Monday, November 16, 2009

BIO Podcast: The Role of Patents in a Pathway for the Approval of Biosimilars

I was recently interviewed by Hans Sauer, Associate General Counsel for Intellectual Property at the Biotechnology Industry Organization (BIO), on the role of patents in proposed follow-on biologic legislation currently being considered by Congress. The interview is posted as a podcast here.

Other BIO podcasts can be found at BIOtech NOW.

Thursday, October 15, 2009

My Amicus Brief Has Been Filed in Ariad v. Lilly

I have filed an amicus brief in Ariad v. Lilly in support of neither party but arguing against the Lilly Written Description Requirement (LWD), available here.

My brief essentially argues that LWD has been applied by the courts and PTO in an arbitrary and inconsistent manner that lacks any rational basis in law, science, or policy, and in a manner that can effectively preclude some biotechnological inventors from obtaining adequate patent protection for their inventions, particularly inventions relating to proteins and DNA. My arguments dovetail in large part with those made by Novozymes in the brief they filed a couple days ago.

My colleagues Mark Janis (Indiana University) and Tim Holbrook (Emory University) have filed their own amici brief, arguing that there is no independent written description requirement, and that enablement is the proper and only doctrinal tool for policing claim scope and for determining whether a disclosure supports later added claims.

Wednesday, October 14, 2009

Law Professor's Debate Impact of Supreme Court's Quanta Decison on Patent Exhaustion and Licensing

Richard Epstein (Univ of Chicago), Scott Kieff (George Washington Univ, Mark Lemley (Stanford) and Fred von Lohmann (Electronic Frontier Foundation) vigorously debate Quanta. Available here.

Tuesday, October 13, 2009

Novozymes Files Amicus Brief in Ariad v. Lilly Arguing Against Lilly Written Description

The brief is attached here. I'll have some commentary and hopefully some more briefs in the next few days.

Tuesday, October 6, 2009

Ariad v. Lilly Appellant's Brief and Follow-On Biologics

Ariad's brief in this important Federal Circuit en banc rehearing of Araid v. Lilly, which asks the court to consider revising or perhaps completely eliminating written description as a separate requirement of patentability is available here. I have not had a chance to read it yet, but will post some commentary once I do.

Also, for those interested in the follow-on biologics legislation currently being considered by Congress, here is a short version of the article I posted last week which focuses specifically on the patent provisions of the bills.

Thursday, October 1, 2009

A Response to the FTC's Report on Follow-On Biologics

Congress is considering legislation that would create an abbreviated FDA approval process for follow-on biologics (FOBs), which proponents anticipate will promote competition and lower prices in the market for biologic drugs. In June of 2009 the FTC published a report on FOBs (“the FTC Report”), which attempts to forecast the nature of competition between innovator biologics and FOBs, and offers a number of substantive recommendations regarding specific provisions of the various FOB bills. In particular, the FTC Report concludes that there is essentially no justification for the inclusion of a substantial data exclusivity period (“DEP”) for innovators in pending FOB legislation, and that Congress should not include a pre-approval patent (dispute) resolution process (“PPRP”). The FTC Report bases its conclusion that a substantial DEP is unnecessary to adequately incentivize innovation in biologics in part on a misapplication of the results of a study I conducted in 2007 on the written description doctrine of patent law.

I have written a manuscript that responds to some of the conclusions and recommendations set forth in the FTC Report. In particular, I think it is important to clarify the scope and implications of my study on the written description doctrine, and explain why I believe that the FTC over-interpreted the results of the study to arrive at a conclusion that is unsupported by the data. In my view an extended DEP for innovators is justified and should be included in FOB legislation enacted by Congress.

I also disagree with the FTC's conclusion that a PPRP is unnecessary and unwarranted for biologic drugs; such a process is appropriate and would be important to maintain adequate incentives for innovation. Some of the proposed FOB legislation would discriminate against the developers of innovative biologic drugs, not only with respect to FOB producers, but also in comparison to the treatment currently afforded conventional drug innovators. These discriminatory provisions should be removed or rectified to provide a more balanced approach to promoting competition while maintaining adequate incentives for investment in biotechnology.

The full length manuscript is available as a Working Paper on SSRN (click here for link)

[Added Oct. 6 2009] A short version of the manuscript focusing on the patent provisions is available here.

Wednesday, September 16, 2009

Prometheus Prevails in a Victory for Biotechnology and Personalized Medicine

In past posts I have discussed Prometheus v. Mayo, which addresses the issue of whether a diagnostic method for providing personalized therapeutic treatment is patent eligible under Bilski (click here for background on the case). In an amicus brief I filed on behalf of myself and several other law professors, we argued that such claims should be patent eligible, and a contrary decision by the court could adversely impact future innovation in diagnostics and personalized medicine. Today a unanimous panel of the Federal Circuit agreed (click here for opinion).

Claim 1 of US Patent Number 6,355,623 is representative of the claims issue:

1. A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8.times.10.sup.8 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8.times.10.sup.8 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.

In its opinion, the Federal Circuit held that the both the step of administering a drug and the step of determining the level of drug metabolite in the patient are sufficiently transformative to satisfy the transformation prong of the Bilski machine-or-transformation test. The court did not address the issue of whether the claims satisfied the machine prong of the test, since satisfaction of the transformation prong was sufficient to find all of the claims at issue patent eligible.

With respect to the administration step, the court held that administration of the drug to a patient results in “various chemical and physical changes of the drug’s metabolites that enable their concentrations to be determined” is clearly transformative. The court found that “the asserted claims are in effect claims to methods of treatment, which are always transformative when a defined group of drugs is administered to the body to ameliorate the effects of an undesired condition,” and that "the human body necessarily undergoes a transformation" upon the administration of the drug. The court rejected Mayo’s argument that metabolism of a man-made drug is a natural phenomenon merely because it involves natural processes, pointing out that all transformations operate by natural principles.

If the Federal Circuit had stopped there, its holding would have left unresolved the question of whether a diagnostic claim that does not recite an administration step would satisfy the Bilski test. For example, many diagnostic claims simply recite a step of determining the presence of some biomarker, such as a genetic mutation or profile, or the level of a metabolite. In some cases, explicit recitation of an administration step would not be practical for the patentee. For example, if the invention is a method of identifying a genetic mutation which results in a predisposition for cancer, it would be difficult to include a step requiring administration of the drug without rendering the patent highly susceptible to circumvention.

Fortunately, the Federal Circuit went on to hold that determining the level of drug metabolites in the patient's body is also transformative, and would have been independently sufficient to render the claim patent eligible, finding that “[d]etermining the levels of [drug metabolites] in a subject necessarily involves a transformation, for those levels cannot be determined by mere inspection.” Examples of transformation include high-pressure liquid chromatography methods, methods of extracting metabolites from the human body, etc. Thus, it appears that any method of diagnosis that would inherently require some physical manipulation or transformation of a sample should satisfy the transformation prong of Bilski. This is good news for genetic diagnostic companies holding method patents that probably claim methods of identifying genetic mutations of medical significance, without being limited to any particular analytic methodologies or patient treatment steps.

Mayo had argued that the transformations involved in sample analysis are mere data gathering steps amounting to nothing more than "insignificant extra-solution activity." But the Federal Circuit rejected this argument, finding that to the contrary, the “transformation is central to the purpose of the claims, since the determining step is, like the administering step, a significant part of the claimed method treatment . . . , central to the claims rather than merely insignificant extra-solution activity.

Mayo had also argued that the “wherein” clauses at the end of the claims were merely unpatentable mental processes, but the Federal Circuit pointed out that in analyzing a claim for patent eligibility one must consider the claim as a whole. The inclusion of mental process steps in an otherwise patent eligible claim is not render the claim patent ineligible.

Amgen v. Hoffman-La Roche: Checking the Wrong Box Could Prove Costly for Amgen

Yesterday the Federal Circuit issued a decision in Amgen v. Hoffman-La Roche, an important case arising out of Amgen’s efforts to block Roche from entering the US market with a competing version of recombinant erythropoietin. Amgen currently sells two recombinant versions of erythropoietin, EPOGEN and ARENESP, and Roche is attempting to enter the market with a PEGylated version of erythropoietin (EPO) under the trade name MIRCERA. The case should be of particular interest to those following the current debate over proposed follow-on biologic legislation, as the MIRCERA product is arguably biosimilar to Amgen's products and would thus qualify as a follow-on biologic. In any event, the case illustrates many of the challenges that biologic innovators will face when attempting to use patents to maintain market exclusivity if follow-on biologic legislation is enacted.

There are many issues at play in the case, but the questions of infringement and obviousness-type double patent are two of the most interesting. Essentially, much of Roche's non-infringement argument is based on its assertion that PEGylation results in substantial structural and functional changes to the protein backbone that render MIRCERA a distinct and non-infringing molecule. Roche has generally lost on this issue. The obviousness-type double patent argument arises out of Roche's contention that Amgen impermissibly obtained multiple patents claiming essentially the same invention, resulting in an undue extension of the effective patent term. Based on a single priority application filed in 1983, Amgen received at least seven patents, one of which has expired (the core erythropoietin gene patent successfully asserted in Amgen v. Chugai (decided by the Federal Circuit in 1991), and five of which were asserted in this action against Roche.

According to my calculations, the last of these patents to expire will be in 2016 (5,955,422), 33 years after the initial filing date and 27 years after EPOGEN was first approved for sale in the US. Note that this sort of de facto patent term extension is not available for patent applications filed after June of 1995, which are limited to a 20 year term after the initial filing date, plus possible extensions due to delays in seeking FDA approval not to exceed 14 years from the date of initial approval of the product.

Here are a few highlights.

Obviousness-Type Double Patenting

35 USC 121 provides a safe harbor that “protects a divisional application, the original application, or any patent issued on either of them from validity challenges based on a patent issuing application subjected to a restriction requirement or on an application filed as a result of a restriction requirement.” The district court found Amgen’s two product patents claiming recombinant erythropoietin therapeutics both arose out of divisional applications, and hence were shielded from invalidation based on obviousness-type double patenting (ODP). The Federal Circuit vacated this judgment, based on its conclusion that the two patents arose out of continuation applications, not divisional applications, and for that reason the Section 121 safe harbor did not apply.

The Federal Circuit seemed to acknowledge that the two product patents arose out of patent applications that satisfied the definition of "divisional application" provided in the Manual of the Patent Examining Procedure (MPEP 201.06):

A later application for an independent or distinct invention, carved out of a pending application and disclosing and claiming only subject matter disclosed in the earlier or parent application, is known as a divisional application or "division."

However, when Amgen filed the applications which led to the product patents, it identified them as continuation applications rather than divisional applications, and checked the continuation application box on the form it submitted to the PTO, and the Federal Circuit held that because Amgen had designated the applications as continuations they would be held to this designation, and thus could not take advantage of a safe harbor available only to divisional applications.

Note that divisional applications are a species of continuation application, so Amgen was correct in identifying the application as a continuation when it was filed. However, it is clear in retrospect that they should have identified it as a divisional application. I think the applications clearly qualified as divisionals under the MPEP definition, a definition which comports with the conventional understanding of the term divisional at that time. More recently, particularly with respect to the proposed continuation rules currently being challenged in Tafas v. Dudas, the PTO has taken to using the term divisional any more narrow sense, limited to applications containing claims that were presented in the initial application but canceled in order to comply with a restriction requirement. In the 1990s when Amgen filed its continuation/divisional applications, I think it could easily have identified the applications as divisionals, and checked the divisional box on the form, and the PTO would not have called them on it. If they had, perhaps the Federal Circuit would have affirmed the district court in its judgment that the patents were shielded from ODP challenge by section 121.

On remand, the district court will have to determine whether the products claimed in the Amgen patents are patently distinct from process claims issued in other related Amgen patents. This will come down to the question of whether at the time the product applications were filed (1993 and 1995) there were alternative processes (not covered by Amgen's process patents) for making the claimed product. In other words, Amgen will likely have to argue for a narrow interpretation of its process patents. This might prove difficult - in the past, Amgen has successfully argued for a broad interpretation of the process patents to encompass, e.g., gene activation technology (Amgen v. Hoechst Marrion Roussel) (as discussed in more detail here). It is unclear whether in 1993 or 1995 alternative processes for producing recombinant erythropoietin were available that would not be encompassed by Amgen's process patents, if those process patents are interpreted as broadly as they have been in litigations.

The issue of ODP could be significant, particular with respect to 5,955,422, the last of the patents in the family to issue. If this patent were to be invalidated on remand, it would effectively reduce Amgen's period of de facto patent exclusivity.

Product-by-process claims

Normally, one of the mantras of patent law is “that which anticipates if earlier will literally infringe if later.” However, the Federal Circuit held that with respect to product-by-process claims:

[T]hat which anticipates if earlier does not necessarily infringe if later. That is because a product in the prior art made by a different process can anticipate a product-by-process claim, but an accused product made by a different process cannot infringe a product-by-process claim. Similarly, that which infringes if later does not necessarily anticipate if earlier. That is because an accused product may need each limitation in a claim, but not possess features imparted by a process limitation that might distinguish the claimed invention from the prior art.

An interesting asymmetry in the law, which resulted in the following conclusion:

To prove infringement, Amgen had to show that MIRCERA comprises EPO made recombinantly, which the Court concluded it did. Importantly, Amgen was not required to show that MIRCERA was also structurally and functionally different than urinary EPO. In other words, for validity, the court correctly required a source limitations to impart novelty onto EPO but it did not require [prior art EPO purified from urine] to meet the source limitations; for infringement, the court correctly required MIRCERA to satisfy the source limitations, but did not require MIRCERA to differ from urinary EPO.

Infringement

Roche argued that MIRCERA is not covered by Amgen's product claims because PEGylation (attachment of PEG polymers to the EPO polypeptide backbone) results in substantial structural changes to the molecule that bring it outside the scope of the claim, including loss of a hydrogen atom and a substantial increase in molecular weight. The district court rejected this argument, finding infringement, and the Federal Circuit affirmed, “[b]ecause MIRCERA embodies the human EPO and source limitations of the asserted claims." The court cited nonchemical caselaw for the proposition that “modification by mere addition of elements cannot negate infringement,” and found that this rule applied to PEGylation of EPO. Apparently, so long as the EPO polypeptide backbone is substantially present, any post-translational modification will still be encompassed by the claim. This is consistent with conventional understanding of protein and DNA claims. However, with respect to other chemical compounds (such as small molecule drugs) one is generally not permitted to disclose a molecule backbone and then claim all molecules comprising that backbone, and I wonder if this apparent dichotomy will at some point be addressed. After all, it seems inconsistent with statements and other Federal Circuit decisions to the effect that claims directed to DNA and protein molecules should be treated just like any other chemical compound claim.

Amgen also prevailed on the issue of whether importation of MIRCERA violates 35 USC 271(g). Section 271(g) essentially allows a patent owner to block importation of a product made by a process patented in the US, so long as the product has not been “materially changed by subsequent processes.” Roche argued that PEGylation of EPO results in substantial structural and functional changes relevant to the recombinant EPO produced by the patented processes, thus satisfying the “materially changed” caveat. However, the Federal Circuit held that, “on this record, we think there was sufficient evidence for a jury to conclude that the structural and functional differences between MIRCERA and EPO recited in the process claims were not material.” The Federal Circuit provided little explanation for this conclusion, beyond its finding that "MIRCERA and human EPO stimulate erythropoiesis similarly."

Thursday, August 27, 2009

ACLU Moves for Summary Judgment in Case Challenging Patentability of Gene-Based Inventions

The ACLU has filed a motion for summary judgment asking a district court to invalidate many of Myriad Genetics’ patent claims directed towards the BRCA1 and BRCA2 breast cancer genes. The challenged claims are directed to isolated DNA molecules having the sequence of naturally occurring wild type and mutant forms of the genes, and towards methods of identifying mutations in the genes and/or correlating the existence of mutations with a predisposition for cancer. This lawsuit was discussed in an earlier post. Documents that have been filed in connection with the case can be found here, and in particular the motion for summary judgment can be found here.

In its brief, the ACLU argues that isolated naturally occurring DNA molecules, and cDNA molecules corresponding in structure to naturally occurring genes and messenger RNA, are unpatentable natural phenomena. This goes against the patent office’ longtime policy of allowing patents claiming isolated forms of genes and other naturally occurring molecules, based on the rationale that isolation from the cellular milieu constitutes sufficient human intervention to render the molecules patentable. The ACLU cites a number of cases predating Diamond v. Chakrabary which arguably support the proposition that the mere isolation of a natural occurring product is insufficient to render it patentable, and argues that Myriad’s gene patents preempt a natural phenomenon by effectively covering any use of the claimed naturally occurring genes.

ACLU make similar arguments with respect to method claims, arguing that owing to the breadth of the claims they effectively monopolize laws of nature and abstract ideas.

ACLU also makes constitutional arguments. For example, it alleges that genes embody information, and thus broad restrictions on the use of genes is tantamount to a restriction on thought and speech in violation of the First Amendment. They also point to Article 1, Section 8, Clause 8, the so-called "intellectual property clause," which provides Congress with the authority to grant inventors exclusive rights in their discoveries for the purpose of promoting the progress of science and useful arts, and argue that gene patents in fact impede rather than promote the advancement of science and medicine.

Many of the ACLU’s arguments are based on assertions that Myriad has employed its patents in a manner that harms the public interest, by blocking research, limiting patient options, preventing patients from getting second opinions, etc.

A Review of Some of the Amici Briefs Filed in Bilski

In earlier posts (here and here, for example), I have argued that recent developments will in the doctrine of patent eligibility, particularly LabCorp, Prometheus and Bilski, threaten to seriously undermine the ability of patents to adequately protect innovations in personalized medicine and diagnostics. The Supreme Court has agreed to hear Bilski, a case that arose out of the patent office's rejection of patent claims attempting to broadly encompass methods of hedging risk, but which resulted in a Federal Circuit decisions that has serious potential for unintentionally adversely impacting biotechnology. In view of the importance of the case for the biotechnology industry, particularly companies working in the area of personalized medicine, it is no surprise that a number of amicus briefs have been filed arguing that the machine- transformation test set forth by the Federal Circuit in Bilski is ill-suited and potentially quite harmful to the life sciences and the development of personalized medicine. I have posted a few of the briefs below, along with a brief filed by a number of law and business professors that does not focus on biotechnology but to which I added my signature.

The following is a brief synthesis of some of the main points made in these briefs:

The machine-or-transformation test, as articulated by the Federal Circuit in Bilski, threatens to preclude the availability of adequate patent protection for many important innovations in biotechnology, particularly those relating to personalized medicine.

Innovation in personalized medicine has already provided substantial benefit to patients, and promises to play an increasingly important role in improving health care, which will have clinical benefits for patients, as well as reducing the cost of health care and expediting marketing approval for innovative life-saving technologies. For example, Genomic Health, Inc. has developed a test for identifying breast cancer patients likely to experience a recurrence of the disease, and whether that patient will benefit from adding chemotherapy to hormonal therapy. Monogram Biosciences has developed a test for identifying breast cancer patients likely to respond to trastuzumab (Herceptin). These processes are at the front- end of the healing process, but nevertheless will play an integral role in the development of the next generation of therapeutics, and require incentives for innovation just like back-end technologies such as drugs and methods of treatment.

The diagnostic and personalized medicine innovations implicated by Bilski are technically difficult and expensive, requiring significant investment of time and capital. For example, Monogram Biosciences and Genomic Health, Inc. explain that thousands of hours of research by highly trained scientists were required to develop their respective products. Effective patent protection is necessary to incentivize it is important new area of innovation.

The patent eligibility doctrine should be interpreted in a dynamic fashion so as to effectively encompass newly emerging fields of technology, consistent with the famous statement by the US Supreme Court that "anything under the sun that is made by man” is eligible for patent protection, so long as it meets the other requirements of patentability such as novelty and nonobviousness.

The doctrine of patent eligibility generally should not play a dominant role in policing the availability of patent protection, or patent scope. Instead, doctrines such as requirements of novelty, nonobviousness and enablement are sufficient and more appropriate safeguards against the issuance of unworthy patents.

Although the machine-or-transformation test might be useful in some contexts in determining the patent eligibility of a claim, particularly in non-biotechnology contexts, it should not be treated as the sole test for all processes, and it can be particularly inappropriate for inventions relating to biotechnology and personalized medicine.

[W]hatever merit there may be to using the machine-or-transformation test as one means to choose one process claim's patent-eligibility, this Court should make clear that it is not requiring satisfaction of that test as the only test for a diagnostic-process claim to be patent eligible; that narrow question should at the very least be reserved for a case that squarely involves such patent claims and raises such issues.(Novartis brief)


The proper test, consistent with Supreme Court precedent, should focus on whether the claim encompasses an abstract idea (patent ineligible) or an applied use of an idea (patent eligible). The application of an idea or discovery in a useful process should generally be patent eligible, and the scope of patent coverage should not be limited to processes employing a specific machine or physical transformation step.

The machine-or-transformation test, as articulated in Bilski, threatens not only to preclude patenting of future innovations in the areas of diagnostics and personalized medicine, but calls into question the validity of many important issued patents. Examples of specific patents implicated by Bilski are provided in the Caris Diagnostics brief. The Caris Diagnostics brief provides a specific example of a pending diagnostic method application recently rejected by the patent office under Bilski. These patents are clearly directed towards innovations providing substantial real-world benefits to patients, but which arguably lack sufficient involvement of a specific machine or transformation to satisfy the Bilski test.

BIO argues that the court should set aside the so-called "preemption" and "extra-solution activity" test for patent eligibility. Some case law would suggest that a claim that wholly preempts a fundamental principle is patent ineligible. BIO argues that while it is impermissible to claim a fundamental principle per se, an inventor should be able to broadly claim applications of the principle, and the scope of this exclusionary right should be constrained by the prior art and the disclosure requirements of section 112, not the patent eligibility doctrine. The "extra-solution activity" test improperly invites the court to dissect the claim and ignore certain claim language, instead of focusing on the claim as a whole.

In order to satisfy the machine-or- transformation test, inventors might be forced to specifically recite a specific machine or transformation in their claims, which would render the claims unduly susceptible to circumvention by design around. For example, BIO points out that for algorithm improvements it may be impossible to find a linking “machine” that isn't conventional or easy to design around. If the claim recites a general purpose computer, for example, it might fail to satisfy the Bilski requirement of a "particular machine," but recitation of a specific machine runs a high risk of design around by a competitor using a different machine to achieve the same result. Likewise, it might be impossible to effectively explain a diagnostic or personalized medicine invention without explicitly reciting a treatment or diagnosis step. The fact that diagnosis or treatment is typically performed by a health care provider, rather than the competitor in the market the patent owner would like to block, raises a number of significant practical issues that could preclude the patent owner from effectively enforcing the patent.

The Bilski test would disproportionately impact universities and nonprofits

Technology transfer by university's and non-profit research institutions depends almost entirely on the underlying patent position for further investment and commercial a station that provides to partners and licensees. Given that most university generated inventions are embryonic in nature and require significant effort and investment to develop a product, any uncertainty that accompanies the patent and its scope and validity increase the likelihood that the technology will not be developed and decreases the chances that the public will benefit from the taxpayers investment in the research that led to the patented technology. (BIO brief)


Links to Briefs

Law and Business Professor Supporting Neither Party

Biotechnology Industry Organization (BIO), Advanced Medical Technology Association, Wisconsin Alumni Research Foundation (WARF) and the Regents of the University of California

Novartis

Monogram Biosciences and Genomic Health, Inc.

Caris Diagnostics

Sunday, August 23, 2009

New Book Perpetuates Popular Misperceptions Surrounding Gene Patents

I was recently invited to review a book entitled "Who Owns You? The Corporate Gold Rush to Patent Your Genes" for the Notre Dame Philosophical Review, an online publication. My review is available here.

Based on the title, I had some idea of where the book was going, but was frankly shocked by the gross misstatements of patent law, particularly with respect to so-called "gene patents." For example, at one point he states that one who has "successfully filed a patent over a non-engineered sheep gene [suddenly becomes] the owner of at least a part of every new and existing sheep in the world." Later he argues that gene patents "might be an affront to individual liberty and equality" because patent owners "have rights over parts of ourselves over which we as possessors of those parts have no particular rights." He goes on to conclude that "having babies would actually technically violate a patent if that baby carries a patented gene given it is the result of an unauthorized reproduction." He then asserts that "technically, each of us carrying a gene that has been patented runs the risk of making unauthorized reproductions simply by virtue of reproducing. When we passed that gene onto our progeny we have technically violated the patent."

All of these scenarios would indeed raise serious ethical concerns if they had any basis in reality, but in fact all are mere figments of the author's imagination resulting from his profound misunderstanding of patent law. I would guess that most readers of this blog recognize how badly this book mischaracterizes the nature of gene patents. Unfortunately, with celebrities like Michael Crichton making similar assertions, these alarmist and irrational fears surrounding gene patents have been adopted by some members of Congress, as exemplified by the bill introduced a couple years ago by Congressman Becerra to outlaw gene patents (H.R. 977, 110th Congress (2007)).

The author of the book, David Koepsell, has posted his response to my review, which questioned my motives based on my past employment in the biotechnology industry but failed to identify any substantive errors in my attempt to correct his misstatements of law.

The author's response to my book review seems to have generated more controversy than the review itself, as exemplified by this blog post by a law professor at the University Chicago.

The book was also panned by Patent Doc Kevin Noonan last June (I published my review prior to seeing Kevin's take on the book).

Friday, August 21, 2009

Federal Circuit to Rehear Ariad En Banc

Today the Federal Circuit vacated the panel's decision in the case of Ariad Pharmaceuticals v Eli Lilly, and granted Ariad’s petition for rehearing en banc. The parties are requested to file new briefs addressing (1) whether 35 USC 112, paragraph 1, contains a written description requirements separate from enablement requirement; and (2) if a separate written description requirement is set forth in the statute, what is the scope and purpose of the requirement?

The order is available here.

The Ariad case was discussed in an earlier post, and has important implications for the biotechnology industry. Prior to Regents of the University of California v. Eli Lilly, decided by the Federal Circuit in 1997, the written description requirement was used solely to prevent patent applicants from amending or adding new claims encompassing subject matter not adequately disclosed in the patent application is filed. In UC v. Lilly, a panel of the Federal Circuit led by Judge Lourie established a new form of the written description requirement that applies to originally filed claims, and which functions very much like the enablement requirement. I have argued that this new form of the written description requirement, which I call Lilly written description (LWD), is essentially redundant with the enablement requirement, and should be abolished. Other academics, and some judges on the Federal Circuit, notably Judge Rader, have expressed a similar opinion.

This will be the first opportunity for the en banc court to address the viability and scope of LWD - it will be a case worth watching.

Wednesday, August 19, 2009

Law Professors Debate Bilski

Two law professors, both with substantial practical patent law experience, recently debated Bilski.

Michael Risch, Associate Professor of Law at the West Virginia University School of Law, takes the position that essentially any applied, non-abstract invention should be considered patentable so long as it meets various patentability requirements such as novelty, nonobviousness, utility and enablement. In his view, the doctine of patent eligibility at issue in Bilski should not function as a substantial bar to patentability so long as the invention is applied and satisfies the other requirements of patentability. I generally share this view with Professor Risch.

Joshua Sarnoff, Professor of the Practice of Law at American University’s Washington College of Law, sees the matter quite differently, and argues that the doctrine of patent eligibility should serve as a meaningful limitation to patentability, preventing the patenting of certain non-technological inventions regardless of their utility and nonobviousness.

During their debate, the professors discuss the significance of a number of arguably inconsistent historical cases dealing with the issue of patent eligibility. A podcast of the debate, which was moderated by Adam Mossoff, Associate Professor at George Mason University School of Law, can be found here.

Monday, August 3, 2009

Bilski and Biotechnology: An Update

A host of amicus briefs critical of the Federal Circuit's "machine-transformation" test for patent eligibility, as recently set forth in the court's en banc Bilski decision, will be filed this week with the US Supreme Court. Some of these briefs reflect concerns of biotechnology industry, particulary with respect to patentability of diagnostics and personalized medicine, I will post some of these briefs as they become available to me. Briefs supporting affirmance of Bilski will be filed later this summer.

In the meantime, those interested in some of my thoughts on the subject might want to check out an article I recently posted on SSRN, you should be able to access it at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1424493&download=yes, but if you have problems please let me know and I will get you a copy.

My blog is back

For those who might be wondering, my blog was taken down for a few days due to Google robots identifying it as "having the characteristics of a spam blog." (I assume based on number of links to other sites) I have apparently succeeded in convincing a human at Google to reconsider, thanks to readers who gave me a heads up that my site had been shut down.

Monday, July 20, 2009

HandyLab Files Declaratory Judgment Action against Caliper Life Sciences

On July 13 HandyLab, Inc., a Michigan company that develops and manufactures nucleic acid extraction and microfluidic real-time PCR instruments and reagents, filed a declaratory judgment action against Caliper Life Sciences. The HandyLab complaint alleges that thirteen Caliper patents relating to microfluidics are invalid and not infringed by HandyLab's products or activities. According to the complaint, Caliper’s Director of Business Development sent letters to HandyLab in May and June expressing Caliper’s belief that the thirteen patents "read on HandyLab's products or services,” and offering to license the patents to HandyLab. The complaint also alleges that Caliper sent a similar letter to Thermo Fisher Scientific Inc., a distributor of HandyLab's products. A copy of the complaint is provided here.

Last February, Caliper asserted some of these patents in a lawsuit filed against Shimadzu, a manufacturer of scientific instruments, in the Eastern District of Texas.

Tuesday, June 30, 2009

In the Interest of Balance: A Clarification of My Recent FOB Post

In my post on FOB legislation I pointed out that the work of economist Alex Brill was supported by generic company Teva. A reader has correctly pointed out that Henry Grabowski's work was partially funded by the Pharmaceutical Research and Manufacturer's of America (PhRMA), a group representing innovators, and I have revised the post to note this.

Sunday, June 28, 2009

Follow-on Biologics Bill Threatens Innovation By Weakening Patent Rights

Congress is considering legislation that would provide FDA with an abbreviated marketing approval pathway for biologic drugs, similar to the abbreviated new drug application (ANDA) process currently available for conventional small molecule drugs. Proponents of the legislation anticipate that an abbreviated process would promote competition in the market for biologics that would translate into lower prices. However, there is a danger that lower prices could come at the cost of decreased future innovation in this increasingly important class of therapeutics. In particular, H.R. 1427 and S. 726, identical bills that have been introduced in the House of Representatives and Senate, tH.R.eaten to stifle innovation by impairing the ability of biologic innovators to maintain a sufficient period of market exclusivity to adequately incentivize future innovation. This post explores the role of marketing exclusivity in incentivizing innovation in conventional and biologic drugs, and considers the implications if H.R. 1427/S.726 (referred to hereafter simply as H.R. 1427) were to be enacted in its current form.

An appropriate period of market exclusivity for innovators is required to incentivize future innovation

Bringing a new drug to market is a notoriously expensive and risky endeavor, and the necessary investment time and capital will only occur in an environment that provides adequate incentives. Although grant funding and prizes play some role, the primary incentive driving drug innovation is the innovator's expectation of some period of market exclusivity in which to secure an adequate return on its investment. Market entry by generic versions of the drug dramatically drives down the price of the drug, and inevitably the innovator’s profits. Competition by “me too” drugs in the same class can also reduce innovator profits, albeit usually to a lesser extent than true generic competition. The optimal legal regime will balance the consumer's interest in timely generic competition with the recognition that innovators must be allowed to benefit from an adequate period of marketing exclusivity in order to incentivize adequate investment in order to maintain the desired pipeline of future drug innovation.

As with any innovative technology, patents play an important role in providing market exclusivity for drug innovators. However, drug innovators also rely heavily on FDA regulatory barriers to delay market entry by competitors. In the absence of an abbreviated approval process, a competitor is required to generate all the necessary clinical and nonclinical data to establish the safety and efficacy of its product, which can be prohibitively expensive and thus provide innovators with a potent barrier to competition independent of patent protection. The substantial role of regulation in maintaining market exclusivity distinguishes drugs from most other innovative products, and is one of the reasons why competition and barriers to entry in the pharmaceutical market has been the subject so much attention by Congress and the FTC.

Hatch Waxman reduced the regulatory barrier to competition in the market for conventional drugs by providing an abbreviated FDA approval process for generics

In 1984, Congress enacted the Hatch Waxman Act in order to promote generic drug competition and thereby drive down drug prices. One of the primary means by which Hatch Waxman speeds generic market entry is by providing the ANDA, an abbreviated FDA approval process for generic drugs that permits a generic drug company to establish the safety and efficacy of its product by providing data demonstrating that it contains the same active ingredient as, and is bioequivalent to, an already approved innovator product. The ANDA pathway eliminates the need for the generic company to sponsor independent clinical testing to establish safety and efficacy, and in effect allows it to free ride on the innovator’s investment in developing the drug and generating the expensive data necessary to achieve regulatory approval. As a result, a generic competitor can bring its version of the drug to market for a fraction of the cost incurred by the innovator. Thanks to Hatch Waxman and the ANDA, once an innovator’s patents have expired (and often earlier in cases where a generic company chooses to challenge the innovator’s patents) market entry by multiple generic competitors is the norm, as is the resulting sharp drop in drug price and innovator profits.

Note that by reducing the FDA regulatory barrier to generic market entry, the creation of an abbreviated approval process dramatically increased the importance of patents in providing drug innovators with a period of market exclusivity. Hatch Waxman does provide innovators with a five-year period of "data exclusivity" after granting marketing approval to innovator drug. FDA is not permitted to accept an ANDA relying on the innovator's data during this five year window, thereby providing innovators with some limited protection from generic competition even in the absence of patents. In most cases, however, drug innovators have successfully employed patents to maintain market exclusivity extending well beyond five years, averaging closer to 13 years by some estimates. Absent the prospect of effective and predictable patent protection, the short period of data exclusivity provided by Hatch Waxman would probably not be sufficient to incentivize the optimal level of drug development.

The current push for an abbreviated approval process for biologic drugs

Biologic drugs, particularly genetically engineered therapeutic proteins and monoclonal antibodies, represent some of the most important fruits of the biotechnology revolution. In recent years they have come to play a critical role in the US healthcare system, providing important therapeutic benefits over conventional non-biologic drugs. In fact, a recent report predicts that by 2014 the six top blockbuster drugs will all be biologics. The benefits, however, come at a price. For a variety of reasons, biologic drugs are substantially more expensive than conventional drugs, and with their increased usage have come to represent a significant and growing percentage of healthcare expenditures in the US.

While Hatch Waxman has been successful in promoting the availability of generic versions of traditional small molecule drugs, its ANDA process is not available for most biologic drugs, which are regulated under a different statute than conventional drugs. In effect, most biologics enjoy an infinitely long period of data exclusivity. The high cost of gaining regulatory approval to market a biologic results in a substantial barrier to market entry by competing biologic products. As a consequence, biologic innovators have been less dependent upon patents to protect market dominance than conventional drug innovators. When the regulatory barrier is insufficient to keep out competition, biologic innovators have had mixed success in using patents to maintain market exclusivity. Amgen, for example, has successfully used patents to block competition in the erythropoietin market. Other biologic innovators have been less successful, and there are numerous examples of competitors designing around patents intended to protect a biologic drug.

In order to address the high cost of biologics, some have proposed creation of an abbreviated approval process for biologics, similar to the ANDA, that would promote competition in the biologics market and thereby drive down prices. Although the term "biogeneric" is sometimes used, it is generally acknowledged that true generic versions of biologic drugs are unlikely to be technically feasible anytime soon. By definition, a generic drug employs the same active ingredient and is bioequivalent to the innovator product on which it is based, rendering the two products functionally interchangeable. This presumption of interchangeability is what allows pharmacists to substitute a generic product for a branded drug prescribed by a physician. Biologic drugs are much more chemically complex than traditional drugs, and safety and efficacy of the product can be affected by subtle variations in the reagents and processes used in the production of the biologic. This dependence of product on process, inherent in any biologically produced product, coupled with limitations in current bioanalytical technology, will for the time being likely preclude FDA from approving generic versions of biologic drugs, although at some point technical advances might render biogenerics a reality.

There is reason to believe, however, that an abbreviated approval process for biologics could reduce the regulatory barrier to entry for "follow-on biologics" (FOBs), by authorizing FDA to consider data generated by an innovator to establish the safety and efficacy of an FOB sharing structural and functional similarity to the innovator product. Proponents anticipate that FOB market entry would increase competition in the market for biologics and drive down prices, albeit probably not to the extent typical of true generic competition as exist in the market for conventional drugs. Because the products will not be presumed identical, at least some clinical testing for safety and efficacy of the FOB will be necessary even under the abbreviated process. Furthermore, potential for clinically significant differences in the safety and efficacy of the products would preclude any assumption that the FOB could be freely substituted for the innovators product.

H.R. 1427 creates an abbreviated approval process that would necessitate strong patent protection for biologic innovators

H.R. 1427 is one of two bills currently pending in Congress that would create an abbreviated approval process FOBs. The bill provides innovators with a period of data exclusivity that is even shorter than that provided for conventional drug innovators under Hatch Waxman. Recall that under Hatch Waxman, FDA will not accept an ANDA until five years after marketing approval of the innovator product, resulting in an effective period of market exclusivity for the innovator that exceeds five years by the period of time necessary for FDA to review and approve the application, which can stretch into years. In contrast, under H.R. 1427 an abbreviated application relying on innovator data to secure approval of a competing FOB could be submitted to FDA at any time, and FDA would be authorized to approve the FOB for market entry as early as five years after the innovator product first enters the market. As a result, the five-year data exclusivity period provided by H.R. 1427 is actually significantly shorter than the period provided by Hatch Waxman.

Some innovative biologics would receive an even shorter period of market exclusivity. Under H.R. 1427, a new biologic sharing structural similarity to a previously approved biologic would only be eligible for three years of market exclusivity before an FOB would be permitted to enter the market, even if the new biologic has significantly improved therapeutic properties relative to the previously approved biologic. For example, chemical modification of the protein backbone can result in substantially different and improved pharmaceutical properties relative to the unmodified protein. PEGylation, the attachments of polyethylene glycol (PEG) groups to a proteins amino acid backbone, for instance, has been used to modify and improve the therapeutic properties of some protein drugs. Because the backbone amino acid sequence of the protein has not been substantially altered, however, H.R. 1427 would appear to award the sort of important innovation with a mere three years of non-patent market exclusivity.

There has much debate over the length of market exclusivity necessary to adequately incentivize innovation in biologics. In a 2008 study, Duke University economist Henry Grabowski calculated that it takes between 12.9 and 16.2 years on the market for a biologic innovator to "break even." In response, Alex Brill published a critique challenging some of Professor Grabowski's assumptions and estimating that seven years of data exclusivity would be sufficient to maintain adequate incentives for biologics innovation. Mr. Brill’s work was supported by Teva Pharmaceuticals, a leading generic drugs company that would presumably prefer a shortened period of data exclusivity in order to hasten its entry into the FOB market. In any event, both estimates substantially exceed the paltry three to five years of data exclusivity provided under H.R. 1427. Unless the innovator can successfully employ patents to extend the period of marketing exclusivity, it will enjoy a period of marketing exclusivity that is substantially less than that currently enjoyed by conventional drugs, and less than the amount necessary as estimated by economists. [NOTE: A reader points out that Professor Grabowski's work was supported by the Pharmaceutical Research and Manufacturer's of America (PhRMA), a group representing innovators (Added June 30, 2009)]

In contrast, H.R. 1548, a competing proposal to legislate a pathway for FOBs that has been endorsed by biotechnology innovators, would provide innovators with at least 12 years of data exclusivity. An innovator could extend this period to 14.5 years by conducting pediatric studies of the drug and by gaining approval for a significant new use of the drug. This extended period of data exclusivity would approximate the length of time an innovator might expect to depend on patent protection, and also is in the range that many would argue is necessary in order to adequately incentivize innovation. As a result of the extended period of data exclusivity, patents would play a less critical role in incentivizing the development of innovative new products than they would under H.R. 1427.

The FTC recently concluded that patents provide adequate incentive for innovation in biologics

Proponents of H.R. 1427 argue that data exclusivity extending beyond five years is not necessary to incentivize innovation, because innovators will be able to employ patents to maintain an adequate period of market exclusivity. This was the conclusion of a recent FTC report, which based this prediction on an assumption that strong and effective patent protection is and will continue to be available for biologics. In the words of the FTC, "patent protection is likely to continue to provide strong incentives for innovation after introduction of follow-on [biologic] drug competition." Not only does the FTC report find that patents are sufficient to incentivize innovation, it also concludes that they are necessary, characterizing patent protection as the "fuel" that drives the biotechnology R&D engine. This view is shared by the biotechnology industry, which has been one of the staunchest advocates for strong and effective patent rights during the ongoing patent reform debates.

It is difficult to assess whether the FTC is correct in its assumption that patent rights will be sufficient to incentivize innovation in the absence of a substantial period of data exclusivity. There is some reason to think that patents may not be as effective for protecting biologics as they have been for conventional drugs. For example, Hatch Waxman requires that a generic version of a conventional drug employ the same active ingredient, thus rendering even a very narrow patent on the active ingredient highly effective in blocking generic competition. Generic companies almost never succeed in successfully challenging composition-of-matter patents claiming a drugs active ingredient, which can be practically impossible to design around. They have been highly successful, however, in challenging formulation patents, often by employing a different formulation that still results in a bioequivalent product.

In contrast, the abbreviated approval process provided under H.R. 1427 would authorize FDA to use innovator data to approve a chemically non-identical albeit "biosimilar" FOB, which could then compete with the innovator product. This could open the door for FOB producers to design around an innovator's patents, thus avoiding infringement, while maintaining sufficient biosimilarity to the innovator’s product to benefit from the abbreviated approval process. Ultimately, the effectiveness of patent protection in protecting biologics will depend on factors such as the scope of patent claim coverage afforded patents relating to biologics and the criteria applied by FDA to determine how close an FOB has to be to an innovator product in order to be classified as sufficiently biosimilar to take advantage of the abbreviated approval process. My previous study of human gene patent litigation identified numerous instances in which the manufacturer of a competing biologic successfully designed around the innovator's patents. Recent decisions in the courts, including Kubin and Bilski, and the PTO’s recent trend toward limiting biotechnology claim scope by a more stringent application of the Eli Lilly written description requirement (as exemplified by the Board of Patent Appeals and Interfences decision in Kubin), could adversely affect the ability of innovators to obtain adequate patent protection for some biologic inventions. In any event, there is little to suggest that patents are too strong in the area of biologics.

H.R. 1427 completely undermines any assumption that strong patent protection will be available to incentivize biologic innovation by substantially weakening the patent rights of biologic innovators, at the same time it dramatically reduces the period of data exclusivity. The patent weakening provisions of H.R. 1427, which specifically target biologic innovators, come in the guise of a pre-approval patent resolution process.

Before delving into the specifics of H.R. 1427, it will be useful by way of contrast to review the pre-approval patent resolution process provided under Hatch Waxman for conventional drugs in order to better appreciate the punitive nature of the H.R. 1427 process.

The patent provisions of Hatch Waxman balance interests of generic companies and innovators

Hatch Waxman created a pre-approval patent resolution process that encourages litigation of infringement issues prior to the grant of marketing approval to a generic drug. Generic market entry prior to resolution of patent infringement issues is often referred to as "at risk,” and for good reason. If a generic company enters the market and is subsequently found to be infringing a valid patent, the company could be liable for lost profit damages far exceeding any profits it could derive from selling the generic drug. If the innovator prevails, on the other hand, the generic company might not have the financial resources to provide adequate compensation. And once consumers (or, more often, the insurance company or governmental agency that pays the bills) would accustomed to paying a lower price for the drug, innovator might be unable to demand the same price for its product even after the generic is forced to exit the market. Thus, both sides can benefit from litigating disputed patents prior to at risk market entry.

Under Hatch Waxman, an innovator marketing an approved conventional drug is required to list all of its patents that claim the drug, or a method of using the drug, in an FDA publication known as the Orange Book. The Orange Book listing requirement only applies to drugs regulated under the Food Drug and Cosmetic Act (FDCA), and thus does not apply to most biologic drugs, which are regulated under the Public Health Services Act (PHSA). Listing a patent in the Orange Book not only provides notice to potential generic competitors of the most relevant patents, but also effectively puts a bounty on each of the listed patents, in the form of a 180 day period of generic exclusivity that is granted to any generic company that challenges an Orange Book listed patent by applying for approval to commence marketing of the generic version prior to patent expiration. The generic company must specifically allege that the challenged patent is invalid or would not be infringed by the company’s proposed generic product. During this 180 days, FDA will not authorize the marketing of any other generic version of the drug, a boon for the generic company and a substantial financial incentive for patent challenges.

Orange Book listing also provides substantial benefit to the patent owner. FDA will not approve a generic version of a drug until all of the Orange Book listed patents relating to the drug have expired, unless the generic applicant explicitly challenges a patent as described above. If a generic company does challenge an Orange Book listed patent, Hatch Waxman authorizes the patent owner to immediately file an infringement lawsuit before the proposed generic product has been approved for marketing. If suit is filed within 45 days, the statute specifies that FDA will not approve the generic application for at least 30 months. In effect, Orange Book listing allows the patent owner to obtain an automatic 30 months preliminary injunction blocking generic market entry, without having to establish the reasonable expectation of success and other equitable factors normally necessary to convince a court to grant a preliminary injunction. Ideally, the 30 months provides the parties an opportunity to resolve patent issues prior to generic market entry.

The benefits of Orange Book listing for innovators tend to balance other provisions of Hatch Waxman that worked at a disadvantage, such as the regulatory approval exemption from patent infringement that permits generic companies to conduct the tests necessary to achieve FDA approval prior to the expiration of the innovator's patents, along with the substantial benefit to generic companies of having an abbreviated approval process which allows them to gain marketing approval based on data generated and submitted by the innovator, and also permits FDA to authorize pharmacists to substitute the generic drug for branded drug prescribed by a physician.

The patent provisions of H.R. 1427 discriminate against innovators and would weaken patent rights

In stark contrast with a balanced approach of Hatch Waxman, H.R. 1427 would create a preapproval patent resolution process weighted heavily against the patent owner. Under H.R. 1427, any applicant or prospective applicant for approval of a follow-on biologic would be authorized to demand from any innovator marketing an approved biologic a list of all patents owned, licensed or controlled by the innovator that could potentially be infringed by a follow-on product. Not only would the innovator be required to identify patents claiming the biologic drug and methods of using it, but also components of the drug and processes that could be used to produce the product, regardless of whether or not the patented process is actually used in the production of the innovator's product. In other words, the innovator would not only be required to identify product-specific patents, but any patent covering a process or reagent which could conceivably be adapted for use in the production of a biosimilar product. To ensure innovator compliance, H.R. 1427 would punish the failure to list any patent by rendering that patent unenforceable, not only against the FOB applicant but against the world.

Facing the draconian threat of patent unenforceability, and uncertainty as to the range of potential variation that would be permitted under the nebulous concept of "biosimilarity," innovators will likely feel compelled to err on the side of over inclusion and list any patent that could conceivably be related to the production of a biosimilar product. Unfortunately for the innovator however, listing a patent will subject that patent will to a number of provisions of H.R. 1427 that dramatically limit the rights of the patent owner. For example, once a patent has been identified in such a list, H.R. 1427 would bar the patent owner from bringing a pre-marketing declaratory judgment lawsuit against the FOB applicant, forcing the innovator to wait until the FOB has entered the market at risk before commencing a lawsuit for infringement. In the past, innovators have used declaratory judgment actions to bring suit prior to market entry by the FOB, which allows them the opportunity to plead their case before a court, and when a likelihood of success on the merits has been demonstrated a court can enjoin the generic product during dependency of litigation or, thereby avoiding the risks associated with pre-resolution market entry. By barring the innovator from bringing suit until after the FOB has entered the market at risk, H.R. 1427 substantially weakens the patent rights of the innovator.

While innovators would be blocked from bringing a declaratory judgment action with respect to any listed patent, H.R. 1427 explicitly authorizes an FOB applicant to bring a declaratory judgment lawsuit alleging invalidity or noninfringement of any of the listed patents at any time. The bill would allow an FOB applicant to decide to challenge any patent anytime prior to approval and marketing, or to decide not to challenge any patent and enter the market at risk, while denying the patent owner any corresponding right to bring an action prior to market entry.

Not only does H.R. 1427 provide a unilateral right to an FOB applicant to bring a declaratory judgment action prior to marketing approval, it also provides an alternate mechanism for challenging a patent without bringing suit. Under the bill, An FOB applicant can, at anytime, provide notice to the innovator alleging that one or more of the innovators patents is either invalid or would not be infringed by the FOB product. The innovator would then have 45 days to bring in infringement suit. If a lawsuit is not filed within 45 days, the innovator will be barred from asserting the patent in court until the FOB product is on the market. And as punishment for not bringing suit within the 45 day window, H.R. 1427 would forever limit the innovator's remedy for patent infringement to reasonable royalty damages, even if the innovator ultimately prevails in court and proves that the FOB product infringes a valid patent. The more potent remedies that are available to any other patent holder – a permanent injunction to force the infringing product off the market, lost profit damages to adequately compensate the innovator, and enhanced damages for willful infringement - would be unavailable for biologic innovators. In effect, failure to file suit within 45 days would result in a compulsory license of the patent in favor of the FOB applicant.

As alluded to in the FTC report, in many cases 45 days will be insufficient time for the patent owner to thoroughly assess the merits of a patent infringement suit. H.R. 1548, the other FOB bill, would create a process for the FOB applicant to provide confidential information to an innovator regarding the specific nature of the proposed FOB product and methods of its production, in order to enable the innovator to make an informed decision as to whether he FOB product would infringe its patent. Patents claiming methods and reagents used in the production of a biologic play a critical role in protecting biologic drugs, much more so than in the case of conventional drugs, where composition of matter patents claiming the active ingredient play the leading role. H.R. 1548 includes provisions intended to maintain the confidentiality of the disclosed information. The FTC report criticizes the exchange of confidential information provisions of H.R. 1548, arguing that in practice it will be difficult to ensure adequate protection of the FOB applicant's confidential information. However, without this information it will be difficult in many cases for an innovator to assess whether an FOB product would infringe its patent, particularly since unlike a generic version of a drug and FOB product could differ substantially from the innovator product and be produced using a very different process.

Compounding the problem, there is nothing to prevent an FOB applicant from changing its production process, and consequently the nature of the product, after the 45 days have expired. Thus, an innovator might decide not to bring suit within 45 days because of its understanding of the proposed product and process, but subsequent changes to the production process could change the nature not only of the process but of the product itself, thereby rendering it infringing, but still the innovator’s remedies will be limited to reasonable royalties as determined by a court, which will likely fall short of adequate compensation for the innovator. The FTC report, which would reject pre-approval patent resolution processes altogether, notes that FOB applicant would be incentivized to engage in this sort of gamesmanship.

H.R. 1427 also includes a change of venue provision that authorizes an FOB applicant that has been sued for patent infringement to request that the court transfer the action to another judicial district. This provision would only operate in one direction, since no complementary right is provided for innovators to seek a change of venue in a declaratory judgment action filed by an FOB applicant. A court considering a request for change of venue under the statute would be required in making its decision to place the greatest weight on moving the case to district court which will adjudicate the matter most expeditiously. By prejudicing the ability of innovators to control the venue in which to enforce their patent rights, the bill further weakens the patent rights of innovators relative to any other participants in the patent system.

H.R. 1427 lacks the balance of Hatch Waxman and threatens innovation

There is broad consensus favoring legislation that would clear the way for FDA to provide an abbreviated approval pathway for FOBs, but it is vital to maintain some means for innovators to achieve an adequate period of market exclusivity to incentivize future innovation. H.R. 1548 would attempt to do this by providing innovators with an extended period of data exclusivity. H.R. 1427, on the other hand, would threaten innovation by providing only a brief period of data exclusivity and at the same time weakening the patent rights of innovators. Although H.R. 1427 purports to emulate Hatch Waxman, it lacks the balanced approach that has been critical to the success of Hatch Waxman in fostering generic competition without unduly compromising future innovation. It would be a mistake to disincentivize innovation in biologics at a time when their enormous potential for alleviating human suffering is poised to explode.

Wednesday, May 20, 2009

ACLU Lawsuit Challenges Patenting of Genes

By now, most readers are probably aware of the lawsuit filed by the ACLU on behalf of multiple plaintiffs(including breast cancer patients, clinicians and providers of genetic diagnostic testing services) against Myriad Genetics and the directors of the University of Utah Research Foundation (referred to collectively as "Myriad"), as well as the US Patent and Trademark Office (PTO). For a summary of the case, and the complaint, see posts on Patently-O and Patent Docs.

In this post, I will discuss two aspects of the case - the merits of the ACLU's allegations of patent invalidity, and the question of whether the named plaintiffs have the necessary standing to bring the lawsuit.

Merits of the assertions of patent invalidity

The ACLU lawsuit does not challenge the validity of all the claims in Myriad’s BRCA patents, but only a select few of the broadest claims. All but one of the challenged claims are directed towards either (1) a method for detecting a mutation in a BRCA1 or BRCA2 gene, or (2) an isolated DNA molecule encoding a naturally occurring BRCA1 or BRCA2 protein. The validity of claim 20 of US patent number 5,747,282 is also challenged - I agree with the observation of the Patent Docs that the inclusion of this claim, directed towards a method of screening for drugs, in the complaint is curious, and I will not discuss that claim further. But with respect to the other claims, I think that the ACLU plaintiffs have nonfrivolous arguments that the claims are indeed patent ineligible. But I think there is substantial question as to whether these plaintiffs have standing to bring the lawsuit, an issue that I address below.

The plaintiffs allege that the challenged patent claims are invalid for a failure to comply with the U.S. Constitution, particularly the so-called "IP clause" (Article I, Section 8) and the First and 14th amendments, and Section 101 of the patent statute (35 USC 101). The constitutional claims are a stretch in my view - to my knowledge, a patent claim has never been invalidated solely on the basis of a constitutional violation. Courts sometimes cite to the IP clause, which authorizes Congress "to promote the progress of science and useful arts, by securing for limited Times to authors and inventors the exclusive rights to their respective writings and discoveries," as a limitation on the potential scope of patent claims, but as far as I know no claim has never been invalidated solely for violating the IP clause.

For example, in Graham v. John Deere, a seminal Supreme Court decision relating to the nonobviousness doctrine, the Court stated that the IP clause limits the authority of Congress to enact patent laws. According to the Graham court, the Constitution requires that the patent laws promote advances in the "useful arts,” and thus Congress may not enact laws that "enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby,” nor may it "authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available." Although the Court pointed to the IP clause as setting the standard for assessing patent validity, the claims at issue in Graham were invalidated for violating Section 103 of the patent statute.

More recently, Justice Breyer in his LabCorp dissent opined that “laws of nature, natural phenomena, and abstract ideas” are excluded from patent protection because "sometimes too much patent protection can impede rather than ‘promote the progress of science and useful arts,’ the constitutional objective of patent and copyright protection.” (italics in original) I suspect that the ACLU plaintiff”s are relying in part on Justice Breyer's assertion as basis for their allegation that Myriad’s patent claims violate the IP clause.

Some scholars have argued that gene patents are unconstitutional because the mere identification of the sequence of a naturally occurring gene lacks sufficient originality to constitute an act of invention, while the IP clause only authorizes exclusive rights for "inventors." The plaintiffs might also pursue this line of argument, though I did not notice any reference to it in the complaint.

The plaintiff’s First and 14th Amendment claims are really out there in uncharted territory. I don't know of any legal precedent that would support the notion that a patent claim violates either of these amendments to the Constitution. I assume that plaintiffs are referring at least in part to the First Amendment’s guarantee of free speech, and are suggesting that the patents restrict the ability of doctors to communicate with their patients. For example, paragraph 84 of the complaint states that "although others including plaintiffs have the technical ability to determine if a person has a mutation, and are willing to do so using non-patented methods, they can be prohibited from doing so because of the patents on the BRCA1 and BRCA2 genes and can't tell any patient the results because of myriads enforcement of its patents.” This allegation seems to assume that the plaintiffs’ identification of the mutation by genetic testing would infringe Myriad’s patents. Importantly, note that the communication of the results to a patient would not be infringing, but rather would merely serve as evidence that the plaintiff had infringed by conducting the patented method of screening for a mutation. This argument really seems to be a stretch. After all, any patent infringer will feel constrained from communicating to others the fact that he has engaged in patent infringing activities, because this will alert the patent owner of the infringement, and could provide evidence of that infringement in an enforcement action. But if this constraint on communication is a violation of the First Amendment, then it would seem that all patents are unconstitutional - after all, no matter what the subject matter covered by the patent, infringers will probably feel constrained not to publicize their infringement. I don't see how one can make a principled legal distinction between patents relating to genetic diagnosis and other patents, and see little merit in this First Amendment challenge to the patents. However, there is a tendency in our society towards genetic exceptionalism, i.e., treating issues involving genes and genetics as somehow fundamentally different and warranting exceptional treatment. And I am sure the ACLU will present its argument much more effectively than I have, so I think it is conceivable that the plaintiffs could make some headway with this challenge.

On the other hand, I think the plaintiffs have a much better shot with their more conventional Section 101 arguments, at least if they can get past issues of standing discussed below. Bear in mind that the Section 101 challenges have only been asserted against Myriad; the ACLU complaint specifically states that the PTO is sued solely on the constitutional claims. As discussed below, I don't believe the plaintiffs have standing to sue the PTO for violating the patent statute.

As discussed in previous posts, the Federal Circuit's decisions in Bilski and Classen have certainly opened the door for challenges to this sort of method claim for encompassing patent-ineligible subject matter. Arguably, Myriad’s broad method claims are not tied to any particular machine, and any transformation that a court would characterize as more than “insubstantial extra-solution activity.” At this point, the validity of this sort of diagnostic claim under the Bilski machine-transformation test is certainly an open question, but a forthcoming decision by the Federal Circuit in Prometheus v. Mayo will likely shed some light on the court’s thinking in this regard.

The ACLU's argument that the isolated DNA claims are patent ineligible under Section 101 is more tenuous. It is generally considered settled law that while a naturally occurring biomolecule is patent ineligible in its native state, isolation or purification of the molecule can constitute sufficient human intervention to render the isolated molecule patent-eligible subject matter under Section 101. Clearly the PTO adheres to this view, and considers naturally occurring DNA sequences and other biomolecules patent eligible so long as the claim is limited to isolated or purified forms of the molecule.

However, to my knowledge this interpretation of patent eligibility has not been directly challenged since the inception of the Federal Circuit more than 25 years ago. The cases most commonly cited for the proposition that a purified naturally occurring compound is patent eligible are In re Kratz, 592 F.2d 1169, 1174 (CCPA 1979) (stating that a naturally occurring strawberry constituent compound does not anticipate claims to the substantially pure compound) and In re Bergstrom, 427 F.2d 1394 (CCPA 1970) (stating that a material occurring in nature in less pure form does not anticipate claims to the pure material). The Federal Circuit implicitly seems to support this view, and as recently as 2003 a Federal Circuit panel cited both Kratz and Bergstrom with apparent approval. But it is worth noting that Kratz and Bergstrom dealt specifically with the novelty and nonobviousness of the compounds, not patent eligibility per se. To my knowledge, there is no judicial precedent that has directly addressed the issue of whether isolation of a naturally occurring molecule renders the isolated molecule and eligible under section 101. Earlier precedent, particularly the Supreme Court's 1948 Funk Brothers decision, arguably supports the proposition that isolated DNA molecules are not patent eligible. In that case, the Court held that a novel, non-naturally occurring combination of naturally occurring bacteria was patent ineligible because the bacteria continued to "perform in their natural way." As recently as 1994, Affymetrix argued in an amicus curiae brief filed with the Federal Circuit in support of the PTO in In re Fisher that under Funk Brothers isolated and purified naturally occurring DNA molecules are patent ineligible. In the words of Affymetrix:

The Supreme Court took up the product of nature doctrine twice during the twentieth century, in Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), and Diamond v. Chakrabarty, 447 U.S. 303 (1980). Funk, which rejected a claim to a mixture of nitrogen-fixing root-nodule bacteria, stated the doctrine as follows: “[M]anifestations of laws of nature [are] free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes.” 333 U.S. at 130. The Court repeated this language in Chakrabarty, and characterized “laws of nature, physical phenomena, and abstract ideas” as being beyond the realm of section 101. 447 U.S. at 309. Chakrabarty's claim was deemed statutory because he had, through genetic engineering, “produced a new bacterium with markedly different characteristics from any found in nature.” Id. at 310.

The subject matter question facing this Court is thus whether the claimed nucleic acid sequences have been subjected to sufficient human intervention to acquire “markedly different characteristics” from their naturally occurring counterparts. On the contrary, the interest in these sequences depends on their being functionally indistinguishable from their natural precursors. As the Deputy Director of the World Intellectual Property Organization has recently written, under Chakrabarty, “isolated, purified and synthesized human genes are not statutory patentable subject matter because, when isolated from the human body, they maintain identical or very similar characteristics to those found in nature ... [and] because they realize exactly the same function that genes inserted in their natural environment perform.” Nuno Pires de Carvalho, The Problem of Gene Patents, 3 WASH. U. GLOBAL STUD. L. REV. 701, 723 (2004) (footnotes omitted).

The rationale for this conclusion is that, even when claimed--unlike here--in “isolated, purified and synthesized form,” a cDNA molecule differs from its natural counterpart only in trivial and functionally irrelevant ways. The only differences are that the DNA has been removed from its natural environment and that its noncoding regions have been excised. Consequently, despite nominal chemical distinctiveness, what is claimed is functionally indistinguishable from natural DNA and RNA. It contains exactly the same genetic information as its natural counterpart. It can do precisely the same work as a naturally occurring gene--protein synthesis or perhaps some other function--and it employs precisely the same processes to do it, whether in the body or in the laboratory. Critically, these informational and functional properties are the whole reason for seeking DNA patents. In Chakrabarty's terms, such a gene does not have “markedly different characteristics from any found in nature.”

In Fisher, the Federal Circuit held the isolated nucleic acid claims at issue in that case (expressed sequence tags, or ESTs) invalid for lack of utility in enablement, and
never addressed Affymetrix’s patent eligibility argument. But if the ACLU lawsuit is allowed to proceed, the court might be put in a position where it will be required to address this important question head-on.

Plaintiff’s Standing to Bring Suit

To my mind, perhaps the more groundbreaking issue raised by the case is the question of whether the plaintiffs have standing to bring suit. Generally, members of the public are not permitted to challenge the validity of issued patents, nor are they permitted to challenge the PTO's interpretation of substantive patent law. Some people would like to change this; for example, patent reform legislation being considered by Congress would create an opposition procedure for third parties to oppose granted patents. In other jurisdictions, such as Europe, opposition of granted patents has long been available. But at least for the time being, in the U.S. the avenues for challenging the validity of a patent are generally limited to reexamination in the patent office, or as a defense to an allegation of patent infringement in a patent litigation.

In this case, patent reexamination was not an option for the ACLU, because reexamination is basically limited to issues of invalidity based on prior art, i.e., lack of novelty or obviousness of the claims. The ACLU plaintiff's only allege violations of the U.S. Constitution and Section 101 of the patent statute, and these sorts of allegations are not amenable to resolution by reexamination.

None of the plaintiffs have been sued by Myriad for patent infringement. However, a potential infringer of a patent can in some instances beat the patent owner to the punch by filing a declaratory judgment action challenging the validity of a patent. Until recently, a potential infringer had to have a "reasonable apprehension" of being imminently sued for patent infringement in order to have standing to bring a declaratory judgment action. However, in 2007 in MedImmune v. Genentech the Supreme Court effectively lowered the bar, making it easier for plaintiffs to bring declaratory judgment actions and eliminating the "reasonable apprehension" test. Still, even after MedImmune, a declaratory judgment plaintiff must allege an “actual controversy . . . touching the legal relations of parties having adverse legal interests.” I think that, even post-MedImmune, the courts will still require a declaratory judgment plaintiff to identify some potential risk of being sued for patent infringement in order to have standing to bring suit. Some of the plaintiffs in this case, such as cancer patients who allege they have been injured by the patents because they prevent competition that would lower the price of BRCA testing, clearly face no credible threat of being sued for infringing Myriad’s patents. Other plaintiffs, particularly providers of genetic diagnostic testing services, do face the prospect of being sued for patent infringement if they were to engage in commercial BRCA testing. But none of the plaintiffs appear to be currently engaged in commercial BRCA testing, and it is doubtful whether any of them would have standing under the pre-MedImmune “reasonable apprehension" standard. The closest would be two professors at the University of Pennsylvania, who allegedly received cease-and-desist letters from Myriad. As discussed in my article on human gene patent litigation, Myriad did sue the University of Pennsylvania in 1998 for infringing its BRCA patents, but according to press reports the University ceased conducting the tests and the lawsuit was immediately dropped. After 10 years of presumably not conducting the tests, these professors seem a little late in claiming a fear of being sued for infringement.

However, perhaps the ACLU will be able to convince a court that at least some of these plaintiffs have standing to bring suit under the more permissive MedImmune standard. I believe the ACLU would argue that universities and other genetic diagnostic testing laboratories have wanted to challenge Myriad’s patents, but have been afraid to continue providing commercial testing services because they fear potential liability if they failed to convince a court that the patents are invalid or not infringed. In MedImmune, the Supreme Court explicitly stated that one of the rationales for a more permissive standing requirement is that a potential infringer should not be required to “bet the farm” by being forced to choose between infringing a patent (and taking on the risk of potentially large damages) or not challenging the patent. The ACLU could pursue this policy rationale, and argue that the plaintiffs legitimately do not want to bet the farm by infringing Myriad’s patent, but still have standing under the MedImmune standard to challenge the patents.

Issues of standing will especially limit the ACLU's ability to challenge the PTO on its position that isolated polynucleotides are patent eligible. In the late 1980s, animal protection organizations such as PETA filed a lawsuit against the PTO challenging a PTO notice in the Official Gazette stating that genetically engineered animals are patent eligible . The case was dismissed because the parties lacked standing to bring suit. In Animal Legal Defense Fund v. Quigg, the Federal Circuit affirmed the dismissal, pointing out that under Supreme Court precedent a party bringing suit must come "within the zone of interests addressed by the substantive provisions of the law they seek to invoke," i.e., the patent laws, and that the plaintiffs failed this test. In pertinent part, the Federal Circuit explained:

In essence appellants claim the patent statute's "zone of interests" encompasses any member of the public who perceives they will be harmed by an issued patent which they believe to be invalid. We cannot agree that the "zone of interests" of the patent laws is so broad. Under such an interpretation, we would, for example, be opening the door to collateral attacks on the validity of issued patents; any competitor could simply file suit against the Commissioner challenging a patent's validity. This we decline to do. The structure of the patent act indicates that Congress intended only the remedies provided therein to ensure that the statutory objectives would be realized."

Under this test, as interpreted by the Federal Circuit, it seems clear that the ACLU plaintiffs lack standing to challenge the PTO’s interpretation of the patent laws, which likely explains why they only sued the PTO on the constitutional claims. ACLU will presumably argue that

In the end, although the merits of the challenges to Myriad’s patents have garnered most of the attention so far, I think the issues of standing are perhaps just as important. If the ACLU is successful in establishing a more permissive standing requirement for challenging issued patents, it could open the door to more challenges by members of the public facing no real threat of being sued for patent infringement, the scenario identified by the Federal Circuit in Animal Legal Defense Fund as problematic and contrary to the structure of the patent act. Biotech has been adamantly opposed to patent reform efforts that unduly open the door to ancillary patent challenges, such as the proposal for so-called “second window” opposition proceedings, but the ACLU appears to be seeking to open a new avenue for these sorts of attacks on patents by “members of the public.”

With respect to the merits of the case, I think that the question of patent eligibility is much more significant for the biotech industry with respect to the method claims than the isolated polynucleotides claims. As discussed in previous posts, a determination by the Federal Circuit that method claims such as this are patent ineligible could significantly impact the ability of innovators to patent diagnostic testing and personalized medicine discoveries. Isolated polynucleotides claims are not as important. Indeed, in the amicus brief Myriad filed in support of Prometheus, Myriad went so far as to argue that composition of matter claims directed toward isolated nucleic acids are no longer available because the Human Genome Project has made the entirety of the genome prior art. I think this might be going too far, but I do believe that claims directed towards isolated naturally occurring polynucleotides are becoming less and less relevant. Although many of these claims have issued in patents, very few have been successfully enforced in the courts; part of the reason I think is that there are challenges to successfully enforcing these sorts of claims, including unknown prior art.

Thursday, May 7, 2009

In re Gleave: Anticipation by a Laundry List of Prophetic DNA Sequences

In re Gleave, a recent decision by the Federal Circuit, affirmed a PTO anticipation rejection under 35 USC 102(b) of claims reciting antisense oligonucleotides directed against Insulin-Dependent Growth Factor Binding Protein (“IGFBP”). The facts of the case, and some implications of the decision, are discussed in a blog post on Patent Docs, available here. I'd like to follow up on that insightful post with a few comments of my own.

Basically, in Gleave the Federal Circuit held that a laundry list of oligonucleotides appearing in a printed publication, in this case a published PCT application, anticipates all of the listed oligonucleotides, even oligonucleotides that have never actually been made and for which there is no disclosed utility. All that is required is an enabling method of making the oligonucleotides, such that one of skill in the art would be able to arrive at a method for synthesizing the molecules without having to engage in undue experimentation. Today, in an era when full-length genes are routinely synthesized chemically, and even whole viral genomes have been artificially synthesized, it would seem that the mere listing of any conventional oligonucleotide, or even long polynucleotide comprising hundreds or even thousands of bases will anticipate and thus render unpatentable the molecule. For more on the synthesis of synthetic genes and genomes, see, for example, Synthetic Genomics: Options for Governance, or websites of gene synthesis companies such as DNA 2.0.

In Gleave, the prior art PCT application listed all of the possible 15 base oligonucleotides (15-mers) that appear in the full-length IGFBP gene sequence (see the Patent Doc post for a more detailed description of the disclosure). But according to the rationale of the Federal Circuit decision, which by the way is entirely consistent with earlier precedent, a prior art reference listing all possible 15-mers (i.e., the 4^15 possible combinations of the four nucleotides - adenine, thymine, cytosine and guanine (A, T, C and G)), would appear to bar the patenting of any and all 15 base oligonucleotides. And why stop there? In principle, a laundry list of all possible polynucleotides made up of the four naturally occurring nucleotides up to a certain length, say 1000 bases, should create patent invalidating prior art with respect to all the sequences, assuming that one of skill in the art would be able to synthesize all the sequences. The number of sequences would be huge, and I would guess there are not enough trees on the planet to provide sufficient paper, but electronic media, such as a reasonably accessible internet posting, can constitute prior art, and perhaps there are enough electrons to create this blockbuster publication which would prevent the patenting of all polynucleotides up to this length.

Professor Andrew Chin, of the University of North Carolina School of Law, specifically addressed this issue in a law review article entitled “Artful Prior Art and the Quality of DNA Patents,” available here. In his article, Professor Chin describes his creation and publication of a CD-ROM containing a list of more than 11 million oligonucleotides (apparently all 12-mers and shorter) that he felt were clearly enabled because they were “the easiest to make and most versatile to use.” For example, “[o]ut of an abundance of caution, the list was restricted to the oligonucleotides that are least likely to form secondary structures.” To my knowledge, the technology has advanced to the point where one of skill in the art could make essentially any oligonucleotide without engaging in undue extermination so, I think in this regard, Professor Chin was probably more conservative than he had to be. The CD-ROM was shelved in the North Carolina School of Law library’s non-circulating reference collection, was indexed under a call number and added to the university's online catalog. The document was subsequently listed in the International Online Computer Library Center. Thus, the CD-ROM likely constitutes a printed publication under sections 102(a) and 102(b).

Gleave and Professor Chin’s article raises questions with respect to the validity of composition of matter claims directed to oligonucleotides, and even longer polynucleotides. For example, some patents claim any fragment of a given polynucleotide sequence up to a certain length, e.g. every 15 base segment. Would such a claim be barred by an electronic publication listing all possible 15-mer oligonucleotides? Under Federal Circuit precedent, and the logic of Gleave, it would seem so. And by extension, any claim to a longer polynucleotide would be anticipated by a reference providing a laundry list of longer polynucleotides. Gleave provides no indication of any upper length limit on patent invalidating prophetic descriptions of polynucleotides.

But does this interpretation of Section 102 make any sense? Professor Chin’s CD-ROM provides no technical contribution to the prior art, it is the equivalent of the disclosure of “all possible oligonucleotides of 12 bases or less.” Similarly, a laundry list of all possible polynucleotides up to 1000 bases in length provides no additional quantum of disclosure over a publication that simply discloses “all possible polynucleotides of 1000 bases or less.” For those opposed to the patenting of DNA sequences, Gleave and Chin’s article provides a roadmap for creating invalidating prior art that would appear to block the patenting of these molecules. But if that is the case, it implies that a publication that teaches absolutely nothing to one of skill in the art can dramatically impact the patentability of a large class of important chemical compounds. It also exemplifies the sometimes illogical outcomes when the courts applies conventional chemical patent law to polynucleotides and proteins