Articles Posted in Patents

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for drugmoney.jpegOn January 24, 2014, Judge Walls of the U.S. District Court for the District of New Jersey dismissed the In re Lamictal Direct Purchaser Antitrust Litigation after concluding that the U.S. Supreme Court’s FTC v. Actavis ruling concerning the antitrust implications of so-called “pay-for-delay” settlements of Hatch-Waxman patent infringement cases only “applies to patent settlements that contain an unjustified reverse payment of money.”

The settlement in this case ended a patent infringement action between branded pharmaceutical manufacturer GlaxoSmithKline (“GSK”) and generic manufacturer Teva Pharmaceuticals (“Teva”). The settlement “allowed Teva to market generic lamotrigine [Lamictal®] before the relevant patent expired and ensured that once it did so, its generic tablets and chewables would not face competition from GSK’s own ‘authorized generic’ for a certain period of time.”

Direct Purchaser plaintiffs Louisiana Wholesale Drug Company and King Drug Company of Florence brought the present antitrust action against GSK and Teva, “alleg[ing] that the settlement violates federal antitrust laws.” The district court dismissed the case a first time in December 2012 for failure to state a claim under the then-existing antitrust laws. The Direct Purchasers appealed. While the appeal was pending, the Supreme Court issued its Actavis decision. As a result, the Third Circuit Court of Appeals remanded the case back to the district court for reconsideration of its earlier dismissal based on Actavis.
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unifedpatentcourtmap.jpgOn December 11-12, 2013, IBC Legal Conferences held its annual International Patent Litigation Conference. This Conference has historically brought together an impressive cast of speakers, and the 2013 Conference was no exception.

Opened by the Rt. Hon. Sir Robin Jacob, Hugh Laddie Professor of Intellectual Property Law, UCL and former Lord Justice of Appeal Court of Appeal of England and Wales, the audience was regularly treated throughout to his strong views on the burning issues. Kevin Mooney, Partner, Simmons & Simmons, chaired the Conference, which began with an update on the Unified Patent Court (“UPC”) and a panel commentating on the multitude of possible scenarios and outcomes. Neil Feinson, International Policy Director of the United Kingdom’s (“UK’s”) Intellectual Property Office (“IPO”), also provided a number of updates. He expects that the UK will ratify the Unified Patent Court Agreement by March 2015, and he reiterated that the whole project was expected to be self funding in the long run, cost effective, and competitive. But there are still a lot of unknowns, Feinson explained, such as the likely number of cases and court running costs, making calculations of costs and therefore fees to be charged difficult to estimate. The UK is working on addressing the unknowns, he said, and it is expected that as the Court gets underway, there likely will be fee reviews on a regular basis. The UK IPO is ultimately responsible for the information technology system, and Feinson expects that an “off the shelf” solution will be purchased rather than a new design.

A free 361-page book covering the 15th Draft on Rules of Procedure in three languages was made available to participants, but the book is likely to be out of date fairly soon, as Mooney and his team of rules drafters are well on the way to coming out with clarifications and updates. The final version of the Rules could be out as early as June 2014.
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GW Law China IP Conference 2013

Yesterday, The George Washington University Law School hosted its third annual China Intellectual Property (“IP”) Conference: Patent and Trade Secrets: A Public Discussion on How to Protect Technologies in China. The Conference focused on the impact of the resolution and spirit of the recent Third Plenum of the 18th Communist Party on the commercial rule of law and IP. Moderated by Mark Cohen, Senior Counsel, China, United States Patent and Trademark Office (“USPTO”) and John Whealan, Intellectual Property Advisory Board Associate Dean for Intellectual Property Law Studies, George Washington Law School, the Conference featured a deep bench of legal experts from academia, government, corporations, trade associations, and domestic and international law firms. Keynote speakers included Randall R. Rader, Chief Judge, U.S. Court of Appeals for the Federal Circuit, David J. Kappos, Former Director, USPTO, and Teresa Stanek Rea, Former Deputy Director, USPTO. Rather than a typical PowerPoint-type presentation format, the Conference featured roundtable discussions with input from the audience, who included seasoned IP prosecutors and litigators with experience in China.

The first panel discussed overall fiscal and other developments in China and how they related to IP changes. Whealan noted that it has been difficult to develop an Chinese economy that depends on IP when the corporate managers are government employees (i.e., no “real” managerial class) and the judicial system is semi-legislative (e.g., it added copyright law before there was a formal copyright law). Rader said that the Chinese use IP as an “area of experimentation” beyond the usual, where he saw some positive movement in the judicial system. For example, Rader explained that he used to say that companies should use something other than the courts to enforce their patent rights; now, he thinks if you do “everything right,” you can win. Rader has also been involved in IP information/education exchanges with the Chinese judicial system, which has helped to lead to thoughts about developing a specialized IP court in China. He was also encouraged by the selection of a lawyer for the Supreme People’s Court. Further, over time he has witnessed a transformation from China’s manufacturing economy that undervalued IP to an economy more dependent on innovation, where there has been a need for greater IP protections.

Cohen observed that while China has been developing its IP program, there has been less emphasis to protect pharmaceutical patents and no national trade secret protection. In some sense, China approached IP protections backward: first there was IP (1983) then there was property law (2007), which never allowed IP law to develop properly. Cohen believed that the Chinese judicial system needs more transparency–important or “embarrassing” cases often are deliberately not published, leading to disclosure of “model decisions” that do not mirror what happens, and no “real Markman [claim interpretation] cases.” Added to that are provincial government control differences, Conrad Wong, Attorney-Advisor, Enforcement Unit, Office of Policy and External Affairs, USPTO, described, and differences of opinion regarding nondisclosure agreements (e.g., employees believe they are not bound by IP rights to their previous employer).
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On December 11, 2013, FLH Scientific Advisor Howard E. Rosenberg, Ph.D. will speak on: “Patent Settlements/Pay-for-Delay – are they so incompatible?” as part of the International Broadcasting Convention (“IBC”) International Patent Litigation Conference held in London, England, at The Bloomsbury Hotel, 16-22 Great Russell Street, London WC1B 3NN.

Dr. Rosenberg’s presentation is a “Case Study” with the following description:

Both in Europe and USA there is pressure for curbing aspects of patent settlements, consequently it has resulted in hotly debated missives from both sides of the divide. Can a patent dispute be resolved in which a settlement can occur where a commercial advantage is obtained by both litigants or is it solely the public purse that has to be of concern?

The IBC website includes a comment from The Right Hon. Professor Sir Robin Jacob explaining the focus of the Conference:

These are interesting times for patent law and procedure. This makes for uncertainty in many directions. Patentees, potential defendants and advisors to both sides are increasingly having to base their actions and predictions on less and less firm material. They need all the help they can get.

This conference is aimed at exploring some of the major questions of the day. IBC Legal have brought together many of the key players in this complex and fast changing world to debate and discuss where things are and may be going. It will be an exciting event – one not to be missed if you really want to know what’s going on.

Dr. Rosenberg looks forward to seeing you there at the IBC International Patent Litigation Conference.

troll.jpgOnce again, legislation aimed at deterring abusive patent litigation is making headlines. The Patent Litigation Integrity Act of 2013 (S. 1612) was introduced by Senator Orrin Hatch, R-Utah, on October 30, 2013, and seeks to address patent troll litigation abuses by targeting “the economic incentives that fuel frivolous lawsuits.”

Patent troll litigation is often characterized by non-practicing entities, holding patents in a shell company with very few assets, who bring baseless claims, and seek nuisance settlements. The Bill seeks to address those concerning aspects of patent troll litigation in two ways: (1) by awarding fees to the prevailing party and (2) by requiring patent trolls to post a bond sufficient to cover the accused infringer’s fees.

Fees would no longer just be awarded to the prevailing party in exceptional cases at the court’s discretion. In the proposed Bill, the court would be required to award fees to the prevailing party, except if the court found that the nonprevailing party’s position was substantially justified or the award would be unjust. With this deterrent, the Bill hopes that patent trolls will think twice about bringing baseless claims and that defendants, knowing they will be awarded their fees if they prevail, won’t be as quick to take a nuisance settlement.
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dna.jpgYears have passed since enactment of the Biologics Price Competition and Innovation Act of 2009 (“BCPIA“), and we have been waiting for developments–from government, industry, and/or law–that would spark life into the biosimilars’ industry. But, with FDA taking a wait-and-see approach, industry unwilling to act without more FDA guidance, and the courts not having any cases to decide, progress on the biosimilars’ front has been slow.

Some of that may change though after a judicial decision coming out of the Northern District of California this week. There, Judge Maxine Chesney nixed Sandoz’s early challenge to two Hoffman-La Roche (“Roche”) patents covering etanercept, a human tumor necrosis factor receptor. Amgen, the exclusive licensee of the patents, claims they cover its Enbrel® product. Sandoz, who is currently conducting clinical trials to test an etanercept product, stated that once the trials were complete, it intended to file an application for licensure of its etanercept product as biosimilar to Enbrel®. Accordingly, Sandoz sought a declaration that its claimed biosimilar product did not infringe either patent, and that both patents were invalid and unenforceable.

Sandoz contended that declaratory relief was appropriate, because it had provided notice of commercial marketing. In opposition, Roche and Amgen made two related arguments: (1) the district court did not have standing to consider the patent dispute, because Sandoz had not yet submitted an application to FDA and (2) there was no cognizable case or controversy. The court agreed with Roche and Amgen, finding a number of problems with Sandoz’s position.
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Scott Kieff.jpgLast night, the George Washington University Law School (“GW Law”) hosted a celebration event for the newest Commissioner to be sworn into the International Trade Commission (next week), its own GW Law Professor F. Scott Kieff. Kieff was nominated by President Obama to serve on the U.S. International Trade Commission (“ITC”). GW Law’s event was called “Law in Action in the Nation’s Capitol” and featured an informal panel presentation where Kieff and others shared their experiences and the impact that their outside work has had on their academic careers. Joining Kieff were John M. Whealan, Dean for Intellectual Property Studies, former Deputy General Counsel for Intellectual Property Law and Solicitor at the United States Patent and Trademark Office; William E. Kovacic, Global Competition Professor of Law and Policy, Director of the Competition Law Center, former Commissioner at the Federal Trade Commission; Jonathan R. Siegel, F. Elwood and Eleanor Davis Research Professor of Law, Special Counsel to the Administrative Conference of the United States; Spencer A. Overton, Professor of Law, former Principal Deputy Assistant Attorney General at the Department of Justice in the Office of Legal Policy; and The Honorable Randall R. Rader, Professorial Lecturer in Law, Chief Judge of the U.S. Court of Appeals for the Federal Circuit.

Kieff studied molecular biology and microeconomics at the Massachusetts Institute of Technology and also did research on molecular genetics at the Whitehead Institute prior to earning his J.D. at the University of Pennsylvania. Kieff spent two years as a clerk for the Hon. Giles S. Rich, United States Court of Appeals for the Federal Circuit in Washington, D.C. and then moved on to the Chicago offices of Jenner and Block, where he was a trial lawyer and intellectual property specialist.

In 1998 Kieff entered academia in 1998 as an Adjunct Professor at Northwestern University School of Law, followed by the University of Chicago Law School, Harvard Law School, Stanford Law School, and Washington University School of Law in St. Louis. Kieff was named a W. Glenn Campbell & Rita Ricardo-Campbell National Fellow and Robert Eckles Swain National Fellow at Stanford’s Hoover Institution on War, Revolution, and Peace in September 2003. Kieff has remained on the staff at the Hoover Institution as a Research Fellow, Senior Fellow, and Ray and Louise Knowles Senior Fellow. Kieff joined GW Law in August 2009 and has specialized in intellectual property and business law and served as the Associate Executive Director of the Law School’s Center for Law, Economics and Finance.

GW Law’s full-time faculty members routinely testify before Congress, collaborate with think tanks, litigate leading cases, serve on international courts and commissions, and work at the highest levels of government.

canada.jpgEli Lilly (“Lilly”) filed a CDN$500M North American Free Trade Agreement (“NAFTA”) suit against the Canadian Government as a direct consequence of losing patent protection in Canada on two of its major drugs, Zyprexa® (olanzapine) and Straterra® (atomoxetine hydrochloride). The formal notice of arbitration came after it had failed to settle by negotiation the dispute it lodged in June 2013.

NAFTA obligates Canada to grant patents for inventions that are new, non-obvious, and useful. Lilley’s position is that Canadian utility patentability rules are different than the Untied States and Europe. In the United States, the utility requirement is met by an assertion of a specific and substantial use, and in Europe the utility requirement is met by a use that is specified and “plausible.” However, in Canada there can be the added requirement that if in the patent specification there is a “promise,” for example, to treat a human disease with fewer side effects, then the utility is measured against that promise, and the patentee is required to prove that it has demonstrated or soundly predicted the promised result as of the date the patent was filed.

Lilly pointed out that Canada is a party to international treaties that require Member countries to offer a uniform level of substantive patent protection on a non-discriminatory basis, and Lilly argued this sound prediction requirement is discriminatory. The Canadian courts have been applying this “promise doctrine” since around 2005 and have invalidated 19 pharmaceutical or biopharmaceutical patents for lack of utility under this doctrine between 2005 and 2012. This doctrine has been codified within the Canadian Intellectual Property Office. The Manual of Patent Office Practice describes the “promise of the patent” as follows:

Where the utility of an invention is self-evident to the person skilled in the art, and no particular promise has been made in regard to any advantages of the invention (e.g. if the invention was to simplify a known invention), the self-evident utility is sufficient to meet the required standard.

Where, however, the inventors promise that their invention will provide particular advantages (e.g. will do something better or more efficiently or will be useful for a previously unrecognized purpose) it is this utility that the invention must in fact have.

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ITC Building.pngSection 337 investigations before the International Trade Commission (“ITC” or “Commission”) already proceed at a fast pace. But in keeping with its goal of completing investigations expeditiously, on June 24, 2013, the Commission announced its plan to speed up the process. The Commission stated in a press release that it will select certain investigations for inclusion in a new dispositive-issue pilot program. For an investigation that contains potentially case-dispositive issues–including the existence of a domestic industry, whether proof of importation of an accused product exists, and whether the complainant has standing to participate in an investigation–the Commission will direct the assigned Administrative Law Judge (“ALJ”) to resolve the dispositive issues within 100 days of institution of the investigation.

Under current ITC practice, an ALJ does not rule on such dispositive issues until the summary-determination stage of an investigation or until he or she issues an initial determination after a trial-type hearing. Both of these events, however, occur after months of discovery have taken place on all issues, dispositive and non-dispositive alike. And in the summary-determination stage, the ALJ may find that issues of fact prevent resolution of the investigation without holding a hearing on all pending issues. By this time, the parties have expended considerable resources litigating the investigation. The pilot program seeks to “limit unnecessary litigation, saving time and costs for all parties involved.”

For an investigation assigned to the program, the Commission will direct the ALJ to rule on a specific dispositive issue early in the investigative process. For instance, under 19 U.S.C. § 1337(a)(2)-(3), complainants accusing respondents of importing products that infringe the complainants’ intellectual-property rights must establish that a domestic “industry” exists or is in the process of being established in the United States with respect to those rights. If the Commission determines at the institution of the investigation that a particular complainant likely cannot establish the existence of a domestic industry, it will direct the ALJ assigned to that case to “rule on that issue early in the investigation through expedited factfinding and an abbreviated hearing limited to the identified issue.”
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troll.jpgLarge companies have long pointed to non-patent entities (“NPEs”) for abusing the patent system by buying patent portfolios and using litigation, or the threat thereof, to force licensing fees and settlements. In contrast, the patent-holding companies argue that they are asserting legally-obtained rights against huge corporations that are using other people’s innovations for profit. Based on legislation in Congress, as well as a proposal from President Barack Obama, it appears that the desire for anti-“patent troll” measures is gaining traction by both parties. The legislation has primarily taken a practical approach of targeting problematic tactics used by NPEs. Six pieces of legislation have been introduced or proposed in Congress including the Shield Act, the Patent Abuse Reduction Act, the End Anonymous Patent Act, the Patent Quality Improvement Act, and an act introduced by the leaders of the House and Senate Judiciary Committees.

The Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013, or Shield Act, (H.R. 6245) was introduced in the House in February. It defines a “troll” as a patent owner who did not do the inventing behind the patent and does not exploit it by making a product. A patent owner that fits those criteria and loses an infringement case would be responsible for its opponents’ costs under the Bill. The Bill would also allow an accused infringer to move early in the case for a judgment that the patent owner is a NPE required to pay litigation costs if it loses.

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Written by Shelly Fujikawa. Ph.D

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The Patent Abuse Reduction Act (S. 1013), introduced in the Senate in May, would mandate that any patent infringement complaint include 14 separate pieces of information that are not currently required. The requirements include identifying each product or feature alleged to infringe the patent, including name or model number; an explanation of how the asserted claim corresponds with the accused function “with detailed specificity,” a description of the plaintiff’s principal business and right to assert the patent; and a list of every other suit in which the patent has been asserted. To reduce discovery costs, the Bill would require any party in patent litigation to cover the cost of discovery beyond “core documentary evidence,” which includes documents that relate to the conception of the patent and potentially invalidating prior art. The Bill would also mandate that the prevailing party in patent litigation be awarded reasonable costs and expenses, including attorneys’ fees, unless “the position and conduct of the nonprevailing party were objectively reasonable” or “exceptional circumstances make such an award unjust.”
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