Patent Docs

California Healthcare Institute Issues White Paper on the Impact of Recent Patent Law Developments

    By Donald Zuhn --

On Thursday, the California Healthcare Institute (CHI), an independent organization comprising more than 250 biomedical companies, academic and research institutions, and companies involved in supporting the biomedical community, released a white paper entitled "Impact of Patent Law Changes on Biomedical Investment and Innovation."  The CHI white paper analyzes the implications of recent patent law developments on the biomedical industry, and concludes that a handful of Supreme Court decisions, Congress' attempt to enact patent reform legislation, and the Patent Office's push for new patent rules have combined to reduce the value of life sciences patents will have a "chilling effect on biomedical investment and innovation."

According to the white paper, the first challenge to the patenting of life sciences inventions comes from the Supreme Court's "apparent growing anti-patent stance," which is reflected in a number of Supreme Court decisions, including: Merck KgaA v. Integra Lifesciences I, Ltd. (2005), eBay Inc. v. MercExchange, L.L.C. (2006), MedImmune, Inc. v. Genentech, Inc. (2007), and KSR Int'l Co. v. Teleflex Inc. (2007).  In particular, the report contends that the Court, in Merck, "weakened the ability of patent holders to enforce their rights against companies performing drug research."  The report also concludes that the Court's decision in eBay, which reduces the availability of permanent injunctions to patentees, "weakens the value of patent rights for patent owners who are not commercializing their inventions by making it more difficult for those parties to enjoin an infringer."  With respect to the MedImmune decision, the report observes that the Court has made it easier for a patent licensee to challenge the validity of a licensed patent.  Finally, the report concludes that the Court's decision in KSR lowers the standards used to evaluate obviousness, thus making it harder for applicants to obtain patents and easier for defendants to invalidate them.

The second challenge to the patenting of life sciences inventions comes from Congress' attempt to enact patent reform legislation.  The report contends that the most recent round of proposed patent reforms reflects fundamental differences in business models of two distinct high-tech industries:  life sciences on one side and software/IT on the other.  The report notes that because life sciences products are long-lived and less susceptible to incremental improvement, and further because investors must be able to rely on patent protection to justify the costs of bringing life science products to market, the relative value of life sciences patents is much higher than the relative value of software/IT patents.

According to the CHI report, the final challenge to the patenting of life sciences inventions comes from the "heavy handed approach taken by the U.S. Patent and Trademark Office (USPTO) towards making and promulgating new patent rules."  The report takes the Patent Office to task for its proposed limitations on the permissible number of claims and continuation applications, contending that such modifications will "significantly change the way applicants file their applications and would decrease an applicant's ability to obtain full patent coverage for its inventions," and predicting that the proposed changes to the rules will "have a devastating effect on mid-sized and start-up life science companies."  The report believes that if the proposed rules changes are implemented, life sciences companies will motivated to accept narrower claims in order to obtain the allowances needed to secure investment funding, or even worse, will be forced into a lengthy appeal process that could preclude investment altogether.

The CHI white paper ultimately concludes that these three areas of change "represent an extensive and dramatic shift that will make patents harder to obtain, easier to invalidate, and cheaper to infringe, thus creating incalculable problems for the life sciences community in procuring and maintaining the essential patent protections for their inventions."

For additional information regarding the recent patent law developments discussed in the CHI white paper, please see:

• "Merck v. Integra: The Supreme Court Misses a Golden Opportunity"
• "MedImmune, Inc. v. Genentech, Inc. (2007)"
• "KSR Int'l Co. v. Teleflex Inc. (2007)"
• "They Just Don't Get It - "Patent Reform" at the USPTO"

The (As Yet) Unfulfilled Promise of Personalized Genomics

    By Kevin E. Noonan --

One of the many benefits touted by proponents of the Human Genome Project has been the prospect of personalized medicine, based on a determination of an individual's entire genomic DNA sequence.  The advantages of this information are expected to include an understanding about the status of disease propensity-associated genes, as well as the existence of isoforms of enzymes, such as the P450 system in liver, that can affect how efficacious a particular drug may be in the individual, or alternatively, how ineffective or even toxic the individual's reaction to the drug may be.  Since both types of information represent a huge increase in specific knowledge about an individual (as opposed to the statistical data that underlie such determinations at present), the prospect of being able to ascertain this sequence information is widely considered to be the harbinger of a brave new world of 21st century medicine.

Two more steps towards this brighter tomorrow were taken today.  First, and entirely fittingly, Dr. James Watson (at left) was presented with a pair of CD-ROMs containing approximately 3 billion basepairs encoding his genomic DNA.  The presentation was made by Dr. Richard Gibbs, director of Baylor College of Medicine's Human Genome Sequencing Center, and Dr. Jonathan Rothberg, founder of the company 454 Life Sciences.  Dr. Rothberg's company makes the automated DNA sequencing machines that enabled Dr. Gibbs' team to determine Dr. Watson's genomic DNA sequence in months rather than years, and at a cost of less than one million dollars.  It is thought that expected advances in the technology will reduce the cost even further, to perhaps as little as ten thousand dollars; at that point widespread genomic DNA sequencing may become economically feasible.

The Watson DNA sequence will be made publicly available, with one exception:  Dr. Watson will not disclose the sequence of the gene that encodes apolipoprotein E in his genome, since certain alleles of this gene are associated with the development of Alzheimer's disease.

Ironically, another total genomic DNA sequence will also soon become available, that of Dr. J. Craig Venter (at right), the man whose for-profit company, Celera Corporation, is credited with motivating completion of the human genomic DNA sequence (obtained from a mixture of different individual's DNA) by the Human Genome Project, headed by Dr. Watson.

The other announcement came from the National Human Genome Research Institute (NHGRI), involving a study of 1,000 individuals with symptoms of coronary artery disease.  This study is limited to determining the genomic sequence of between 200 and 400 genes known to be associated with this disease, although there will also be an analysis of other genetic variations.  These genomic determinations will take about two years, and will be correlated with changes in disease states of the participants.  The goal is better understanding of the association between disease and genetic variability.

As promising as these efforts may be, there are reasons to be skeptical about them, at least in the short term.  The determination of individual genomes, while informative for the individuals, may not provide any broader information about the "canonical" human sequence, because there is good evidence from classical population genetics that such a sequence does not exist.  In studies done 40 years ago, Richard Lewontin (at right) and others showed that natural populations contain a great deal of genetic variation in the amino acid sequence of common cellular enzymes.  This variation did not appear to confer any evolutionary advantage on the organisms expressing them (typically, Drosophila), leading to what has been called the "neutralist" school of population biologists.  The explanation is that organisms have this vast genetic variability that is neutral under normal circumstances, but provides a reservoir of adaptability during times associated with speciation - natural disasters, isolated sub-populations, and geographic allopatry.  Thus, a determination of any individual's genomic DNA can be expected to say little about "the" sequence for any particular gene; "the" sequence will, at best, be the most common sequence in a population, requiring information from thousands or perhaps millions of individuals to be accurately portrayed.

Another reason for skepticism about projects like the NHGRI's is that it will be limited to the 200-400 genes now known to be associated with coronary artery disease.  By limiting the scope of the study to these genes, the data produced will increase our understanding of the genes, but not perhaps the underlying disease, for example, if there are genes not yet identified that play an unappreciated (and perhaps important) role in the disease etiology.

Finally, the problem with applying genomics in this way is reminiscent of Abraham Maslow's aphorism, that "if you only have a hammer, you tend to see every problem as a nail."  The determination of the human genomic sequence has been a landmark achievement, but caution suggests that the problems of biology are unlikely to be solved in any meaningful way merely by detecting variabilities in DNA sequence.  Certainly these do exist - sickle cell anemia is the result of a transversion (A to T) mutation that changes a valine residue to a glutamic acid residue.  However, clinicians know that there is variability in how different sickle cell anemia patients react to environmental stimuli, reflecting the interactions of the millions of other genes they express.  Systems biologists are just now beginning to explore the relationships between the biological products of genes, proteins and the cellular structures they create.  It is well to be reminded that we are merely at the beginning of this journey, and that the projects announced today are only the smallest of steps to unraveling (to the extent we are able) the fascinating riddle of life.

FDA Grants Approval to UCB & Sanofi-Aventis Allergy Drug

    By Christopher P. Singer --

In a May 29, 2007 press release, sanofi-aventis and UCB announced that the FDA approved Xyzal® (active ingredient: levocetirizine dihydrochloride) a once-daily prescription antihistamine for the relief of seasonal and perennial allergic rhinitis, as well as for the treatment of chronic idiopathic urticaria (hives) in adults and in children age six and older.  UCB filed the new drug application (NDA) in July 2006 and researched the drug in a number of clinical trials.  Xyzal® was shown to reduce the severity of common symptoms associated with allergies, such as runny nose, itchy eyes, and sneezing.  In patients with hives, the drug was able to reduce the number, size, and itch associated with the hives.

In the fall of 2006, sanofi-aventis signed an agreement with UCB in which it agreed to launch and co-market and Xyzal®, which is expected to be ready for launch for the upcoming fall allergy season.

Invitrogen and Clontech Settle Lengthy Patent Litigation

    By Donald Zuhn --

On Tuesday, Invitrogen Corporation and Clontech Laboratories, Inc. jointly announced that the two companies had reached a settlement in a patent litigation battle that had been begun more than 11 years earlier.  Invitrogen had initiated the lawsuit when it filed a complaint against Clontech in December of 1996 in the District Court of Maryland, asserting that Clontech infringed Invitrogen's U.S. Patent Nos. 5,244,797; 5,405,776; 5,668,005; 6,063,608.  Two weeks ago, on May 17, Invitrogen secured a unanimous verdict from the Maryland jury.

As part of the settlement, Clontech, a wholly-owned subsidiary of Takara Bio Inc., has agreed that the four patents-in-suit are valid and enforceable.  In addition, Clontech has agreed to discontinue sales of its RNase H minus RT products, including its PowerScript products, until Invitrogen's patents expire.  No other details of the settlement were announced.

The patents-in-suit encompass a polypeptide having DNA polymerase activity and substantially no RNase H activity ('797 patent), an isolated DNA molecule encoding such a polypeptide ('005 patent), an isolated "DNA compound" encoding such a polypeptide ('776 patent), and an isolated polypeptide having DNA polymerase activity and substantially reduced RNase H activity ('608 patent).

Commenting on the length of the lawsuit, Invitrogen's trial counsel Robert J. Koch of Milbank, Tweed, Hadley & McCloy LLP noted that "[t]he complexity of the underlying science combined with the multiple patents and number of claims involved, contributed to the duration of the litigation" (see "Patent Infringement Victory for Invitrogen").  Over the course of the litigation, the parties had engaged in three District Court battles and had taken three appeals to the Federal Circuit.

For additional information regarding the settlement, please see:

• Invitrogen's press release
• Clontech's press release

Novacea and Schering-Plough to Collaborate

    By Jason Derry --

Novacea, Inc. and Schering-Plough have announced an agreement to develop and commercialize Asentar®, which is currently in Phase III clinical trials for the treatment of prostate cancer.  Novacea is to receive an upfront payment of $60 million and $12 million in common stock.  Novacea may also receive up to $380 million in future royalty payments on sales of Asentar.  The Agreement is subject to clearance under the Hart-Scott-Rodino Antitrust Improvement Act.

Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing

    By Kevin E. Noonan --

There are new developments in global drug pricing policy today, but while they are good news for sub-Saharan Africa they fall far short of addressing the overarching disaster facing Western drug companies in these disputes (see "Worldwide Drug Pricing Regime in Chaos").

In a move kindly described as charity, The Wall Street Journal reports that Roche Holdings AG announced that it had agreed with two African generic drug companies to transfer technology related to production of the anti-AIDS drug saquinavir "free of charge."  The deal also includes the right for these companies, located in Ethiopia and Zimbabwe, to distribute the drug to any country in sub-Saharan Africa characterized by the United Nations as a "least developed" nation.  Roche also expressed a willingness to enter similar technology transfer agreements under the same terms with other generic drug companies in such countries.

This agreement is one avenue for addressing the economic and political effects of the developing world efforts to reap the benefits of World Trade Organization membership while being able to provide needed drugs for their citizens.  The crisis is particularly acute with regard to anti-AIDS drugs, and in this regard Roche has astutely chosen the countries most affected by the pandemic, and least capable of affording the drugs, to garner the benefits of its charitable largess.  Its actions are also likely to blunt the effectiveness of "more" developed countries, such as Brasil, from establishing markets in such countries for their own generic drug industries.  And by supporting local drug production in Africa, Roche has also began a process for building the types of development relationships that may render these countries' governments less intractable in respecting Roche's patent rights for other, less critically-needed drugs.

The downside of Roche's actions, however, is that they perpetuate the model of Western drug companies treating intellectual property rights as bargaining chips.  They do not address the larger question of resolving the tensions between the once-hoped-for international IP protection regime and resistance to respecting Western drug companies' IP rights when it comes to anti-AIDS and other drugs.  It is possible that deals like the ones Roche has struck with these local drug companies are the best now possible, and insofar as they lessen the pressure of rhetoric (from governments, non-governmental organizations, and even individuals like former President Clinton) to eliminate such IP rights entirely (and have the other benefits mentioned above), they are clearly a coup for Roche.  But they also represent a throwback to the more paternalistic posture of the past, where less developed countries are dependent not on a regulated international system of rights and privileges but on the West's inclinations to act humanely in the face of a crisis (something whose effects can be variable, as seen most recently in Darfur).  They also raise the question of whether Western drug companies, and their governments, have the political will to address the challenges raised by specific actions (like the Doha Declaration and actions taken pursuant thereto by Brasil and others) that most seriously, and systemically, challenge the reigning drug development paradigm.

For additional information regarding this and other related topics, please see:

• "U.S. Trade Policy Becoming Less Pharma-Friendly," May 18, 2007
• "The "Unfairness" of World Intellectual Property Protection According to The New Yorker," May 17, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "Not Getting It about Patented Drug Prices at The Wall Street Journal," May 6, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
• "Abbott Agrees to Offer AIDS Drug at Reduced Price," April 12, 2007
• "No New Abbott Medicines for Thailand," March 14, 2007
• "More Compulsory Licensing in Thailand," February 1, 2007
• "Thailand Compulsory License Still in the News," December 18, 2006
• "Thailand Issues Compulsory License for AIDS Drug," December 6, 2006

ACI Conference on Pharma and Biotech Collaborative Agreements

American Conference Institute (ACI) will be holding a conference on Pharma and Biotech Collaborative Agreements on July 16-17, 2007 in San Francisco, CA.  The conference will provide information about protecting intellectual property rights, minimizing risks through effective due diligence, developing effective governance processes, drafting termination provisions, overcoming antitrust violations, anticipating the impact of generics, and avoiding pitfalls associated with international deals with respect to the structuring, negotiation, and management of pharma and biotech collaborative agreements.  In particular, ACI's faculty will offer presentations on the following topics:

• Adapting negotiation strategies to allow for future merger and acquisition opportunities.
• Strategically planning the deal, gauging value, and structuring compensation in the face of increased competition for early-stage products.
• Leveraging and safeguarding intellectual property rights during negotiations.
• Exploring the potentially damaging impact of MedIimmune v. Genentech.
• Ensuring the agreement includes flexible and scalable methodologies for assessing the value of multiple indications.
• Fine-tuning due diligence processes to identify and minimize risks.
• Successfully negotiating collaborative research.

Two additional master classes will be offered on July 18, 2007.  The morning class is entitled: "Negotiating Industry/University Collaborations: Ethical and Practical Strategies for Maximizing Return on Investment," and the afternoon class is entitled: "The "Win-Win" Collaborative Agreement: Ethical and Practical Negotiating and Drafting Strategies."

The agenda for the Technology IP Due Diligence conference can be found here.  A complete brochure for this conference, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee ranges from $1,995 (conference alone) to $2,595 (conference and one master class) or $3,195 (conference and both master classes).  Those registering on or before June 15, 2007 will receive a $200 discount off the registration fee.  Those interested in registering for the conference can do so here or by calling 1-888-224-2480.

Patent Docs is a media sponsor of ACI's Pharma and Biotech Collaborative Agreements conference.

Court Report

    By Sherri Oslick --

About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases, and a few interesting cases will be selected for periodic monitoring.

Allergan Inc. v. Apotex Inc. et. al.
1:07-cv-00278; filed May 21, 2007 in the District Court of Delaware

Infringement of U.S. Patent Nos. 5,424,078 ("Aqueous Ophthalmic Formulations and Methods for Preserving Same," issued June 13, 1995), 6,562,873 ("Compositions Containing Therapeutically Active Components Having Enhanced Solubility," issued May 13, 2003), 6,627,210 ("Compositions Containing alpha-2-Adrenergic Agonist Components," issued September 30, 2003), 6,641,834 (same title, issued November 4, 2003), and 6,673,337 (same title, issued January 6, 2004) following a paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Allergan's Alphagan® P (brimonidine tartrate ophthalmic solution, used to treat glaucoma).  View the complaint here.

Iowa State University Research Foundation, Inc. v. Monsanto Company et. al.
4:07-cv-00221; filed May 21, 2007 in the Southern District of Iowa

Infringement of U.S. Patent Nos. 5,534,425 ("Soybeans Having Low Linolenic Acid Content and Method of Production," issued July 9, 1996) and 5,710,369 ("A16 soybeans having low linolenic acid content and descendents," issued January 20, 1998) based on Monsanto's Vistive® soybean program.  View the complaint here.

Takeda Pharmaceuticals North America, Inc. et. al. v. Sandoz, Inc.
3:07-cv-02341; filed May 18, 2007 in the District Court of Delaware

Infringement of U.S. Patent Nos. 5,965,584 ("Pharmaceutical Composition," issued October 12, 1999), 6,329,404 (same title, issued December 11, 2001), 6,166,043 (same title, issued December 26, 2000), 6,172,090 (same title, issued January 9, 2001), 6,211,205 (same title, issued April 3, 2001), 6,271,243 (same title, issued August 7, 2001), and 6,303,640 (same title, issued October 16, 2001) following a paragraph IV certification as part of Sandoz's filing of an ANDA to manufacture a generic version of Takeda's Actos® (pioglitazone hydrochloride, used to treat type II diabetes).  View the complaint here.

Michael Crichton's Nightmare: Not Just Talking Monkeys, But Patentable Talking Monkeys

    By Kevin E. Noonan --

The significance of single nucleotide polymorphisms (SNPs) has been appreciated in genetic research ever since the discovery in the early 1980's that SNPs could produce genetic markers known as restriction fragment length polymorphisms (RFLPs).  However, although this type of polymorphism is responsible for well-recognized genetic mutations (for example, in sickle cell anemia, where an A to T transversion mutation changes a glutamic acid to a valine at position six of the amino acid sequence of the  hemoglobin beta-chain), the significance of this type of genetic mutation has been appreciated more than it has been observed - but when observed, such mutations have occasionally been significant (see, for example, U.S. Patent No. 6,051,379).

A striking example of a SNP that alters gene expression and gene product function has been found in a human gene encoding kallikrein-8 (KLK-8).  KLK-8 is a gene expressed in brain and known to be involved in speech and memory.  It was also known that humans differed from mice in producing a splice variant containing an additional 45 amino acids encoded in the intervening sequence adjoining the third exon (which sequence is spliced out in mice but retained in the mRNA produced in human brain tissue).  The significance of this change has been unappreciated, at least in part due to the phylogenetic distance between mice and man.  The analysis of these differences in species closer to man evolutionarily, specifically chimpanzees and other great apes, sheds new light on its significance.

As reported on May 8, 2007 in the online version of Human Mutation, scientists from the Chinese Academy of Sciences have identified a transversion mutation in human KLK-8 gene.  As a consequence, human KLK-8 is alternatively-spliced in human brain tissue, with one of the resulting transcripts being identical to the mouse transcript, and the other having an additional 45 amino acids encoded by exon 3.  In their analysis, these researchers showed not only that the "long form" variant was not expressed in other primates (or any other mammalian species studied), but that the capacity for producing this alternatively-spliced transcript was due to an T to A mutation in the intervening sequence between coding exons 2 and 3.  Other primates do not have this mutation, only humans do (and there is no polymorphism detected among different human racial groups, suggesting this mutation is "fixed" in the human genome), and it can be traced to an event that occurred about 5 million years ago.  The mutation creates a "splicing enhancer" sequence that creates the long form transcript for the first time in primate evolution.

It has been evident for some time that the small overall differences between human and chimpanzee genomic DNA (on the order of 1-2%) could explain the phenotypic differences between the species based not on how many genetic sequence differences there are but on which sequences are different.  The possibilities for genetic differences that are responsible for the species differences include those operating at a histological level (such as chromosomal rearrangements, both local and global, and genetic duplication) and on the genetic level (such as SNPs, alternative splicing, and differential gene expression).  Significantly, human neural tissue exhibits a high level of alternative splicing events, one of the proposed mechanisms that reconcile the phenotypic differences between humans and other primates and the relatively small human transcriptome size (30,000-45,000 genes rather than the anticipated ~100,000 human genes).

The discovery of the KLK-8 mutation, and the existence of transgenic animal technology, suggests the possibility that a transgenic chimpanzee can be produced that expresses the long form of KLK-8 in neural tissues.  Indeed, the only sure way to determine whether this mutation had any effect on neural function would be to make such a transgenic animal.  And this is where it gets interesting (or terrifying, depending on your point of view).  KLK-8 is believed to be involved in the physiological mediation of speech in the brain, and the coincidence of the unique abilities of humans for speech and the existence of the long form mutation raises the possibility that any such transgenic chimpanzee would have an enhanced ability to learn to speak.  Classic attempts to teach other primates to speak (notably, "Nim Chimpsky," at left, in the 1970's) demonstrated that these animals have whatever brain structures or functions are required to be capable of making connections between human words and objects (even emotions).  Thus, a transgenic chimpanzee might be able to speak, and if so, verbal communication with another species could occur for the first time.

The possibilities for bridging the gap in our understanding of how another species thinks are tantalizing.  Other possibilities are less felicitous, including the realization that such a talking chimpanzee is eminently patentable.  U.S. law has a strict prohibition on patenting humans - the 13th Amendment banning slavery - and attempts by Jeremy Rifkin and others to patent human/animal chimeras have been thwarted by administrative decisions in the U.S. Patent and Trademark Office.  (In this regard, the British Department of Health recently reversed a ban on such chimeras, although it has not yet passed the House of Commons.)  There are no such prohibitions against transgenic primate patenting (transgenic animal patent claims usually recite a "non-human" animal), and given the costs of producing such a transgenic chimp, patent protection may be necessary to garner sufficient investment.

Whether the results of these studies will resemble "Dr. Doolittle" or "Planet of the Apes" is, of course, impossible to predict.  However, it is likely that anyone (like author Michael Crichton) who is unconvinced about the wisdom of permitting "patenting life" will be politically opposed, and the extent to which such opposition is persuasive will determine the fate of any attempts to own a talking monkey.

Dr. Noonan has written a number of related articles for Patent Docs, including:

• "The Future of DNA Patenting," February 20, 2007
• "A DNA Patenting Thought Experiment," February 16, 2007
• "Science Fiction in The New York Times," February 13, 2007
• "The Continuing Value of Biotech Patenting," February 4, 2007
• "Anti-Patent (Sullivan?) Malice by the New York Times," January 29, 2007
• "In Support of Gene Patenting," December 7, 2006

Conference & CLE Calendar

May 30, 2007 - "Patent Law After KSR v. Teleflex: Are Your Patents Still Valid?" (ABA CLE)

May 30, 2007 - "Stating the Obvious: Patent Protection after KSR" (Managing Intellectual Property)

May 31, 2007 - "Biotechnology and the Law: A Primer" - Part I (ABA CLE)

May 31, 2007 - "KSR International Co. v. Teleflex Inc.: Discover How the High Court's Ruling Will Alter the Patent Landscape" (West LEGALworks®)

June 7, 2007 - "Biotechnology and the Law: A Primer" - Part II (ABA CLE)

June 13, 2007 - "The Scope and Implications of the Supreme Court's Ruling in KSR v. Teleflex on the Doctrine of Patent Obviousness" (Practising Law Institute)

June 21-22, 2007 - Technology IP Due Diligence Conference (American Conference Institute) - San Francisco, CA***

June 21-22, 2007 - Pharma/Biotech Patent Boot Camp (American Conference Institute) - New York, NY***

June 26-28, 2007 - Euro-Biotech Forum 2007 - Paris, France

June 28, 2007 - "Patent Licensing Post MedImmune: Proceed with Caution: Best Practices for Adapting to Sweeping Change in Licensing" (Strafford CLE Teleconferences)

***Patent Docs is a media sponsor of this conference or CLE.

Strafford CLE on Patent Licensing

Strafford CLE Teleconferences will be offering a telephone conference entitled: "Patent Licensing Post MedImmune: Proceed with Caution: Best Practices for Adapting to Sweeping Change in Licensing" on June 28, 2007 from 1:00-2:30 PM (EST).  In January, the Supreme Court rejected the Federal Circuit's long-standing "reasonable apprehension of suit" test in MedImmune v. Genentech, changing the legal landscape for patent licensing.  In late March, the Federal Circuit substantively applied the MedImmune decision for the first time in SanDisk v. STMicroelectronics, holding that a patent owner that asserts infringement against another entity to demand licensing and royalties cannot prevent the alleged infringer from then litigating the merits of these infringement assertions.

In the Strafford teleconference, speakers Allen E. Hoover of Banner & Witcoff, Michael J. Sacksteder of Fenwick & West, and Michael L. Kiklis of Akin Gump Strauss Hauer & Feld will examine the Federal Circuit's first application of the Supreme Court's decision in MedImmune, discuss the impact of this decision on patent holders and licensees, and outline the best practices for IP asset owners in view of these latest developments in patent licensing law.  The speakers will also address questions such as:

• What is the immediate impact of SanDisk for both patent holders and prospective licensees?
• What clues does SanDisk give patent owners and licensees on the continuing development of patent law in the wake of MedImmune?
• How does SanDisk alter how patent holders and licensees should approach patent licensing negotiations and agreements?
• What are the important considerations for pursuing infringement accusations and for filing declaratory judgments?

An interactive Q&A session will follow the speaker presentations.  The registration fee for this telephone conference ranges from $247 (for those registering before June 1) to $297 (for those registering after June 1).  A program outline for the teleconference can be obtained here.  Those interested in registering for the teleconference, can do so here, or by calling 800-926-7926 ext. 10.

PLI CLE on KSR Int'l Co. v. Teleflex, Inc.

Practising Law Institute (PLI) will be offering a webcast on the Supreme Court's decision in KSR Int'l Co. v. Teleflex, Inc. on June 13, 2007 from 1:00-2:00 PM (EST).  The webcast, entitled "The Scope and Implications of the Supreme Court's Ruling in KSR v. Teleflex on the Doctrine of Patent Obviousness," is the fourth installment in PLI's series of Patent Hot Topic Briefings.  Speakers James W. Dabney of Fried, Frank, Harris, Shriver & Jacobson LLP (counsel of record for KSR International), Thomas C. Goldstein of Akin Gump Strauss Hauer & Feld LLP (counsel of record for Teleflex), and moderator Douglas R. Nemec of Skadden, Arps, Slate, Meagher & Flom LLP will discuss the KSR decision and its implications on the prosecution of applications before the U.S. Patent and Trademark Office, on the litigation of patent cases (including the impact of the decision on summary judgment procedures), and in negotiations over potential patent licenses.  According to PLI, the speakers will also cover such issues as:

• The Federal Circuit's anticipated reaction to KSR.
• Additional obviousness issues that remain to be resolved.
• The Supreme Court's approach to patent questions generally.

The registration fee for this webcast is $299.  Those interested in registering for the webcast, can do so here.

Dispute over Fat-Loss Supplement Settles

    By Robert Dailey --

Norwegian biotech Natural ASA has settled its patent infringement suit against ArkoPharma involving conjugated linoleic acid (CLA), a dietary supplement thought to reduce body fat.  Natural markets its CLA product in the U.S. under the trademark Tonalin®.  (A month's supply of Tonalin® gel capsules sells for about $25.)

Natural ASA is the exclusive licensee of two WARF-owned patents: U.S. Patent Nos. 5,554,646 and 5,814,663.  Both patents cover methods of using CLA to reduce and/or maintain body fat in humans.  ArkoPharma had begun selling CLA-containing dietary products in the U.S. without seeking a license from Natural ASA (or Natural's downstream licensees).  Therefore, Natural filed suit last summer in federal district court in Madison, Wisconsin.  Under the settlement agreement, ArkoPharma will begin purchasing its CLA from Natural's licensees (in addition to paying damages for past infringement).

The settlement spells good news for those holding CLA patent portfolios.  The Tonalin® products have become a popular dietary supplement in the U.S. and Europe.  Natural's dominance in this market is sure to continue.  Furthermore, this result should bode well for U.S.-based PharmaNutrients, which is planning to introduce a CLA formulation that reduces atheriosclerotic plaque.

Additional information regarding the settlement can be found here and here.

Robert Dailey, Ph.D., is a physical chemist and regular Patent Docs contributor.  Dr. Dailey, who recently completed his studies at the University of North Carolina School of Law and passed the patent registration exam, will be joining MBHB this fall.

Patent Profile: Koronis Pharmaceuticals Announces Allowance of HIV Therapeutic Patent

    By Donald Zuhn ---

Last month, Koronis Pharmaceuticals, Inc. announced that the United States Patent and Trademark Office had issued a Notice of Allowance for its application directed to Koronis' lead HIV therapeutic candidate, KP-1461.  The patent that eventually issues from the allowed application will be the first U.S. patent to be awarded to the Redmond, Washington-based biotechnology company.

A search of the USPTO Published Applications database and of Public PAIR indicates that the Notice of Allowance described in Koronis' statement was issued for U.S. App. No. 10/226,799, which is entitled "Mutagenic Nucleoside Analogs for the Treatment of Viral Disease," and which was published on September 11, 2003 as U.S. Patent Application Publication No. 2003/0170872.  The Public PAIR record for this application shows that the Notice of Allowance was mailed on January 11, 2007.  Because the applicants filed a Petition to Revive on January 25, 2007, it is unclear when the patent will issue.

According to the statement released by Koronis, the allowed claims relate to both the use and composition of KP-1461, a small molecule for oral administration that is currently being tested in clinical trials for the treatment of HIV infection.  In a process known as Viral Decay Acceleration (VDA), the novel compound has been shown in in vitro experiments to increase the virus' naturally high mutation rate, with the accumulation of mutations throughout the viral genome ultimately exceeding an error threshold that leads to viral collapse.

The '799 application claims the benefit of U.S. Provisional Application Nos. 60/314,728, filed August 24, 2001.  Representative independent claim 1 of the '799 application recites:

West LEGALworks® CLE on KSR

  West LEGALworks® will be rebroadcasting its webcast entitled: "KSR International Co. v. Teleflex, Inc.: Discover How the High Court's Ruling Will Alter the Patent Landscape" on May 31, 2007 from 1:00-2:30 PM (EST).  Speakers Thomas C. Goldstein of Akin Gump Strauss Hauer & Feld LLP (counsel of record for Teleflex), Robert Greene Sterne and Kenneth C. Bass, III of Sterne, Kessler, Goldstein & Fox P.L.L.C. (co-counsel for Teleflex), and moderator Jeffrey K. Sherwood of Akin Gump Strauss Hauer & Feld LLP will discuss how the KSR decision could alter the patent law landscape and make it harder for applicants to get new patents and defend existing ones, as well as how the decision fine-tunes the manner in which prior-art can be combined to render a claimed invention obvious.  According to Thomson-West, the speakers will provide a balanced perspective on what the Supreme Court ruling means for patent holders, patent applicants, and licensees, and cover such issues as:

• What does the decision mean?
• What does the decision mean for the relationship between the Federal Circuit and the Supreme Court?
• What impact will the Court's decision have on inventors, businesses, corporations and innovation in the U.S.?
• What questions has the Supreme Court left unanswered?
• What can we expect from the USPTO during its transition period?
• What impact will the KSR decision have on generic drug makers?
• What are the implications of KSR on technology companies?
• Will the number of patents filed drop off drastically?
• Will KSR decision stifle innovation?
• What kind of testimony will sway patent examiners?

The registration fee for this webcast is $175.  Those interested in registering for the webcast, can do so here.  The webcast was originally presented on May 8, 2007.

McKesson Info. Solutions, Inc. v. Bridge Med., Inc. (Fed. Cir. 2007)

Federal Circuit Increases Risk for Biotechnology Patent Prosecutors

    By Kevin E. Noonan --

In a decision that might not be noticed by most biotechnology patent prosecutors, McKesson Information Solutions, Inc. v. Bridge Medical, Inc., the Federal Circuit significantly increased the extent to which the duty of candor extends to activities occurring during prosecution of related applications.  At the same time, the Federal Circuit lowered the standard for deciding that activities during patent prosecution could be inferred to be intentional, making it easier for a patent to be found unenforceable due to inequitable conduct.  The effects of this decision are likely to be felt disproportionately by biotech patent applicants, in view of the high frequency with which applications in this technology area are required to file divisional and continuation applications.

In McKesson, the activities found to constitute inequitable conduct occurred during prosecution of three related applications, two examined by one examiner (Traton) and a third by a different examiner (Lev).  (One important point is that this separately-examined application was not explicitly related by priority to either of the other two applications.)  The District Court found, and the Federal Circuit affirmed, inequitable conduct arising from the failure of the applicant's representative to disclose three items of information deemed material to patentability.  The first was a prior art patent, cited by Examiner Lev in the third application, where the reference appears to contradict (or at least call into question) the applicant's arguments in favor of patentability.  The reference disclosed what the Court characterized as a "three-node means of communication," and contrasted this purported disclosure with affirmative statements by patentee's counsel to Examiner Traton in the prosecution of the first two applications that the prior art did not teach "three-node" communication means.  None of the grounds of rejection were based on anticipation under 35 U.S.C. § 102; rather, the issue was whether the combinations of the reference or information would have affected the Examiner's view of the non-obviousness of the claims under examination.

Both the District Court and the Federal Circuit focused on the purported disclosure in the Baker reference of "three-node" communication means and counsel's assertions that the art did not teach the "three-node" means in support of its materiality determination.  Both Courts rejected the patentee's assertions that the Baker reference was cumulative to other art of record, in part because Examiner Lev had added the Baker reference to the putatively cumulative art in making his obviousness rejection.  In addition, even though patentee's counsel informed Examiner Traton of its third application being examined by Examiner Lev, counsel did not inform either examiner about the course of prosecution of any of the co-pending applications.  This was particularly striking in view of counsel making its "no three-node communication means" known in the prior art to Examiner Traton within 17 days of a telephone interview regarding the Baker reference with Examiner Lev; the Court stated that counsel "knew or should have known" of the materiality of the reference from Examiner Lev and thus counsel's failure to disclose to Examiner Traton evinced an intent to deceive.  This inference was bolstered by counsel's cancellation of claims before Examiner Lev in the face of the Baker reference where substantially similar claims were allowed by Examiner Traton.

The second item of non-disclosed information was that counsel did not inform Examiner Traton about the grounds of rejection of substantially-similar claims pending before Examiner Lev.  Supporting the Court's determination that this was material information was counsel's behavior during prosecution, specifically cancelling claims before Examiner Lev in the face of the Baker reference that counsel permitted Examiner Traton to allow without benefit of reviewing the Baker reference.  The Court rejected counsel's reliance on Federal Circuit precedent - specifically, Akron Polymer Container Corp. v. Exxel Container, Inc. (Fed. Cir. 1998) - that disclosure to Examiner Traton of the existence of the application being examined by Examiner Lev was sufficient to discharge counsel's Rule 56 duty of disclosure.

The third and final item of undisclosed material information was the allowance of one of the applications, where the possibility that the allowance might have provoked an obviousness-type double patenting rejection was the basis for determining the materiality of the allowance, citing Dayco Products, Inc. v. Total Containment, Inc. (Fed. Cir. 2003).  Here, counsel did not remind Examiner Traton that he had allowed the second, related continuation-in-part application prior to issuance of the original application as a patent, which oversight was enough to trigger unenforceability for inequitable conduct.  The Court mentioned the fact that the "entirety" of the specification of the earlier-filed parent application was contained in the continuation-in-part application in support of the purported likelihood of obviousness-type double patenting.  While this is a not-uncommon practice in preparing continuation-in-part applications, and the question of obviousness-type double patenting depends on the substance of the claims rather than the disclosure, the Federal Circuit here raised this similarity to greater significance in this case as evidence of an obviousness-type double patenting issue.

The Federal Circuit singled out a number of practices by patentee's counsel in support of its materiality determinations and inferences of intent underlying its finding of inequitable conduct.  For one thing, counsel submitted the same prior art references to both examiners, indicating to the Federal Circuit that the inventions claimed in the applications were very similar.  Curiously, however, the District Court used this coincidence to determine that the undisclosed reference "must have been pretty material," a conclusion that at best is not supported merely by its assertion:  the materiality of a reference should depend on the relationship between what the reference teaches and what is claimed, not whether other art has been cited in common between two applications.  Particularly damning, however, in both the District Court's and the Federal Circuit's eyes, was the position of the prosecuting attorney, that he would have done nothing differently having the benefit of hindsight.  Both Courts interpreted these assertions as evidence of an intent to deceive.

The Federal Circuit (Judge Clevenger writing for the panel and joined by Judge Bryson) affirmed over Judge Newman's dissent, basing its decision on substantial agreement with the District Court's findings coupled with the patentee's failure to show clear error in the District Court's factual findings.  The majority agreed with the District Court that the Baker reference was highly material and not cumulative.  The Federal Circuit further stated that its precedent raised a duty to disclose more than just the existence of co-pending applications; grounds of rejection and art filed in one case must be communicated to an examiner in a second, related case.  Finally, the Federal Circuit affirmatively stated that patentee's counsel "was not entitled to assume that Examiner Traton would recall his decision to grant the claims of the '372 patent when he was examining the '278 application in the absence of a written disclosure to that effect."

Judge Newman dissented, although less strenuously than has been her wont on other matters.  She simply did not believe that the evidence presented below was sufficient to satisfy the requirements of Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc) and Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) concerning the quantum of proof required to support an inequitable conduct claim.  She further made the policy argument that the majority's decision will encourage the "plague" of inequitable conduct charges in patent litigation that the Federal Circuit has descried almost since its installation.  See Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988) (stating that "the habit of charging inequitable conduct in almost every major patent case has become an absolute plague").

The Federal Circuit's decision in this case has several important (and perhaps dire) lessons for patent practitioners, especially those prosecuting biotechnology claims.  The requirement to submit art, even art considered to be cumulative, cited by an Examiner in one case during prosecution of a related case is unremarkable and is an illustration of sound prosecution strategy:  not only does submission reduce the possibility of a successful unenforceability defense, it increases the quantum of evidence required to show invalidity by clear and convincing evidence.

The real mischief arises in the Federal Circuit's affirmance of the principle that not only the existence but the course of prosecution of related applications should be disclosed to Examiners during prosecution.  The institution of the Patent Application Information Retrieval (PAIR) system makes it easier in practice to make note of developments in related cases.  However, the Federal Circuit's decision is properly understood to impose the additional requirement that an applicant (or her counsel) take affirmative steps to bring such parallel prosecution to the attention of each examiner in related applications.  In view of the relatively larger number of divisional and continuation patent applications filed in support of biotechnology inventions, the burden and expense of this type of monitoring will be disproportionately borne by such applicants.

Even more burdensome is the requirement that an applicant remind an examiner of actions taken by that same examiner in related applications, with the concomitant proscription against assuming that the Examiner is aware of the relationships between the applications, even when said relationships have been explicitly made on the record.  This kind of handholding by applicants of Examiners appears unrealistic and unnecessary, in view of the supposed presumption that an Examiner has done his or her job properly.  Announcing a new requirement that applicants take affirmative steps to ensure that Examiners are aware of their actions is incompatible with this presumption.

Although the views of only one panel (and a divided one at that), this case should increase the patent bar's apprehension regarding the Federal Circuit's grasp of its role in bringing consistency to U.S. patent law, and its capacity to come to an agreement not only within particular panels but with its own precedent.  The inconsistency illustrated in the McKesson case can do nothing but make even more uncertain the value of U.S. patents, a result diametrically opposed to Congressional intent in establishing the Federal Circuit.

McKesson Info. Solutions, Inc. v. Bridge Med., Inc. (Fed. Cir. 2007)
Panel: Circuit Judge Newman, Senior Circuit Judge Clevenger, and Circuit Judge Bryson
Opinion by Judge Clevenger
Dissenting opinion by Judge Newman

Additional information regarding this case can be found at Patently-O.

MIP CLE on KSR Int'l Co. v. Teleflex Inc.

Managing Intellectual Property (MIP) will be offering a webcast entitled "Stating the Obvious: Patent Protection after KSR" on Wednesday, May 30, 2007 from 12:00-1:00 PM (EST).  Speakers James Nurton, Editor of MIP; John Dragseth and Katherine Lutton of Fish & Richardson P.C.; and Kevin H. Rhodes, Assistant Chief Intellectual Property Counsel of 3M will discuss the issues raised in the KSR case and the potentially fundamental changes that this decision may have on patent owners, litigants, the courts, and the U.S. Patent Office.  In particular, the panel will address the following topics:

• Will the Court's rejection of the Federal Circuit's rigid test for obviousness make it easier to challenge patents?
• Will it lead to litigation becoming less predictable?
• Will it make it harder for applicants to get patents granted at the USPTO?

Those interested in registering for the webcast can do so here.  The webcast is free of charge.

Celesq® Supreme Court IP Roundup

Celesq® AttorneysEd Center will be offering a webcast entitled "Supreme Court IP Roundup, the Court Asserts Itself: A Discussion of the Supreme Court Decisions in KSR International Co. v. Teleflex, Inc.; Microsoft Corp. v. AT&T Corp.; and MedImmune, Inc. v. Genentech, Inc." on Thursday, May 24, 2007 from 12:00-1:00 PM (EST).  Speaker Anthony F. Lo Cicero of Amster, Rothstein & Ebenstein LLP will discuss these three landmark Supreme Court decisions and the Court's reassertion over the Federal Circuit of its supremacy in patent cases.  Those interested in registering for the webcast can do so here.  The registration fee for the webcast is $60.

Pfizer, Inc. v. Apotex, Inc. (Fed. Cir. 2007)

    By Donald Zuhn --

On Monday, the Federal Circuit denied a combined petition for panel rehearing and rehearing en banc filed by Plaintiff-Appellee Pfizer, Inc.  The Federal Circuit's denial of Pfizer's petition for rehearing en banc was not unanimous, with Judges Newman, Lourie, and Rader each writing their own dissent.

Pfizer had been seeking a rehearing of the Federal Circuit's earlier determination that U.S. Patent No. 4,879,303 (the '303 patent) was obvious in view of U.S. Patent No. 4,572,909 (the '909 patent) and Berge, 1977, "Pharmaceutical Salts," J. Pharm. Sci., 66:1-19 (Berge) (as previously reported by Patent Docs).  Pfizer's '303 patent relates to amlodipine besylate, an acid addition salt of amlodipine that does not exhibit the instability and stickiness in tablet form of amlodipine maleate (an acid addition salt of amlodipine disclosed in Pfizer's '909 patent).

The District Court determined that amlodipine besylate was nonobvious, concluding that "[t]here is no reliable way of predicting the influence of a particular salt species on the behavior of a parent compound," and further, that amlodipine besylate "clearly and unexpectedly illustrates a superior combination of properties when compared to [amlodipine maleate]."  On appeal, a panel consisting of Chief Judge Michel and Judges Mayer and Linn reversed, stating that "[a]t most . . . Pfizer engaged in routine, verification testing to optimize selection of one of several known and clearly suggested pharmaceutically-acceptable salts to ease its commercial manufacturing and marketing of the tablet form of the therapeutic amlodipine."

In dissenting from the denial of a rehearing en banc, Judge Newman stated that a rehearing en banc was necessary because "the panel's statement of the applicable law and its application to the facts of this case are inconsistent with the court's precedent."  In particular, Judge Newman concluded that the panel, in reaching its decision, had (1) applied "the long-discredited 'obvious to try' standard . . . in direct conflict with precedent," (2) declined to give weight to "acknowledged 'secondary considerations' of unexpected results" - namely the stability and lack of stickiness of the besylate salt, and (3) improperly "change[d] the criteria as well as the analysis of patentability."

Because "the panel erred in its legal determinations, and . . . those errors will confuse the law relating to rebuttal of a prima facie case of obviousness of a chemical compound," Judge Lourie concluded that "an en banc hearing is warranted . . . in order to maintain uniformity of the court's decisions and because it presents questions of exceptional importance."  In Judge Lourie's view, the panel erred when it (1) "failed to defer to fact-findings made by the district court that were not clearly erroneous regarding the unexpected properties of amlodipine besylate" and the expectation of success that existed in the art, (2) "improperly placed greater importance on the therapeutic value of a claimed compound over the value of its physical properties" by "conclud[ing] that the improvement of the invention, which related to drug formulation . . . was 'insufficient' to meet the standards of patentability," and (3) contravened the statutory requirement that "[p]atentability shall not be negatived by the manner in which the invention was made" by finding that the invention was the result of routine experimentation, and therefore not patentable.

In the final dissent, Judge Rader noted that "[t]hree separate district courts held trials involving the '303 patent [and] each of those three different district court judges came to the same factual conclusion regarding the nonobviousness of amlodipine besylate."  Agreeing with Judge Lourie, Judge Rader concluded that the District Court's factual determinations were not clearly erroneous, and therefore, that the panel should have deferred to those factual findings.  With regard to the panel's "obvious to try" analysis, Judge Rader felt that "[w]ith unpredictable pharmaceutical inventions, this court more wisely employs a reasonable expectation of success analysis," and since salt selection is unpredictable, there would be no reasonable expectation of success in this case (as three District Court judges had found).  Finally, Judge Rader, like Judge Lourie, believed that the panel had placed far too much emphasis on therapeutic value, essentially disregarding the compound's other beneficial properties.

Pfizer, Inc. v. Apotex, Inc. (Fed. Cir. 2007)
Before: Chief Judge Michel and Circuit Judges Newman, Mayer, Lourie, Rader, Schall, Bryson, Gajarsa, Linn, Dyk, Prost, and Moore
Circuit Judges Newman, Lourie, and Rader each dissenting in a separate opinion

Additional information regarding this case can be found at the Orange Book Blog.

Could Creating a U.S. "Utility Model" Patent Fulfill the "Need" for Patent Law Reform?

    By Kevin E. Noonan --

Last week, Simran Trana (at right), director of Purdue Research Foundation's Office of Technology Commercialization acknowledged the 800 lb. gorilla that everyone talking about patent reform has been ignoring.  Speaking on a panel discussing patent reform legislation at BIO 2007 in Boston, Ms. Trana said that the need for patent law "reform" stems from the disparate needs of technologies like biotechnology and pharmaceuticals on the one hand and the information technology (IT) industry on the other.  IT "has different rules and moves at a different pace" than biotech/pharma, Ms. Trana said.  And the perceived "problems" with patent law - as evidenced by Eolas Tech., Inc. v. Microsoft Corp., the Amazon.com "one-click" patent (U.S. Patent No. 5,960,411) case against Barnes and Noble, and eBay Inc. v. MercExchange, LLC - come from trying to "adapt patenting - which is a long-term, research-intensive system of preserving value - to a vastly evolving quick-turnover technology."

Ms. Trana accurately set out the competing interests.  On the one hand, biotechnology and pharmaceutical research requires vast investments of time and resources in an inherently unpredictable art, where one drug gets to market for every 500-1,000 drug lead compounds tested.  It is not only research that drives costs, but the need to show that a drug is safe and effective, and to do so with sufficient evidence to obtain regulatory approval from the Food and Drug Administration.  In order to be worth the investment, this industry needs solid patent protection so as to be able to recoup the investment and to have the resources to continue the search for new drugs.

IT, on the other hand, is beset by short times-to-market and quick obsolescence, whether as a result of technology-driven imperatives such as Moore's law, or pressures from the market place for "new and improved" products.  Investments are in people who write and develop code, and for all the complexities this endeavor may have, it is orders of magnitude lower than in the biotech/pharma arena, and inherently predictable in outcome.  There is also no need for approval from anyone other than the market place, which imposes additional pressure for development of new products.  Under this regime, patenting provides much less intrinsic value.

With its "one-size-fits-all" patent regime, U.S. patent law has no way to accommodate the differing needs of these two technologies.  Since the U.S. gives one kind of patent, with the same statutory requirements for patentability and the same patent term, what is necessary, even vital, to biotech/pharma has created a wave of complaints from the IT industry that patents are anticompetitive and prevent progress in their technological art, whereas the biotech/pharma industry is vitally dependent on patents to protect their technology.  Given these differences in how the patent system is viewed and used by these industries, compromise is an unsatisfactory solution:  anything less than strong patent protection critically weakens the biotech/pharma industry, while anything close to the type of patent system now in place provides protections both unneeded and unwanted by the IT industry.

One way to address this issue (that has not been part of the present discussion on patent law reform) is to provide different types of patents, with different patentability requirements and different terms, to the two industries, perhaps providing the applicant with a choice of which type of patent the applicant wants.  Such a patenting scheme exists in Europe and many other countries (see list below), where a more limited type of patent, called a "utility model" patent, is available by applicant election.  Having its origins in Germany, the utility model patent requires novelty but is held to a lower standard of non-obviousness, and is particularly useful for inventions having only incremental improvements over the prior art.  Utility model patents have the advantage of being obtained more quickly than "regular" or (in the U.S.) "utility" patents, having shorter terms (typically 2-3 years, although they can be renewed for up to 7-10 years) and being examined under less rigorous standards (and having an appropriately lower presumption of validity); typically a search is performed but there is little or no substantive examination.  Also advantageous is that in most countries, utility model and utility patents can be pursued at the same time, providing a relatively rapid road to patent protection.

Establishing a utility model scheme would provide the U.S. patent system with flexibility for different kinds of inventions requiring different levels of protection.  Novelty can remain the unrelenting standard, since what is not new cannot satisfy the Constitutional mandate for promoting "Progress" in the useful arts.  Lessening or eliminating the non-obviousness requirements, particularly for incremental inventions, would prevent much of the mischief expected to result from the U.S. Supreme Court's KSR Int'l Co. v. Teleflex Inc. decision, which will most likely be directed at just such incremental improvements.  Additional provisions of current proposals, such as expanding the prior user defense to infringement of utility model patents, and requiring applicants to search for novelty-destroying prior art, could be implemented to speed utility model patent procurement and prevent misuse in their enforcement.  Moreover, certain kinds of patents in the biotech/pharma area, such as new formulations, may also benefit, since the bulk of the developmental and regulatory burden for bringing a new drug to market is borne by the active pharmaceutical ingredient molecule, whereas new formulations are relatively more easily produced.

What certainly will not suffice are current efforts to modify the patent system (specifically, The Patent Reform Act of 2007, HR 1908) that decrease infringement costs or reduce the levels of protection available for those inventions where the economic realities of the market place demand them.  Many are apprehensive about the proposed changes, as evidenced from the remarks of Hans Sauer, associate general counsel for BIO: "I think it's a very patent-hostile bill," he said, "there being hardly a single change that does not tilt the advantage to patent infringers."  The U.S. has benefited disproportionately from the biotech and IT boom of the last 25 years, coincident with a time when U.S. patent rights became more consistent and certain.  In view of the many challenges to American prosperity that we are facing, now is not the time for that to change.

Utility model patent protection is currently available in Australia, Argentina, Armenia, Austria, ARIPO, Belarus, Belgium, Brazil, Bulgaria, China, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Guatemala, Hungary, Ireland, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Malaysia, Mexico, Netherlands, OAPI, Peru, Philippines, Poland, Portugal, Republic of Korea, Republic of Moldova, Russian Federation, Slovakia, Spain, Tajikistan, Trinidad & Tobago, Turkey, Ukraine, Uruguay and Uzbekistan.