May 2009

People (lots of) vs. The Breast Cancer Gene Patents

Patent, , ,

Assn for Medical Pathology v. USPTO & Myriad & the Directors of the University of Utah Research Foundation (S.D.N.Y. 2009)

A host of medical organizations, researchers, and cancer patients have filed a Section 1983 action against the USPTO, Myriad Genetics, and the University of Utah Research Foundation (via its directors) demanding that the BRCA gene patents be declared invalid as unpatentable under 35 USC Section 101.

“Because human genes are products of nature, laws of nature and/or natural phenomena, and abstract ideas or basic human knowledge or thought, the challenged claims are invalid under Article I, section 8 of the Constitution and 35 U.S.C. Section 101.”

In addition, the suit alleges that the patents are unconstitutional under the First and Fourteenth Amendments to the US Constitution.

Myriad’s patents allow the company to maintain a monopoly in the US over genetic testing for human BRCA1 and BRCA2 genes – markers for breast cancer. Claim 1 is directed to “an isolated DNA coding for BRCA1 polypeptide.” (The patent defines the amino acid sequence of the polypeptide).

PubPat and the ACLU are serving as attorneys for the plaintiffs.

Notes:

  • Read the Complaint: BRCA1 complaint.pdf
  • NYTimes Article
  • ACLU Blogs Here (with pictures of the plaintiffs).
  • The gene patenting debate has been interesting – emphasis here on has been. The genome has been mapped and sequences published. Very few new patents claiming isolated human genes are being filed. The ones already patented will expire within the next decade — most of them will expire before being put to any practical use.  
  • Caplan of CNN Says “Lawyers who work on patents in the pharmaceutical and biotechnology industries are sweating bullets today.” This is good, because the US is currently suffering under a bullet shortage.
  • On May 6, PubPat filed two other lawsuits.
  • PubPat v. Cumberland Packing (alleging false marking of its Sweet n Low sugar packets).
  • PubPat v. Iovate (alleging false marking of Xenadrine).

Actonel Patent Validity Affirmed: Nonobviousness of Positional Isomer

Obviousness, Patent, Patent Cases 2009

Procter & Gamble (P&G) v. Teva Pharmaceuticals (Fed. Cir. 2009)

P&G’s osteoporosis drug Actonel reportedly has $1.5 billion in annual sales. Hoping to manufacture a generic version, Teva challenged P&G’s patent – arguing obviousness in light of a prior P&G patent (the ‘406 patent) and obviousness-type double patenting. The district court rejected those challenges, and on appeal the Federal Circuit affirmed the patent’s validity. The patent is set to expire in 2013.

New Compound is Nonobvious: The claimed active compound – risedronate – is a bisphosphonate. In arguing obviousness, Teva pointed to P&G’s ‘406 patent which listed “central problems” in using bisphosphonates to treat osteoporosis. Although the prior art patent does not list risedronate, it does suggest the use of thirty-six similar molecules in the same class including one a positional isomer of the claimed risedronate. The positional isomer (2-pyr EHDP) includes the same atoms as risedronate, but those atoms are arranged in a somewhat different order.

In risedronate, the hydroxy-ethane-diphosphonate group is connected to the #3 carbon of a pyridine ring, while in 2-pyr EHDP, the hydroxy-ethane-diphosphonate group is connected to the #2 carbon. Because the nitrogen atom is in a different position in the two molecules, they differ in three dimensional shape, charge distribution and hydrogen bonding properties.

In addition to these structural differences, P&G pointed to “contemporaneous writings from Herbert Fleisch, the preeminent authority on bisphosphonates during the relevant time period.” Fleisch wrote that “every … bisphosphonate, exhibits its own physical-chemical, biological and therapeutic characteristics, so that each bisphosphonate has to be considered on its own. To infer from one compound the effects in another is dangerous and can be misleading.”

On appeal, the Federal Circuit agreed that these differences were sufficient to push development of the new compound beyond the obvious – additionally noting that Teva had not shown that a PHOSITA would have had a “‘reasonable expectation of success’ in synthesizing and testing risedronate.” Here, the court quoted its 1988 O’Farrell decision: “Patents are not barred just because it was obvious ‘to explore a new technology or general approach that seemed to be a promising field of experimentation, where the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it.'”

This holding further supports the conventional wisdom that the KSR case will have much less impact in the area of pharmaceutical research.

Secondary Factors: In arguing secondary considerations of nonobviousness, TEVA argued that the element of long-felt but unmet need could not be proven because another drug (aledronate) was available prior to risedronate. The Federal Circuit rejected that argument – holding that the need may still have existed because the P&G patent application was filed before the other drug was on the market. “Under Monarch, we look to the filing date of the challenged invention to assess the presence of a long-felt and unmet need.”

Swearing Behind Not Allowed: P&G’s researcher had evidence that it had invented risedronate prior to the filing of the ‘406 patent. In particular, the inventor submitted a lab notebook with detailing the structure of risedronate and the procedure for its synthesis. However, the Federal Circuit rejected the evidence because the entry “was unwitnessed and was not corroborated by any other evidence.”

Double Patenting: “Having concluded that risedronate was not obvious under 35 U.S.C. § 103, we similarly conclude that the [risedronate] patent is not invalid for obviousness-type double patenting … [because] the claims of the [risedronate] patent are distinct from the claims of the ‘406 patent.”

Further Discussion:

Claim Construction Disclaimer & Judicial Estoppel

Patent,

Fitness Quest (FQ) v. Jonathan Monti (Fed. Cir. 2009) (non-precedential)

In 2002, Monit – an individual inventor – approached FQ with his idea for personal exercise equipment. FQ agreed to a confidentiality & nondisclosure agreement, but FQ eventually walked away from the deal.

In 2003, FQ began making the now-popular “Ab Lounge” and Monti sent a letter accusing the company of infringement and breach of the confidentiality agreement. FQ quickly filed for declaratory relief.

The district court ruled for FQ on summary judgment – finding that FQ had not violated the confidentiality agreement and that its new product did not infringe Monti’s patent. On appeal, the Federal Circuit vacated-in-part – holding that summary judgment of non-infringement was improper as to claim 28 of Monti’s patent.

Disclaimed Needed Scope: Claim construction focused first on the term “back extension” in the apparatus claims. Monti argued that “back extension” could include pushing back in the Ab Lounger. The court rejected that argument because Monti’s application specifically disclaimed coverage of back extensions that require pushing.

From the patent: “Many Nautilus TM type machines have been constructed in the prior art to mimic this movement and add resistance to it, biomechanically, the core movement of this type of machine was a pushing movement. This is a distinct disadvantage of the prior art methods of back extension. Also, this does not fall within the scope of Kinesiologically Correct TM [i.e., this invention].”

One of the asserted claims (claim 28) does not, however, include the back extension limitation. Apparently, the disclaimer only applies to the coverage of the “back extension” term. Consequently, the Federal Circuit held that that claim may still be infringed (pending reconsideration by the lower court.)

Judicial Estoppel: During litigation, Monti explained the claim term “selectively applying a force” as applying a different force based on the weight of the user, but then later wanted to expand the definition after learning that the relevant portion of the Ab Lounger does not apply a force based on the weight of the user. Following the equitable doctrine of judicial estoppel, the district court refused to allow Monti to change his argument.

Monti clearly advocated that the system must determine that amount of force to apply with reference to the weight of the individual using the device. This position is directly contrary to his current position, which is that the force producing assembly applies a force irrespective of the user’s weight. The Court adopted Monti’s previous construction and finds that FQ would suffer an unfair detriment if Monti was not estopped because Monti could defeat summary judgment by assuming a contrary position now that the facts show his prior position is unhelpful to him.

In New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001), the Supreme Court outlined the guidelines for finding judicial estoppel in federal courts:

First, a party’s later position must be “clearly inconsistent” with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party’s earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled. Absent success in a prior proceeding, a party’s later inconsistent position introduces no risk of inconsistent court determinations, and thus poses little threat to judicial integrity. A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Here, the Federal Circuit vacated the finding of judicial estoppel – finding that Monti’s new claim construction argument was not “clearly inconsistent” with his prior winning position. Rather, the Federal Circuit saw Monti’s explanation as an attempt to distinguish “selectively applying” in the asserted claim from a “selectively adjusting” limitation in another claim. “This was not “clearly inconsistent” with his arguments on summary judgment, making the application of judicial estoppel inappropriate.”

Breach of Contract (Confidentiality): The breach of contract ruling is also interesting. During discussions Monti sent the following message to FQ: “After using the machine I noticed that it would be better for me to take the back extension out and lower the pivot point.” According to Monti, FQ then disclosed the beneficial aspects of lowering the pivot point (but not removing the back extension). On appeal, the Federal Circuit did could not find any breach of confidentiality because Monti had not disclosed that “lowering the pivot point alone has any benefit.”

 

US News Top IP Programs

Patent

[Updated 5/12/09 at 2:00 pm]

The US News & World Report ranking of Intellectual Property focused law schools was released in late April. The ranking is created by polling professors who teach at least one IP course. The professors then list up to fifteen programs with good IP programs. Those "votes" are then used to create a ranking. Of course, most IP professors are not patent professors. All of the programs on the list have excellent IP faculty. However, only a few have a patent focus.

The US News list:

Rank

Law School

1.

Stanford University

2.

University of California–Berkeley

3.

George Washington University

4.

Columbia University; Illinois Institute of Technology (Chicago-Kent) (tie)

6.

Franklin Pierce Law Center

7.

University of Houston

8.

Santa Clara University; Yeshiva University (Cardozo) (tie)

10.

Duke University

Link

Patently-O Rankings: I have redone my list of "the top thirty law school patent programs" based solely on the number of Patently-O visits received from the associated university in the past year. There are many issues with problems with this study – although it is probably at least as good as the US News IP Specialty ranking. Some of the problems: Many schools may not use their name in their IP address — making them lose their ranking. This appears to be largely true of Franklin Pierce Law Center. Schools where students (and professors) primarily study away from campus building may also rank relatively lower.  Finally, many of the visits to Patently-O may come from other departments – such as the Technology Transfer office – rather than the law school.

Rank

School

Relative Score

1

GWU

100%

2

Stanford

65%

3

Harvard; Columbia

50%

5

Texas; Missouri; Washington U; George Mason; Santa Clara

45%

10

Richmond; NYU

40%

12

BU; Berkeley; Georgetown; Virginia

35%

16

Duke; Minnesota; Northwestern; U Washington

30%

20

SUNY Buffalo; Loyola (LA); Cornell

25%

23

Illinois; BC; Houston; Denver; Arkansas; Ohio State; Depaul

20%

30

Iowa; Fordham; William & Mary; Suffolk; Wisconsin; Colorado; Penn State; Utah; Florida; Yale; Chicago; Syracuse; UPenn

15%

 

To add an additional layer of confusion, remember that many folks access Patently-O through the free daily e-mail. The following list ranks law school's according to the number of Patently-O e-mail subscribers. Here, we may have bias if some subscribers use their personal e-mail account (such as gmail) instead of the university account.

Rank

Law School

Relative Score

1

Pierce Law (Franklin Pierce)

100%

2

University of Michigan

75%

3

Stanford

55%

4

GWU

40%

5

NY Law School; Columbia; Colorado; Case Western, U Washington, Elon

35%

11

Michigan State; Chicago-Kent; Denver

30%

14

George Mason; Cornell; BU; Berkeley; Albany; Washington U; SMU

25%

 

Lieter Ranking: One part of the 'reputational' ranking of an IP program is based on the scholarship of the faculty. In 2007, Professor Lieter compiled a list of the top-ten intellectual property / cyberlaw faculty and ranked them according to the number of times their work had been cited in law review articles. The Lieter ranking is listed below:

  • Mark Lemley (Stanford University):  2110 citations, age 41.
  • Robert Merges (University of California, Berkeley):  1280 citations, age 48.
  • Thomas McCarthy (University of San Francisco), 1100 citations, age 70.
  • Pamela Samuelson (University of California, Berkeley):  970 citations, age 59.
  • Jessica Litman (University of Michigan):  870 citations, age 54.
  • Dan Burk (University of Minnesota [Now IRVINE]):  840 citations, age 45.
  • Jane Ginsburg (Columbia University):  840 citations, age 52.
  • Rochelle Dreyfuss (New York University):  790 citations, age 60.
  • Paul Goldstein (Stanford University):  790 citations, age 64.
  • Julie Cohen (Georgetown University):  740 citations, age 43.

Runners-up for the top ten:  Yochai Benkler (Harvard University):  730 citations; Rebecca Eisenberg (University of Michigan), 690 citations; Neil Netanel (University of California, Los Angeles), 640 citations; Wendy Gordon (Boston University), 610 citations; A. Michael Froomkin (University of Miami), 600 citations. 

Other highly-cited scholars who don't work exclusively in this area::  Lawrence Lessig (Stanford University [Now Harvard]), 2500 citations; William Landes (University of Chicago), 1550 citations; Margaret Jane Radin (University of Michigan), 1210 citations; William W. Fisher (Harvard University), 1020 citations; James Boyle (Duke University), 710 citations.

 

Design Patent Law: The New Ordinary Observer Test

Patent,

Sofpoool LLC v. Intex Recreation Corppic-31.jpg . (Fed. Cir. 2009)(Nonprecedential)

In Egyptian Goddess, an en banc Federal Circuit eliminated the points of novelty test as a separate requisite test of infringement of a design patent. Rather, the court held that design patent infringement should be determined based on the “ordinary observer test” — a test that originated in the 19th century Gorham case.

In Sofpool, a pre-Egyptian Goddess District Court asked a jury to determine infringement based on both the points of novelty test and the ordinary observer test. As expected in essentially all point of novelty cases, the jury returned a verdict of noninfringement.

On appeal, the Federal Circuit vacated. The interesting portion of this opinion stems from the patent holder’s request that the appellate court issue a judgment of infringement. During trial, Intex admitted that its design might infringe under the ordinary observer test. The Federal Circuit disregarded that admission and broke from tradition by noting that Egyptian Goddess created a “new” ordinary observer test. Thus, the prior admission does not satisfy the new test.

Sofpool argues that it “is entitled to an instruction on remand that the ’817 patent is infringed, because both Intex’s expert and its attorney conceded that the accused design satisfied the ordinary observer test.” We disagree. Although Intex acknowledged that its oval pool might infringe the ’817 patent under the ordinary observer test as it existed prior to Egyptian Goddess, Intex has never conceded that its oval pool infringes under this court’s newly articulated ordinary observer standard.

Attorneys will need to work-out how this decision meshes with the statement in Egyptian Goddess that the court was reviving the Gorham test:

From Egyptian Goddess: [I]n accordance with Gorham and subsequent decisions, we hold that the “ordinary observer” test should be the sole test for determining whether a design patent has been infringed.

If anything, Egyptian Goddess changed the Gorham test by stating that similar prior art may be used to “highlight[] the differences between the claimed and accused design.”

BPAI Precedential Opinion: The Nexus for Obviousness and Nonobviousness

BPAI, Obviousness, Patent, Patent Cases 2009,

Ex parte Jellá (BPAI Precedential Opinion) fd081619-1.pdfpic-30.jpg

Most modern metal garage doors have four or five panel sections. The older wooden doors often had only one panel. Jella’s invention is simple — have three panels each “substantially twenty-eight inches” in hight. The prior art taught “any number” of panels including one, four, five, or six. Following the examiner’s lead, the Board of Patent Appeals and Interferences (BPAI) found the invention obvious.

The BPAI issued a precedential opinion focusing on obviousness. The prima facie case of obviousness is easy under KSR even without any evidence that anyone had previously considered a twenty-eight inch door.

The Court in KSR noted that “[wlhen a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, Section 103 likely bars its patentability.” Changing a conventional seven foot high overhead garage door from a four panel section door to a three panel section door is nothing more than a predictable variation sparked by design incentives in the hope that a new look to the door would result in increased sales.

What it looks like here is that the driver for the innovation really was a need for a new ornamental design – motivating PHOSITA to create the obvious variation.

In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation . . . .

We further find that market pressure existed in the garage door industry to create a new design trend by updating the look of garage doors to spur additional sales in the industry.

In addition to allowing ornamental design needs to serve as the motivator to try a new design, the Board did not require any tight nexus between the design motivation and the new design (other than the need for a new design).

I highlight the lax approach on obviousness to contrast the Board’s strict approach when considering objective or secondary factors of nonobviousness.

Nexus: The bulk of the Jellá opinion is spent repeatedly shooting down the applicant’s arguments on secondary considerations of non-obviousness and the accompanying declarations. The most often repeated point was that any objective evidence must have a clear nexus with the invention as claimed.

“To be given substantial weight in the determination of obviousness or non-obviousness, evidence of secondary considerations must be relevant to the subject matter as claimed, and therefore the examiner must determine whether there is a nexus between the merits of the claimed invention and the evidence of secondary considerations.”

The nexus requirement include being “commensurate in scope with the claims.”

Ornamental Features in Utility Patents: Additionally, the ornamentality or striking good looks of a design cannot be used as evidence of nonobviousness. Here, the BPAI rejected a declaration discussing the “unique” look of the garage door based on a desire to avoid overlap with design patent law: “Were we to allow secondary considerations of non-obviousness to be based on the industry’s reaction to the ornamental appearance of the claimed invention, we would be blurring the distinction between design and utility patent protection. Objective evidence of secondary considerations of non-obviousness should be tied to the functional aspects of the claimed invention for a utility patent application.” Oddly enough, the BPAI did allow the PTO to use the ornamental features to prove a “market pressure” — finding that “market pressure existed in the garage door industry to create a new design trend by updating the look [and appearance] of garage doors to spur additional sales in the industry. …  In our minds, this is an example of market demand driving a design trend, and the Supreme Court in KSR warned against granting patent protection to advances such as this that would occur in the ordinary course without real innovation.”

Rejection Affirmed.

Obviousness-Type Double Patenting and Splitting Ownership (CAFC Says Don’t Do It)

Obviousness, Patent, Patent Cases 2009,

In re Fallaux pic-29.jpg (Fed. Cir. 2009) 08-1545.pdf

The Fallaux family of patents began with a PCT filing in June 1995. The first US patent issued in November 1999. Three more patents issued from continuation applications in 2001, 2003, and and 2006. The application at issue here was filed in 2003.

The PTO’s appellate board – the BPAI – rejected the most recent application under the judge-made doctrine of obviousness-type double patenting. Obviousness-type double patenting is equitable in nature and operates as a mechanism to prevent “unjust extension of patent exclusivity beyond the term of a patent.” Thus, an obviousness-type double patenting rejection requires a link between the two applications – either in terms of inventorship or ownership. The doctrine is only relevant when a prior patent cannot be considered prior art as defined by Sections 102 and 103(a) of the Patent Act. (If it is prior art, then the reference is applied under those statutory provisions.)

The change in the patent term and publication of pending applications eliminated most of the need for this judge-made regime. Because patent term is calculated from the filing date, it is now difficult to extend the term while claiming priority. Likewise, published applications ordinarily create a statutory bar that operates to prevent an applicant from extending the term by not claiming priority to an earlier filing. Here, the Federal Circuit recognized the significance of the change in the law, but was not prepared at this juncture to eliminate the doctrine.

It is true that the unjustified patent term extension justification for obviousness-type double patenting has limited force in this case. Indeed, this is surely true of many double patenting rejections today, in no small part because of the change in the Patent Act from a patent term of seventeen years from issuance to a term of twenty years from filing. … Nonetheless, we do not think that we may disregard all of our cases relying on this justification for obviousness-type double patenting. In some cases there may still be the possibility of an unjust time-wise extension of a patent arising from patent term adjustment under § 154 or patent term extension under § 156.   

Furthermore, there is a second justification for obviousness-type double patenting—harassment by multiple assignees. … The harassment justification for obviousness-type double patenting is particularly pertinent here because the Fallaux application and the Vogels patents are not commonly owned.

Of course, careful Patently-O readers will realize that the Court’s use of mismatched patent term extensions as a justification for a double patenting rejection does not sit well with the law. In 2007, the Federal Circuit in Merck v. HI-TECH held that the patent term extension should apply to further extend the patent term despite a terminal disclaimer. Id. (Holding that a patent term extension under the Hatch-Waxman Act, 35 U.S.C. § 156, may be applied to a patent subject to a terminal disclaimer under 35 U.S.C. § 253, filed to overcome an obviousness-type double-patenting rejection.) The dicta of this Fallaux decision will tend to confuse the issue.

Common Inventorship: As the court notes, in this case, the double patenting rejection is based on second patent family. Both families list multiple inventors, and the link between the families is a single common inventor. Originally, the families were commonly owned by IntroGene, but some of the patents were assigned to Crucell and others to Galapagos Genomics.

No Common Ownership: The division of ownership rights here puts the applicant in a bind. Notably, it could not file a terminal disclaimer because the prior patent and the pending application were not commonly owned.

One Way versus Two Way Test: In most obviousness determinations, the examiner applies a “one way test” – asking “whether the application claims are obvious” over the prior art. This same approach is used in obviousness-type double patenting except that the prior patent is generally not considered “prior art.” More particularly, because the focus is on extending patent term, the question is whether the pending claims are only obvious variations of the already patented claims. Occasionally, courts have required a more stringent two-way test where the examiner additionally considers “whether the patent claims are obvious over the application claims.”

The two way test can be required if the PTO “is at fault” for a delay that causes an improvement patent to issue prior to the basic patent. Here, the court agreed with the PTO that

Dr. Fallaux was entirely responsible for the delay that caused the Vogels patents to issue prior to the filing of the Fallaux application. . . . there [is no] evidence to suggest—that the PTO shared any responsibility for the delay. . . . Dr. Fallaux elected to prosecute other applications and delay filing the Fallaux application [for] six years after the [original US] application was filed. During this six year period, the Vogels patents were filed for and issued. In view of the Board’s fact findings, we hold that the PTO was not responsible for the delay.

Because the PTO had not caused the delay in prosecution, it could apply the less stringent one-way test of obviousness. And, as a consequence, the Federal Circuit affirmed the rejection.

Notes:

  • The Fallaux panel of Judges Schall, Archer, and Moore* have no overlapping authors with the Merck v. HI-TECH panel of Judges Linn*, Friedman, and Plager. The direct contradiction of this case and the dramatic shift in the statutory law opens it to en banc rehearing.
  • Patent term adjustments (due to PTO delay) are definitely limited by terminal disclaimers. Meck (“Section 154(b)(2)(B) expressly excludes patents in which a terminal disclaimer was filed from the benefit of a term adjustment for PTO delays.”).

Patently-O Bits and Bytes No. 110

Articles and Publications, Bits and Bytes, Patent, ,
  • Tom Bakos and Mark Nowotarski have posted their own inventions on the Peer-to-Patent site. You can review them and add prior art: Invention 1, a Risk Assessment Company; Invention 2, SoberTeen Driving Insurance
  • I am expecting an announcement of the next PTO director on Friday (May 8). Jim Pooley is being nominated as deputy director of WIPO and is apparently out of the running for the job of PTO director. The two leading candidates thus appear to be Todd Dickinson and David Kappos.
  • If Kappos is nominated, the Peer-to-Patent system (originally funded by IBM) will receive a boost.
  • Speaking of WIPO, the US has proposed “comprehensive” PCT Reform “which would result in the establishment of a new Patent Cooperation Treaty, PCT II. The new treaty would serve to better facilitate workload sharing between the patent offices.
  • I just looked at Prof. Margo Bagley new article on First-to-Invent published in the Berkeley Technology Law Journal. Her conclusions: “The US First-to-Invent system may be unique in the world but it offers significant benefits to small entity entrepreneurs and others.” Bagley sees these benefits as primarily coming through the “robust grace period.” When should FITF be adopted? “Only when such a move will provide a clear advantage for small entities by facilitating the adoption of a one-year grace period outside of the US.” See The Need for Speed (and Grace).
  • Bagley’s short article is well received. My one quibble is that she perpetuates the idea that a desire to end interferences is a major motivation in the debate. She says “Eliminating interferences and the uncertainty associated with them appears to be a prime motivation for the FITF legislation.” Lets be clear, in the US, proponents of the first to file legislation want to make it easier to invalidate patents by creating more prior art.

Patently-O Bits and Bytes No. 110

Articles and Publications, Bits and Bytes, Patent, ,
  • Tom Bakos and Mark Nowotarski have posted their own inventions on the Peer-to-Patent site. You can review them and add prior art: Invention 1, a Risk Assessment Company; Invention 2, SoberTeen Driving Insurance
  • I am expecting an announcement of the next PTO director on Friday (May 8). Jim Pooley is being nominated as deputy director of WIPO and is apparently out of the running for the job of PTO director. The two leading candidates thus appear to be Todd Dickinson and David Kappos.
  • If Kappos is nominated, the Peer-to-Patent system (originally funded by IBM) will receive a boost.
  • Speaking of WIPO, the US has proposed “comprehensive” PCT Reform “which would result in the establishment of a new Patent Cooperation Treaty, PCT II. The new treaty would serve to better facilitate workload sharing between the patent offices.
  • I just looked at Prof. Margo Bagley new article on First-to-Invent published in the Berkeley Technology Law Journal. Her conclusions: “The US First-to-Invent system may be unique in the world but it offers significant benefits to small entity entrepreneurs and others.” Bagley sees these benefits as primarily coming through the “robust grace period.” When should FITF be adopted? “Only when such a move will provide a clear advantage for small entities by facilitating the adoption of a one-year grace period outside of the US.” See The Need for Speed (and Grace).
  • Bagley’s short article is well received. My one quibble is that she perpetuates the idea that a desire to end interferences is a major motivation in the debate. She says “Eliminating interferences and the uncertainty associated with them appears to be a prime motivation for the FITF legislation.” Lets be clear, in the US, proponents of the first to file legislation want to make it easier to invalidate patents by creating more prior art.

Patently-O Bits and Bytes No. 110

Articles and Publications, Bits and Bytes, ,
  • Tom Bakos and Mark Nowotarski have posted their own inventions on the Peer-to-Patent site. You can review them and add prior art: Invention 1, a Risk Assessment Company; Invention 2, SoberTeen Driving Insurance
  • I am expecting an announcement of the next PTO director on Friday (May 8). Jim Pooley is being nominated as deputy director of WIPO and is apparently out of the running for the job of PTO director. The two leading candidates thus appear to be Todd Dickinson and David Kappos.
  • If Kappos is nominated, the Peer-to-Patent system (originally funded by IBM) will receive a boost.
  • Speaking of WIPO, the US has proposed “comprehensive” PCT Reform “which would result in the establishment of a new Patent Cooperation Treaty, PCT II. The new treaty would serve to better facilitate workload sharing between the patent offices.
  • I just looked at Prof. Margo Bagley new article on First-to-Invent published in the Berkeley Technology Law Journal. Her conclusions: “The US First-to-Invent system may be unique in the world but it offers significant benefits to small entity entrepreneurs and others.” Bagley sees these benefits as primarily coming through the “robust grace period.” When should FITF be adopted? “Only when such a move will provide a clear advantage for small entities by facilitating the adoption of a one-year grace period outside of the US.” See The Need for Speed (and Grace).
  • Bagley’s short article is well received. My one quibble is that she perpetuates the idea that a desire to end interferences is a major motivation in the debate. She says “Eliminating interferences and the uncertainty associated with them appears to be a prime motivation for the FITF legislation.” Lets be clear, in the US, proponents of the first to file legislation want to make it easier to invalidate patents by creating more prior art.

Holman: A Contrarian Law Professor’s Two Cents on the Arkansas Carpenter’s (Ciprofloxacin) Petition for Certiorari

Academic Studies, Articles and Publications, Patent,

By Christopher M. Holman, Ph.D., J.D., Associate Professor at UMKC Law School

Professor Mark Lemley recently filed an amici curiae brief on behalf of himself and a cohort of prominent professors of law, economics, and business in support of a petition for certiorari in Arkansas Carpenter's Health and Welfare Fund v. Bayer (the "Professors’ Brief").[1] Joining the professors as amici on the brief are the American Antitrust Institute, the Public Patent Foundation, and AARP. These professors and organizations are asking the Supreme Court to review and reverse the Federal Circuit's decision in In re Ciprofloxacin Hydrochloride Antitrust Litigation.[2] Arkansas Carpenter's is the latest in a string of certiorari petitions that have been filed in cases involving an unsuccessful antitrust challenge to a so-called “reverse payments settlement” between a drug patent owner and a potential generic competitor. So far the Supreme Court has denied all of the petitions.

The defining characteristic of a reverse payments settlement is the transfer of some form of consideration, often but not always cash, from the patent owner to the alleged infringer. In most settlements of patent infringement suits any payment typically flows from the alleged infringer to the patent owner, i.e., in the "forward" direction. Reverse payment settlements of challenges brought against prescription drug patents under the Hatch-Waxman Act have been controversial for years. The FTC and others charge that these agreements are anti-competitive and result in substantially higher prescription drug prices for consumers (and ultimately third-party payers such as the government). The atypical direction of the payment is considered suspect by many who view it as evidence that the merits of the patent case must be weak, and argue that the branded drug company is in effect paying the generic company to stay off the market and using the patent as a mere pretense to skirt antitrust liability. Clearly, absent the patent a naked agreement by a generic drug company to stay off the market in exchange for cash would constitute an antitrust violation.

Nonetheless, courts who have considered the legality of reverse payment settlements have repeatedly concluded that, in view of the incentives and dynamics created by the unique structure of a patent infringement suits brought under the Hatch-Waxman Act, it is neither surprising nor particularly suspicious to find payments flowing from the patent owner to the alleged infringer in the settlement of these suits. In fact, even the FTC has acknowledged that at least some reverse payment settlements are legitimate and even pro-competitive. In most patent infringement litigations, the alleged infringer faces the prospect of potentially large money damages based on its past infringement, so there is often an incentive to pay the patent owner to settle the lawsuit and avoid this risk. In contrast, Hatch-Waxman litigation generally occurs before the potentially infringing generic drug goes on the market. The generic drug company typically faces no risk of money damages for past infringement. At the same time, the drug patent owner faces huge potential financial losses if even one court finds its patent invalid or not infringed, and given the uncertainty patent litigation, particularly at the district court level, it is not surprising that some patent owners would be willing to pay to settle the lawsuit and resolve the uncertainty.

The Professor's Brief is essentially an updated version of a brief Professor Lemley filed in 2006 in support of a petition for certiorari in In re Tamoxifen, a reverse payment settlement antitrust challenge arising out of the Second Circuit. In 2006, I seriously considered signing on to his Tamoxifen amici brief; without having delved into the issue, the notion of reverse payments settlements as characterized by Professor Lemley and others struck me as suspicious and anti-competitive . After all, why would a patent owner pay an alleged infringer to settle a lawsuit unless the merits of the patent case were weak? Under these circumstances, is it not logical to infer that the parties are using the patent lawsuit as a mere pretense to provide cover for what is in actuality an agreement between potential competitors not to compete? However, before I signed on to the brief I decided to read the Second Circuit'sTamoxifen decision, as well as the reverse payments settlement decisions that had already been issued by the Sixth and Eleventh circuits. In his brief, Professor Lemley argued that the decisions from these other circuits were in conflict with the Second Circuit's decision in Tamoxifen. After reading the cases, I found that I disagreed with Professor Lemley's interpretation of the decisions, and concluded that in fact there is no split between the circuits. In fact, the decisions by the Second, Sixth and Eleventh circuits (and now the Federal Circuit) are all quite consistent, taking into account that each case involves its own unique settlement agreements and other surrounding facts, and that the decisions necessarily reflect the facts of the individual case being decided.

Reading these decisions sparked my curiosity, particularly since my interpretation of the case law diverged substantially from that of Lemley and many other academic commentators. I decided to research the topic, and in 2007 I published an article entitled “Do Reverse Payments Settlements Violate the Antitrust Laws?”[3] In the article, I survey the diverse array of patent settlements that have been lumped together under the imprecise label "reverse payment settlement,” and explain the factors that motivate the structure of these settlements. After reviewing the facts surrounding specific settlement agreements, and considering the well reasoned explanations of various judges who have rejected the notion that the mere presence of a reverse payment can render an otherwise legitimate patent settlement illegal, I came to disagree with the position propagated by the FTC and academics such as Professor Lemley, i.e., that the mere inclusion of a reverse payment in an otherwise legal patent litigation settlement renders the agreement per se or presumptively in violation of the antitrust laws. Moreover, my view is aligned with that of the vast majority of courts that have addressed the issue. After a close reading of the decisions, it is clear to me that the purported split between the circuits has so far failed to materialize, although the situation could change if and when other circuits weigh in on the issue.

In this short article penned for Patently-O, I will challenge some of the specific assertions made in the Professors’ Brief. For simplicity, many of the citations in this article are to my law review article. Those interested in a more expansive treatment of the subject are encouraged to consult the law review article, which includes primary cites to the cases and other authorities.

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Supreme Court Reverses: Finding that the Federal Circuit has Appellate Jurisdiction to Review Remand to State Court

Patent, Patent Cases 2009

Carlsbad Tech v. HIF Bio (Supreme Court 2009) 07-1437-1.pdf

This involves the power of a federal appellate court to review a district court order to remand a case back to state court. In its opinion, the Federal Circuit held that it lacked such power. The Supreme Court has now reversed that decision and instead followed lead of the Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits.

HIF first sued Carlsbad in California state court seeking a declaratory judgment of ownership and inventorship of various anti-angiogenesis drugs under California state law. The complaint also alleged various issues of slander, conversion, fraud, etc. The case was removed to federal court based on one federal RICO allegation. However, once that claim was dismissed, the district court refused to continue to exercise its supplemental jurisdiction to hear the remaining state claims — thus remanding the case back to state court. The Federal Circuit refused to review the remand for an abuse of discretion – instead finding that it lacked subject matter jurisdiction to hear the appeal.

The Federal Circuit’s outcome makes sense if you look at the statute. 28 U.S.C. §1447(d) says: ‘An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise . . . .’ However, the Supreme Court has clearly moved beyond the words of the statute in this situation. Here, the Supreme Court reversed — finding that the remand may be appealed in federal court.

When a district court remands claims to a state court after declining to exercise supplemental jurisdiction, the remand order is not based on a lack of subject-matter jurisdiction for purposes of §§1447(c) and (d). The judgment of the Court of Appeals for the Federal Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

On remand, the Federal Circuit will need to determine whether the remand was properly within the discretion of the lower court.

Although the decision was unanimous, the decision is accompanied by three concurring opinions by Justices Stevens, Scalia, and Breyer. Justice Stevens was honest about the court’s failure to follow the text of the statute: “If we were writing on a clean slate, I would adhere to the statute’s text.”

When the Federal Circuit’s decision was issued in 2007, I noted that “[t]his case would have a good shot of being granted certiorari. Its impact on patent law, however, is nil.” [Link]

Pointing Out the Problem to be Solved or Objects of the Invention

Enablement, Patent, Patent Cases 2009

Revolution Eyewear v. Aspex Eyewear (Fed. Cir. 2009) 08-1267.pdf [UPDATED 5/7/09 – To correct a mix-up of parties]

The patents at issue in this litigation focus on eyeglasses configured to be fitted with a second set of sunglass lenses using magnets. Magnetic auxiliary frames were already in the prior art, but the apparent advance is that the magnets are located in projections rather than embedded in the frames — thus allowing for a stronger magnetic bond. The patent also identified a second deficiency in the prior art: insufficient “stability support.”

The district court held that Revolution infringes claim 22 of Patent No. RE37,545.

On appeal, Revolution argued that that the claim was invalid — raising three separate arguments: (1) failure of written description under Section 112 ¶ 1 because the apparatus as claimed does not address both deficiencies in the prior art; (2) failure to claim the “original” invention in the reissued patent under Section 251; and (3) improper expansion of claim scope in the reissue application under the recapture rule. The Federal Circuit rejected each of these invalidity arguments.

Written Description: The written description requirement is often raised when the issued claims are different than those originally filed. New claims must find support in the original specification in a way that “convey[s] with reasonable clarity to those skilled in the art that, as of the filing date sought, [the inventor] was in possession of the [claimed] invention.”

Revolution admits that all of the claimed elements are found in the original drawings. Of course, that is not conclusive for written description. Rather, in cases such as LizardTech and Liebel-Flarsheim, the Federal Circuit found claims invalid even though all the explicitly claimed limitations and arrangements were originally disclosed. The problem with the claims in those cases was that they did not include enough limits.

The invalidity argument in this case is actually more akin to Gentry Gallery. Here, Revolution argues that the patent is invalid because the claimed apparatus does not address both of the stated functions of the invention. The Federal Circuit found that argument lacked legal grounding: “when the specification sets out two different problems present in the prior art, it is unnecessary for each and every claim in the patent to address both problems.” Of course, the negative implication of the court’s statement is that the claim must address at least one of the stated problems. “Inventors can frame their claims to address one problem or several, and the written description requirement will be satisfied as to each claim as long as the description conveys that the inventor was in possession of the invention recited in that claim.” In this case, the claim addressed the magnetic strength problem – and thus satisfied the written description requirement.

Claiming the Same Invention: 35 USC Section 251 focuses on requirements of reissue applications. Under the statute, a reissued patent must be for the same “invention disclosed in the original patent.” Here, the Federal CIrcuit found that this requirement is “analogous to the written description requirement.” “Because we have held that the written description requirement is satisfied, we similarly hold that claim 22 complies with § 251.”

Recapture Rule in Reissue Patents: Reissue patents are intended to correct errors in the originally issued patents. Courts have created the recapture doctrine which would exclude certain intentional acts from the list of correctable ‘errors.’ In particular, under the recapture rule, an intentional and deliberate act of narrowing claims or disclaimer of claim scope in order move the patent application toward issuance will not be considered an “error” under Section 251. Akin to prosecution history estoppel, “the recapture rule is aimed at ensuring that the public can rely on a patentee’s admission during prosecution of an original patent.” On appeal, the Federal Circuit could find no admission or disclaimer being recaptured.

Affirmed.

Notes:

  • Pointing out deficiencies in the prior art: Most patent attorneys no longer discuss the prior art in the patent application because of the potential problems raised by this and other cases. Almost as an aside, this case also notes that by “pointing out the two deficiencies in the prior art, [the inventor] disclaimed an auxiliary frame that is not stably supported in top-mounting configuration and a primary frame that has embedded magnetic members.”

Patently-O Bits and Bytes No. 109

Bits and Bytes, Patent
  • Quote of the week: “Am I starting to grow nostalgic for Jon Dudas? At least he hated all applicants, big and small. Jon, Jon, Jon – should I have not doubted your wisdom?” Greg Aharonian, on contemplating the potential that Dave Kappos (IBM) will be the next PTO director.
  • My Discussion of Kappos: Here.
  • Section 2 of the Sherman Act: The Truth on the Market Blog is hosting a series of interesting articles on reforms of Section 2 (unilateral monopolization). Expect a post from IP/Antitrust leader Hovenkamp on Tuesday or Wednesday. [Link].

Patently-O Bits and Bytes No. 109

Bits and Bytes, Patent
  • Quote of the week: “Am I starting to grow nostalgic for Jon Dudas? At least he hated all applicants, big and small. Jon, Jon, Jon – should I have not doubted your wisdom?” Greg Aharonian, on contemplating the potential that Dave Kappos (IBM) will be the next PTO director.
  • My Discussion of Kappos: Here.
  • Section 2 of the Sherman Act: The Truth on the Market Blog is hosting a series of interesting articles on reforms of Section 2 (unilateral monopolization). Expect a post from IP/Antitrust leader Hovenkamp on Tuesday or Wednesday. [Link].

Patently-O Bits and Bytes No. 109

Bits and Bytes
  • Quote of the week: “Am I starting to grow nostalgic for Jon Dudas? At least he hated all applicants, big and small. Jon, Jon, Jon – should I have not doubted your wisdom?” Greg Aharonian, on contemplating the potential that Dave Kappos (IBM) will be the next PTO director.
  • My Discussion of Kappos: Here.
  • Section 2 of the Sherman Act: The Truth on the Market Blog is hosting a series of interesting articles on reforms of Section 2 (unilateral monopolization). Expect a post from IP/Antitrust leader Hovenkamp on Tuesday or Wednesday. [Link].

Bits and Bytes No. 108

Bits and Bytes, Patent

Bits and Bytes No. 108

Bits and Bytes, Patent

Bits and Bytes No. 108

Bits and Bytes