Reasons for Allowance Do Matter

Pharmastem_licensed2PharmaStem Therapeutics, Inc. v. Viacell, Inc. (Fed. Cir. 2007)(Read Part I of our analysis)

In addition to regular examination, the asserted patents had also been reexamined by examiners at the PTO.  Later, during litigation, several already cited references were used by courts as invalidation tools.

Patents are given a presumption of validity.  When previously considered references are asserted in an invalidity defense, the presumption of validity is even stronger.  Courts reason that such a challenge “bears the added burden of overcoming the deference that is due to a qualified government agency presumed to have done its job.” 

Here, however, the CAFC gave little weight to the Examiner’s review of references after finding a misstatement in the Examiner’s reasons for allowance.

The examiner … summarized her analysis of the prior art by stating that none of the cited references “addresses the presence of hematopoietic stem cells in umbilical cord or placental blood, that these cells may successfully be cryopreserved, or that, as a collection from a single human at birth, these cells may comprise an amount that is sufficient to effect hematopoietic reconstitution of a human adult.” That explanation is flawed for three reasons. First, as we have explained, the prior art references and the admissions in the specification address the presence of hematopoietic stem cells in cord blood, even though the references may not conclusively prove their presence. Second, Koike established that cord blood could be cryopreserved without substantial losses in the population of progenitor cells; the inventors contributed nothing more with respect to cryopreservation, as their mouse experiments were not performed with cryopreserved blood. Third, while the joint specification states that the amount of cord blood obtained at the time of birth would often be sufficient to transplant an adult, the inventors reached that conclusion simply by comparing the known properties of bone marrow against the results of routine testing of their own cord blood samples.

Although left ambiguous, it appears that the flaws in the Examiner’s final analysis gave the courts reason to take an entirely fresh look at the references in question.

17 thoughts on “Reasons for Allowance Do Matter

  1. 17

    Is it my imagination, or do these kind of things (unusual judgments) seem to always happen when a court is irritated about somehting else? For example, it seems that the court was already irritated by / rejected the Pharmastem: 1) expert analysis, 2) 271 analysis, 3) evidence regarding number of stem cells in samples, and 4) lack of arguing for a subset of the cord blood samples (instead of suing for all samples). It almost reminds me of Dippin dots (i.e., where a court was already irritated about something else.

    Newman probably has a point generally (about the selection of little bits of art in hindsight considering a general skepticism in the field). However, if the claims were written differently, then this probably would have helped (i.e., possibly overbroad claims not helpful here.)

  2. 15

    “if you were implying that the patent in PharamStem was re-examined three times, I think you are wrong.”

    My thinking was Intitial Exam + 2 Reexams = Three Exams.

  3. 14

    @Malcolm: You’ve got to be right that that’s the logic behind the added presumption. I guess my point was just that it’s kind of sad departure from idealism that our law don’t expect examiners to do that same thorough job the first time.

    Also, and you are completely excused from blame on this, if you were implying that the patent in PharamStem was re-examined three times, I think you are wrong. Although Judge Newman says so in her opinion, it looks like she was mistaken and that the patent was re-examined only twice, with a third request pending. Perhaps someone can correct me if I’m wrong?

  4. 13

    jed — Do you really think the court affirmatively had the intent to ignore all of those bodies? Or do you think, as I take it you do, that the panel failed to give due weight to those bodies?

    If you think the latter, perhaps you would care to explain why the panel’s views of the examiner’s, board’s, and district court’s reasoning is wrong.

    This is not administrative review, so Zurko does not apply. And the standard of review for a JMOL motion is de novo. Maybe you take issue with the deference to a re-examined patent, but one can’t tell from your post.

  5. 12

    “I too do not understand the “added deference” approach for re-examination. The supposition should be that the examiner did her job as well the first time around as the second.”

    I think the idea that a reexam (performed properly) gives a patent an Extra Shiny Presumption of Validity is reasonable. To some extent, isn’t it a “once over” of the original prosecution? Any jury (or judge) understands that errors in a document can be reduced by a having a fresh pair of eyes take a second look. I think juries are particularly easy to persuade in that regard. “Ladies and gentlemen, this patent was examined not once, but THREE TIMES by professionals patent examiners!!!”

  6. 11

    “In regard to the PharmaStem case, we can presume that the numerous Examiners who did look at the prior art documents had college degrees if not MS or PhD degrees in the biological sciences. That means they “wasted” 4 or more years of their lives studying stuff that apparently, any Fed. Cir. judge can become an expert in within hours of having been “tutored” by a bunch of unbiased lawyers writing appeal briefs.”

    Uh, just because someone has a Ph.D. in field X does not mean they know the detailed history of every subtopic in the field. At least, that’s my personal take on the degree. But maybe I’m the world’s stupidest Ph.D… [looks around cautiously for CaveMan]

  7. 10

    the court will take any excuse to abide by its own prerogative and ignore examiners, USPTO board, or lower courts

  8. 9

    I too do not understand the “added deference” approach for re-examination. The supposition should be that the examiner did her job as well the first time around as the second.

    I think the panel majority is adopting that approach. Basically, it recognizes the standard is clear and convincing evidence to overcome the presumption of validity, and rather than treat the re-examination as raising that standard, it just treats the examiner’s reasons on re-examination as potentially weighty _reasons_ that substantial evidence might support the jury’s verdict, reasons subject to being overcome if they are proven flawed (as here).

    Thus, I don’t see the re-examination as itself making a court _more_ deferential to the verdict, and thus I don’t quite agree with Dennis that the flaws in the re-examination reasoning caused a “fresh look.” I think the look at the record evidence is always judging the evidence against the same standard, and there was just nothing persuasive in the re-examination that the court could point to, and rest at, as showing that the record evidence was substantial evidence in support of the verdict.

  9. 8

    Ouf ifrm’s practice is to always comment on the reasons for allowance. At a minimum we say “there are additional reasons why the invention is patentable, for example the combination of features and such features as …. in dependent claims …”

    This cannot hurt. Since examiners only refer to the independent claims it is appropriate to refer to dependent claims for backup positions in litigation.

    However, I agree that it is unlikely I would ever say an examiner got it wrong because the prior art does in fact teach what the examiner says it does not teach. The poor prosecutor in this case was between a rock and a hard place, even if the majority were right.

  10. 7

    step back:

    I am a biotech guy, and you are right – from the statements you quoted and others, it seems the court was of the opinion that the presence of progenitor cells meant cord blood must contain stem cells. As it turns out, that’s true, but no one in the art knew that until these inventors demonstrateed it(according to the evidence PharmaStem presented at trial).

    Between the naturally high self-esteem circuit court judges are prone to, and the fact that a science background is not necessary to becomne a CAFC judge, it’s no wonder we get these wildly creative opinions.

  11. 6

    OK Dennis.
    You baited me into continuing the discussion/debate.

    First off, a confession.
    I’m not a biotech guy. I work more on arts that are termed as the “predictable” ones, like EE, ME, CS where outcome can be seen without actual experimentation in many cases.

    Even when it comes to the predictable arts, I see it on a daily basis that fools rush in where experts dare not go. And the reason is that the fools simply do not know they are fools.

    I don’t mean that they are “dumb”. Instead they are “ignorant” and “arrogant”. They are not educated enough to understand various subtle nuances of a particular speciality. And because of that, they are not qualified to read a technical document and comprehend what it means to someone actually skilled in the art. Nonetheless they eagerly rush in and interpret the document in ways that even a person of less than ordinary skill in the art would dare not.

    In regard to the PharmaStem case, we can presume that the numerous Examiners who did look at the prior art documents had college degrees if not MS or PhD degrees in the biological sciences. That means they “wasted” 4 or more years of their lives studying stuff that apparently, any Fed. Cir. judge can become an expert in within hours of having been “tutored” by a bunch of unbiased lawyers writing appeal briefs.

    IIRC, judge Newman was a chemist in her former life before crossing over to the dark side and joining the legal profession. And it is clear that she has some modicum of respect for the 4 or more years of “waste” undertaken by Examiners who qualify to examine in the biotech arts. On the other hand, the other 2 members of the PharmaStem panel seem to have zero respect for the educational backgrounds of the numerous Examiners who looked at the prior art documents. These 2, smarter-than-everybody panel members do not bolster the record by laying out their credentials for being able to read the technical documents (the prior art) through the eyes of an ordinary artisan, as they are required to do by law. Instead, they simply brush aside the expertise of so many people who came before them and glibly decide they know best with regard to “likelihood of success” (whatever that means) in an art where they probably know less than nothing about the details and nuances.

    That’s just the tip of the iceberg on what is wrong with this PharmaStem ruling. But by now I have probably overstressed the ADHD tolerances of most readers here. So I’ll shut up and await the charge of the bulls into the china shop.

  12. 5

    Usually there’s some note about the dissent in the posted case analysis, but not here. Just as well, that might detract from all those delightful, anecdotal stories about pesky “reasons for allowances” sure to follow in the comments.

    Nope, it will get out sooner or later, so it might as well be now. Many readers of this blog should now prepare to have their world turned upside down. None other than Judge Newman in the dissent did not find error with the examiner’s reasons for allowance.

    I have a special question for “don’t drag it out.” In this was your case, and you recognized the alleged flaw in the examiner’s reasons for allowance, namely that your claims failed to distinguish over the prior art of record, would you have then filed a request for a corrected notice of allowance, stating as much?

    Don’t bother answering, I know you would have. Your superior skill at patent prosecution is only matched by your ethics, no doubt.

  13. 4

    I have never understood the rhetorical phrasing of an “added burden of overcoming the deference that is due to a qualified government agency presumed to have done its job.” The entire reason for the presumption of validity is that the PTO is presumed to do its job. Why is the PTO doing its job in fact–when we have presumed that all along–news?

    I can understand the reverse, that we would remove the presumption if the PTO did not examine the relevant prior art (see KSR), because the premise underlying the presumption turns out to be factually untrue. And the “added burden” effectively creates this two-tier system. But why is the rhetorical scale thumbed so heavily in favor of patent validity?

  14. 3

    Examiners often mischaracterize the claims in reasons for allowance. It was much worse a few years ago when it appeared the PTO was forcing examiners to write them.

    The problem is that examiners rarely see your comments in response to flawed statements of reasons for allowance. I wonder what effect, if any, such a response would have.

    The reasons provided in a couple of cases were so bad that I filed requests for corrected notices of allowance, which forced the examiners to respond to my comments.

  15. 2

    Examiner A states a fear that “maybe the attorney decides to broaden the claims.”

    So, why is that a bad thing? If the claims include elements in addition to those that the examiner feels are not in the prior art, why shouldn’t the claims be tightened up?

  16. 1

    It’s good to let the public know what you’re thinking when you allow something. The fear from some examiners, however, is that the quality assurance people can use your reasons for allowance against you, or maybe the attorney decides to broaden the claims.

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