Classen v. Biogen: The Federal Circuit Applies Bilski to the Life Sciences

In a non-precedential opinion, a panel of the Federal Circuit affirmed a lower court’s decision in Classen v. Biogen to invalidate Dr. Classen’s process claims for encompassing patent-ineligible subject matter. I have previously discussed the district court decision in posts to this blog and Patently-O. The claims are directed to methods for determining an optimal immunization schedule based on comparing the observed incidence of immune-mediated disorders in treatment groups subjected to different vaccination schedules.

The decision, in its entirety, states as follows: “In light of our decision in In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), we affirm the district court’s grant of summary judgment that these claims are invalid under 35 U.S.C. § 101. Dr. Classen’s claims are neither “tied to a particular machine or apparatus” nor do they ‘transform[] a particular article into a different state or thing.’ Bilski, 545 F.3d at 954. Therefore we affirm.”

The opinion ducks important issues. Contrary to the holding, the claims do in fact involve a transformation, e.g., claim 1 of 5,723,283 recites a ‘method . . . which comprises immunizing mammals in the treatment group of mammals with one or more doses of one or more immunogens . . ..” The immunization of a mammal clearly effects a transformation of a particular article [a mammal] into a different state [a state of induced immunity]. It is inconceivable that this does not constitute a transformation; if that were the case, it would logically follow that all method of treatment claims are patent-ineligible. Rather, the court implicitly must have determined that, in the context of the claims at issue, immunization of a mammal constitutes an “insubstantial extra-solution activity.” In Bilski, the court held that an otherwise patent-ineligible process is not rendered patentable by tagging on an insubstantial additional step. The court could have provided some needed guidance by explaining its basis for determining that the immunization step is insubstantial, but instead the court decided to punt on the issue.

The lower courts decision was less than fully coherent on the basis for its determination that claims are patent-ineligible, at times asserting that the claims are invalid for claiming a mental process, while at other times complaining that that the claims encompass a natural phenomenon. The district court concluded that “[c]learly, the correlation between vaccination schedules and the incidence of immune mediated disorders that Dr. Classen claims to have discovered is a natural phenomenon.” The court provided absolutely no reasoning to support this conclusion. To my mind, it is not at all clear that it can be so blithely assumed that vaccination is a natural phenomenon. That would depend upon how vaccination is defined, but clearly immunization using human-generated vaccines is not something that occurs absent human intervention.

As I discussed in my previous post to Patently-O, to my mind the Bilski machine-transformation test is inappropriate in some cases involving natural phenomena. For example, a claim encompassing photosynthesis in a plant involves a transformation of a particular article [carbon dioxide and water] into a different thing [sugar and oxygen], so it passes the Bilski test. But it cannot be patentable under Supreme Court precedent, since it encompasses a natural phenomenon. I think the Federal Circuit needs to be careful in blinding applying the Bilski test to a claim arguably directed to a natural phenomenon.

A similar case is currently pending before the Federal Circuit, Prometheus v. Mayo, discussed in my earlier posts. The district court in Prometheus also found that the claims at issue encompass an unpatentable natural phenomenon, i.e., the correlation between the amount of a drug metabolite in a patient’s body with the optimal dosage of the drug. Unlike vaccination, which arguably encompasses the natural introduction of an immunogen into a patient’s body, the correlation at issue in Prometheus is entirely the results of the introduction of a non-naturally occurring drug into the patient. While the vaccination in Classen arguably can be interpreted so as to encompass a natural phenomenon, the correlation in Prometheus is not what I would consider to be a natural phenomenon. To hold otherwise would establish dangerous precedent, but the Federal Circuit might never even address the issue if it proceeds to simply apply the Bilski test in a reflexive manner, as appears to have to been the case in Classen.

I would also point out that the Classen decision does not bode well for a host of issued patent claims, particularly genetic diagnostic method claims which purport to broadly encompass any method of identifying a mutation.

WARF Unable to Persuade EPO Enlarged Board of Appeal to Allow Human Embryonic Stem Cell Claims

On November 25, 2008, the European Patent Office (EPO) Enlarged Board of Appeal (EBA) affirmed a Technical Board of Appeal (TBA) decision refusing a Wisconsin Alumni Research Foundation (WARF) patent application claiming cultured primate embryonic stem cells. (The EBA can be analogized to the Supreme Court of the EPO.) The corresponding US patent, No. 5, 843,780, has been the subject of controversy in the US, but nonetheless recently survived an ex parte reexamination challenge. The inter partes reexamination of a related WARF stem cell patent was discussed in a previous post. An appeal of that decision is currently pending.

In its decision, the EBA held that WARF’s stem cell claims violate Rule 28(c) of the Implementing Regulations to the European Patent Convention, which states “[u]nder Article 53(a), European patents shall not be granted in respect of biotechnological inventions which [uses] human embryos for industrial or commercial purposes.” The EBA based its decision on the fact that, at the time the application was filed, production of the claimed stem cells necessarily entailed the use and destruction of a human embryo, which the Board characterized as an industrial purpose within the meaning of Rule 28 (c). WARF argued that the claims are directed to cells, not embryos, but the EBA found that Rule 28(c) applies not only to subject matter of the claims but rather to the invention as a whole, which includes the methodology required to make the claimed invention.

WARF argued that the claimed embryonic stem cells could be used for research purposes, and that research is not “industrial or commercial” in nature. However, the EBA pointed out that Article 28(c) traces its origin to Article 6(c) of the Directive 98/44/EC of 6 July 1998. As originally drafted, Article 6(c) would have banned the patenting of any method in which human embryos are used. However, in order to allow the patenting of inventions which could be used to treat human embryos, i.e., procedures designed to benefit a human embryo, the Article 6(c) was amended to recite “uses of human embryos for industrial or commercial purposes.” In other words, the industrial or commercial purposes limitation was intended to allow for the patenting of inventions intended to benefit a human embryo, not to permit the patenting of inventions which exploit (let alone destroy) human embryos for research purposes. The EBA found that European legislators were concerned with preventing misuse in the sense of a commodification of human embryos, and that one of thire essential objectives was the protection of human dignity. The Board also pointed out that, consistent with its interpretation of legislative intent, the European Community excludes funding for research which results in the destruction of human embryos, including for the procurement of stem cells.

WARF further argued that the term “embryo” as used in Rule 28(c) should be interpreted as limited to embryos of 14 days or older. However, the EBA found that this narrow interpretation would be inconsistent with the intent of European legislators, pointing out that under German law an embryo is defined as including a fertilized egg, and UK law defines an embryo so as to encompass a two cell zygote and an egg in the process of fertilization. The EBA rejected also characterized WARF’s proposed narrow definition of embryo as inconsistent with a legislative intent to protect human dignity and prevent the commercialization of embryos.

WARF, and other interested parties who voiced their opinions in the case, urged the EBA to find the invention patentable based on “balancing the benefits of the invention for humanity against the prejudice to the embryo.” However, the EBA found that it was not the proper forum to decide such policy issues, particularly given the clear legislative intent to exclude inventions such as the one at issue from patentability.

Finally, WARF argued that the claims should be patentable because today the claimed human embryonic stem cells could be derived directly from other human embryonic cell lines, thereby avoiding the necessity for further destruction of human embryos. But the EBA rejected this argument also, finding that when assessing whether a claim contravenes Rule 28(c), technical developments which became publicly available only after the filing date cannot be taken into consideration. To hold otherwise, according to the EBA, could unduly prejudice the rights of a third party who might later provide an innocuous way to carry out the invention (presumably a method not involving the destruction of human embryos).

Genomics-Based Patents: Are Prophetic Assertions of Utility Enough?

During the late 1990s and early 2000s large-scale gene sequencing projects led to a wealth of newly identified human gene sequences, and a flood of patent applications attempting to lay claim to them. With so many laboratories cranking out newly discovered gene sequences every day there was huge pressure to file patent applications early, in many cases before the biological role of the gene or gene product had been assessed experimentally. In an attempt to satisfy the utility requirement, which essentially requires a patent applicant to disclose a practical use of a genetic sequence that is specific, substantial and credible, patent applicants resorted to the disclosure of “prophetic utilities.” Often times these predictions were based on sequence similarity (i.e., homology) between the sequence of the newly discovered gene product and a protein or family of proteins of known function, or identification of tissue or disease state-specific expression of the gene. In many cases this limited information was supplemented by providing essentially a laundry list of potential uses of the gene, typically involving use of the gene or genes product as a drug or diagnostic, or in the development of a drug or diagnostic. The hope was that at least one of the proposed uses would actually pan out, and the patent applicant would be able to point to the disclosure of the utility in the patent application as evidence that the utility was disclosed at the time of filing.

Although many of these applications resulted in the issuance of patents directed to the gene, the protein product of the gene, antibodies specific for the protein product, etc., it is not at all clear whether these patents would withstand a determined validity challenge during litigation. I am not aware of any case where one of these patents has actually been successfully asserted in court, either in the US or abroad. In my recent survey of human gene patent litigation in the US (“Trend in Human Gene Patent Litigation,” Science, 322:198-99 (2008)), I identified only one lawsuit in which a genomic-based patent was asserted. The lawsuit was filed by Incyte (a leading genomics company during the peak of the gene patenting frenzy, and one of the leading holders of human gene patents) against Invitrogen. Incyte appears to have filed the lawsuit in retaliation for a patent lawsuit that Invitrogen had previously filed against Incyte. Incyte and Invitrogen settled prior to any substantive briefing by the parties, so there is no indication from this lawsuit as to how Incyte's gene patents would have fared against a validity challenge.

Other major genomic companies that patented many genes based on prophetic assertions of utility, such as Human Genome Sciences, Lexicon Genetics and Millenium Pharmaceuticals, have apparently never asserted any of these patents in court. Many of these turn-of-the- century genomic companies have in recent years sought to reposition themselves as pharmaceutical companies, as the genomic-based business models have lost much of their appeal. They have also chosen not to pay maintenance fees on many of these patents, allowing them to enter the public domain. New patent filings on genes have also reportedly dropped off in recent years (see cite in my Science article).

On a number of occasions, the US Patent Office’s Board of Patent Appeals and Interferences (BPAI) has affirmed rejections of genomic-based patent claims under 35 USC 101 and 112 for lack of utility. For example, in Ex Parte Lee (2004 WL 1967421) claims to a newly discovered gene, and the corresponding protein, were rejected for failure to identify a specific utility in the application as filed. On appeal, the applicant attempted to establish utility based on post-filing date gene knockout experiments that allegedly showed that at least one of the predicted utilities actually panned out. However, the Board rejected this argument and affirmed the rejection of both the protein and DNA claims, finding that the predicted utilities were only speculative at the time the application was filed, and there was no evidence that the utility had been adequately demonstrated as of the filing date of the application.

For another example, see Ex Parte Lal, 2007 WL 1878008, an unsuccessful appeal by Incyte of a rejection based on lack of utility. The application as filed disclosed that the most similar prior art sequence the applicant could find to the protein product of the claimed gene sequence was a taste receptor, and Incyte argued that this constituted a sufficient assertion of utility. The BPAI rejected this argument, and found that post-filing date evidence that the protein actually was a taste receptor was insufficient, since the utility had not been established as of the date of filing.

On July 31, 2008 the British Royal Courts of Justice revoked a Human Genome Sciences (HGS) genomic patent claiming a member of the TNF ligand superfamily, which HGS identified as “Neutrokine-alpha.” (Eli Lilly v. Human Genome Sciences [2008] EWHC 1903 (Pat)). HGS knew at the time it filed its patent application that the newly discovered gene appeared to be a member of the TNF ligand superfamily, based on sequence similarity. The patent application discloses this fact, and includes a host of predicted utilities, many of them based on the known diverse activities of other members of the TNF superfamily. The British court found the claims to be invalid based on lack of industrial applicability (utility), insufficiency (enablement) and obviousness. In particular, the Court found that by disclosing a huge number of speculative (and often contradictory) utilities, the application in effect failed to provide any real teaching of utility and thus fail to solve any technical problem. The court was highly critical of this laundry list approach to satisfying the industrial applicability requirement. The decision cites a number of EPO Technical Board of Appeals decisions relating to patent applications disclosing prophetic utilities for biological molecules and arriving at a similar outcome.

One aspect of the British decision I found interesting, and quite different from US practice, was the Court’s ruling on obviousness. Lilly raised a number of obviousness challenges to the patent, based on prior art disclosures of clones containing partial sequences of the claimed gene, e.g., EST sequences, but the Court held that these partial sequences were insufficient to render HGS’s successful cloning of the full-length gene obvious. However, the Court held that since the specification contains more no more than a range of speculative applications of the gene, which the Court characterized as implausible, it fails to teach a person skilled in the art how to solve any technical problem. In essence, the court finds that because the applicant failed to meaningfully identify a use for the gene, the patent was invalid not only for lack of industrial activity, but also for lack of inventive step, i.e., obviousness.

University of Utah Achieves [Modest?] Victories in Fight for European BRCA Patents

[Note from Author - In my original post, I characterized the patentholder's victories as modest. It has since been pointed out to me that frameshift mutations account for a large percentage of the relevant mutations inBRCA1, so the most recent decision allowing claims directed to methods of detecting frameshift mutations in EP699754 could constitute more than a modest victory for the patentholder. Since the decision has not been published, and I am only going off of the EPO press release, it is impossible to know the actual scope of the remaining claims. We will have to await the decision before making any sort of real conclusion as to the import of the remaining claims.]

On November 19, 2008, a Technical Board of Appeal (TBA) of the European Patent Office (EPO) decided that EP 699754, a European patent relating to the BRCA1 gene and methods for diagnosing a predisposition for breast and ovarian cancer by identifying mutations in the gene, is to be maintained in an amended form. The patent is assigned to the University of Utah, but it is widely reported that Myriad Genetics is a real party in interest – Myriad was initially an assignee of the patent, but later the designation of Myriad as a proprietor was removed from the patent, perhaps owing to the widespread negative feelings towards Myriad in Europe which resulted from a perception that the company was engaging in overly aggressive enforcement tactics.

The patent was opposed by a number of groups from the public and private sectors of various European countries, including research institutes in various national centers for human genetics, and the initial opposition proceedings had resulted in a full revocation of the patent in 2004. On appeal, the TBA set-aside the initial opposition decision and reinstated the patent, albeit in an amended form.

The TBA decision and the text of the amended claims do not appear to have been posted on the EPO website yet, according to an EPO press release the claims have been narrowed to encompass only diagnostic methods for the detection of a predisposition for breast and ovarian cancer caused by a specific group of mutations of the gene, so-called frame-shift mutations. The patent in its current form does not contain claims directed to the BRCA1 gene itself or to mutated forms thereof. According to the press release, the patent cannot be further contested at the European level, indicating that the TBA rejected any requests by the University for referral to the Expanded Board of Appeals (EBA). The patent will still be susceptible to challenge at a national level.

This is the third case in which the University of Utah has succeeded in maintaining European BRCA1 patents, but in each case the resulting claims are significantly narrower than both the originally issued European claims and Myriad’s corresponding BRCA1 patents in the US.

A week earlier, on November 13, 2008, the EPO issued another press release reporting that another University of Utah BRCA1 patent, EP 705903, is likewise to be maintained in an amended form resulting in much narrower claims than the original patent. In this case, the TBA affirmed the result of the initial opposition proceedings, which resulted in the revocation of all diagnostic method claims, leaving only claims relating to a “gene probe of a defined composition for the detection of one specific BRCA1 mutation,” reportedly relating to a mutation specific to Ashkenazi Jewish populations. The actual TBA decision has not been posted yet, but should be in due course.

The first TBA decision relating to one of the universities BRCA1 patents (T 1213/05) was decided September 27, 2007, and resulted in the maintenance of EP 705902, albeit with substantially narrowed claims. Initially, the patent included a claim directed to the full-length BRCA1 gene, and another claim broadly encompassing hybridization probes capable of recognizing BRCA1 mutations. The claims ultimately allowed by the TBA are limited to a single probe capable of recognizing one exon of BRCA1, and several other probes capable of recognizing some BRCA1 intron-exon junctions. It is unclear how relevant these probe claims are to BRCA1 testing in its current state, but I suspect that the claims could be readily avoided by the use of diagnostic testing procedures that do not rely on the specific probes. I think it will be difficult to argue for an expansive interpretation of the claims, particularly in view of emphatic statements in the TBA decision to the effect that the claims are limited to probes (emphasis in the TBA decision), and the invalidation of the claims reciting the full-length gene and the broad genus of probes capable of detecting mutation.

The TBA decision regarding EP 705902 is available through the EPO website, and includes a number of interesting features. For one thing, sequencing errors in the initial US patents applications prevented the university from relying on these applications as priority documents. Unable to benefit from the earlier priority dates, the TBA found that the broader claims were anticipated by the inventors’ own publication of the correct sequence in Science prior to filing a US patent application including the correct sequences. In the US, with its one-year grace period, publication less than one year before the application filing date will not stand as a bar to patentability. But in Europe, which lacks any grace period, publication prior to the filing of a patent application results in a lack of novelty. This decision highlights the vulnerability of any DNA patent, particularly in Europe, which is based upon a patent application containing a sequencing error. This could be a significant issue, given the relatively high error rate in DNA sequencing. Of course, this error rate depends upon the methodology used for sequencing, when the sequencing was performed, the expertise of the party performing the sequencing, etc.

The opponents of EP 705902 argued that the patent is invalid for violating the “ordre public,” or morality, as referred to in Article 53(a) ofteh European Patent Convention (EPC). In particular, they argued that the patents were immoral based on the university’s failure to provide proof that the patients whose genetic mutations had been instrumental in identifying the gene had provided informed consent to use the information to secure a patent. The TBA rejected this argument, finding that there is no obligation for a patent applicant to provide evidence of informed consent.

The opponents also argued that the patent is immoral because of the social and economic consequences, i.e., the patent would only result in increased costs for patients, would influence the way in which diagnosis and research will be organized in Europe, and would clearly be to the detriment of patients and doctors. The TBA responded that 53(a) pertains to cases where “exploitation of the invention” would be immoral, not “explication of the patent.” Since the objections were raised against the patent rather than the underlying invention, the board determined that the EPO was not the proper venue for considering the socio-economic effects of a patent directed to a legitimate invention.

On t he other hand, the TBA also rejected challenges to the narrow claims which did survive the initial opposition proceedings. For example, the opponents of the patent argued that the probes recited in the university’s surviving claims were invalid for lack of novelty, based on a prior art reference disclosing a yeast artificial chromosome (YAC) allegedly including exon 11 and other exons of BRCA1. Claim 1 in the patent surviving opposition recites a probe comprising a sequence fragment derived from exon 11. However, the board rejected this argument, finding that the opponents had failed to establish with a sufficient degree of certainty that the YAC clone actually contained any of the sequences specified in claim 1.

The opponents also argued that the claims allowed after opposition lacked an “inventive step,” i.e., that the claims were obvious in view of a prior art reference which identified the location of a breast cancer gene in an approximately 1.5 Megabase (Mb) region of a human chromosome. This turned out to be the location of BRCA1. The opponents argued that once the location of the gene had been mapped with this degree of specificity, it only involved routine experimentation to clone and sequence the gene. They alleged that the university had won the race simply due to working harder and putting more money into the project. However, the TBA rejected this argument, finding that even after the general location of the gene had been mapped, finding the mutation “would not only involve a substantial amount of work, but would also require a ‘lucky strike’, which could in no way be predicted” based on the prior art.

These three European BRCA1 decisions are significant for at least two reasons. First, although the University of Utah (and Myriad) can claim partial victories, it is unclear how relevant the resulting patents are, and to what extent they impose meaningful restrictions on competing providers of BRCA1 testing in Europe. And secondly, the decisions provide some insight into legal arguments that could be made in the US if the BRCA1 patents were ever challenged in court. As I reported in a recent Science article (Christopher M. Holman, “Trend in Human Gene Patent Litigation,” Science, 322:198-99 (2008)), Myriad has only asserted its BRCA1 patents in two lawsuits, both filed more than 10 years ago. Both cases were quickly settled and dismissed, prior to any substantive decisions pertaining to the scope or validity of the claims. The EPO decisions at least point out some potential vulnerabilities of the much broader US BRCA1 patents, and perhaps gene patents in general.

For more information, follow this link for an EPO press release, which provides information on these decisions and links to other relevant press releases.

Federal Circuit Affirms Rejection of Claim Reciting Broad Genus of Monoclonal Antibodies For Failure to Satisfy Written Description Requirement

In In re Alonso, decided Oct. 30, 2008, the Federal Circuit affirmed a Board of Patent Appeals and Interference (“Board”) decision sustaining a written description rejection of a claim reciting a method for treating a neurofibrosarcoma (a type of cancerous tumor) using a human hybridoma-derived monoclonal antibody idiotypic for the patient’s tumor, i.e., a human monoclonal antibody capable of recognizing a particular epitope on that patient’s tumor. The Court held that the applicant’s disclosure of a single monoclonal antibody capable of recognizing one particular patient’s neurofibrosarcoma failed to adequately describe the recited genus purporting to encompass all human hybridoma-derived monoclonal antibodies capable of recognizing any patient’s neurofibrosarcoma.

The PTO routinely allows claims broadly reciting a genus comprising any isolated antibody capable of recognizing a specified antigen, without limiting the applicant to any specific antibody, or any specific epitope on the antigen (a single antigen typically has multiple epitopes, the specific and discrete region of the antigen bound by a given antibody). The PTO's revised written description training materials, published earlier this year, specifically states that the disclosure of a reasonably well characterized antigen satisfies the written description requirement with respect to a claim encompassing any isolated antibody capable of binding the antigen (see earlier post discussing the training materials). This is consistent with the Federal Circuit's decision in Noelle v. Lederman, which found that although the disclosure of a mouse antigen was insufficient satisfy the written description requirement with respect to a claim reciting a monoclonal antibody capable of recognizing the human counterpart of the mouse antigen, disclosure of the mouse antigen would provide adequate written description support for a claim broadly reciting any antibody capable of recognizing the mouse antigen. It is worth pointing out that under this approach, not only is it unnecessary for the patent applicant to disclose the structure of any monoclonal antibody falling within the scope of the claim, it is also unnecessary to disclose any information regarding the structure of the antigen. This is inconsistent with other Federal Circuit written description cases relating to gene sequences which have required some disclosure of chemical structure, i.e., Fiers v. Revel, UC v. Lilly, In re Wallach, and most recently Carnegie-Mellon v. Roche (discussed in an earlier blog post).

Alonso’s claim is distinguishable, however, because it is not directed to a single antigen. The PTO and Court found that this sort of tumor is characterized by “considerable antigenic heterogeneity,” both between patients and between metastatic sites within a single patient. It was this unpredictability with respect to the structure of neurofibrosarcoma antigens, and consequently the genus of antibodies recited in the claim, which was the basis for the written description rejection.

In Alonso, the PTO is employing the written description requirement as a doctrinal tool for limiting claim scope. Traditionally, the enablement requirement has played the primary role in policing claim scope. For example, in Amgen v. Chugai the enablement requirement was invoked to invalidate a claim broadly reciting genetic sequences encoding structurally undefined functional analogs of human erythropoietin, with the court essentially finding that the claimed genus exceeded the scope justified by Amgen's disclosure of a single gene encoding wild type erythropoietin. But in UC v. Lilly the Federal Circuit established a new role for the written description requirement, which I refer to as the Lilly written description requirement (LWD), and which many commentators have characterized as a super-enablement requirement. Indeed, the examiner rejected Alonso’s claim for failure to comply with both the enablement and written description requirements, treating the two doctrines as effectively redundant. The Board, however, only affirmed the written description rejection, reversing on the issue of enablement.

The examiners tandem enablement-LWD rejection was not surprising. For years, examiners have asserted violations of both the enablement and LWD requirements in rejecting what they perceive to be overly broad genus claims. But until recently, it was almost unheard of for the Board to explicitly overrule the enablement rejection while affirming on LWD. In fact, when I conducted a comprehensive study of LWD cases a couple of years ago I found only one case where the Board (or any court for that matter) reversed an enablement rejection but affirmed on LWD. That decision, Capon v. Esshar, was soundly reversed by the Federal Circuit on appeal. In its decision, the Federal Circuit stated that analysis for compliance with the enablement and LWD requirements are essentially coextensive, and suggested that it would rarely if ever be proper to find a claim enabled but nevertheless in violation of LWD. Thus, in this respect Alonso breaks new ground.

The Federal Circuit has repeatedly stated that an applicant can satisfy LWD with respect to a genus claim by disclosing "a representative number of species in that genus." In Alonso the court agreed with the board that, in view of the heterogeneity and unpredictability of the antigen, disclosure of a single species did not constitute a “representative number." However, the decision provides no guidance with respect to how many species would represent a representative number. In fact, although the "representative number" standard was set forth in UC v. Lilly in 1997, a cited repeatedly by the courts and PTO, to my knowledge neither the PTO nor the courts have yet to provide any useful guidance with respect to how to determine just how many species is necessary to constitute a "representative number.” In fact, I would argue that the test for compliance of a genus claim with LWD cannot be meaningfully distinguished from the test for enablement, as suggested by various panels of the Federal Circuit, e.g., Capon v. Esshar and Lizardtech.

Alonso exemplifies what I see as a recent emphasis in the patent office on carving out a substantial doctrinal role for LWD in policing claim scope, separate and distinct from the enablement requirement. Another example can be found in In re Kubin, another appeal to the Federal Circuit of a Board decision finding a claim enabled but nevertheless in violation of LWD due to the excessive breadth of the claim. The Federal Circuit's decision in Alonso does not bode well for Kubin, but the facts are distinct and we will have to await the Federal Circuit's decision in that case.

MIRCERA Permanently Enjoined: A Summary of the District Court’s Decision in Amgen v. Roche

Last week the District Court issued an important memorandum and order in Amgen v. Roche, a patent infringement litigation of great importance to biotechnology. The 150 page memorandum seeks to address and resolve all matters pending before the court, putting the case in condition for full appellate review. When reading the decision, I came away with the impression that Judge Young has been overwhelmed by the many complex issues brought up in the case. Early in the opinion, he acknowledges that due to the massive volume of post-trial briefing he was unable to address every motion. Nonetheless, he ends by noting that the order should be sufficiently "final" to allow for an immediate appeal, welcome appellate guidance, and expresses his hope that in this case he will be able “to avoid the process of appeal-remand-appeal-remand that unfortunately has characterized the related Amgen v. TKT/HMR litigation.”

I found a number of Judge Young's conclusions surprising, and will summarize a few of them here.

The Patents and Allegedly Infringing Product
Amgen's asserted patents claim methods and reagents for expressing and purifying recombinant erythropoietin (EPO), one of the earliest and still most successful biotechnology products. The patents come out of Amgen's groundbreaking work at the dawn of the biotechnology era which resulted in the successful cloning and recombinant expression of human EPO. Amgen sells two recombinant EPO biologic drugs (referred to as “erythropoiesis stimulating agents,” or ESAs), EPOGEN and Aranest. It also licenses Johnson & Johnson to sell its ESA, Procrit.

Roche’s allegedly infringing product is a pegylated-version of recombinant EPO, which goes under the trade name MIRCERA. Pegylation refers to the covalent attachment of PEG (a non-biological polymer) to the protein, and is a common technique used to modify the functional characteristics of a protein. In the case of MIRCERA, pegylation reportedly increases the half-life of the EPO protein in the body, allowing the drug to be administered at less frequent intervals. MIRCERA is produced by Roche in Europe, but they have sought FDA approval to market the drug in the US, sparking the infringement suit by Amgen.

Obviousness Double Patenting
Roche apparently pinned much of his hope of escaping liability on its argument that Amgen's patents are invalid for violating the judge-made prohibition against obviousness-type double patenting (ODP). Unfortunately for Roche, the court did not find this argument very persuasive. There appears to have been some confusion as to whether the determination of ODP is for the judge or jury. Judge Young noted that he was "surprised (and concerned) that Roche focused heavily in its opening to the jury on double patenting issues, as though it were some sort of equitable defense.” Ultimately, he decided it was a decision for the judge, not jury, and he rejected all of Amgen's ODP arguments.

At times, Judge Young appeared to confuse obviousness double patenting with statutory double patenting. For example, he states that “at its essence the inquiry ODP asks: “Is the same invention being claimed twice?”

Based on the facts as I understand them, Roche seemed to have some pretty strong arguments for ODP. For example, Amgen’s earliest EPO patent (4,703,008; expired now but successfully asserted in Amgen v. Chugai and Amgen v. TKT/HMR) includes a claim 23 which recites a “[eucaryotic] host cell transformed or transfected with a DNA sequence [encoding erythropoietin] in a manner allowing the host cell to express [the EPO protein].” The judge acknowledges this claim in his memorandum , but for some reason chooses to ignore the more relevant Claim 24, which depends from Claim 23 and specifies that “the host cell is capable of glycosylating [the EPO protein].”

The only practical utility for the cell of Claim 24 is to express the glycosylated EPO and to purify it. Methods for purifying glycosylated EPO were available at the time, as evidenced by the earlier success of others in purifying glycosylated EPO from the trace amounts present in human urine. Nonetheless, the judge found that the claim to the cell did not render obvious Amgen’s later issued 5,441,868 patent claims reciting a process for the production of glycosylated [EPO protein] comprising the steps of growing up the cell claimed in the ‘008 patent and isolating the glycosylated [EPO].

The judge held that “simply having a starting material [i.e., the cell capable of expressing glycosylated EPO] and knowing that, in theory, it can be used to create proteins is not the equivalent of having an actual process of successfully does so.” But this implies that the earlier patent was not enabled, since he is essentially arguing that there was no reasonable expectation of successfully expressing and isolating glycosylated EPO from the claimed cells, which means the earlier patent did not adequately teach one of skill in the art to use the invention. He does not provide any positive explanation as to why the use of the cells for their intended purpose would not have been obvious given the disclosure of the cells.

He was not persuaded by some seemingly relevant statements made by Amgen in an interference proceeding before the PTO involving some of the asserted patents. For example, in the past Amgen has argued that “clearly, the whole purpose and intent of the purified and isolated DNA sequence encoding human EPO (and cells transfected therewith) at issue in the litigation was to express in vivo biologically active human EPO.” In its decision, the Interference Board ruled that Amgen's work “relating to expression of the EPO gene in mammalian host cells and isolation of the resulting product involved [nothing] more than the exercise of ordinary skill by practitioners in the field.”

The judge concludes his ODP analysis by finding “that the ‘868 claims are not anticipated by the ‘008 patent and [] that the ‘868 claims are different from the claims of the ‘008 patent, again seemingly confusing anticipation with obviousness.

Anticipation
Roche also argued that Amgen's claims directed to pharmaceutical compositions comprising recombinant EPO were anticipated by the earlier purification of the EPO from human urine. The court rejected this argument, finding that a claim limitation requiring that the EPO be purified from mammalian cells grown in culture distinguished over the prior art. This determination was based on evidence that there are structural differences between recombinant EPO and EPO purified from human urine. In particular, it had been shown that the glycosylation of recombinant EPO differs from urinary EPO, so that the limitation to EPO purified from cell culture reflected a real structural difference relative to the prior art, although the structural difference was not determined with any specificity.

This ruling seems correct, based on the apparent structural differences between the claimed and prior art proteins, assuming that the claims would not cover a recombinant EPO that is structurally identical to the prior art EPO derived from urine. There was one interesting statement from Judge Young that did stand out. In addressing the anticipation argument, he noted that "it is significant that the source [i.e., from recombinant cell culture] is what enables mass production and commercial viability.” In effect, he appears to be suggesting that recombinant EPO protein would be patentable over the prior art even if the structure of recombinant and prior art EPO is identical. This clearly cannot be correct. The invention of a new process for producing a prior art product can be patentable, but it does not render product produced by the new process patentable unless there is some structural difference from the prior art, regardless of the commercial significance of the new process.

Indefiniteness
Roche also argued that certain claims were indefinite because "the breadth of the claim term ‘human erythropoietin’ makes it impossible to determine what is and what is not within the claim." Roche present expert testimony which opined that “the patent specification contemplates dozens of ‘polypeptides of the invention’ that fall within the scope of ‘human erythropoietin,’ including mutants, analog and allelic variants." However, the jury sided with Amgen, apparently crediting Amgen's expert, who testified that one of skill in the art would have understood the meaning of the term, and the court found this was enough to support the jury’s verdict.

Infringement
Roche argued that the EPO claimed in the Amgen patents does not encompass pegylated EPO, and thus MIRCERA does not contain the claimed EPO. The court found that these assertions were inconsistent with Roche's own internal communications, and communications with FDA in connection with seeking regulatory approval for MIRCERA. Prior to litigation, Roche referred to the active ingredient in MIRCERA as “peg-EPO” in internal communications. In its biologic license application (BLA), submitted to FDA to gain approval to market a product in the US, Roche stated that pegylation did not alter the amino acid sequence or glycosylation of EPO.

While acknowledging structural differences between EPO and pegylated EPO, the court found these differences to be irrelevant because they did not affect the underlying amino acid sequence of the protein. According to the court, the only structural limitations set forth in Amgen's patent relate to amino acid sequence, and therefore attachment of other chemical groups to the amino acid sequence (i.e., post-translational modifications) are irrelevant to the question of infringement. The problem with this is that structural modifications to the amino acid chain were critical to the patentability of Amgen's recombinant EPO. The amino acid sequence of recombinant EPO was not novel, but inherently existed in the prior art EPO purified from human urine. In order to overcome this prior art, Amgen limited its EPO claims to EPO derived from cultured cells (i.e, recombinant EPO), which it argued had a different chemical structure than the prior art EPO. But these patentable differences did not reside in the amino acid sequence, but rather in the carbohydrate groups attached to the string of amino acids, i.e., the glycosylation pattern. I think the judge is confused when he states that the attachment of carbohydrate groups to the amino acid chain are irrelevant to infringement, when it is these very modifications that distinguish the patented recombinant EPO over the prior art.

Judge Young engages in some circular logic in his infringement analysis. He concedes that the source limitation in the claims (derived from cell culture) confers patentability because they result in a structural difference relative to the prior art. If recombinant EPO derived from cell culture had identical structure to the prior art EPO, then recombinant EPO would not be a novel chemical and would not be patentable as a product. However, he concludes that “the structural differences are merely evidence that the source limits the claim; they are not themselves limitations.” He concludes that once a determination has been made that a source limitation confers patentability, the issue of structure becomes immaterial. But he seems to forget that since this is a claim directed to the protein itself, not the process used to produce it, the source limitation is relevant only to the extent it serves as a proxy for a definition by structure.

Injunctive Relief
Judge Young thought seriously about denying Amgen permanent injunctive relief, based on its initial view that the introduction of competition in the EPO market would benefit the public. Under the 2006 Supreme Court decision in eBay v. Mercexchange, the public interest is one of the four factors to be considered in weighing whether to grant a permanent injunction after infringement of a valid patent has been found. Nonetheless, he ultimately decided that entering a permanent injunction is the proper remedy under eBay.

The judge surveyed post-eBay case law and found it very rare for a court not to grant injunctive relief in cases where not granting the injunction would result in competition between the plaintiff and infringer.

He then found that the first three eBay factors strongly favored permanent injunctive relief for Amgen. In particular, he found that the entry of Roche in the EPO market would cause substantial market erosion and loss of revenue for Amgen, and could encourage other would-be infringers to attempt to gain access to the market. This would weaken Amgen's patents, which the court characterized as "the foundation of Amgen's business." He opined that the Amgen stock price would fall, along with its ability to attract investment and to engage in research and development.

Regarding the fourth eBay factor, Judge Young found that the public interest would not be disturbed by permanent injunction. He determined that Amgen would be able to adequately satisfy the current demand for EPO products, and that Roche had failed to adequately prove that MIRCERA offers significant clinical advantages over Amgen's products.

He also found that declining to enter injunctive relief would harm the public interest by weakening the patent system, which he characterized as critical for incentivizing the highly expensive and risky business of drug development.

Finally, he found that the competition Roche’s product would introduce into the EPO market would probably not result in any savings to the US consumer (or more particularly, to Medicare, which ultimately fits the bill for most EPO sold in the US). To the contrary, he concluded that it was not unlikely that the introduction of competition would actually result in higher prices, a counterintuitive conclusion that I discuss in more detail in an earlier post.

Judge Young concludes by noting that a modified injunction that he had originally considered, which would have in effect amounted to a compulsory license to Roche under terms dictated by the court, would be difficult to enforce and manage. Not only would it be difficult to set and monitor entry prices for MIRCERA, but the court would almost certainly be called on to monitor pricing and resolve disputes that would occur during the remaining life the patents. In short, the compulsory licensing scheme he considered would result in “needless, protracted involvement in the affairs of these two companies.”

Judge Young's View of PTO Operations
The judge expressed some cynicism regarding the functioning of the PTO, stating that it is an "indisputable fact" that the Office is "perennially underfunded and slow."

Judge in Amgen v. Roche Finds That Competition by Follow-On Biologic Will Likely Not Lead to a Reduction in Price, and Might Result in Price Increase

In a February post, I summarized a new report by economist Robert Shapiro which purported to identify $378 billion in savings if the US creates accelerated pathway for the approval of follow-on biologics. A critical assumption underlying this projection is that competition will inevitably drive down prices. Apparently, however, at least one federal district court judge does not buy into this assumption. Last week, in a much anticipated decision by the district court in Amgen v. Roche, Judge Young entered a permanent injunction against Roche, based in part on his conclusion that the introduction of competition into the erythropoietin (EPO) market would likely result in no reduction in Medicare costs, and might actually cause prices to rise. Most EPO purchased in the US is ultimately paid for by Medicare.

This counterintuitive economic analysis was based primarily on testimony from Amgen's expert, Prof. Douglas Bernheim, who testified that under the current Medicare reimbursement scheme there are perverse incentives at play such that competition can actually lead to higher prices. This conclusion would presumably not apply to most drugs, but depends upon the fact that EPO is a physician-dispensed drug, and the actual purchaser is the physician or healthcare provider. According to Prof.. Bernheim, a healthcare provider is not incentivized to purchase the least expensive drug, but rather the drug that offers the largest difference between the amount a provider is reimbursed under Medicare and what the provider actually paid for the drug. Because the amount of Medicare reimbursement is determined by the drugs average sale price (ASP), a higher drug price can actually increase provider reimbursement and thus lead to higher sales, contrary to the classic free market where increase in price is assumed to result in a decrease in demand.

Roche offered the testimony of its own expert, Prof. Einer Alhauge, who argued that Prof. Bernheim's analysis “really assume[s] Medicare is irrational." Prof. Elhauge opined that Medicare would rationally approve reimbursement at a rate higher than that charged by Amgen only if Roche’s product (MIRCERA, a pegylated version of EPO) is of higher quality than Amgen's product, or if Medicare thought that MIRCERA’S entry was going to lead to lower prices over time and wanted to help fund the entry to make sure that it happened. However, ultimately judge Young appears to have been persuaded that Medicare is indeed irrational, and that at least for physician-administered drugs like EPO the introduction of follow-on competition will not likely lead to lower prices. This conclusion is not only inconsistent with the Shapiro report, but with the strong movement in Congress towards providing a statutory abbreviated approval process for follow-on biologics.

It should also be noted that Judge Young also cited more convincing reasons for denying Roche's request for a compulsory license. In particular, he pointed out that allowing Roche to enter the market would cause "immense, immeasurable, irreparable harm" to Amgen, there was no compelling evidence that Roche's product provides substantial clinical benefits not provided by Amgen's products, and permitting Roche to enter the market would severely undermine the incentives for innovation provided by patents, and so crucial to the success of the pharmaceutical and biotechnology industries.

More on the decision to follow.