretion of the district court.

Non-infringement affirmed.

[Copyright 2005 Dennis D. Crouch – Originally published at www.patentlyo.com]

Hatch-Waxman 180-Day Exclusivity Does Not Restrict NDA-Holder’s Ability to Sell Generic Version of Patented Drug

ScreenShot008Teva Pharmaceuticals v. Crawford (FDA), No. 05–5004, (D.C. Cir. 2005).

As the first ANDA filers on a generic version of gabapentin (Neurontin), Purepac & Teva (joint agreement) were eligible for a 180–day exclusivity period during which no other ANDA for the same drug may be approved.

However, Teva also sued to stop the patentee Pfizer from selling a generic version of its name brand Neurontin during the 180 day period of exclusivity.  After losing at the district court level, Teva appealed to the D.C. Circuit, arguing for a “functional” interpretation of the statute (21 USC 355(f)(5)(B)(iv)).

Teva argued that the purpose of the statute was to grant the first ANDA filer complete generic exclusivity for 180 days, and that allowing the patentee to sell the generic would “defeat the statutory purpose.”

Writing for the panel, Chief Judge Ginsberg affirmed the lower court’s judgment. 

[A]s Teva’s counsel conceded at oral argument, prior to the Hatch-Waxman Amendments, nothing in the Act prohibited the holder of an approved NDA from marketing a “brand-generic” version of its drug; thus Teva asks the court to declare that a previously lawful practice became unlawful when the Congress passed a statute that said nothing about that practice.

Thus, the court affirmed that the exclusivity provision “clearly does not prohibit the holder of an approved NDA from marketing, during the 180–day exclusivity period, its own ‘brand-generic’ version of its drug.”

Links:

Does the First Sale Doctrine Apply to Digital Music?

ScreenShot007The Berkeley IP weblog has an interesting post regarding the the “first sale doctrine” and its application to music downloads. The controversy is whether Warner Music Group (WMG) content downloaded through Rhapsody/iTunes is licensed or purchased. 

Tom Waits’ contract with WMG entitled him to a high royalty for third-party licenses but a lower royalty for the sale of copies.  In a case filed last week, by Waits’ former production company, WMG is likely to take the position that its downloads are sold just like physical products — thus resulting in a lower royalty. Of course, WMG’s expected argument flies in the face of the “terms of service” agreed to by users to any of the popular mp3 download sites.

All of this begs the question of whether associating the sale of mp3 files with the sale of physical CD’s gives purchasers the right to resell under the first sale doctrine. (The U.S. Gov’t thinks not.)

Links:

  • Link: Reuters Article
  • Link: Duke Law & Technology iBrief on First Sale
  • Link: EBay restrictions on resale of digital music

Next Steps in Patent Reform

ConstitutionPatent reform is expected to be taken to a new level this week with two events.

  • A version of the patent reform committee draft is expected to be introduced in the House of Representatives — perhaps as early as Tuesday, June 7, 2005. The House subcommittee on the Courts and Intellectual Property is scheduled to hold a hearing on the legislation on June 9, 2005.
  • Also on June 9, 2005, the NAS and AIPLA are hosting a wrap-up conference on patent reform in DC.  (Conference schedule). 

Matthew Buchanan has created the Patent Reform Library to serve as a repository of available material on patent reform including legislative material, articles, and background information. Bookmark it.

Samples not warranted to ensure injunction compliance.

LuteinKemin Foods v. Pigmentos (S.D. Iowa 2005).

In a battle over Kemin’s patented form of purified lutein a jury that Pigmentos had infringed one of Kemin’s patents. (Lutein is a color additive with no vitamin A activity).

A jury found for Kemin on one patent.  In addition to requesting a permanent injunction, Kemin also asked for the court to order the defendant to provide representative samples of its products to ensure compliance with the injunction.

In considering this motion, the district court found that that it had the power to “fashion an appropriate remedy” to ensure that the injunction would be enforceable.  However, the injunction should not be“a sword for wounding a former infringer who has made a good-faith effort to modify a previously adjudged or admitted infringing device to remain in the marketplace.”

As a result, court refused to order the samples — holding that “Kemin has been able to obtain samples in the past, and despite the affidavit provided by Kemin, the Court is not convinced it will be unable to do so in the future.”

Links:

Indecipherable Patents

PatentlyOImage002The June 2005 Corporate Legal Times includes an interesting roundtable discussion on patent reform.  The participants were all in-house patent counsel.  In the discussion, Richard Rodrick of S.C. Johnson raised an issue that has not been touched by any of the proposed patent reforms.

You can write a patent application today that is almost indecipherable, and you’ve got a good chance of getting it out of the patent office with a patent. 

Anyone who regularly reads patent documents knows that Rodrick is right on the money.  Should the Patent Office be issuing more rejections based on a lack of clarity in the specification based on the requirements of Section 112?

LINKS:

CAFC: Patent Licensee in Good Standing has No Standing for Declaratory Relief

ChimericImmunoglobulinMedImmune v. Centocor (Fed. Cir. 2005).

Centocor is the exclusive licensee of a patent on lymphocytic cells that produce chimeric immunoglobulins. (U.S. Patent No. 5,807,715). After a period of negotiations, MedImmune sub-licensed the patent and began paying royalties. Even after signing the agreement, MedImmune asserted to Centocor that it did not infringe and that the patent was unenforceable/invalid.  Centocor responded that “it expected MedImmune to continue to adhere to its license obligations.”

MedImmune then filed suit, asking for declaratory judgment that it owes no royalties. The district court, however, dismissed the case for lack of an actual controversy.  On appeal, the CAFC affirmed — finding Gen-Probe v. Vysis (Fed. Cir. 2004) dispositive.

In Gen-Probe, we considered the case of a licensee in good standing who sought a declaratory judgment that it was not infringing the licensed patent, and that the licensed patent was invalid. . . . [W]e determined that the license, “unless materially breached, obliterated any reasonable apprehension of a lawsuit,” and that once the licensor and licensee “formed the license, an enforceable covenant not to sue, the events that led to the formation [of the license] became irrelevant.”

MedImmune argued that Gen-Probe should not be followed because it is “inconsistent with Supreme Court Precedent and with prior Federal Circuit precedent.”  The CAFC rejected that argument — finding the cited opinions to be consistent with Gen-Probe.

From a policy perspective, the Court rejected MedImmune’s argument that Gen-Probe creates an unacceptable “Hobson’s choice.”

Every potential infringer who is threatened with suit, or who is sued, for patent infringement must decide whether to settle or fight. In short, the “Hobson’s choice” about which MedImmune complains arises not from Gen-Probe, but from Article III’s requirement that, before a district court exercises jurisdiction in a declaratory judgment suit, there must be an actual controversy between the parties. For the reasons set forth above, such a controversy does not exist here.

Dismissal affirmed.