Patent Docs

Dr. Robert Shapiro Discusses Follow-on Biologics Report

    By Donald Zuhn --

Last week, we reported on a campaign being initiated by Insmed Inc. to raise public awareness regarding the importance of establishing a regulatory pathway in the U.S. for follow-on biologics.  As part of the campaign, Insmed commissioned a study by economist Dr. Robert J. Shapiro (at right) to determine the cost benefits to patients and healthcare providers from the establishment of a follow-on biologics market in the U.S.  Earlier today, Dr. Shapiro held a conference call with a handful of biotech and pharma bloggers to provide a briefing on his report, entitled "The Potential American Market for Generic Biological Treatments and the Associated Cost Savings."

Dr. Shapiro, who served as Under Secretary of Commerce in the Clinton Administration and who is the current chairman of Sonecon, LLC, a private firm advising U.S. and foreign businesses, governments, and non-profit organizations, concludes in his report that "generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years."  During the conference call, Dr. Shapiro reiterated that the cost savings to patients and health care providers from a European-style follow-on biologics regulatory pathway would be "very, very large."

While acknowledging that Congress could craft a regulatory pathway that places many barriers in the way of the biogenerics, he did not think Congress would do so in view of the healthcare financing burdens it was facing.  Moreover, in order for the cost savings detailed in Dr. Shapiro's report to be realized, it was imperative that Congress create an "expedited" pathway in which biogeneric companies would not be required to conduct full clinical trials, but rather would only have to show that a follow-on biologic meets the standard of "profound" or "effective similarity" with respect to the corresponding brand name biologic.  According to Dr. Shapiro, if biogenerics were required to perform full clinical trials, fewer biogenerics would attempt to enter the market, and the reduced competition would result in far less cost savings.  However, with a fairly expedited regulatory pathway in place, Dr. Shapiro predicted cost savings of at least 35%, if not more.

Dr. Shapiro dismissed a conclusion reached by other researchers that the barriers to entering the biologics market would be large for biogenerics, since biologics are much more expensive to manufacture than small molecule therapeutics.  Instead, Dr. Shapiro contended that the barriers would actually be smaller than others predict since biogenerics have alternatives to erecting costly biologics manufacturing facilities, including outsourcing to foreign producers, partnering with European biogenerics, or using now idle U.S. plants.  However, when reminded about the problems Chinese companies have been having in providing safe chemicals, Dr. Shapiro conceded that "whatever the price savings are, they're not enough if the [foreign-produced] product is not safe."

Although Dr. Shapiro recognized that data exclusivity was an "important issue" and noted that he had written about this issue in the past, he stated that he did not take any data exclusivity provisions into consideration in preparing his report.  Interestingly, when asked to identify the largest obstacle that Congress would face in creating a regulatory pathway for follow-on biologics, Dr. Shapiro responded that it would be designing a pathway that establishes both the safety and effectiveness of follow-on biologics, and not selecting an acceptable data exclusivity period.  Nevertheless, Dr. Shapiro was confident that Congress would be able to overcome the "fairly unique challenges" that creating a follow-on biologics -- as opposed to small molecule -- regulatory pathway presented.

For additional information on this and other related topics, please see

• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part II," February 14, 2008
• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007

The (Un)Intended Consequences of the Law

    By Kevin E. Noonan --

In discussing the patent "reform" bill waiting to be brought to the floor for a vote in the Senate (S. 1145), various stakeholders have availed themselves of their right to petition the government for redress in opposition to the bill, and Patent Docs has published, supported, and encouraged those efforts (see "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill").  Just coming into focus recently, flying "under the radar" of the major changes to U.S. patent law contained in the bill, are two provisions nicely illustrating the benefits that can accrue to companies and industries that understand the political process.  And in both cases the effects will be increased costs to the public that have little to do with "reforming" U.S. patent law.

The first of these is the antithesis of reform:  it is a "get out of jail free" card to the banking industry, absolving them of responsibility for infringing electronic check cashing patents.  Shamelessly, these provisions are another example of a cynical use of the emotions and patriotism surrounding the terrorist tragedy of September 11, 2001, wrapping the flag around a provision that would shift the costs of infringement from the banks who reaped the benefits, to U.S. taxpayers who will pay the estimated $1 billion judgment.

The amendments are made to § 287 by adding new subsection (d)(1), reading in pertinent part:

§ 287.  Limitation on damages and other remedies; marking and notice

* * *

(d)(1) With respect to the use by a financial institution of a check collection system that constitutes an infringement under subsection (a) or (b) of section 271, the provisions of sections 281, 283, 284, and 285 shall not apply against the financial institution with respect to such a check collection system.
(2) For the purposes of this subsection --
    (A) the term ''check'' has the meaning given under section 3(6) of the Check Clearing for the 21st Century Act (12 U.S.C. 5002(6));
    (B) the term ''check collection system'' means the use, creation, transmission, receipt, storing, settling, or archiving of truncated checks, substitute checks, check images, or electronic check data associated with or related to any method, system, or process that furthers or effectuates, in whole or in part, any of the purposes of the Check Clearing for the 21st Century Act (12 U.S.C. 5001 et seq.);
    (C) the term ''financial institution'' has the meaning given under section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809);
    (D) the term ''substitute check'' has the meaning given under section 3(16) of the Check Clearing for the 21st Century Act (12 U.S.C. 5002(16)); and
    (E) the term ''truncate'' has the meaning given under section 3(18) of the Check Clearing for the 21st Century Act (12 U.S.C. 5002(18)).

The amendment shall apply to any civil action for patent infringement pending or filed on or after the date of enactment of this Act.

And that's the rub.  Despite the fact that the Federal Reserve proposed an electronic check imaging processing, archival, and retrieval system in 1994, and the architecture and design specifications for the system were issued by the American National Standard for Financial Image Interchange in 1996, and that the Federal Reserve implemented a pilot program in 1999, the Senate report points out that the importance of "this evolving technology . . . became particularly noted in the days after September 11, 2001, when transporting paper checks by airplane was impossible for several days," citing a 2006 law review article by Mark Hargrave (Check 21: A Year in the Life, 38 UCC L.J. 3 Art. 3 (2006) (notwithstanding the illogic of a few days inconvenience as the impetus for electronic check processing)).  The Senate report then accused "several inventors" with seeking patents "in 1999 and 2000 . . . on what the government was already doing" with regard to imaging, storing, and transferring paper checks for processing electronically.  The report also notes that the Check Clearing for the 21st Century Act of 2003 requires "all banks to recognize and accept the digital images of checks it receives from other banks" using technology "developed by the Federal government."  These "facts" then provide the justification for immunizing the banking industry from patent infringement liability for using patented technology to comply with the law.

The facts appear to be different from the reasons stated for the record in the Senate report on S. 1145.  As reported last Friday by Jeffrey H. Birnbaum in The Washington Post (see "Lawmakers Move to Grant Banks Immunity Against Patent Lawsuit"; free registration required) the impetus for this amendment came from Senator Jeff Sessions (R-Ala) (below at right), and is directed specifically at DataTreasury, a small company from Melville, New York that is owned by the inventor of the check imaging technology, Claudio Ballard.  The patents at issue, U.S. Patent Nos. 5,910,988 and 6,032,137, have priority dates of August 27, 1997 and May 19, 1998, more than two years earlier that the accusations found in the Senate report.  Moreover, there is no evidence that Mr. Ballard used technology "developed by the Federal government"; indeed, The New York Times reported in 2004 that Mr. Ballard accused officials at J.P. Morgan Chase of expropriating his ideas (see "Small Company Is Specializing in Suing Banks").  Although accused by defendant banks of obtaining these patents by inequitable conduct for failure to disclose invalidating prior art, the patents were found to be valid after a re-examination by the U.S. Patent and Trademark Office (ironically, the kind of "second look" procedure touted as being a panacea for "bad" patents by those supporting the "opposition" provisions of S. 1145) initiated by a litigation defendant, First Data.  In the re-examination certificates issued by the Office, the patentability of claims 1-25 of the '988 patent and claims 1-43 of the '137 patent were wholly affirmed without amendment, and the patentees were granted additional claims in each patent.

And it isn't as if DataTreasury is unwilling to license its technology.  According to the Post, J.P. Morgan Chase and Merrill Lynch have already done so (as did Affiliated Computer Services and RDM Corp. four years ago according to the Times article).  But other defendants, including Bank of America, Wells Fargo, Wachovia, and Citigroup have not, and they are at risk of an estimated $1 billion in infringement liability.  Faced with this liability, the banking industry, through its lobbying group The Financial Services Roundtable, approached Senator Sessions "because of his long-standing antipathy to plaintiff's attorneys" according to the Post.  (When taking the side of Goliath in a David v. Goliath battle, it can be useful for a politician like Senator Sessions to have David's lawyers to blame.)  Thus, at the behest of banking giants, their lobbyists worked with Senator Sessions to "rush" Judiciary committee members with a 3-page summary of the amendment produced by the lobbyists but distributed by Senator Session's staff.  This is not surprising, since the political action committees of financial institutions made up the largest category of donors to the Senator, accounting for $52,300 in recent donations (equal to one-fourth of all PAC contributions to the Senator as of June, 2007).

The Senator, for his part, not only denies the banking industry has undue influence on this legislation but places the blame squarely on DataTreasury.  His spokesman, Stephen Boyd, said this portion of the law "is designed to protect banking institutions complying with post-9/11 security requirements from the abusive practices of patent trolling trial lawyers seeking personal enrichment, which ultimately will be paid for by checking account customers across America."

But the Senator's concern for the "checking account customers across America" seems to have blinded him to the reality that the damages DataTreasury is owed by the infringing banks will be paid by the taxpayers of America.  As reported today by the Congressional Budget Office (CBO), the $1 billion dollars Senator Sessions has saved the banking industry is likely to constitute a "taking" under the Fifth Amendment's "takings clause," a taking for which DataTreasury can obtain recompense from the Federal Treasury (i.e., you and me).  The CBO report states that "the likelihood of litigation alleging a taking of private property is very high; based on Supreme Court precedents, there is a high likelihood that the federal government will have to pay damages; and there is a strong basis for estimating those damages."  How much?  The CBO states:

we estimate that the expected value of the federal government's liability under section 14 would total about $1 billion, representing a royalty of 0.5 cents per check on more than 200 billion checks cleared by financial institutions that would be authorized to infringe on the rights of patent holders under the bill.  Depending on the outcome of the likely litigation against the government, the cost could be substantially more.

Indeed, this is one of the reasons the Bush Administration opposes S. 1145; a Commerce Department letter to Senator Leahy from Assistant Secretary Nathaniel F. Wienecke, asserted the administration's position that "[l]imiting patent holders' rights and remedies in this instance could reduce innovation in this technology area.  The Administration does not support exceptions to patent protection based on a particular technology" (see "Department of Commerce Sends Letter on Patent Reform to Senator Leahy").

And as for the accusation that DataTreasury is a "patent troll," the Post article reports Ballard's contention that the predatory behavior of the banks, which would rather steal his invention than license it, reduced his company from 100 employees to only 2, and almost destroyed his small business.  These facts might explain why the amendment was "rushed" through the Judiciary Committee, "in minutes and without opposition" and also without giving DataTreasury notice or an opportunity to tell its side of the story (which might otherwise be called the truth).  Further evidence of the "backroom" politics of the measure is the fact that it does not name DataTreasury as its (only) target.  Surely, if the facts were as the banking industry and Senator Sessions contend, the decency of giving Mr. Ballard and DataTreasury a hearing would not have unduly importuned the committee or prevented them from making an informed decision on the bill.

The other provision in the bill, Section 13, permits the U.S. Patent and Trademark Office to extend deadlines for taking certain actions.  The amendment is to Section 2 of the Patent Act:

§ 2.  Powers and duties

* * *

(e) DISCRETION TO ACCEPT LATE FILINGS IN CERTAIN CASES OF UNINTENTIONAL DELAY.--
    (1) IN GENERAL.-- The Director may accept any application or other filing made by --
        (A) an applicant for, or owner of, a patent after the applicable deadline set forth in this title with respect to the application or patent; or
        (B) an applicant for, or owner of, a mark after the applicable deadline under the Trademark Act of 1946 with respect to the registration or other filing of the mark,
to the extent that the Director considers appropriate, if the applicant or owner files a petition within 30 days after such deadline showing, to the satisfaction of the Director, that the delay was unintentional.
    (2) TREATMENT OF DIRECTOR'S ACTIONS ON PETITION.-- If the Director has not made a determination on a petition filed under paragraph (1) within 60 days after the date on which the petition is filed, the petition shall be deemed to be denied.  A decision by the Director not to exercise, or a failure to exercise, the discretion provided by this subsection shall not be subject to judicial review.
    (3) OTHER PROVISIONS NOT AFFECTED.-- This subsection shall not apply to any other provision of this title, or to any provisions of the Trademark Act of 1946, that authorizes the Director to accept, under certain circumstances, applications or other filings made after a statutory deadline or to statutory deadlines that are required by reason of the obligations of the United States under any treaty.
    (4) DEFINITIONS.-- In this subsection, the term ''Trademark Act of 1946'' means the Act entitled ''An Act to provide for the registration and protection of trademarks used in commerce, to carry out provisions of certain international conventions, and for other purposes'', approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to as the Trademark Act of 1946 or the Lanham Act).

These provisions would apply to cases like the celebrated case from the Northern District of California (Aristocrat Tech. Australia v. International Gaming Tech.), where a Federal District Court judge held it outside the scope of the Patent Office's statutory authority to permit an applicant to file a U.S. national phase application based on a PCT application one day after the 30-month deadline date, a decision now before the Federal Circuit for review.  It also would permit The Medicines Company to seek a 1,773 day patent term extension for its heart medication Angiomax, which has been denied because the application for extension under 35 U.S.C. § 156 was filed one day late.  TMC has tried to have this deficiency cured ex post facto before, with a bill introduced by Congressman William Jenkins (R-TN) in 2006 that failed to be considered in the wake of vocal opposition by consumer groups, generics companies, and others.  That bill would have permitted the Office to accept a patent term extension application if the application was filed no more than 5 days late and the applicant showed that the delay was unintentional.

All of this makes even more puzzling the moral tone (and choice of venue) for the ranking committee members, Senators Leahy and Hatch (R-UT) in their op-ed piece in The Washington Times last Friday (see "Meaningful Patent Reform").  Not unexpected were the paeans to the need for reform, the changes in technology, the failure of Congress to "modernize" patent law since 1952 (conveniently ignoring "major" revisions in at least 1984, 1988, 1995, and 1999), the extensive hearings and testimony (which was hardly uniform, at least in ways reform should be implemented), and the bipartisanship of the Senators' goals.  In view of the features discussed above, however, it is a little disquieting to read that the Senators believe that their patent "reform" bill is ultimately about fairness:  fairness in how courts apportion damages, fairness to patentees so that patent infringement does not become "the cost of doing business," fairness in how the Patent Office grants patents, and fairness in the judicial process, whether to prevent abuse of the inequitable conduct defense or to prevent the consideration of venue to be solely "where the plaintiff has the best chance of winning."  These words ring a little hollow in view of the facts, as do the Senators' excoriation of those who "would like to play political football with the bill to pursue other agendas," seemingly because all the agendas that count are through playing.

The Senators say "Now is the time."  We agree:  now is the time to defeat this bill.  Write your Senators.

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

• "BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part I," February 14, 2008
• "BIO Report Indicts "Patent Reform" Proponents," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Patent Reform and Infringement Damages: Some Economic Reasoning," February 5, 2008
• "Department of Commerce Sends Letter on Patent Reform to Senator Leahy," February 4, 2008
• "Biotech and Pharma Opposition to Senate Patent Reform Bill," February 3, 2008
• "The Letters Keep Coming Over the Senate Transom," January 30, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill: An Update," January 23, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill," January 18, 2008
• "Patent Reform Discussed on Senate Floor," December 21, 2007
• "Enjoined New Rules and Patent Reform Finally Appearing on Biotech Industry's Radar," December 20, 2007
• "Chinese IP Judge Discusses Implications of U.S. Patent Reform Bill and Two Congressmen Heed Warning," December 17, 2007
• "IPO President Seeks Deletion of Patent Reform Provision," December 12, 2007
• "Senate May Act on Patent 'Reform' Bill in the New Year," December 2, 2007
• "The Wall Street Journal Gets It Half Right," November 5, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "Reversal in Microsoft Case Weakens Patent Reform Argument," August 7, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007
• "Could Creating a U.S. 'Utility Model' Patent Fulfill the 'Need' for Patent Law Reform?" May 21, 2007

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.

Nycomed GmbH et al. v. Apotex Inc. et al.
1:08-cv-00827; filed February 7, 2008 in the Northern District of Illinois

Infringement of U.S. Patent No. 6,780,881 ("Freeze-dried Pantoprazole Preparation and Pantoprazole Injection," issued August 24, 2004) (licensed to Wyeth) following a paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Wyeth's PROTONIX I.V. (pantoprazole sodium injection, used to treat gastroesophageal reflux disease).  View the complaint here.

Novartis Corp. et al. v. Teva Pharmaceuticals USA, Inc.
2:08-cv-00686; filed February 7, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 6,162,802 ("Synergistic Combination Therapy Using Benazepril and Amlodipine for the Treatment of Cardiovascular Disorders and Compositions Therefor," issued December 19, 2000) following a paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Novartis' Lotrel® (amlodipine besylate/benazepril hydrochloride, used to treat hypertension).  View the complaint here.  [NB: Novartis and Teva are already involved in a litigation over this product; this action is directed to a different dosage strength.]

Orion Corp. v. Sun Pharmaceutical Industries Ltd.
3:08-cv-00720; filed February 7, 2008 in the District Court of New Jersey

Infringement of U.S. Patent No. 5,446,194 ("Pharmacologically Active Catechol Derivatives," issued August 29, 1995) following a paragraph IV certification as part of Sun's filing of an ANDA to manufacture a generic version of Orion's Stalevo® (marketed by Novartis in the U.S.) (entacapone, levodopa, and carbidopa mixture, used to treat Parkinson's disease).  View the complaint here.

New Developments in Patent Protection for Medical Uses in Vietnam

    By Thieu Hai Yen --

For applicants and patent practitioners seeking protection for medical use inventions in Vietnam, recent developments in Vietnamese patent practice would likely be of great interest.  This article is intended to provide readers with information concerning these developments.

When the Vietnamese patent system was first established, medical use claims were not permitted.  With the advent of the Civil Code 1995, a general ground for excluding medical use inventions from patent protection was provided.  The prohibition against medical use inventions was in fact based on the political will of the local government to provide the comparatively poor national population with access to medical treatment and inexpensive drugs.  This is why patent protection for medical use inventions, even if for only a limited period of time, was initially not permitted under Vietnamese patent law.

Consequently, claims to inventions relating to methods of treating, preventing, or diagnosing diseases in animals or human beings were rejected in Vietnam.  This constituted a significant obstacle for applicants in this field, most of which are large pharmaceutical corporations.

As the Vietnamese patent system developed, medical inventions patent practitioners and applicants began to search for other claim formats with which to secure a certain scope for these inventions.  Following much debate on this controversial topic, the Vietnamese National Office of Intellectual Property (NOIP) decided to follow the practice of the European Patent Office (EPO) in allowing second medical use claims, also known as "Swiss-style" claims (i.e., "Use of a compound in the manufacture of medicaments for treating certain diseases").

Strictly speaking, neither use claims nor second medical use claims constituted a statutory class of invention under Vietnamese patent law at the time, and therefore, in contrast with EPO case law, there was no ground for allowing such claims under Vietnamese patent law.  Instead, the ground for such protection was based on a provision under the PCT Guideline for Examination, and a provision under Ordinance 308/DK issued by the Vietnamese National Office of Industrial Property (which was subsequently replaced by the NOIP).  These provisions, though mainly addressing the issues of unity, allowed for a possible grouping of inventions in one patent application, wherein compounds, processes, and uses of known compounds for a different purpose were named.

Over the years, the controversy over medical use inventions continued, but the established practice of pharmaceutical patent prosecution in Vietnam was to amend patent claims relating to medical methods into second medical use format (Swiss-style claims).  In this way, numerous patents containing such claims were granted under the Civil Code 1995.

However, within one year of implementation of the new Intellectual Property Code of Vietnam ("the IP Code"), which was promulgated by the Vietnamese National Assembly in 2005, and which went into effect on July 1, 2006, the Vietnamese NOIP once again started to reject claims directed to use inventions, including second medical use inventions.  The grounds for these new rejections can be found in the IP Code's definition of an invention, which states that an "Invention is a technical solution, in the form of a product or a process, to resolve a specific problem by utilizing the laws of nature" (Article 4.12).  Also, the new Circular 01-2007/TT-BKHCN of the Ministry of Science and Technology, containing detailed guidance for implementation of the IP Code, provides that "a subject-matter of a patent application should be regarded as incompatible with the title of protection applied for [invention] if this subject-matter is not a technical solution, in particular failing to be either a product or a process" (Article 25.3).  Consequently, all patent applications with claims relating to medical uses, in particular, or to uses, in general, are now subject to rejection as early in the patent prosecution process as the stage of examination as to form.

Certainly, the way the Vietnamese NOIP is treating use inventions has triggered a bitter debate regarding the meaning of a "technical solution," as well as to the pros-and-cons of rejecting such claims.  In this regard, it has been observed that the above quoted provisions of the new patent law in Vietnam, which are now applied for the rejection of use claims and medical use claims, have been construed by the NOIP in a manner that is too strict, thereby unduly hurting the interests of many patent applicants.  Furthermore, such a hasty and rigid construction of these legal provisions could well lead to undue implementation of the law as well as an incorrect application of the Vietnamese National Assembly's intent.  This is especially true considering that Vietnam has just joined the World Trade Organization (WTO), and that the legal system should facilitate, not thwart, investment into Vietnam.  Moreover, despite the fact that the Vietnamese law belongs to the civil system, the totality of the precedents in rejecting and allowing medical use claims should not be ignored.

Thieu Hai Yen is a patent attorney with the intellectual property law firm TRUNG THUC JSC. in Hanoi, Vietnam.

Conference & CLE Calendar

February 25-26, 2008 - Pharma/Biotech Patent Claim Drafting and Prosecution (American Conference Institute) - New York, NY***

February 25-26, 2008 - Strategic Intellectual Property Planning (American Conference Institute) - Scottsdale, AZ

March 12, 2008 - Biotechnology, Chemical & Pharmaceutical Art Group Customer Partnership Meeting (U.S. Patent and Trademark Office)

March 30-April 1, 2008 - Advanced Courses (Patent Resources Group) - Bonita Springs, FL

March 31-April 1, 2008 - Document Management, E-Discovery, and Litigation Readiness (American Conference Institute) - New York, NY

April 3-5, 2008 - Advanced Courses (Patent Resources Group) - Bonita Springs, FL

April 7, 2008 - Successful Mulitlateral Patents (Law Seminars International) - Arlington, VA

April 10-12, 2008 - 23rd Annual Intellectual Property Law Conference (American Bar Association) - Arlington, Virginia

April 25, 2008 - Patent Claim Construction (Law Seminars International) - Atlanta, GA

April 30-May 1, 2008 - Pharma/Biotech Collaborative Agreements (American Conference Institute) - San Francisco, CA

June 17-20, 2008 - BIO International Convention (Biotechnology Industry Organization) - San Diego, CA

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

LSI Patent Claim Construction Workshop

Law Seminars International (LSI) will be holding a Patent Claim Construction workshop on April 25, 2008 in Atlanta, GA.  The workshop will provide information on:

• New federal case law developments in claim construction.
• U.S. Patent and Trademark Office rule changes.
• Ways for prosecutors to create patents worthy of litigation.
• Tips for making the patent easier for litigators to defend.
• The Markman hearing demonstrated.
• Claim construction litigation strategies from plaintiff and defendant perspectives.
• Trying your case on the issues remaining after claim construction.
• Setting up effective roles and work relationships for company personnel, outside experts, and litigation counsel.

In particular, LSI's faculty will offer presentations on the following topics:

-- New federal case law developments in claim construction; Implications of Patent Office rule changes:

• Recent Supreme Court and Federal Circuit cases;
• Prospective legislation allowing interlocutory review;
• Other pending issues.

-- Ways for prosecutors to create patents worthy of litigation; Tips for making the patent easier for litigators to defend:

• Outside counsel perspective;
• Drafting an application to comply with today's standards;
• Minimizing the chance that allowed claims will be infringed;
• Making sure to use plain language and get the results you want.

-- Demonstrative Markman hearing:

• A mock Markman hearing:  Trying the case for appeal;
• How the various issues play out from both sides of the table.

-- Claim construction litigation strategies from plaintiff and defendant perspectives…

• Pros and cons of evidentiary hearings;
• Foundations of successful summary judgment motions;
• What to do after the claim construction ruling;
• Defense strategies for getting constructions that tee-up winning summary judgment motions or at trial;
• Selling constructions having examples:  "Non-limitations," "claim as a whole" limitations, and drawings;
• Use of experts, tutorials, and special masters.

-- Trying your case on the issues remaining after claim construction:

• Effective and ineffective strategies (starting at the trial level);
• Differences in approaches for appellant versus respondent;
• Application of waiver and/or estoppel to new claim construction arguments on appeal;
• Role of deference.

-- Case management:  Setting up the most effective roles and work relationships for company personnel, outside experts, and litigation counsel:

• Perspectives on finding the optimal structure for the litigation team;
• Tips for working through issues as they arise;
• In-house and outside counsel perspectives.

The agenda for the Patent Claim Construction workshop can be found here.  A complete brochure for this workshop, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee is $347.50 for students and new employees,$545 for government employees, or $695 for all other attendees. Those interested in registering for the conference can do so here, by calling 1-800-854-8009, or by faxing a registration form to 1-206-567-5058.

LSI Successful Multilateral Patents Workshop

Law Seminars International (LSI) will be holding a Successful Multilateral Patents workshop on April 7, 2008 in Arlington, VA.  The workshop will provide information on:

• Successful patent preparation and prosecution with the EPO, the JPO, Australia, and China.
• Update on multilateral initiatives:  USPTO, EPO, JPO, and others.
• Selecting foreign jurisdictions most appropriate for patent applications.
• Drafting the specification and claims in a multilateral patent application.
• Litigating patents overseas and country-specific considerations.

In particular, LSI's faculty will offer presentations on the following topics:

-- Focus on Europe:  Successful preparation and prosecution:

• Formal requirements for the description and claims in the EPO;
• EPO operational issues;
• The problem/solution approach to inventive step.

-- Focus on Japan:  Successful preparation and prosecution:

• How the JPO determines lack of inventive step;
• How the description and claims should be drafted for success.

-- Focus on Australia:  Successful preparation and prosecution:

• Preparing specifications and claims to maximize patent protection in Australia;
• Tips and strategies for expediting Australian patent prosecution.

-- Focus on China:  Successful preparation and prosecution:

• Perspectives and suggestions on patent prosecution in China;
• The current patent system and development trends of patent law in China

-- Update on multilateral initiatives:  USPTO, EPO, JPO, and others:

• Current trilateral activities directed toward harmonizing application format;
• Status of pilot programs for sharing priority documents and search results;
• New procedures under consideration and their impact on patent practice;
• Activity at WIPO.

-- Managing multilateral patent procurement:

• Selecting foreign jurisdictions most appropriate for patent applications corresponding to a prior U.S. case;
• Ensuring consistent claim coverage across multiple countries;
• Management systems;
• Managing outside counsel.

-- Drafting the specification and claims in a multilateral patent application:

• Can a U.S. application be drafted for later successful foreign prosecution with essentially no changes in the specifications?
• Proposed form introduced;
• Interactive panel addressing benefits and drawbacks;
• Drafting issues;
• Multiple jurisdiction claims.

-- Litigating patents overseas:  Country-specific considerations:

• Pre-filing considerations, discovery issues, trial procedures, remedies, and cultural issues of litigating patents in the UK, Germany, France, Netherlands, Japan and China.

The agenda for the Successful Multilateral Patents workshop can be found here.  A complete brochure for this workshop, including an agenda, list of speakers, and registration form can be downloaded here.

The registration fee is $347.50 for students and new employees,$545 for government employees, or $695 for all other attendees. Those interested in registering for the conference can do so here, by calling 1-800-854-8009, or by faxing a registration form to 1-206-567-5058.

ACI Document Management, E-Discovery, and Litigation Readiness Conference

American Conference Institute (ACI) will be holding its 4th Annual Life Sciences Counsel Guide to Document Management, E-Discovery, and Litigation Readiness conference from March 31 to April 1, 2008 in New York, NY.  The conference will provide information on:

• Balancing the management of documents and electronic records preserved for regulatory and compliance purposes with day-to-day document preservation protocols.
• Streamlining legacy document management systems and record retention policies during mergers, acquisitions, and collaborations.
• Reinforcing utmost data security of highly sensitive stored electronic information pertaining to products, patients, and the company.
• Minimizing the risk of failing to find, preserve, and disclose potentially discoverable data during litigation.
• Reviewing the performance of your IT solutions to ensure cost efficiency and optimization across business units.

In particular, ACI's faculty will offer presentations on the following topics:

• Judicial roundtable:  Tips, traps, and techniques for dealing with e-discovery one year later.
• E-discovery rules and procedures:  Practical implications.
• Minimizing risk through a balanced document management approach:  Reassessing the company’s document management policies to address organization and efficiency.
• Reconciling disparate data retention policies to foster an integrated system for meeting the company’s business, regulatory, and operational needs.
• Revising (or developing) consistent and efficient protocols, playbooks, and other proactive strategies to streamline the e-discovery process.
• Learning from experience:  What’s working and what’s not in managing life science records.
• Converting the company’s e-document management system from a cost center to a business and litigation resource tool.
• Preserving confidentiality of patient, product, and company information while compiling, redacting, and producing proprietary information during discovery.
• Utilizing to your advantage evolving standards for e-discovery in the document production process to your advantage.
• Designing, implementing, and maintaining document management policies that survive multi-jurisdictional and international discovery of scientific e-data.
• Navigating the ethical gray areas in life sciences e-discovery.

The agenda for the Document Management, E-Discovery, and Litigation Readiness 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 $2,195 (for private practice attorneys) to $2,495 (for consultants and service providers).  Those registering on or before February 29, 2008 will receive a $200 discount off the registration fee.  Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

ACI Pharma/Biotech Collaborative Agreements Conference

American Conference Institute (ACI) will be holding a conference on Structuring, Negotiating, and Managing Pharma/Biotech Collaborative Agreements from April 30 to May 1, 2008 in San Francisco, CA.  The conference will provide information on:

• Incorporating new laws and trends into business strategies to ensure successful and lucrative collaborations.
• Negotiating and drafting favorable exclusivity and termination provisions.
• Protecting rights relating to future developments and improvements.
• Evaluating viable deal and compensation structures.
• Minimizing risks through effective due diligence.
• Ensuring effective alliance management through workable governance processes.
• Anticipating the potential impact of merger and acquisition activity on your intellectual property and collaboration strategies.
• Negotiating hotly contested issues with universities and collaborating effectively with government agencies and nonprofits.
• Avoding the top pitfalls of international deals.

In particular, ACI's faculty will offer presentations on the following topics:

• Factoring emerging trends in biotech/pharma collaborations into your dealmaking strategy.
• Negotiating exclusivity, rights to improvements and other critical terms to maximize profits and protect intellectual property.
• Selecting the most viable and profitable compensation structure.
• Incorporating international business strategies into collaborative agreements.
• Minimizing business and intellectual property risks through effective due diligence.
• Limiting the potential for litigation:  Best drafting practices after MedImmune.
• Alliance management:  Establishing governance structures for a successful collaboration.
• Successfully negotiating collaborative research agreements with academic institutions.
• Accessing government technologies and working with nonprofits in the global health field.
• Addressing the critical importance of termination provisions.
• Doing the deal in reverse:  Overcoming challenges in negotiating out licensing by pharma.
• Negotiating agreements in light of the recent surge of merger and acquisition activity.

An additional master class entitled: "The “Win-Win” Collaborative Agreement: Practical and Ethical Negotiating and Drafting Strategies" will be offered on May 2, 2008.  The master class will walk conference attendees through the key aspects of negotiating and drafting that are essential to successful agreements, use actual deals and hypothetical examples to demonstrate how to negotiate terms and draft clauses that anticipate and adapt to change and accommodate competing interests, and address ethical questions that arise during such negotiations.

The agenda for the Pharma/Biotech Collaborative Agreements 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 $2,195 (conference alone) to $2,795 (conference and master class).  Those registering on or before February 29, 2008 will receive a $300 discount off the registration fee and those registering on or before April 4, 2008 will receive a $200 discount off the registration fee.  Those interested in registering for the conference can do so here, by calling 1-888-224-2480, or by faxing a registration form to 1-877-927-1563.

BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part II

    By Donald Zuhn --

Earlier today, Patent Docs participated in a conference call with Jim Greenwood (at right), the President and CEO of the Biotechnology Industry Organization (BIO).  Mr. Greenwood, who represented Pennsylvania's Eighth District in the U.S. House of Representatives from January 1993 through January 2005 prior to his BIO appointment, had invited the press and a handful of biotech and pharma bloggers to participate in the conference call, where he provided a briefing on the prospects for passage of biologics legislation and patent reform legislation in this Congress.  Mr. Greenwood expressed the hope, in view of the time and effort expended in "educating" legislators to the intricacies of these issues, that progress can be made with respect to both pieces of legislation in order to avoid having to retrace steps were the legislation left to the next Congress and administration.

With respect to follow-on biologics, Mr. Greenwood quickly dispelled any notion that BIO or its membership stood in opposition to the passage of follow-on biologics legislation, stating that "Congress ought to act," and noting that BIO had been actively encouraging both houses of Congress to report a bill.  Mr. Greenwood contended that securing passage of a suitable follow-on biologics bill was important because biologics innovators could have difficulty fending off generics with just their patents alone, which might provide no protection, or only weak protection, against biosimilars.  According to Mr. Greenwood, BIO found H.R. 1956, which was introduced by Rep. Jay Inslee (D-WA; at left) last April, to be an acceptable bill.  Mr. Greenwood noted that another potentially suitable bill could soon be introduced by Rep. Anna Eshoo (D-CA; at right).  Rep. Eshoo's bill, which is said to be a compromise between "generics-friendly" legislation written by Rep. Henry Waxman (D-CA) and Rep. Inslee's "brand-friendly" legislation, recently picked up the support of Rep. Joe Barton (R-TX), the top Republican on the House Energy & Commerce Committee (see "Barton Backs Eshoo's Biosimilars Plan").

Whichever bill BIO ultimately backs, Mr. Greenwood stressed the importance of striking a fair balance between the demands of the brand names and those of the generics, stating that "if you give companies incentives to create new drugs, they will."  Mr. Greenwood acknowledged that the sticking point with regard to passage of follow-on biologics legislation would continue to be the period of data exclusivity.  When asked whether BIO would be satisfied with splitting the difference between a 12-year exclusivity period backed by the generics industry and the 14-year period of Rep. Inslee's bill, Mr. Greenwood expressed skepticism that generics would support a 12-year period, stating that "if the generics were at 12, we would have a Valentine's Day love fest."

In addition to providing Mr. Greenwood with an opportunity to once again address patent reform and follow-on biologics legislation (Patent Docs readers will recall that Mr. Greenwood had addressed both topics in a conference call last September; see "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform"), the session with the media also provided BIO with an opportunity to present a number of its position papers on the topics.  In a paper entitled "BIO Principles on Follow-On Biologics," the organization outlined principles that Congress should recognize when crafting a follow-on biologics bill.  Among the key principles that BIO lists are the following:

• Ensure patient safety by mandating that follow-on biologics approval be based on the same rigorous standards of safety, purity, and potency that are applied by Food and Drug Administration (FDA) to the approval of innovator drugs, and assigning follow-on biologics a non-proprietary name that is readily distinguishable from that of the innovator drug.

• Because biologics are more complex than small molecule drugs, follow-on biologics legislation should recognize the scientific differences between the two classes of molecules.  For example, small manufacturing differences between a follow-on biologic and innovator drug can, in contrast with small molecule drugs, result in significant safety or effectiveness differences.

• Preserve incentives for innovation by providing "substantial" non-patent data exclusivity, during which time follow-on biologics manufacturers could not rely on the FDA's prior approval of innovator biologics to support approval of the follow-on manufacturer's own products.  According to the BIO position paper, such data exclusivity is necessary because of the biologics industry's "heavy dependence on access to significant amounts of high-cost public and private investment capital, and the high risks and costs involved in the development of new biologic medicines."

In a companion piece to this article, Kevin Noonan discussed Mr. Greenwood's comments on patent reform legislation.

For additional information on this and other related topics, please see

• "Insmed Announces National Awareness Campaign Regarding Follow-on Biologics," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007

USPTO News: Enhancement of PDX Program and Declaration Form

    By Christopher P. Singer --

In a notice published on February 13, 2008, the U.S. Patent and Trademark Office announced that it is enhancing the priority document exchange program (PDX) with the European Patent Office (EPO) and Japan Patent Office (JPO).  Specifically, in an effort to streamline and simplify the requirements of the program, the USPTO has modified its Declaration form (PTO/SB/01) to include a checkbox which provides the applicant with the option to preauthorize the EPO and JPO to access its US application(s).  Essentially, this updated Declaration form bypasses the need to file a separate form PTO/SB/39.  Prior to the modified Declaration form, the PTO/SB/39 form had to be completed properly in order to permit the JPO and/or the EPO to have access to, and request copies of, the priority U.S. application(s).  The PTO anticipates that the new Declaration form will be used in U.S. applications with a likelihood of having corresponding applications filed in Europe and/or Japan.

For additional information regarding this topic, please see:

• "USPTO e-Commerce Update and Public PAIR Verification System," January 16, 2008
• "USPTO e-Commerce Update," December 5, 2007
• "e-Commerce e-Alert," August 28, 2007
• "JPO-USPTO Priority Document Exchange Update," August 2, 2007
• "USPTO and JPO Launch Electronic Priority Document Exchange," July 31, 2007
• "JPO to Join USPTO and EPO in Priority Document Exchange Program," July 11, 2007
• "Patent Office Announces Simplification of Priority Document Exchange," June 7, 2007
• "USPTO's Advice Concerning Priority Document Exchange (PDX) Program," April 24, 2007
• "EFS-Web Document Indexing and Priority Document Exchange," January 30, 2007
• "Priority Document Exchange Update," January 19, 2007
• "USPTO Implements Priority Document Exchange," January 18, 2007
• "Private PAIR 7.0 and PDX Presentation," December 20, 2006
• "$$$ in Applicants' Pockets!" November 24, 2006

USPTO News: USPTO e-Commerce Update

    By Christopher P. Singer --

An e-Commerce e-Alert sent out today by the U.S. Patent and Trademark Office contained information regarding the upcoming release of new EFS-Web 1.3 enhancements; the availability of all M.P.E.P . Editions; EFS-Web indexing hints for provisional application cover sheets; and tips for submitting images in EFS-Web.

New EFS-Web 1.3 Enhancements

EFS-Web 1.3 is scheduled to be released during the week of February 17th and will include new features, several of which are based on EFS-Web user requests.  The enhanced features include a new auto-process petition, which will allow a filer to submit an age-based Petition to Make Special that will be electronically processed; and form-fillable PDF documents that are compatible with Adobe version 8.1.1.  A complete list of the enhancements associated with EFS-Web 1.3 can be found here.

All Editions of M.P.E.P. Available in PDF Format

As previously reported by Patent Docs and others, the USPTO has made all prior editions and revisions of the Manual of Patent Examining Procedure (M.P.E.P.) available in PDF format.  Early versions (pre-6th Ed.) which had been available only on microfilm have been converted to PDF format and are now available here.

EFS-Web Indexing: Provisional Cover Sheet Document Description

For practitioners filing Provisional Patent Applications using EFS-Web, the PTO and Electronic Business Center (EBC) ask that, when filing, you index the cover sheet using the document description "Provisional Cover Sheet (SB/16)."  Of course, as an alternative to (or in addition to) the provisional cover sheet, an applicant can file an Application Data Sheet (ADS).  However, if you do file with a cover sheet, the PTO asks that you do not select "Transmittal of a New Application" as the document description, as this is an incorrect document description that will cause delays in processing the application.

Submission of Images in EFS-Web

Interestingly, the Office announced (or reminded us?) that PAIR is only capable of displaying portrait orientation and grayscale images.  Consequently, EFS-Web users should avoid submitting landscape-oriented drawings by EFS-Web.  Evidently, PAIR automatically converts the image to portrait and grayscale, which can cause the landscape/color images to be distorted upon viewing.  The only exception to this in EFS-Web based filings is for submission of color images for Design applications.

BIO CEO Provides Update on Patent Reform and Follow-on Biologics Legislation - Part I

    By Kevin E. Noonan --

Earlier today, Patent Docs participated in a conference call with Jim Greenwood (at right), the President and CEO of the Biotechnology Industry Organization (BIO).  Mr. Greenwood, who represented Pennsylvania's Eighth District in the U.S. House of Representatives from January 1993 through January 2005 prior to his BIO appointment, had invited the press and a handful of biotech and pharma bloggers to participate in the conference call, where he provided a briefing on the prospects for passage of biologics legislation and patent reform legislation in this Congress.  Mr. Greenwood expressed the hope, in view of the time and effort expended in "educating" legislators to the intricacies of these issues, that progress can be made  with respect to both pieces of legislation in order to avoid starting over were the legislation left to the next Congress and administration.

The costs of these additional efforts are not worth passage of pending legislation, however, especially with regard to the patent "reform" bill under consideration by the Senate.  Indeed, BIO's position on the Senate patent reform bill is that "no bill is better than this bill," and Mr. Greenwood vowed that BIO would continue to vigorously oppose the pending bill and to work to prevent cloture of debate and a vote, something Senators Leahy (D-VT) and Hatch (R-UT) have promised to do in this session.

BIO agrees with several portions of the bill, including the venue provisions and establishment of some form of post-grant review along the lines of European oppositions which must be filed within nine months of patent grant.  However, it opposes unlimited opportunities to challenge patents (the so-called "second window") for oppositions; citing an economic analysis by Robert J. Shapiro and Aparna Mathur (see "The Economic Implications of Patent Reform: The Deficiencies and Costs of Proposals Regarding the Apportionment of Damages, Post-Grant Opposition, and Inequitable Conduct"), permitting an unlimited opposition period would increase the costs of the system 100-fold, to 1.6 billion dollars a year.  BIO also believes the inequitable conduct provisions of the bill are "nonsensical."  Of particular concern are the apportionment of damages provisions, which BIO argues would encourage patent infringers to consider infringement damages as just another "cost of doing business" and thus devalue patents to the detriment of investment.  On this issue, BIO believes the patent reform process was "hijacked" by the information technology and financial industries, which used intensive lobbying and fundraising efforts to encourage the current provisions of the bill.  Mr. Greenwood thinks the tide may be turning on this point, however, in view of opposition from the Bush administration, BIO and other industry groups, and letters from Senate constituents, including ones from the Association of American Universities, and a number of trade unions (see links below).  However, Mr. Greenwood also acknowledged that patent legislation "puts Members of Congress to sleep" and that made progress in getting a good bill an uphill battle.  A result of the polarized opinions and consequences of the damages provisions of the bill on different industries is that voting on the bill would put Senators in the uncomfortable position of favoring one portion of their constituencies over another, which they would rather not do.  Another consequence of this disparate impact is that it implicates provisions of the TRIPS agreements that mandate there be no disproportionate treatment of different types of intellectual property, but Mr. Greenwood made it clear that he was not contending that passage of the Senate bill would constitute a TRIPS violation.

Finally, since Mr. Greenwood expects that the various stakeholders will get about a week's notice before the bill comes to the Senate floor, as well as disclosure of any amendments Senators Leahy or Hatch intend to report with the bill, the likelihood of a vote in February is diminishing.  In response to a question, Mr. Greenwood said our information was as good as his as to when the bill might come to the Senate floor for a vote.

[NOTE:  As reported by the Intellectual Property Owners Association (IPO) this morning, Senator Leahy (at right) told Congressional Quarterly Today that the bill won’t come to a vote until after the two-week March recess that ends March 28th, and that "certain sections" will be subject to redrafting.]

In a companion piece to this article, Donald Zuhn will be discussing Mr. Greenwood's comments on the follow-on biologics legislation.

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

• "BIO Report Indicts "Patent Reform" Proponents," February 13, 2008
• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Patent Reform and Infringement Damages: Some Economic Reasoning," February 5, 2008
• "Department of Commerce Sends Letter on Patent Reform to Senator Leahy," February 4, 2008
• "Biotech and Pharma Opposition to Senate Patent Reform Bill," February 3, 2008
• "The Letters Keep Coming Over the Senate Transom," January 30, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill: An Update," January 23, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill," January 18, 2008
• "Patent Reform Discussed on Senate Floor," December 21, 2007
• "Enjoined New Rules and Patent Reform Finally Appearing on Biotech Industry's Radar," December 20, 2007
• "Chinese IP Judge Discusses Implications of U.S. Patent Reform Bill and Two Congressmen Heed Warning," December 17, 2007
• "IPO President Seeks Deletion of Patent Reform Provision," December 12, 2007
• "Senate May Act on Patent 'Reform' Bill in the New Year," December 2, 2007
• "The Wall Street Journal Gets It Half Right," November 5, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "Reversal in Microsoft Case Weakens Patent Reform Argument," August 7, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007
• "Could Creating a U.S. 'Utility Model' Patent Fulfill the 'Need' for Patent Law Reform?" May 21, 2007

BIO Report Indicts "Patent Reform" Proponents

    By Kevin E. Noonan --

The Biotechnology Industry Organization (BIO) earlier this week released a report on the purported bases of current patent "reform" efforts that have culminated in passage of a bill in the House of Representatives (H.R. 1908) and consideration of another bill by the Senate (S. 1145).  The Senate bill has been passed out of the Judiciary Committee and is said to be on the Senate's calendar for a floor vote this month, although growing, vocal opposition may derail these efforts.

The BIO report was prepared by Ann Mills, an economist and Assistant Professor, and Dr. Patricia Tereskerz, an attorney, epidemiologist, and Research Associate Professor in the Center for Biomedical Ethics at the University of Virginia.  The report, entitled "Proposed Patent Reform Legislation: Limitations of Empirical Data Used to Inform the Public Policy Debate," assesses the evidence underlying current patent "reform" efforts, and "a huge body of academic literature," and in particular, three studies, as forming the intellectual and evidentiary basis for these efforts.  The studies the authors identified are the Federal Trade Commission's (FTC) report: "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy"; the National Academy of Sciences (NAS) Committee on Intellectual Property Rights in the Knowledge-Based Economy report: "A Patent System for the 21st Century" (which can be purchased or viewed for free here); and the National Research Council's (NRC) Committee on Intellectual Property Rights in Genomic and Protein Research and Innovation report: "Reaping the Benefits of Genomic and Proteomic Research: Intellectual Property Rights, Innovation, and Public Health" (which can be purchased or viewed for free here).  The authors reviewed the methodologies, evidence, and conclusions of each of these reports to assess whether the recommendations were in fact supported by the evidence presented.

The results constitute a scathing indictment of each of the reports, to different degrees, but with one clear conclusion:

[T]he empirical data which is being used to justify the need for overhaul either has serious methodological limitations or is non-existent.  Furthermore, and ironically, the limited studies which do exist, at least in the biotechnology industry, have not found that the patent system imposes serious impediments to innovation and successful commercialization.

Instead, the report illustrates that the different parties involved in the reports saw what they expected to see, a patent system in crisis, based on their own prejudices, interests, and political agendas, and then reported their results in the face of either no empirical evidence, or worse, evidence contrary to their conclusions.

The FTC report in some ways is the most benign, as it involved a survey of 300 participants across the broad spectrum of technology industries involved in the patent system.  These included biotechnology and the pharmaceutical industry; computer hardware manufacturers; and computer software developers and Internet companies.  The survey addressed two related questions:  first, whether the proliferation of patenting activities and patents in each industry had or was at risk for creating a "patent thicket" which would impair innovation; and second, whether the Patent Office was granting poor-quality patents.  Predictably, the results varied across the different industries.  For biotechnology and pharma, the patent thicket problem was not an issue; there may be an exception for research tools and for companies that produce DNA chips, for example, since such chips may require licensing of many different patents to the different genes (up to 10,000) on the chip.  However, in general, the biuotechnology and pharmaceutical industry did not report a concern about patent thickets, perhaps the authors noted because these industries had a lower number of patents.  Also, patents in these industries tend to be more discrete, with products not encompassing multiple patents from different patent-holders as may be common in other industries.

Similarly, poor quality patents were not reported to be a general concern.  Respondents did report that "incrementally modified" drug patents presented a potential problem, due to their capacity to extend patent protection that reduced the effectiveness of generic drug entry.  Litigation was also mentioned as a concern with regard to generics, as was the FTC's own "Generic Drug Study," which was directed at whether FDA policies were thwarting generic-promoting provisions of the Hatch-Waxman Act.  The Virginia authors note, however, that the concerns raised by the Generic Drug Study have been overcome by modifications of the FDA's policies.

The authors also cite the result of a study by Walsh and coworkers (John P. Walsh, Ashish Arora & Wesley Cohen, Effects of Research Tool Patents and Licensing on Biomedical Innovation, in Patents in the Knowledge-Based Economy (Wesley M. Cohen & Stephen Merrill eds), 285-340 (2003); which can be purchased or viewed for free here) that showed that the "tragedy of the anticommons" posited by Heller and Eisenberg (M. Heller and R.S. Eisenberg, "Can Patents Deter Innovation? The Anticommons in Biomedical Research," Science 280: 698-701 (1998)) had, in fact, not come to pass.  Indeed, the biotechnology industry has developed means to avoid patent issues, and the Utility and Written Description Guidelines for examining gene patents (among others) had "clarify[ied] patentability standards for emerging technologies, such as gene-related technologies."  Moreover, guidelines from the National Institutes of Health regarding disposition of materials (including cloned genes) obtained using government monies had also modulated any anticommons tendencies in this industry.

Finally, although some respondents voiced concerns about patent quality generally, the overall perception was that patent quality was high due to the attention this technology area had received from the Patent Office in promulgating examination guidelines.

The situation was not very much different in the computer hardware industry from the biotech and pharma areas, despite differing circumstances from the biotech and pharma areas.  Patent thickets were perceived to be more likely in this industry, because innovation tended to be cumulative, participants were more likely to patent defensively, and patents in this area were perceived to be easier to obtain.  The report noted that the technology in this industry was "complex, rapidly changing, and characterized by incremental innovation" as evidence of the threat that in the industry was being hampered by patent thicket problems (despite not receiving this response to this degree from study participants).

The report also noted the possible depredations of patent "trolls," based on a study that purported to support the conclusion that "Non-Practicing Entities" could contribute to the purported patent thicket through litigation (Bronwyn H. Hall and Rosemarie H. Ziedonis, "The Patent Paradox Revisited: An Empirical Study of Patenting in the US Semiconductor Industry," RAND Journal of Economics (32)1: 101-28 (2001)).  However, the BIO report authors note that the cited report was based not on an empirical study, but on a survey showing that one-third of the lawsuits filed by a group of 136 companies involved patents not invented by the company.  However, not all these patents were asserted by patent trolls, since the study did not take into account transfer of patents between "practicing entities."  Indeed, when the BIO authors reviewed the evidence "supporting" the study's conclusions, they found merely the observation that "[t]here was also an apparent rise in infringement suits brought by specialized 'patent licensing' companies."  Finally, while the study participants in this industry acknowledged the potential for patent thickets to arise, they also noted that "cross-licensing, patent pools, and the licensing requirements of standard setting organizations" have ameliorated this tendency.

The final group, the software developers and Internet companies, held "the most divergent" views about the role of patenting in their industry.  These participants noted that patents were less effective due to other forms of protection, such as copyright, the effects of open-source software, and the effects of competition as the main driver for innovation.  Like their computer hardware industry counterparts, these respondents recognized that innovation tended to be incremental.  In addition, more of these industry participants disputed that patents on software and business methods had a positive effect on innovation.  There was also recognition that the cycle of innovation in this industry was frequently out of sync with the timeframe required for patent protection, so the technology was obsolete before any meaningful patent protection could be obtained.  Because products could contain "dozens, if not hundreds, of patent[ed] . . . individual components" the possibility of patent thickets was high, as was the perceived negative effects of defensive patenting.

The BIO authors conclude that the FTC report "panelists across industries disagreed about the nature and degree to the patent system might be hindering innovation and successful commercialization specifically with regard to the issues of an anti-commons or patent thicket and questionable or poor quality patents," and that "in the biotechnology industry and the computer hardware industries, to the degree to which industry participants are experiencing patent thickets and facing issues associated poor quality patents, they are finding solutions or ways around these problems."

Turning to the NAS report, the BIO authors noted that this report was more concerned with theoretical considerations raised by academic commentators on the possibility that patents, particularly poor-quality patents, could stifle innovation.  Focusing on patent quality, the NAS report assessed three "direct: measures of quality:  "1) the ratio of invalid to valid patent determinations in infringement lawsuits; 2) the error rate in USPTO quality assurance reviews of allowed patent applications; and 3) the rate of claim cancellation or amendment or outright patent revocation in re-examination proceedings in the USPTO."  The BIO authors note that, while seemingly benefiting from a patina of objective, quantifiable data, the actual numbers of patents that "qualified" under the NAS criteria were low:  "the litigation rate was just over 1 percent; only 2-3 percent of a year's  patents are reviewed [for quality] by the USPTO; and re-examined patents represent about 0.3 percent of the total number of patents."  Yet, "despite the lack of evidence showing a systematic decrease in the quality of patents issued – and some evidence showing that the quality of patents has not declined but is actually improving, the NAS believes that the USPTO is issuing more poor quality patents" according to the BIO report authors.  The NAS cited four reasons for their conclusions:  the failure of the Patent Office to automate filing and processing applications; the relatively higher patent approval rate in the U.S. as compared with other countries; the difficulties in examining genomic and business methods patents (despite successful Patent Office efforts specifically relating to each) and finally a perceived "dilution" in the non-obviousness standard.  The BIO authors note that the evidentiary basis for the second of these factors is, to put it kindly, questionable:  while Quillen and Webster estimated that the approval rate is between 85 percent and 97 percent, others put the approval rate at closer to 75 percent, and the USPTO reported an approval rate of 54% in 2006.

The NAS report also raised the issue of patent thicket and anticommons effects in biotechnology, despite the results of the Walsh study to the contrary (and ironically, it was the NAS that commissioned the Walsh study, only to ignore its conclusions when they did not "fit" the expected outcome).  Finally, the NAS report addressed the potential for patents to limit access to clinical testing, based on a study by Merz and colleagues (J. Merz, F.D.G. Kriss, D.D.G. Leonard, and M.K. Cho, "Diagnostic Testing Fails the Test," Nature 415: 577-79 (2002)).  The study reported that 25% of laboratory physicians reported abandoning a clinical test due to patent royalties, but the BIO authors noted that clinical labs typically charge insurers for such tests, in contrast to laboratories engaged in non-commercial research.  Moreover, the NAS study found no evidence that patients lacked access to needed clinical tests as the results of patents.

Finally, the BIO report considered the NRC's study, which was the most limited in scope and was directed to "trends in patenting genomic and protein related inventions."  Surprisingly, the numbers of these patents actually declined in the 2000-2001 timeframe, no doubt due in part to application of the new utility and written description guidelines on applications submitted before the guidelines were promulgated by the Office.  In addition, a survey of 30 U.S. universities and other academic institutions (19 of which responded) owning 75% of the granted genomics patents (2,700 patents) showed their licensing practices "broadly consistent" with the NIH guidelines (including the Guidelines for Licensing Genomic Inventions).  Finally, the NRC commissioned a second Walsh study, directed to a sampling of 1,124 persons that included university investigators, government laboratory workers, and 563 industry scientists.  There were also 299 researchers in "the fields of biomedical sciences of high commercial interest (because of their association with normal and disease-associated cellular processes)."  Thirty-three percent of the sampling responded.  The results of this Walsh study were strikingly similar to the results of the first study.  Of a total of 274 persons whose research goals were "drug discovery" "basic research" or "other," "the top five reasons for project abandonment, were, in order of frequency, 'lack of funding' (62%), 'conflict with other priorities' (60%), 'a judgment that the project was not feasible' (46%), 'not scientifically important (40%),' and 'not that interesting' (35%)  -  in short, scientific reasons having nothing to do with patenting.  Only 10% of all respondents cited 'unreasonable terms for obtaining research inputs' and only 3% cited 'too many patents covering needed research inputs' as reasons for abandoning a research project.

The BIO authors, in summary, report that despite the different scope, goals, and perspectives of the reports and their authors, all of the reports conclude that patents pose a danger to innovation due to patent thickets, anticommons effects, and excessive litigation, and that patent quality is poor.  The three reports also have similar recommendations, including increased post-grant review and other measures to challenge granted patents, a higher non-obviousness standard, and ensuring adequate funding for the Patent Office.  (Paradoxically, this last recommendation has in fact been achieved, as Patent Docs learned from John White on Monday; see "PLI's John White Discusses Tafas/GSK v. Dudas.")

The problem (and the scandal) is that the BIO authors show that there is no empirical evidence for the need for any of these recommended changes.  They do not mince words in this regard:  "the call to overhaul the patent system to date is based more on conjecture, anecdote, and individual publicized cases, rather than upon reality."  They cite the "coincidence" of the timing of these reports and the "ethical, legal, and economic concerns" over "patents in the biotechnology industry such as those involving genes," where "policy has largely been driven by social unease, preliminary data, and literature on adverse practical ramifications, as well as several highly publicized patent protection controversies."  Indeed, the only empirical studies cited by the reports, the two Walsh studies, provided conclusions opposite to the conclusions contained in the reports.  The BIO report concludes with a consideration of the eBay v. MercExchange and KSR Int'l Co. v. Teleflex Inc. cases as evidence that some of the patent quality and patent "troll" concerns raised by reports have been already addressed.

As stated in the BIO report, "there is a lack of evidence that justifies overhauling the patent system in a way that could potentially disrupt the incentives of industries that rely on patents to innovate."  Paradoxically, the BIO authors find evidence in each of the three reports that the current patent system is working, and working well, particularly for the biotechnology industry.  These three reports, along with several academic polemics supported by dubious premises and containing insufficiently-supported conclusions, are the intellectual basis for the patent "reform" efforts currently before Congress.  It is unfortunate that the House and Senate have labored on this legislation without the benefit of the BIO report's analysis of the "unclothed emperor" characteristics of these reports, and the extent to which the evidence does not support the rabble's chanting that the patent system is broken and in need of extensive overhaul.  But it would be even more unfortunate if we didn't all take the time to write our Senators and be sure they know that we know that the patent "reform" movement is without empirical basis, and that we expect them to vote accordingly.

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

• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Patent Reform and Infringement Damages: Some Economic Reasoning," February 5, 2008
• "Department of Commerce Sends Letter on Patent Reform to Senator Leahy," February 4, 2008
• "Biotech and Pharma Opposition to Senate Patent Reform Bill," February 3, 2008
• "The Letters Keep Coming Over the Senate Transom," January 30, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill: An Update," January 23, 2008
• "U.S. Senate Mailbox Filling with Letters against Passage of Patent 'Reform' Bill," January 18, 2008
• "Patent Reform Discussed on Senate Floor," December 21, 2007
• "Enjoined New Rules and Patent Reform Finally Appearing on Biotech Industry's Radar," December 20, 2007
• "Chinese IP Judge Discusses Implications of U.S. Patent Reform Bill and Two Congressmen Heed Warning," December 17, 2007
• "IPO President Seeks Deletion of Patent Reform Provision," December 12, 2007
• "Senate May Act on Patent 'Reform' Bill in the New Year," December 2, 2007
• "The Wall Street Journal Gets It Half Right," November 5, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Patent 'Reform' Bill Passes House of Representatives," September 9, 2007
• "Reversal in Microsoft Case Weakens Patent Reform Argument," August 7, 2007
• "San Francisco Chronicle Opines on Patent Reform," August 6, 2007
• "Patent Reform Bill to Be Delayed?" June 12, 2007
• "Senate Judiciary Committee Holds Hearing on Patent Reform," June 10, 2007
• "Could Creating a U.S. 'Utility Model' Patent Fulfill the 'Need' for Patent Law Reform?" May 21, 2007

Insmed Announces National Awareness Campaign Regarding Follow-on Biologics

    By Donald Zuhn --

Insmed Inc., a biopharmaceutical company based in Richmond, VA, announced last week that it was launching a campaign on the importance of establishing a regulatory pathway in the U.S. for follow-on biologics (sometimes referred to as biosimilars or biogenerics).  Last summer, we reported that the U.S. Senate Committee on Health, Education, Labor & Pensions passed the Biologics Price Competition and Innovation Act (S. 1695).  Although the Senate set the biologics bill aside late last year, it has pledged to resume work on the bill this year.

In its announcement regarding the biologics campaign, Insmed contends that "[t]he scientific, regulatory, and legal framework for the approval of small-molecule generic drugs is well developed," pointing to the biologics regulatory system established in Europe in 2006.  Insmed also contends that a biologics regulatory pathway in the U.S. would result in enhanced patient access to and reduced costs for expensive biotech drugs.

As part of its national awareness campaign, Insmed has commissioned an economic study to determine cost benefits to patients and healthcare providers from the establishment of a follow-on biologics market in the U.S., created an online resource of information regarding follow-on biologics, and established an online interactive advocacy program for follow-on biologics.  Insmed CEO Dr. Geoffrey Allan stated that the company hopes that "this renewed attention and the inception of these initiatives will shed some light onto the significant need for Congress to adopt legislation so patients can receive affordable access to life-saving biotech drugs."

With respect to the commissioned report, Insmed issued a related statement announcing the release of the report, entitled "The Potential American Market for Generic Biological Treatments and the Associated Cost Savings."  The report, which was prepared by economist Dr. Robert J. Shapiro (at left), former Under Secretary of Commerce in the Clinton Administration and current chairman of Sonecon, LLC, a private firm advising U.S. and foreign businesses, governments, and non-profit organizations, concludes that "generic versions of the top 12 categories of biologic treatments with patent protections that have expired or that are due to expire in the near future could save Americans $67 billion to $108 billion over 10 years and $236 billion to $378 billion over 20 years."  Insmed also noted that other published reports have estimated that $10 billion worth of biologic drugs are expected to come off patent by 2010 and that an additional $10 billion are expected to come off by 2015.

Insmed's online resource of follow-on biologics information includes a page discussing the nature of follow-on biologics, the creation of a regulatory pathway, and the company's role in follow-on biologics.  This resource defines follow-on biologics as versions of approved biologics that are developed after the original product has been created with the intention of marketing them after the patent on the innovator product has expired.  With respect to a regulatory pathway, Insmed argues that because biologics are larger proteins made from living cells, product variability should be addressed by requiring abbreviated clinical testing to make sure that differences between the innovator product (brand product) and biologic will not adversely affect the safety and efficacy profile of the drug.

Insmed acknowledges that it would stand to benefit from the establishment of a follow-on biologics regulatory pathway in the U.S. since, as a developer of follow-on biologics, Insmed would be "prepared to enter the market as soon as [such a pathway] becomes a reality."  With regard to its own biologics program, Insmed announced its intention to initiate clinical trials this year on its first two follow-on biologics, both having brand sales of over $3 billion worldwide.

In a third related announcement, Dr. Allan commented on both the Bush Administration's FY 2009 budget, which includes a plan to seek authority for the Food and Drug Administration (FDA) to approve abbreviated applications for follow-on biologics (see "FDA $2.4B Budget Includes Follow-on Biologic Pathway"), and the FDA's proposal to assist Congress on its follow-on biologics legislation.  Dr. Allan stated that the company "hope[s] that the attention this important issue has received from both the White House and FDA will move Congress to adopt follow-on biologics legislation so patients can receive safe and affordable access to generic versions of these life-saving biotech drugs."

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

• "Millennium Pharmaceuticals Spent $1.28 Million on Lobbying in 2007," February 8, 2008
• "Biologics Legislation Faces Unresolved Issues," December 28, 2007
• "BIO CEO Provides Briefing on Follow-On Biologics and Patent Reform," September 18, 2007
• "Biotechs Facing New Challenges," August 13, 2007
• "Three New Biosimilars Pass EMEA Test," July 26, 2007
• "European Medicines Agency Releases Paper on Biosmiliar Medicines," July 23, 2007
• "Senate Committee Passes Biologics Legislation," July 5, 2007

USPTO News: Director Announces USPTO Budget Proposal; PTO Makes Old MPEPs Available

    By Donald Zuhn --

Last week, Jon Dudas (at right), Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO), presented the President’s fiscal year 2009 budget request for the USPTO.  The Bush Administration is seeking $2.075 billion for the Patent Office, which represents an 8% increase over the FY 2008 budget of $1.916 billion.  The Director noted that the FY 2008 budget gave the Patent Office full access to anticipated fee revenues, and the proposed budget for FY 2009 would continue this practice for a fifth consecutive year.

Commenting on the budget proposal, Director Dudas stated that "it provides us the resources to continue our record hiring of patent examiners and to streamline our processes to achieve maximum operational efficiency.”  The Director indicated that the Patent Office plans to use its Congressional appropriations to hire 1,200 more patent examiners, expand the Office's telework programs, and improve electronic communications with applicants in 2009.

Reflecting on 2007, Director Dudas noted that the Office had examined more than 362,000 applications in 2007 -- a new high -- while maintaining an "examination compliance rate" of 96.5% -- a 25-year high.  The USPTO announcement did not define how it determines the examination compliance rate.

The Patent Office also announced last week that it was making all prior editions of the Manual of Patent Examining Procedure (MPEP) available in electronic format on the Office's website.  Prior versions of the MPEP, including the original version of the MPEP published in 1948, can be found here.  All told, the Patent Office has published 116 editions and revisions of the MPEP between 1948 and August 2006, when the Eighth Edition, Revision 5 was published.

PLI's John White Discusses Tafas/GSK v. Dudas

    By Kevin E. Noonan --

John White (at right) of the PLI Patent Blog came to visit some of the Patent Docs today, and he had more to say about the summary judgment hearing in Tafas/GSK v. Dudas held last Friday in the Eastern District of Virginia before Judge James C. Cacheris.  Readers will recall that Judge Cacheris granted Tafas/GSK’s preliminary injunction motion last October that prevented the November 1st enactment of the U.S. Patent and Trademark Office’s misguided and ill-conceived “new rules” limiting the number of claims and continuation applications an applicant can file.

Although Judge Cacheris took the unusual step (in the Eastern District of Virginia) of taking the matter under advisement, John thinks we should see a decision in about a week or so.  And while unwilling to say the Court’s decision will be a “slam dunk,” he reported getting the feeling that Judge Cacheris was inclined to stick to his original determination that the rules should not be implemented (while admitting that there was never a great deal of profit to be made by judicial tealeaf reading).

The hearing was held in the ceremonial courtroom in the Eastern District courthouse, its largest, and it was packed with about 100 people.  John summarized the arguments for both sides from his notes taken during the hearing.  GSK first argued that the PTO actions were outside the scope of its authority under 35 U.S.C. § 2(b)(2), being of a substantive nature and not merely procedural.  Second, GSK argued that even if the PTO had the statutory authority to promulgate the “new rules,” they were contrary to 35 U.S.C. § 120, which by its plain meaning contains no limitations on the number of continuing applications an applicant may file.  Responding to questioning from the Court (which was a very “hot” bench, a characteristic of this court) regarding the arbitrary and capricious standard for overturning agency actions, GSK responded that the PTO’s actions met the standard, by being outside the scope of the Office’s authority and for ignoring the (overwhelmingly negative) comments submitted during the notice and comment period.  GSK also argued that the ultra vires nature of the PTO’s rulemaking made it entitled to no deference under the Supreme Court’s Chevron standard for judicial review of agency rulemaking.  GSK also argued that, with regard to examination support documents (ESDs), the PTO had failed to satisfy the procedural requirements for obtaining approval of the rules by the Office of Management and Budget (OMB) by understating the economic impact of the rules (actually, according to the PTO, ESDs would have no economic impact).  Finally, in a point that John believed the Court seemed to appreciate, GSK argued that the rules constituted an unconstitutional taking of a property right since patent applicants like GSK had disclosed valuable trade secrets under the rules in force at the time their applications were filed, and the Office was substantially changing the rules retroactively in ways that would irrevocably diminish applicants’ ability to protect their intellectual property.

The government set forth contrary positions in arguments by Department of Justice lawyer Lauren Wetzler and PTO lawyer Steven Walsh.  Counsel Wetzler was in the unenviable position of arguing the intricacies of patent law and PTO rules of practice, and made a few gaffes, the most egregious of which was stating that GSK’s trade secret argument was specious because the PTO didn’t disclose (publish) pending applications (John reports audible muttering in the courtroom at this statement).  She also argued that patent applications are not property, citing cases that were 100 years old and generally ignoring CAFC precedent to the contrary.

Counsel Walsh’s arguments, according to John, actually seemed to help GSK.  His main argument was that the application of § 120 had changed in recent years; in the past, his argument went, applicants had not filed the interwoven and excessive amount of related applications they now do, and the rules were necessary (and intended) to stop this practice.  Of course, this argument went directly to GSK’s point that the rules were an attempt to effect a substantive change in the law outside the scope of PTO’s authority. Counsel Walsh also argued that keeping a continuation application pending during the term of a granted patent was contrary to the reissue statute, an argument GSK countered by contending that any such inconsistency should be corrected by statute, not by PTO rulemaking.

Counsel for the other plaintiff in the case, Dr. Triantafyllos Tafas, was not a potted plant at the hearing, and John credited him with raising at least two good points during argument.  First, Dr. Tafas' Counsel argued that the PTO rules were a fundamental change in how Office policies were considered.  By promulgating the rules, the Office was asserting an authority to interpret the law, not merely implement it.  Dr. Tafas' Counsel referenced the conventional disclaimer by the Office that its guidelines, and the M.P.E.P., did not have the force of law but were merely an explication of how Office policies were intended to apply the law as interpreted by the Federal Circuit and Supreme Court.  These rules were different, in that the Office was asserting the authority to interpret the scope and extent of the continuation right.  He also argued that the Court should consider all applicants, not merely those like GSK with the economic wherewithal to absorb the increased costs that would be occasioned by the ESD and application cross-disclosure rules.  Dr. Tafas' Counsel also asked the Court to consider the amici’s arguments, a request the government contended the Court should ignore (purportedly because it represented an effort to supplement Dr. Tafas’ arguments outside the scope of his brief).  The Court’s colloquy that it needed to consider “all these arguments” as a reason for taking the case under advisement suggests it will in fact consider the amici in reaching its decision.

In response to a question, John also related an interesting fact that has gone relatively unnoticed.  After years of bemoaning Patent Office fee diversion, over the past few years the Office has received 100% of its budgetary allotment.  Indeed, the PTO budget has doubled in the past four years, no doubt making it an exception to every other department except Defense in getting additional federal money.  (The Senate Judiciary Committee asserted as much in its draft report on the Senate patent reform bill when commenting on provisions to put an "end" fee diversion.)  Despite this budgetary support, the Office has not been able to stem the tide of a growing backlog.  The rules can be seen as a bureaucratic response to this fact, since it seems to be easier to try to reduce the number of applications being filed than to properly address the management problems that now can be seen to be at the root of the Office’s inability to efficiently examine the mountain of pending applications.  As has been posited by Patent Docs in the past, the Office would probably be just as happy to take the “oldest” 250,000 applications and put them on a bonfire in the PTO courtyard as to implement the rules.  The point is to reduce the backlog, not make the fundamental changes (like increasing the number of hours examiners have for examining each application) that would bring cases to resolution rather than keep them on the continuation/RCE treadmill.

John also confirmed a suspicion Patent Docs has been having during the rules contretemps, that the intransigence of PTO management is a bureaucratic rather than a political phenomenon.  Although the Office’s “our way or the highway” attitude and demonization of both its “customers” and patent counsel is in keeping with at least the rhetoric coming from the current administration in other areas, the political appointees -- Jon Dudas, paradoxically -- are much less invested in having these rules, and their brethren the IDS and alternative claim language rules, put into practice.  John speculated that, should Judge Cacheris rule against the PTO and the case go to the Federal Circuit, and should that Court not render a decision until the summer, the new rules would be unlikely to go into effect in any event, in deference to the new administration that will be in place next January.  Of all the things he said today, that prospect was the most heartening to those of us who are happy Judge Cacheris granted the October 31st injunction.

For information regarding this topic, please see:

• "Judge Cacheris Takes GSK Case under Advisement," February 8, 2008
• "GSK Summary Judgment Hearing Set for Friday Morning," February 7, 2008
• "New Briefing Deadline Set In PTO Rules Case," December 18, 2007
• "Court Sets Summary Judgment Schedule in New Rules Case," December 3, 2007
• "No Discovery in New Rules Case," November 27, 2007
• "Tafas v. Dudas; SmithKline Beecham Corp. v. Dudas (E.D. Va. 2007)," October 31, 2007
• "USPTO Late to Its Own Party," October 31, 2007
• "GSK Secures Injunction," October 31, 2007 (includes links to Court's Order and Opinion)
• "Senator Schumer Sends a Signal," October 30, 2007
• "GSK TRO/Preliminary Injunction Hearing," October 29, 2007
• "AIPLA Supports GSK's Lawsuit Against the Patent Office's New Rules," October 25, 2007
• "GSK Brings Out the Big Guns Opposing the New Continuation and Claims Rules," October 24, 2007
• "Hooray! - (Finally) the Big Dogs Have Joined the Hunt," October 11, 2007
• "Rules Challenger Amends Complaint and Withdraws PI Motion," September 11, 2007
• "Inventor Sues PTO to Prevent New Continuation and Claims Rules from Taking Effect," August 30, 2007

Human Genome Sciences and Xencor Enter Antibody Collaboration

    By Christopher P. Singer --

On February 7, 2008, Human Genome Sciences, Inc. (HGS) and Xencor, Inc. announced that the two companies will enter a collaboration agreement relating to Xencor's proprietary XmAb™ humanization and optimization technologies.  Xencor's technology will be applied to several new monoclonal antibody drug candidates developed against antigens discovered by HGS.

Under the agreement, Xencor will receive an upfront payment and is eligible for additional payments for development and commercial milestones, as well as royalty payments on any commercialized products arising from the agreement.  All preclinical and clinical development, manufacturing and commercialization will be handled by HGS.

According to Xencor, its XmAb™ engineered Fc domains are designed to improve one or more important effector functions of an antibody candidate, such as enhanced antibody-mediated tumor cell killing, extended half-life, and selective regulation of immune cells.  Xenxor's XmAb™ Fv technology generates high-quality human sequence diversity in antibody variable domains in order to improve affinity, stability, and production yield.

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.

SB Pharmco Puerto Rico, Inc. d/b/a GlaxoSmithKline et al. v. Mutual Pharmaceutical Company, Inc. et al.
2:08-cv-00549; filed February 4, 2008 in the Eastern District of Pennsylvania

Declaratory judgment that Mutual’s Paragraph IV notice was improper, null, void, and without legal effect, that the Court therefore has no subject matter jurisdiction over the claims surrounding the patents at issue, that Mutual’s notice did not trigger the 45-day period for filing an infringement action under the Hatch-Waxman Act, and that Mutual must serve new Paragraph IV notice upon GSK if and when the FDA accepts Mutual’s ANDA.  Also, infringement of U.S. Patent No. 7,268,156 ("Carvedilol Phosphate Salts and/or Solvates Thereof, Corresponding Compositions and/or Methods of Treatment," issued September 11, 2007) following a paragraph IV certification as part of Mutual’s filing of an ANDA to manufacture a generic version of GSK’s Coreg® CR (carvedilol, used to treat congestive heart failure).  View the complaint here.

Boehringer Ingelheim Pharmaceuticals, Inc. v. Apotex Inc. et al.
2:08-cv-00098; filed February 4, 2008 in the Middle District of Florida

Boehringer Ingelheim Pharmaceuticals Inc. v. Apotex Inc. et al.
1:08-cv-00065; filed January 31, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 5,098,715 ("Flavored Film-Coated Tablet," issued March 24, 1992) following a paragraph IV certification as part of Apotex’s filing of an ANDA to manufacture a generic version of Boehringer’s Zantac® 150 products (ranitidine hydrochloride, used to treat gastroesophageal reflux disease).  The complaints in these cases are substantially identical.  View the Delaware complaint here.

Forest Laboratories, Inc. et al. v. Kendle International Inc.
1:08-cv-00078; filed February 4, 2008 in the Southern District of Ohio

Forest Laboratories, Inc. et al. v. Sun India Pharmaceutical Industries Ltd.
1:08-cv-00749; filed February 4, 2008 in the Northern District of Illinois

Forest Laboratories, Inc. et al. v. Genpharm, L.P. et al.
1:08-cv-00444; filed January 31, 2008 in the Eastern District of New York

Forest Laboratories, Inc. et al. v. Lupin Pharmaceuticals, Inc. et al.
1:08-cv-00167; filed January 28, 2008 in the District Court of the District of Columbia

Infringement of U.S. Patent No. 5,061,703 ("Adamantane Derivatives in the Prevention and Treatment of Cerebral Ischemia," issued on October 29, 1991), following a paragraph IV certification as part of defendants’ filing of an ANDA to manufacture a generic version of Forest's Namenda® (memantine hydrochloride, used for the treatment of moderate to severe dementia of the Alzheimer's type).  The complaints in these cases are substantially identical.  View the Lupin complaint here.

Abbott Laboratories v. Sun Pharmaceutical Industries, Ltd.
2:08-cv-10498; filed February 4, 2008 in the Eastern District of Michigan

Infringement of U.S. Patent Nos. 6,511,678 ("Controlled Release Formulation of Divalproex Sodium," issued January 28, 2003), 6,528,090 (same title, issued March 4, 2003), 6,713,086 (same title, issued March 30, 2004), and 6,720,004 (same title, issued April 13, 2004) following a paragraph IV certification as part of Sun’s filing of an ANDA to manufacture a generic version of Abbott's Depakote® ER (divalproex sodium, used to treat manic episodes associated with bipolar disorder, epilepsy, and migraine headaches).  View the complaint here.

SB2, Inc. v. Alexion Pharmaceuticals, Inc.
4:08-cv-00730; filed February 1, 2008 in the Northern District of Illinois

Infringement of U.S. Patent No. 5,624,821 ("Antibodies with Altered Effector Functions," issued April 29, 1997) based on Alexion’s manufacture and sale of allegedly infringing antibodies, including Alexion’s Soliris® monoclonal antibody (eculizumab, used to treat paroxysmal nocturnal hemoglobinuria (PNH)).  View the complaint here.

Procter & Gamble Company v. Teva Pharmaceuticals USA Inc.
1:08-cv-00066; filed February 1, 2008 in the District Court of Delaware

Infringement of U.S. Patent No. 5,583,122 ("Pharmaceutical Compositions Containing Geminal Diphosphonates," issued December 10, 1996) following a paragraph IV certification as part of Teva’s filing of an ANDA to manufacture a generic version of P&G’s Actonel® (risedronate sodium, used to treat and prevent postmenopausal osteoporosis).  View the complaint here.

Conference & CLE Calendar

February 15, 2008 - Patent Claim Construction (Law Seminars International) - Chicago, IL

February 25-26, 2008 - Pharma/Biotech Patent Claim Drafting and Prosecution (American Conference Institute) - New York, NY***

February 25-26, 2008 - Strategic Intellectual Property Planning (American Conference Institute) - Scottsdale, AZ

March 12, 2008 - Biotechnology, Chemical & Pharmaceutical Art Group Customer Partnership Meeting (U.S. Patent and Trademark Office)

March 30-April 1, 2008 - Advanced Courses (Patent Resources Group) - Bonita Springs, FL

April 3-5, 2008 - Advanced Courses (Patent Resources Group) - Bonita Springs, FL

April 10-12, 2008 - 23rd Annual Intellectual Property Law Conference (American Bar Association) - Arlington, Virginia

June 17-20, 2008 - BIO International Convention (Biotechnology Industry Organization) - San Diego, CA

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