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

Patent, Patent Cases 2005

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?

Patent,

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

Patent, Patent Cases 2005

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.

Patent, Patent Cases 2005

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

Patent, ,

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

Patent, Patent Cases 2005,

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.

USPTO: Examiner Error Rate at Less Than Five Percent

Patent

The USPTO’s Quality Review Program for Examined Patent Applications conducts post-allowance reviews on a random sample of applications.  (MPEP 1308.03).  These reviews are primarily used for Examiner reviews.

A table in the April/May 2005 POPA newsletter, shows the PTO’s error statistics report for October 2004 through March 2005.  The report is divided by Technology Center (TC) and also shows that the initial quality review decision is reversed or modified approximately 40% of cases.

TC

Total
Cases

Total
Error Findings

Error
Finding
Affirmed

Error
Finding
Reversed

Error
Finding
Modified

Current Error
Rate

Error Finding Reversed

1600

213

19

8

9

2

3.76%

47.37%

1700

303

38

20

14

4

6.60%

36.84%

2100

224

15

12

2

1

5.36%

13.33%

2600

219

5

2

3

0

0.91%

60.00%

2800

440

23

17

5

1

3.86%

21.74%

2900

33

3

2

0

1

6.06%

0.00%

3600

165

16

12

3

1

7.27%

18.75%

3700

221

20

12

6

2

5.43%

30.00%

Totals

1818

139

85

42

12

4.68%

30.22%

In the big picture, the report shows that Examiners are doing a pretty good job of not allowing unpatentable cases.

Claim Construction: Failure to Submit Contrary Definition Results in Inferred Agreement

Patent, Patent Cases 2005,

Brembo v. Alcon Components (N.D. Ill. 2005).

IndyCarBrakesDanica Patrick has been in the media spotlight since her fourth-place finish in this weekend’s Indianapolis 500.  Now, the Brembo brakes on her Indy-car are the subject of a patent infringement lawsuit. 

One disputed claim term was “single part.”  Interestingly, because Alcon provided “no definition for the word ‘single,’ . . . the Court infer[red] that Alcon does not dispute Brembo’s proposed definition.” 

As with virtually all claim construction decisions.  This one is expected to be appealed. 

File Attachment: Brembo.claim.construction.pdf (103 KB)

 

Government Opposes Supreme Court Review in Festo Remix

Patent, Patent Cases 2005, ,

CompressorHoneywellHoneywell v. Hamilton Sundstrand (on petition for certiorari).

Following Festo, some attorneys stopped “amending” claims. Rather, they would cancel claims and add new ones with additional limitations.  In 2004, an en banc Federal Circuit panel held that such rewriting would still create a presumption of prosecution history estoppel that would bar use of the doctrine of equivalents.

[R]ewriting of dependent claims into independent form coupled with the cancellation of the original independent claims creates a presumption of prosecution history estoppel.,

Honeywell has petitioned for a writ of certiorari at the Supreme Court, asking the court to determine whether the CAFC was correct in its interpretation of Festo.

Upon invitation, the Solicitor General has filed a brief for the United States as an amicus curiae.  In the brief, the Government opposes the petition, arguing that the CAFC “correctly applied Festo to the facts of this case.” 

Links:

Patent Reform: Bloggers Take Sides

Patent

Yesterday I posted a note discussing special interest groups in the patent reform debate.  I noted three major coalitions forming:

1) Large high-tech / software companies, including Microsoft and Intel, with the goal of reducing the strength of patents. These companies have major patent portfolios, but fear small companies and individuals that may develop blocking patents.  This group is also garnering support from denouncers of software patents.

2) Other large patent holders, including Big Pharma, with the goal of strengthening and streamlining patents by changing to a first-to-file system and encouraging a post-grant opposition.

3) Start-ups and individual inventors, with the goal of keeping the status quo.

I received a few of great responses from patent bloggers:

  • [Link] Russ Krajec correctly notes the irony in Microsoft taking the same position as the FFII. “FFII and their ilk have tirelessly protested, rallying their troops by proclaiming that the big software companies will exert their patents to harm the small companies. When the truth is uncovered, the big companies are actually intimidated by the small companies, not the other way around.”
  • [Link] Stephen Nipper takes issue with my interest group #3 — Steve notes that “small entities in general support reformations to the patent system in fact, small entities support a number of the current proposals.  HOWEVER, they will not support those ‘reforms’ proposed by large entities for no purpose other than to avoid liability/damages.”
  • [Link] Always able to bring parties together, Matt Buchanan notes that Steve is right and that I am right.  “Based on the record, it is clear that small entities, which includes individual inventors, adamantly oppose changing the injunctive relief provision of the patent law. . . . [However,] small entities have expressed support for many of the reform proposals that are on the table.”

Overlapping Ranges Create Prima Facie Case of Obviousness

Patent, Patent Cases 2005,

PatentlyOImage046In re Harris (Fed. Cir. 2005).

By Mark Chael and Dennis Crouch

The CAFC today upheld a Patent Office determination that pending claims relating to a chemical composition were obvious in view of overlapping prior art ranges.  The patent application at issue relates to nickel-based superalloys for turbine engines that operate under high temperatures. (e.g., CMSX-486®). The superalloy includes 12 elements, with the balance being nickel and incidental impurities. Claim 1, for instance includes:

A nickel-base superalloy comprising, in percentages by weight, from about 4.3% to about 5.3% chromium, (Cr), from about 9.0% to about 10.0% cobalt (Co), . . . the balance being nickel and incidental impurities.

The PTO rejected the claim as obvious in view of prior art references that disclosed overlapping ranges of elemental quantities. Harris appealed to the CAFC.

The PTO has the initial burden of showing prima facie obviousness by presenting evidence that the ranges of a claimed composition overlap the ranges disclosed in the prior art.  In this case, all twelve ranges in claim 1 overlapped the ranges disclosed in the art, and eleven of them were completely encompassed. Despite that fact, Harris argued that the disclosures were too broad to teach any specific alloy falling within the ranges. The CAFC disagreed, finding that the ranges were prima facie obvious because they “sufficiently overlap the [claimed] ranges.”

Rejection affirmed

Links:

Patent Reform: Congress Choosing Sides

Patent, Patent Legislation

The partisan nature of politics often falls apart on patent reform issues. For instance, IP subcommittee leaders Lamar Smith (R) and Howard Berman (D) both support patent reform efforts — although it is unclear if either support all the provisions in the proposed draft legislation.  Now, the New Democrat Coalition (NDC), a group 43 of “pro-growth” Democratic Representatives, has sent an open letter to Smith and Berman supporting the legislative initiative.  The NDC is specifically supporting some of the most controversial aspects of the legislation — including limits to injunctions and damages.

[W]e urge you to include the following among the many important patent reform items in your legislation:

1) Third Party Submission of Prior Art. . .

2) Injunctions: We believe injunctive relief is an important legal reform element of patent reform and we encourage the Committee to take aim at those who seek to abuse the patent system for profit.

3) Treble Damages: . . . this legal standard should be revised. While courts should be able to assess higher damage amounts when a defendant’s actions warrant, treble damages should be limited to those cases where intentional or egregious conduct warrants a punitive measure of damages.

4) Apportionment of Damages: . . . Today, complex products such as semiconductors or software programs include thousands of features, many of which are patented.  As these products have become more complex, the old methods for determining the value of infringement have become strained and have led to some unfair results.

From the side of special interests, I see three major coalitions forming:

1) Large high-tech companies, including Microsoft and Intel, with the goal of reducing the strength of patents. These companies have major patent portfolios, but fear small companies and individuals that may develop blocking patents.  This group is also garnering support from denouncers of software patents.

2) Other large patent holders, including Big Pharma, with the goal of strengthening and streamlining patents by changing to a first-to-file system and encouraging a post-grant opposition.

3) Start-ups and individual inventors, with the goal of keeping the status quo.

The question is: where does your company fit into the picture?

Links:

Wise patent attorneys

Patent

This week, Franklin Pierce gave an honorary degree to C. Yardley Chittick — the oldest practicing patent attorney in the U.S. Chittick is 104 years old. According to NPR,

Chittick, who is 104, lived across the hall from Humphrey Bogart in 1917 at Phillips Academy in Andover, Mass. He turned down a job with Thomas Edison after graduating from MIT with a degree in mechanical engineering. He later earned his law degree from George Washington University.

Although not nearly as advanced, over the past year, I have gotten to know Jim Hawes (Reg. No. 19,680).  Jim is a long-time author of a number of books published by West.  Most recently, he asked me to help him update Patent Application Practice. PAP is already in its second edition and still going strong with updates every six-months.  I would love to hear comments from anyone who has used the book.

May 2005 Report on New Academic Research

Patent

AcademicEach month I post a note discussing new research from the academic side of patent law.  The May 2005 edition includes three great articles from a range of topics:

1. Donald S. Chisum, Reforming Patent Law Reform, 4 J. Marshall Rev. Intell. Prop. L. 336 (2005).  In a short and accessible article, Professor Chisum discusses the nuts and bolts behind patent law reform and asks “reformers” to take a high road.  Specifically, the article proposes six “principles” that any proposed patent legislation should follow: (i) simplicity; (ii) zero-based budgeting; (iii) cost sensitivity; (iv) completeness and generality; (v) international compatibility; and (vi) clarity on effective dates.  As demonstrated by Chisum, the proposed legislation fails each of these principles.  Download the article. (Also, check out footnote 31). (Thanks to Karl Maersch for the tip).

2. Douglas G. Lichtman, Substitutes for the Doctrine of Equivalents: A Response to Meurer and Nard, U Chicago Law & Economics, Olin Working Paper No. 244 (May 2005). In a preemptive strike, Professor Lichtman has taken issue with the forthcoming patent claim scope article by Professors Michael Meurer and Craig Nard. Lichtman argues that the doctrine of equivalents (DOE) is still useful in today’s patent world.  Making three major points, Lichtman argues that the DOE (i) ensures patent viability despite language and foresight limitations; (ii) discourages wasteful efforts to “perfect” claim language; and (iii) allows the patent system to make decisions based on todays knowledge rather than living in the false construct that time stopped at the date of the invention.  Remembering the article’s title, Lichtman argues that the DOE has no equivalent substitutes. Meurer Nard Article, Lichtman Article. (The Meurer Nard article will be published in the Georgetown L.J. later this year).

3. Mark H. Webbink, A New Paradigm for Intellectual Property Rights in Software, 2005 Duke L. & Tech. Rev. 0012 (2005). Webbink is deputy GC at Red Hat.  In this critique, Webbink presents a dissenting voice against a recent article by Microsoft’s GC Bradford Smith (71 U. Chi. L. Rev. 241 (2004)).  In that article, Smith, and his co-author Susan Mann (also of Microsoft) argued that growth in the software industry is a direct result of implementation of strong intellectual property regimes for software.  Webbink makes the case that many other developments were much more important to the explosion in the software industry in the 1980’s and 1990’s.  He lists the development of the personal computer as one such cause for the explosion in off-the-shelf software.  Webbink also gives Microsoft as a test-study — showing that Microsoft did not escalate its patent filings until 1994, “long after the company had become well established.” Read the Article.

 

CAFC Interprets Knorr-Bremse — Finds Willful Infringement

Patent, Patent Cases 2005

PatentlyOImage044Imonex Services v. W.H. Munzprefer Dietmar Trenner (Fed. Cir. 2005).

In one of the first willfulness decisions since Knorr-Bremse, the Court of Appeals for the Federal Circuit (CAFC) has affirmed a district court’s denial of JMOL after a jury verdict of willfulness.

This case involves a mechanical money sorter that differentiates according to coin diameter. Imonex sued several defendants and won a jury verdict that included increased damages for willfulness. 

According to the CAFC, “willfulness requires a showing that the totality of the circumstances evince the egregious conduct that constitutes willful infringement.” (citing Knorr-Bremse). 

In this case, Imonex had disclosed the patented device (that was properly marked) to employees of the defendants several years before filing suits. Likewise, Imonex brochures and literature included statements that the products were patented.  These facts, according to the CAFC, were sufficient to raise a duty of due care. 

“The jury could have reasonably concluded that several instance recounted in the record triggered the [Defendants’] duty of care.”

Once the duty of care exists, the defendants must take steps to ensure that they do not violate the patent.

Affirmed.

Link:

BPAI interprets closed transition phrase for method claims

Patent, Patent Cases 2005

Ex parte Hideaki Ueda (BPAI ) (NOT PRECEDENTIAL)

In a case involving a process for preparing an organic electroluminescent element, the patent examiner issued a rejection for indefiniteness under 35 USC 112, second paragraph.  The examiner indicated that the claimed language of "consisting essentially of" excluded any further steps which materially affect the claimed process. Because the dependent claims included further limitations, the examiner rejected those claims as logically excluded by the "consisting" language.

On appeal at the BPAI, the Board reversed the examiner, finding that the phrase "consisting essentially of" does not limit a claim only to steps specifically recited in the claim — but is only would exclude ingredients which would materially affect basic and novel characteristics.

In this case, the limitations described in the dependent claims were disclosed in the specification.  As such, those elements cannot contradict the basic characteristics of the invention.

Link:

Caterpillar Petitions Supreme Court on Issue of Implied Bias of Jury Members

Patent, Patent Cases 2005,

Caterpillar v. Sturman (on petition for writ of certiorari).

In 2004, the Court of Appeals for the Federal Circuit vacated a jury verdict in a trade secret and contract dispute involving Caterpillar. [Article].  The problem involved Juror No. 3, whose spouse was a current Caterpillar employee — and thus potentially biased.

Normally, the question of whether an individual juror is biased is a factual determination entitled to deference on appeal.  However, the CAFC ruled that the district court’s decision was based on “implied bias, as opposed to actual bias” and thus is reviewed de novo.  Applying Seventh Circuit law, the court found the implied bias is demonstrated by “showing that the juror has a personal connection to the parties or circumstances.”  As such, the spouse’s presence on the jury created an implied bias sufficient to vacate the judgment.

Now, Caterpillar has asked the U.S. Supreme Court to review the case.  In its petition for writ of certiorari, Caterpillar argues that the CAFC’s decision to “automatically disqualify the spouse of an employee of a party” is in conflict with the Second, Fourth, Fifth, Sixth, Eighth, Seventh and Eleventh circuits.  The petition cites Smith v. Phillips (1982) for the proposition that “implied bias doctrine is not viable for parties challenging jurors on a per se basis.  Caterpillar also argues that Sturman should not be able to argue implied bias because the company failed to use its peremptory challenges to protect against potentially biased jurors.

In its brief filed in opposition, Sturman argues that (i) there is “no circuit split” on the issues raised by Caterpillar; (ii) that the CAFC properly applied Seventh Circuit and Supreme Court law; and (iii) that Caterpillar did not raise its current argument below.  Sturman notes that the implied bias has a long history of application “stretching back to Blackstone’s day.”  Sturman also dismisses the importance of the case — since the CAFC’s interpretation of Seventh Circuit law is not binding precedent.

 

Inconsistency Between Views of Two PTO Examiners Found Relevant to Obviousness Determination During Litigation

Patent, ,

PatentlyOImage043Syntex v. Apotex (Fed. Cir. 2005).

Apotex filed an ANDA to begin marketing a generic version of ACULAR, an ophthalmic NSAID protected by a patent owned by Syntex.  Based on the Section IV filing, Syntex filed suit against Apotex for patent infringement.

After a bench trial, the district court determined that the proposed generic infringed the claims of the ACULAR patent and that the patent was not invalid.

Regarding invalidity, the district court concluded that Syntex had overcome obviousness issues by showing that the prior art taught away from the use of the drug/surfactant for opthalmic uses and that such a use created “unexpected results.” In its decision, district court noted that because the prior art at issue had been before the examiner during prosecution, the burden of proving the challenged claims obvious “is particularly high” — and that Apotex had failed to meet this heightened burden. 

On appeal, the CAFC reversed — finding “clear error by the district court in several of the grounds that led it to conclude that the invention claimed by the claims in suit would not have been obvious.” 

Of the several grounds for reversal, the issues of examiner discrepancy, expert testimony, and commercial success may be the most interesting:

Examiner Discrepancies:

Two different PTO examiners worked on various portions of the asserted application and its parent applications and had seemingly inconsistent views regarding patentability of the application.  The CAFC found this relevant to the obviousness determination.

This statement contradicted the express finding of the initial PTO examiner that Syntex’s earlier data failed to show unexpected results. Whether the second examiner was aware of the earlier rejection of Syntex’s claims is unknown. But the relevance of the inconsistency between the views of two examiners is not insignificant.

Although we conclude . . . that Syntex did not commit inequitable conduct . . . we think the unvarnished view of the prosecution history shows some weakness in the conclusion that the patentee established unexpected results for the claimed surfactant.

Expert Testimony:

The Appellate Panel found that the district court erred by failing to examine Apotex’s expert testimony on the question of motivation to combine and unexpected results.

Commercial Success:

The district court relied heavily on the commercial success of ACULAR in its nonobviousness decision.  However, the CAFC requested that the lower court revisit this issue in light of the recent case of Merck v. Teva.

In Merck, the court found that commercial success of an FDA restricted product “has minimal probative value on the issue of obviousness. . . . Financial success is not significantly probative . . . because others were legally barred from commercially testing the [] ideas.”

Concurrence:

In a concurring opinion, Judge Prost disagreed with a portion of the majority opinion that made note of “inconsistency between the views of two examiners” who examined the asserted application and a parent application.

In general, I fail to see how the conduct of a patent applicant is relevant to an obviousness determination. Alleged misconduct at the PTO, in terms of either mischaracterizations or omissions, goes to the heart of an inequitable conduct inquiry but is simply irrelevant to an obviousness inquiry.

 Links:

Does the Constitution Provide for a Right to an Injunction in Patent Cases?

Patent, Patent Legislation

Summer is almost here — How would you fare on this final exam question:

The Progress Clause (Article I, Section 8, Clause 8) of the U.S. Constitution provides that:

“Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Using this clause as a basis for analysis:  

  1. Would it be Constitutional for Congress to eliminate the right to an injunction for patent infringement?
  2. Would it be Constitutional for Congress to modify the right to an injunction so that one is only available if the patentee is “making use” of the invention?