June 2014
pharmazeutische medizin
Authored by Elizabeth A. Doherty; Marcus D. Kretzschmar, Ph.D.; and Anthony C. Tridico, Ph.D.
In the U.S., the scope of subject matter eligible for patent protection has traditionally been very broad. The patent laws define patent-eligible subject matter as "any [invented or discovered] new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."1 The U.S. Supreme Court previously provided limitations to this broad definition of patent-eligible subject matter by holding that "laws of nature, natural phenomena, and abstract ideas" are "basic tools of scientific and technological work" that cannot be patented.2 Furthermore, patent claims directed to or encompassing a human organism cannot be granted.3
In 2012 and 2013, the U.S. Supreme Court issued two important decisions that further define patent-eligible subject matter for biopharmaceutical inventions. In Mayo v. Prometheus4, the Court addressed the question whether a method of optimizing the therapeutic efficacy for treatment of a disorder is eligible for patent protection, where the method comprises a step of administering a drug to a patient, a further step of determining the level of a drug metabolite in the patient, and a third step providing that certain levels of the drug metabolite indicate a need to adjust the amount of drug administered to the patient. The Court held that the correlative relationship between the drug metabolite concentration and the efficacy of the treatment was a law of nature, and as such was not patent-eligible itself. Only an application of a law of nature may be patent-eligible. The Court concluded, however, that the recited method steps did not add enough to make the claimed method a patent-eligible application of the underlying law of nature, because the steps consisted only of "well-understood, routine, conventional activity already engaged in by the scientific community."5
In Association for Molecular Pathology v. Myriad Genetics6, decided in June 2013, the Court addressed the question whether isolated gene sequences are eligible for patent protection. The Court reached an unanimous decision and broke with decades of U.S. Patent and Trademark Office (USPTO) practice, holding that an isolated DNA molecule is not patent-eligible subject matter if its nucleotide sequence is identical to a naturally occurring gene sequence. This holding applies independently of the DNA sequence length, i.e., it applies equally to an entire gene sequence or to just a short DNA primer sequence. In contrast, an isolated DNA molecule with a sequence that is different from any naturally occurring gene sequence, e.g., a complementary DNA (cDNA) or a DNA molecule containing non-naturally occurring mutations, expressly remains patent-eligible.
Since the Court's analysis in Myriad was limited to DNA molecules, the reach of the decision remained initially unclear. Would other areas of interest to the biopharmaceutical industry be affected as well, such as, e.g., proteins, isolated microbial strains or mammalian cell populations, or natural compounds isolated from plants, fungi or microorganisms? It has now become clear that at least in the view of the USPTO, Myriad, in conjunction with Mayo v. Prometheus, casts a wide shadow and impacts patent-eligibility not only of DNA molecules, but of any natural product, as well as of methods of using natural products or laws of nature.
On March 4, 2014, the USPTO issued new guidelines for determining patent eligibility based on Mayo and Myriad, which interpret the scope of both decisions broadly.7 If a claim involves, or may involve, a so-called "judicial exception" to patentability, such as a law of nature, a natural phenomenon, or a natural product, then the examiner must determine whether the claim as a whole recites something "significantly different" than the judicial exception. Only if the claim as a whole recites something "significantly different" than the judicial exception itself, is the claim patent-eligible.
But what is "significantly different"? The USPTO guidelines provide a factor-based analytical framework that is designed to assist examiners in answering this difficult question. The examiner must assess a series of factors that relate to structural differences from natural products, and in case of method claims, to claim elements or steps that impose limits on claim scope, provide specific instructions how to apply or use the judicial exception(s), or add a feature that is more than well-understood, conventional or routine in the relevant field of study.
At the end of the analysis, all relevant factors are weighed, and only if the totality of these factors weighs toward eligibility does the claim qualify as eligible subject matter. If the totality of these factors weighs against eligibility, the claim should be rejected. The weight accorded each factor will vary based upon the specific facts of the application. Of note, for a claimed product to be considered "significantly different," and hence patent-eligible, it must be "markedly different in structure" from natural products.
The USPTO guidelines provide a handful of examples to illustrate the analysis.8 For instance, the USPTO considers a hypothetical claim to a "purified amazonic acid," a chemical isolated from the leaves of a tree found in the Amazon rainforest and known to have therapeutic effects for treating breast cancer, to be ineligible. According to the USPTO, the purified amazonic acid compound is structurally identical to the amazonic acid found in leaves and the claim does not provide any other distinguishing features. In contrast, a hypothetical claim to a "purified 5-methyl amazonic acid," a derivative created in the laboratory with additional therapeutic functions, is considered patent-eligible, because the claimed compound is "markedly different in structure" from what exists in nature.
If the claim to the purified natural compound is considered ineligible for patenting, what about methods of using that compound? The USPTO guidelines address this question only insufficiently. The USPTO considers a hypothetical claim to "a method of treating colon cancer, comprising: administering a daily dose of purified amazonic acid to a patient suffering from colon cancer for a period of time from 10 days to 20 days [at a daily dose of] about 0.75 to about 1.25 teaspoons of amazonic acid" to be patent-eligible, because the claim as a whole recites something "significantly different" than the natural product by adding specific limitations as to the patient population (colon cancer, not breast cancer), administration schedule, treatment duration and dosage. But the guidelines do not consider simpler, and probably more commercially valuable, method claims that do not recite a new patient population, treatment schedule and/or dosage range. Thus, while the very broad or very narrow example claims in the guidelines provide some useful guidance, it remains uncertain how claims will be treated that lie in between these two extremes. This uncertainty will likely persist for a long time, unless the USPTO provides additional guidance.
It is important to note that the USPTO guidelines are based on the USPTO's interpretation of the Supreme Court's Mayo and Myriad decisions, and that the guidelines are not binding on the U.S. courts. It remains to be seen whether courts will agree with the USPTO's position. Only when final claim rejections by the USPTO based on its analytical framework are appealed in the federal courts, will it become clear whether the courts agree with the USPTO's interpretation of Mayo and Myriad. This will likely take several years. In the meantime, however, patent applicants in the biopharmaceutical industry have to grapple with the new examination strategy of the USPTO. Thus, applicants should consider adapting claim drafting and disclosure strategies for new U.S. patent applications to meet the requirements for patent-eligibility outlined in the new USPTO guidelines. In addition, applicants may also review relevant claims in pending U.S. patent applications and take appropriate action to amend claims as necessary.
The America Invents Act (AIA) of 2011 provided the most extensive revision of U.S. patent law in the past 60 years. Perhaps the most-recognized change in the U.S. patent system is the move from the "first-to-invent" system to the "first-inventor-to-file" system. This change was a significant step towards harmonization of the U.S. patent system with the patent systems in Europe and other regions in the world.
The AIA also introduced a new set of proceedings that allow a party to challenge the validity of an already issued patent before the USPTO. The most important for the biopharmaceutical industry are the Inter Partes Review (IPR) and the Post-Grant Review (PGR).9 These proceedings bear some superficial resemblance to oppositions at the European Patent Office, but their format is quite different in practice. Since PGR proceedings are only available for patents issued from patent applications filed on or after March 16, 2013, no PGR proceedings have been instituted yet and thus PGR will not be further discussed here.
In contrast to PGR, IPR proceedings became available in September 2012 for any issued patent independently of its filing date. IPR proceedings allow a party to challenge the validity of patent claim(s) based on prior art patents and printed publications, arguing that the patent claim(s) are invalid for lack of novelty or for being obvious. IPRs thus far have proven extremely popular. Indeed, as of April 10, 2014, more than 1000 IPR petitions have been submitted by patent-challengers and more than 400 IPR proceedings have been instituted at the USPTO.10
IPR proceedings are conducted before the Patent Trial and Appeal Board (PTAB) of the USPTO. In comparison to patent trials at the U.S. federal courts, IPR proceedings are faster, cheaper, and involve a much more limited amount of discovery evidence (e.g. production of documents and testimony of witnesses). An IPR terminates with a "final written decision" issued by the PTAB, and such a final written decision must generally be issued within 12 months from the date the proceeding was instituted.11 Consistent with this requirement, the PTAB has issued the first final written decisions in IPR proceedings in the last few months.
What can we learn from the first 19 months of IPR proceedings? First, it is interesting to note that from all of the AIA post-grant petitions filed to date, only about 5 percent relate to biotech and pharmaceutical inventions.12 The vast majority of the filed petitions relate to electrical and computer technologies (71.4%), followed by the mechanical (14.5%) and chemical (8.5%) arts. This apparent skew towards electrical and computer technologies may, at least in part, relate to the fact that in these arts a commercial product is often covered by multiple patents, while in the biopharmaceutical area often a single patent can block market entry of a product.
One of the most striking observations, however, is how successful IPR proceedings have been for patent challengers thus far. Specifically, the PTAB has revoked the vast majority of the challenged patent claims and has not allowed any patent owner to amend its claims in order to rescue them from revocation. In the 29 final written decisions issued up to April 10, 2014, 310 patent claims have been revoked and only 28 claims have survived. Thus, 91.7 percent of patent claims challenged in these 29 IPR final decisions have been revoked. The first three, and so far only, final written decisions in the biotech and pharmaceutical arts nicely fit into this trend.13 In these three related IPRs, all 32 challenged claims, related to a DNA sequencing method, were revoked and the patent owner's motions to amend the claims were denied. It will be interesting to see in the coming months whether this current trend of very high percentage claim revocation continues.
One key difference between an IPR or PGR and a European opposition is that the PTAB has the option to deny hearing a challenge if it believes that the challenger's arguments lack substantive merit. Nonetheless, the PTAB has decided to hear more than 80 percent of the over 500 IPR petitions it has considered thus far.14
These current trends suggest that initiating an IPR proceeding at the PTAB provides an attractive opportunity for potential patent infringers to eliminate the implicated patent claims. IPR should therefore be considered as an option in dealing with patent claims that stand in the way of manufacturing or selling a product in the United States.
On the other hand, these trends, of course, raise significant concerns for patent owners, who should be well prepared to defend their patent if such a challenge were to occur.
Even though the America Invents Act was a major overhaul of US patent law and entered into force less than three years ago, the U.S. Congress is continuing to pursue significant patent law reform. At least eight different bills have been introduced into Congress that significantly affect patent law. A main driving force behind this legislative activity is the desire to curb what many describe as aggressive litigation tactics by so-called "patent trolls."
The proposed anti-patent troll legislation pending in the U.S. Congress may significantly affect all U.S. patent holders, including those in the biopharmaceutical industry. Confirming this concern, the Biotechnology Industry Organization (BIO) released a public statement regarding one of the major pending anti-troll bills (Innovation Act, H.R. 3309), stating that "BIO cannot support the legislation in its current form" because "provisions in the Act remain overly broad in important respects and, if ultimately enacted, would continue to result in too many unintended and unknowable consequences for innovators who rely on the patent system to fund and protect their inventions."15 BIO believes that the legislation "would erect unreasonable barriers to access justice for innovators, especially small startups that must be able to defend their businesses against patent infringement in a timely and cost-effective manner, and without needless and numerous procedural hurdles or other obstacles."
Two provisions of H.R. 3309 should especially be followed as they could alter litigation strategy. First, the bill provides for heightened pleading requirements for patent infringement claims, meaning that the initial complaint for patent infringement must include detailed information, including identification and/or a detailed description comparing the patent claims to the alleged infringing product or process.16 Current pleading standards do not require such detailed information. Thus, a company seeking to enforce a patent would have to invest more time, effort, and money upfront before filing a complaint.
Second, the bill provides that reasonable fees (including attorney fees) and expenses should be awarded to the winning party in a patent litigation, if the conduct by the losing party was not reasonably justified in law and fact, or in special circumstances.17 Currently, each party in a U.S. trial pays its own litigation costs in almost all cases, and thus the risk of having to pay the other side's litigation expenses is low. Under the new proposal, this risk would be significantly increased. Since the litigation costs for a patent infringement suit in the U.S. can be substantial (e.g. in the range of 3-5 million USD or even higher), this increased risk may deter small and medium-sized enterprises from enforcing their patent rights in court.
In order to become law, the pending patent bills must pass both houses of Congress and there is significant opposition to some of the controversial provisions. However, it seems likely that some form of anti-troll legislation will be enacted in the near future. Federal court decisions may also affect the standards for determining under what circumstances a loser must pay the winner's litigation costs. It will be interesting to see how these changes in patent law shape up. For biopharmaceutical companies, especially small to medium-sized companies, who are considering enforcing a patent in the U.S., it is prudent to consider the possible changes affecting patent infringement litigation.
The authors will closely monitor the discussed important developments in U.S. patent law and will provide further updates in the coming months.
1 35 United States Code (U.S.C.) § 101.
2 Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289, 1293 (2012).
3 America Invents Act § 33(a) [Public Law 112-29; Sept. 16, 2011].
4 Mayo Collaborative Services v. Prometheus Laboratories, Inc., see footnote 2.
5 Id. at 1298.
6 Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107 (2013).
7 Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products, issued by the USPTO on March 4, 2014.
8 Further examples are provided in an examiner's training slide presentation available from the USPTO's Internet site.
9 35 U.S.C. 311 (Inter partes review); 35 U.S.C. 321 (Post-grant review).
10 Patent Trial and Appeal Board AIA Progress Statistics (as of April 10, 2014), available online at http://www.uspto.gov/ip/boards/bpai/stats/041014_aia_stat_graph.pdf (last opening: 23.04.2014).
11 35 U.S.C. 316(a).
12 See [10].
13 IPR2012-00006, IPR2012-00007, and IPR2013-00011, all issued on March 6, 2014.
14 See footnote 12.
15 BIO Statement regarding the Innovation Act, H.R. 3309, dated December 3, 2013, available online at http://www.bio.org/media/press-release/bio-statement-regarding-innovation-act-hr-3309 (last opening: 23.04.2014).
16 Innovation Act, H.R. 3309, at Sec. 3(a).
17 Id. at Sec. 3(b).
Originally printed in the June 2014 issue of pharmazeutische medizin. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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