Friday, March 30, 2012

District Court Sees through Misleading Allegations in PubPat Lawsuit against Monsanto

In a recent post, I pointed out similarities between "fabrications" regarding conditions at factories in China manufacturing Apple products, and the misinformation being promulgated regarding gene patents and agricultural biotechnology. Some prime examples of this sort of misleading information are evident, I think, in the lawsuit filed last year by the Public Patent Foundation against Monsanto. In a post on the case, I pointed out that the plaintiffs in the case seemed to lack standing, and that there seemed to be no basis for PubPat’s allegation that Monsanto had sued involuntary/inadvertent infringers, or that there was any reasonable likelihood that the plaintiffs (organic farmers and the like) would be sued for infringing Monsanto patents on recombinant crops.

Fortunately, the district court saw through the exaggerated allegations raised by the Public Patent Foundation in the lawsuit against Monsanto, and dismissed the case last February. The court's decision specifically addresses some of these unfounded assertions.

For example, the complaint alleges that certain plaintiff farmers and seed distributors were afraid that their crops and seeds would be contaminated by recombinant Monsanto products. In rejecting this argument, the court pointed out that none of the plaintiffs claimed that contamination had actually occurred in any of the crops they had grown or seeds they have sold.

The complaint further alleged that organic farmers risked losing their organic certification if their fields became contaminated by recombinant product, but the court found “no evidence in the record that any farmer has ever been decertified as organic by the U.S. Department of Agriculture National Organic Program (the “NOP”) because of seed contamination.” In fact, according to the NOP, “[o]rganic certification is process based, and as a result, “[i]f all aspects of the organic production or handling process were followed correctly, the presence of a detectable residues from a genetically modified organism alone does not constitute a violation of this regulation.”

The complaint also alleged that the plaintiff farmers risk being sued for patent infringement based on inadvertent growth of crops with Monsanto's patented traits. However, the court found that Monsanto had never filed a patent infringement suit against a certified organic farm or handling operation over the presence of patented traits in its operations. In fact, during oral arguments Monsanto stated that they had never sued the party who did not “want to make use of the traits that are manifested in [defendants’] transgenic products.” The court noted that Monsanto had expressly declared that it is not their policy “to exercise [their] patent rights where trace amounts of our seed or traits are present in [a] farmer’s fields as a result of inadvertent means.” The court went on to find that although the complaint “alleges without specification that defendants have accused certain non-intentional users of Monsanto’s seed of patent infringement and threatened them with [litigation, no] plaintiffs claim to have been so threatened.”

The complaint alleged that the organic farmers feel threatened by the fact that between 1997 and 2010 Monsanto filed 144 patent infringement lawsuits against farmers. However, the court found that plaintiffs had overstated the magnitude of Monsanto's patent enforcement, since this "average of roughly 13 lawsuits per year is hardly significant when compared to the number of farms in the United States, approximately two million."

The plaintiffs alleged that Monsanto had filed patent infringement lawsuits against other farmers who did not want to grow patented crops, citing specific examples where this had allegedly occurred, but the court found that this assertion was:

“belied by the decisions in the suits against the referenced individuals. See Monsanto Co. v. Parr, 545 F. Supp. 2d 836, 842-44 (N.D. Ind. 2008) (defendant intentionally induced others to infringe Monsanto’s patents); Monsanto Co. v. Nelson, No. 4:00-CV-1636, 2001 U.S. Dist. LEXIS 25132, at *2 (E.D. Mo. Sept. 10, 2001) (Monsanto alleged that defendants had intentionally saved and replanted second generation seed with patented traits in violation of their licensing agreement); Monsanto Can. Inc. v. Schmeiser, 2001 FCT 256 [120] (Can.) (finding that the defendant saved and planted seed “he knew or ought to have known was Roundup tolerant”).”

I found it particularly gratifying that the court addressed the widely held misperception that Percy Schmeiser, a Canadian farmer who took Monsanto to the Canadian Supreme Court (and lost) and became somewhat of a folk hero in the process, was an innocent victim whose fields were contaminated by Monsanto product. If you actually read the decisions from the Canadian courts, it is very clear that the court was convinced that Schmeiser had actively selected for and cultivated Monsanto Roundup ready seeds on his property without authorization and without paying any licensing fee (see my previous post).

The court was particularly critical of the Public Patent Foundation’s characterization of an attempt by Monsanto to reassure organic farmers that they would not be sued for inadvertent infringement as an "implicit threat" by Monsanto. The Public Patent Foundation had written a letter to Monsanto basically asking for a blanket immunity for all the plaintiffs against ever being sued for patent infringement, even if they did intentionally engage in infringing activity. Monsanto responded with a statement of its policy, which it had previously published in other venues:

“It has never been, nor will it be[,] Monsanto policy to exercise its patent rights where trace amounts of our patented seeds or traits are present in [a] farmer’s fields as a result of inadvertent means.”

Amazingly, the Public Patent Foundation characterized Monsanto's statement as an implicit threat, and as such the basis for declaratory judgment action.

The court totally rejected this flawed logic, declaring it "objectively unreasonable for plaintiffs to read [the language of Monsanto statement] as a threat." The court also stated that,

"[i]ndeed, plaintiffs’ letter to defendants seems to have been nothing more than an attempt to create a controversy where none exists. This effort to convert a statement that defendants have no intention of bringing suit into grounds for maintaining a case, if accepted, would disincentivize patentees from ever attempting to provide comfort to those whom they do not intend to sue, behavior which should be countenanced and encouraged. In contrast, plaintiffs’ argument is baseless and their tactics not to be tolerated.”
It bears noting that critics of Myriad Genetics have repeatedly complained that Myriad should make an explicit statement that the company promises not to sue entities that infringe its BRCA patents in the context of research or non-commercial testing. But I've always maintained that Myriad is rightly concerned that such a statement could be used against them. Here we see a perfect example of this, with the Public Patent Foundation using Monsanto's attempt to reassure inadvertent infringers that they will not be sued as a weapon against Monsanto.

The district court in this case, fortunately, rejected the argument, and noted that public policy dictates that companies such as Monsanto should be encouraged to provide such reassurance, not punished, and that the Public Patent Foundation's tactic of using the statement against Monsanto is "not to be tolerated." But with all the advocacy groups out there gunning for Myriad, is it any wonder the company would be reluctant to open itself up to the negative unintended consequences of an explicit statement of immunity for some infringers?

Thursday, March 29, 2012

Interesting Empirical Study Looks at Role of DNA Patents and Tech Transfer Licensing Policies in the Development of Diagnostic Tests

Before becoming an independent consultant, Lori Pressman was Assistant Director of the MIT Technology Licensing Office. She recently published an article in the Bloomberg BNA Life Sciences Law & Industry Report that provides interesting empirical insight into the role of "DNA patents" in the development of diagnostic tests, and a comparison of the licensing practices of the NIH and independent academic institutions with respect to these patents and technologies.

Ms. Pressman conclused that the results of her study suggest that "broad patent eligibility combined with field specific license exclusivity and diligence best serve innovation in diagnostics and personalized medicine."

Her article is described in a recent press release issued by the Association of University Technology Managers (AUTM), which includes a link to the article. An abstract of the article is provided below.


To investigate the effect of exclusivity in license agreements, licensing outcomes for patents with DNA sequences in their claims “DNA Patents” managed under the Bayh-Dole Act at academic institutions “AI’s”, and under the Stevenson-Wydler Technology Innovation Act and the Federal Technology Transfer Act of 1986 at the NIH OTT were studied; the former permits and favors more exclusivity than the latter. Timelines for i) patent filing, ii) patent publication, iii) license execution, and iv) receipt of a first earned royalty , for products which read on DNA Patents are generated and analyzed. The fraction of patents ever licensed and the duration of the licenses, are documented and compared. The data show that, relative to AI managed DNA Patents, fewer NIH OTT managed DNA Patents are ever commercially licensed, and that more NIH OTT licenses to DNA Patents end early and unexpectedly, before either patent expiration, or a predetermined end date. The data suggest that products associated with AI managed DNA Patents may get to market sooner than products associated with NIH OTT managed DNA Patents, -though the data sets are small and the null hypothesis can’t be ruled out. The data also suggest that at both the NIH OTT and at academic institutions, licenses with exclusivity are executed more consistently before a product sale, and thus are more consistent with incentive creation than nonexclusive licenses, which tend to be “just-in-time” licenses, executed at about the same time as a product sale.

Using a relational database which maps NIH OTT managed DNA Patents to licenses and from there to products, the sensitivity and specificity of i) the bioinformatic algorithm for identifying “DNA Patents” alone, and ii) the algorithm refined by expert curators, are tested for their ability to predict which patents will cover “genetic diagnostic tests”. The data show that the field of use in the license agreement is significantly more specific and sensitive a predictor than the patent claims. Timeline analysis applied to NIH products associated with DNA Patents suggests that diagnostics generally take longer to develop than reagents, but not as long as therapeutics.

The author concludes that these results considered in concert with i) the publication of the human genome in 2001, ii) increased emphasis on enablement and written description by the USPTO, and iii) the blurring distinction between therapeutics and diagnostics, suggest that broad patent eligibility combined with field specific license exclusivity and diligence best serve innovation in diagnostics and personalized medicine.

Tuesday, March 27, 2012

Judge Posner Questions Whether Owner of Patent on Heart-Healthy Cookies Would Be Entitled To Nontrivial Damages

Last year I reported that Brandeis University had joined its exclusive licensee GFA Brands in suing a number of cookie companies for infringing its patents directed towards methods of "Increasing the HDL Level in the HDL/LDL Ratio in Human Serum by Balancing Saturated and Polyunsaturated Dietary Fatty Acids." The case is being heard by Judge Richard Posner in the Northern District of Illinois. On March 16, Judge Posner issued an interesting order in the case, ordering the parties to brief the issue of whether plaintiffs, if successful, would be entitled to nontrivial damage awards. Here is the order:

“I am concerned whether the plaintiffs if successful in establishing liability will be entitled to nontrivial damages awards. Suppose the defendants infringed the asserted patents but that none of the defendants marketed its products as low in bad cholesterol (LDL) or high in HDL, or as having a high ratio of HDL to LDL; and suppose further that the defendants obtained no cost savings by infringing the patents rather than using some non‐infringing recipe and that neither Brandeis nor its licensee GFA Brands lost any business as a result of the infringement. On those assumptions, would the plaintiffs have any claim for damages, whether compensatory or punitive, or restitution? I would like the parties to address this question in briefs filed simultaneously by close of business on April 2.”
In other words, if the cookie manufacturers are not profiting from the healthy cookie recipe by using it to market their cookies, and the recipe does not cut their costs, then how has the patent owner been harmed, and what does Brandeis want the court to do? Perhaps the answer is that customers do pay a premium for healthier cookies, even if the cookie manufacturer does not use that information in marketing its products. And in any event, Brandeis/BFA would presumably like to get an injunction against the cookie manufacturers, as leverage to demand royalty payments, or to keep them off the market, thus reducing competition in the market for healthy cookies. But if the defendant cookie manufacturers do not profit from the technology, perhaps they will simply change their recipe, perhaps rendering their cookies less healthy but no less profitable.

Thanks to Docket Navigator for making me aware of this order.

Addendum to Yesterday's Post on NPR Retraction and the Attacks on Biotechnology

In yesterday's post, I stated that "the author [of "Who Owns You?" has] characterized himself as an intellectual property attorney." It's been years since I read the book, but I seem to clearly recall the author of the book holding himself out as an attorney with expertise in intellectual property. However, that author has contacted me and asked me to retract that statement, stating that he has never claimed to be an "intellectual property attorney." I don't have his book at hand, and perhaps I was mistaken in my recollection, if so I apologize.

I'd rather not delve into his book again, but a quick Google search will show that he claims to be an attorney, to have JD from a US law school, to have spent years researching in the area of intellectual property and technology, to lecture on the subject of intellectual property, and to have published more than one book with a focus on intellectual property. I will leave it to readers to judge for themselves whether these credentials might lead one to infer that he holds himself out as an attorney with some expertise in intellectual property.

Monday, March 26, 2012

NPR Retraction of Story on Apple Factories Provides Insight into the Mentality behind Attacks on Gene Patents and Agricultural Biotechnology

On March 16, the popular National Public Radio (NPR) program This American Life (TAL) was forced to retract statements made during an episode that aired in January alleging abuse of workers at Chinese factories manufacturing products for Apple. The explanation provided by “monologist” Mike Daisy, source of the "significant fabrications" reported on the TAL program, provide some insight I think into the mentality behind the flood of misinformation that has been promulgated with respect to gene patents and agricultural biotechnology, and which unfortunately has found its way into the courts and Congress.

TAL admits to having excerpted the fabricated story from "The Agony and The Ecstasy of Steve Jobs," a one-man show that Mike Daisey had been performing across the country, and which is currently in production at the Public Theater in New York. In a press release, TAL says it first learned Daisey had fabricated parts of his story when another public radio program, Marketplace, tracked down Daisey's interpreter, who disputed parts of Daisey's monologue. After being caught lying, Daisey apologized to NPR, explaining that:

“I’m not going to say that I didn't take a few shortcuts in my passion to be heard. [] My mistake, the mistake I truly regret, is that I had it on your show as journalism, and it's not journalism. It's theater.'"
Daisey's rationalization of his lies reminds me a lot of the response of an author after I reviewed his book entitled "Who Owns You? The Corporate Gold Rush to Patent Your Genes", and pointed out some of the numerous inaccuracies in the book regarding patent law in general, and gene patents in particular. In the book, the author characterized himself as an intellectual property attorney, but when he was unable to refute the many inaccuracies in his book that I pointed out in my review, he dismissed them, and asserted that it did not matter because he had approached the issue as a philosopher, rather than as a lawyer or scientist; very reminiscent of Daisey's explanation that his report on NPR was "theater," not journalism.

The problem is, these people target a lay audience largely unfamiliar with the subject matter they cover, and push forward their work as evidence allegedly supporting their position. It would be one thing if Daisey had explained to his NPR audience that he was merely engaged in theater, or if the author of "Who Owns You?" had explained that his book was nothing more than philosophical ponderings, with no grounding in fact. But that is not how they present their work, and unfortunately their works can play an important role in motivating others (including judges and members of Congress) to take action.

For example, according to NPR the TAL piece featuring Daisey made him "Apple's chief critic and it also inspired a petition that collected more than 250,000 signatures demanding that Apple better the working conditions at the factories.” Books like "Who Owns You?” have no doubt played a role in shaping the current widespread antipathy toward gene patents.

I also found it interesting that Daisey characterizes his fabrications about Apple factories as "shortcuts in [his] passion to be heard." I suspect that this sort of mentality might explain the bending of reality routinely engaged in by the opponents of gene patents and agricultural biotechnology. They are convinced that gene patents and genetically engineered crops endanger society, and that companies like Myriad Genetics and Monsanto are evil, and will seemingly say anything in their passion to be heard. Like Daisey, they do not appear to be bothered by specific facts, and are willing to take shortcuts around the truth in seeking to eliminate these evils from the world.

The disturbing thing is that there is so much incentive for people to propagate these myths. People like Daisey clearly love being in the spotlight, and the more sensational he can make his reports of condition Apple factories, the more people he will have listening. NPR reported that this episode of TAL had the largest audience that show had ever achieved, and that Daisey became the most prominent critic of Apple factories because of the coverage. Unfortunately, I think there are also incentives at play, particularly in academia and with respect to advocacy groups such as the ACLU and Public Patent Foundation, for making overblown and sensationalistic allegations on hot button issues such as gene patents and agricultural biotechnology.

Supreme Court Sends Myriad Back to the Federal Circuit

Today the Supreme Court granted certiorari in Association for Molecular Pathology v. Myriad Genetics, and sent the case back to the Federal Circuit to reconsider in light of Mayo v. Prometheus. The case has important implications not only for the patent eligibility of isolated DNA, but more generally for purified natural products and other inventions based on naturally occurring biological materials.

When the Federal Circuit originally decided Myriad, it held the method of genetic diagnostic claims to be patent ineligible, but the claims directed towards isolated DNA molecules patent eligible. The Supreme Court's decision in Mayo clearly would not change the outcome regarding the former - Myriad's diagnostic method claims lie further down the spectrum of patent ineligibility than the Prometheus claims, since they do not recite a step of physically analyzing a DNA molecule, but could potentially be infringed by merely comparing DNA sequence information (at least according to the Federal Circuit's interpretation of the claims). However, it could alter the result with respect to the isolated DNA claims, and presumably that is the issue which the Supreme Court wishes the Federal Circuit to revisit.

There is a sense of déjà vu. Recall that the Federal Circuit originally decided the Prometheus appeal prior to the Supreme Court's Bilski decision, and found the Prometheus personalized medicine claims patent eligible. Mayo petitioned for certiorari, and then the Supreme Court decided Bilski, granted Mayo's petition, vacating the Federal Circuit's earlier decision and directing the Federal Circuit decision to reconsider the patent eligibility of Prometheus’ claims in light of Bilski. The Federal Circuit responded by again upholding the patent eligibility of the Prometheus claims, relying to a large extent on the same rationale used in the original pre-Bilski decision, and arguably paying insufficient heed to the Supreme Court's pronouncement in Bilski. This prompted the Supreme Court to take up the Prometheus case, and unanimously reject the Federal Circuit's narrow interpretation of Bilski as the court had applied it to the Prometheus claims. Clearly the Supreme Court has a significantly narrower view of the scope of patent eligible subject matter than many of the judges on the Federal Circuit, and it will be interesting to see how this tension plays out in the Myriad case.

On remand, I can see the Federal Circuit going either way on the patent eligibility of Myriad's isolated DNA claims. I think the Mayo decision could plausibly read as rendering claims to isolated (naturally occurring) DNA patent ineligible, an outcome that would be consistent I think with the rationale and tenor of Mayo. After all, naturally occurring DNA sequences would seem to fall squarely into the category of natural phenomena, and under Mayo patent eligibility of the claims would depend on a determination of whether the "isolated" limitation is sufficient to can find the claim to a patent eligible "application" of the phenomenon.

In Mayo Justice Breyer concluded that the specific recitation of a step of determining the level of drug metabolite a patient sample was "well-understood, routine and conventional," and for that reason did not render the claim patent eligible. At the time Myriad filed its patent applications on isolated BRCA sequences, the isolation of naturally occurring DNA could be characterized as routine and conventional, and hence insufficient to impart patent eligibility on a claim to isolated DNA. I think that would likely be the outcome were the Supreme Court to decide the issue itself, and perhaps the Federal Circuit will feel obliged to come to that outcome, particularly after being implicitly chastened by the Mayo decision.

On the other hand, I think that many of the judges on the Federal Circuit, including the two in the Myriad majority (Lourie and Moore) believe that isolated DNA claims should be patent eligible, and there is I think sufficient ambiguity in Mayo to support that outcome (although I do not think that decision would be likely to withstand Supreme Court review, were the Court inclined to take up a third patent eligibility case). For one thing, Mayo only addressed method claims, and the Federal Circuit could read the decision as having limited applicability to product claims reciting compositions of matter. Significantly, Mayo did not overturn Diehr and Chakrabarty, so the Federal Circuit could cite to those cases as supporting patent eligibility of isolated DNA.

As I pointed out in my Mayo blog post last week, the Supreme Court left the door open for lower courts to declare a claim patent eligible if it includes some limitation that is, in the words of Justice Breyer, "[significant] in terms of patent laws objectives." Perhaps the Federal Circuit could point to this language, and affirm the patent eligibility of Myriad's isolated DNA claims based on a determination that the isolation of DNA significantly furthers the objectives of patent law (whatever those are).

If the Federal Circuit finds Myriad's isolated DNA claims patent ineligible, I'm not sure how significant that decision will be for biotechnology. I don't think it would be good, since it unfortunately sends a message to investors that the courts might come in at anytime and declare patent ineligible subject matter that for years has been treated as patentable, and invalidate a whole category of patents that have been deemed important in investment decisions (as discussed in an earlier post).

On the other hand, I don't think it would be devastating for biotechnology, or even diagnostics. I tend to think that claims to isolated forms of naturally occurring DNA molecules are becoming less and less relevant, and that method claims are in fact much more important for the protection of innovation in personalized medicine diagnostics. I think that product claims directed towards DNA constructs based on naturally occurring DNA molecules, but drafted more narrowly so as to be limited to particular embodiments, such as gene therapy vectors or recombinant expression vectors, should remain patentable.

On the other hand, the prospects appear to not be so bright for claims directed towards isolated natural products, such as proteins or other naturally occurring biomolecules. In the Federal Circuit's Myriad decision, Judge Lourie emphasized that the Federal Circuit was not declaring purified biomolecules patent eligible, and in fact he seemed to cast doubt on the patent eligibility in general of purified biomolecules. He took pains to explain that isolated DNA is different, because it involves the breaking of covalent bonds, resulting in a different chemical structure for isolated DNA relative to its naturally occurring counterpart. I suspect he did this in order to frame the decision as a narrow one, and thus hopefully avoid Supreme Court review of the decision.

In general, Mayo has raised some question as to the degree of human intervention that will be required to transform naturally occurring biological material from a patent ineligible natural phenomenon into a patent eligible application of that phenomenon.

Wednesday, March 21, 2012

Mayo v. Prometheus: Analysis and Implications of an Important Supreme Court Decision

When I first read the Supreme Court's decision in Prometheus, I must admit I was somewhat taken aback. To my mind, the Federal Circuit had already drawn a reasonable and relatively well-defined line between patent eligible molecular diagnostic methods that entail a physical step of analyzing for the presence of molecular marker and/or treating a patient (Prometheus) and patent ineligible diagnostic methods that could potentially be infringed by the mere analysis of genetic information (Myriad). Prior to yesterday, I had been hopeful that a majority of the Justices on the Supreme Court would agree and that the Federals Circuit's decision in Prometheus would be affirmed.

Instead, as most of my readers are no doubt already aware, the Supreme Court unanimously reversed the Federal Circuit’ decision, declaring all of Prometheus’ claims at issue in the case patent ineligible. With the benefit of 20/20 hindsight, the Supreme Court's decision does not strike me as surprising at all. In his dissent from the Court's decision in 2006 to dismiss LabCorp v. Metabolite, Justice Breyer set forth in great detail his concern that "too much patent protection,” for methods of molecular diagnosis can, in his words, "impede rather than ‘promote the Progress of Science and useful Arts,’ [i.e.,] the constitutional objective of patent and copyright protection.” In his view, patents broadly claiming this sort of innovation "can discourage research by impeding the free exchange of information, for example by forcing researchers to avoid the use of potentially patented ideas, by leading them to conduct costly and time-consuming searches of existing or pending patents, by requiring complex licensing arrangements [].”

Justice Breyer's LabCorp dissent held up the patent eligibility doctrine as an important tool for avoiding the "danger of overprotection." He described claims of the type at issue in LabCorp as merely a "natural law" cast by a clever patent attorney "in the abstract patent language of a 'process’.” He went on to conclude that a process "embodying" a natural phenomenon is not rendered patent eligible by the recitation of steps of physically analyzing for the presence of molecular markers or using the resulting information in the treatment of the patient. With respect to the particular claim under review in LabCorp, he stated that:

“One might, of course, reduce the ‘process’ to a series of steps, e.g., Step 1: gather data; Step 2: read a number; Step 3: compare the number with the norm; Step 4: act accordingly. But one can reduce any process to a series of steps. The question is what those steps embody.”

Thus, Justice Breyer's opinion in Prometheus represents nothing more than fruition of seeds he sowed in his LabCorp dissent. But why did all the other Justices join him in a unanimous decision? I'm not sure the reason, but it seems to be the case that the Supreme Court decides patent decisions unanimously, perhaps because many of the Justices do not find patent cases particularly compelling, although Justice Breyer clearly does. In Prometheus the Supreme Court handed Justice Breyer the pen, and he decided the case in precisely the manner he set forth six years ago in his LabCorp dissent.

This blog article analyzes certain aspects of the Prometheus decision, and considers potential implications for the patentability of molecular diagnostics, personalized medicine and biotechnology in general.

The Court’s expansive definition of "natural phenomena"
The Supreme Court has repeatedly stated that certain fundamental principles, including "natural phenomena," are ineligible for patent protection. At the same time, it has stressed that a useful application of a natural phenomenon can be patent eligible. To my mind, however, the Court has never clearly articulated a useful definition of "natural phenomenon," nor adequately explained how to discern the boundary between a method claim that impermissibly embodies a natural phenomenon, as opposed to a patent eligible claim reciting the specific application of a natural phenomenon. Prometheus has not remedied the situtation.

More than three years ago, when the Federal Circuit first took up the Prometheus appeal, I submitted an amicus brief on behalf of myself and a few other law professors arguing that the correlation between drug metabolite level and optimal drug dosage at the heart of Prometheus’ claims does not constitute a "natural" phenomenon. Unlike the LabCorp claim, which relates to a correlation between vitamin B and homocysteine that occurs naturally in human body, the Prometheus claims involve a correlation between a non-naturally occurring drug metabolite and the optimal dosage of the drug. The drug metabolite does not occur naturally, but is created as a byproduct when the human body breaks down the precursor drug. Hence the correlation between metabolite level and optimal dosage does not occur naturally, but only as the result of human intervention, i.e., the synthesis of the drug and administration of the drug to a patient. In my view, the correlation at the heart of the Prometheus claims is not a natural phenomenon, and hence it is erroneous to conclude that the claim is patent ineligible for claiming a natural phenomenon.

In its initial decision, the district court that decided Prometheus acknowledged that the drugs and their metabolites (breakdown products) do not occur absent human intervention, but nonetheless characterized the correlation between the breakdown products and optimal drug dosage as an unpatentable “work of nature” because the drugs “are converted naturally by enzymes within the patient’s body to form an agent that is therapeutically active, [and thus] the correlation results from a natural body process.” In essence, the district court concluded that the mere involvement of a natural process in the interaction between a man-made drug and the human body renders the interaction a “natural phenomenon.”
In my amicus brief, I pointed out what I saw as the flaw in the district court's logic:

“Surely the lower court’s expansive definition of “natural phenomena” cannot be correct, for virtually every patented invention is based on some discovery involving the interaction of human ingenuity with the natural environment and natural processes. For example, an airplane operates by interacting with the air in a particular manner that results in flight. The air and its properties are natural phenomena, but surely that does not render the interaction of an airplane with the air a natural phenomenon. More to the point, what biological or pharmaceutical invention is not based on an interaction with natural biological processes? In particular, drugs operate by means of chemical interactions with naturally occurring proteins and other biomolecules in the body, according to the fundamentals laws of chemistry and biology. Simply interacting with natural processes does not render a man-made biological phenomenon a natural phenomenon, but that would seem to be the result if the rationale of the lower court were applied generally to other scenarios beyond the facts of this case.”
On appeal, the Federal Circuit assumed that the correlations between drug metabolite level and optimal dosage are natural phenomena, without seeming to appreciate the implications of this broad definition of "natural phenomena." Justice Breyer took the same tack, concluding that:

“While it takes a human action (the administration of a thiopurine drug) to trigger a manifestation of this relation in a particular person, the relation itself exists in principle apart from any human action. The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes.”
Under this broad interpretation of natural phenomena, it is hard to imagine any invention in biotechnology or the life sciences that is not based on the discovery of a natural phenomenon. All inventions in this realm of technology are the consequence of the way in which physical matter interacts with natural processes. PCR, recombinant DNA and monoclonal antibodies are some of the most important inventions of biotechnology, but all are based on harnessing natural biological and chemical processes, and hence seem to be "natural phenomena" under the Court's broad interpretation of the term.

What constitutes a patentable "application" of a biological natural phenomenon?
Of course, Justice Breyer acknowledged that a claim limited to a patentable "application" of a natural phenomenon remains patent eligible, but his decision does not seem to provide any coherent guidance with respect to what constitutes a patentable application of the phenomenon, as opposed to a patent ineligible claim that merely "describes" the phenomenon. Consider the rationales he set forth to justify his conclusion that the claimed steps of "administering" drug to a patient and "determining" the level of drug metabolite in a patient's body were insufficient.

With respect to the “administering” step, he found that the step:

"simply refers to the relevant audience, namely doctors who treat patients with certain diseases with thiopurine drugs. That audience is a pre-existing audience; doctors used thiopurine drugs to treat patients suffering from autoimmune disorders long before anyone asserted these claims. In any event, the “prohibition against patenting abstract ideas ‘cannot be circumvented by attempting to limit the use of the formula to a particular technological environment.’ [cite to Bilski].”
Consider the implications if a lower court were to apply the same reasoning to a drug method of treatment claim. Method of treatment claims are extremely important for the pharmaceutical industry, and typically recite a method of treating a particular ailment by administering a drug to a patient. Applying the rationale of Justice Breyer, it would seem that doctors constitute a "pre-existing audience” for method of treatment claims, no less so than with respect to the molecular diagnostic claims at issue in Prometheus. I don't see how one could make a principled distinction between the two scenarios, although, as discussed below, I suspect lower courts will find a way, rather than eliminate this important class of patents.

Regarding the step of determining the level of relevant metabolites in the blood, Justice Breyer concluded that determining the level of drug metabolites in the body is "well-understood, routine and conventional." But again, think of the implications if this rationale were to be extended to method of treatment claims. In general, I think it can be safely said that the administration of a known drug to a patient is "well understood, routine and conventional." But until now it has been generally understood and accepted that someone who discovers a new, nonobvious and useful method of using a known drug to treat a disease can patent her invention as a method of treatment. Justice Breyer does not provide any guidance as to how one would distinguish between "well understood and routine" administration of a known drug in the context of a method of treatment claim and administration of the drug as it appears in Prometheus’ claims.

Justice Breyer acknowledges the possibility that a combination of conventional steps might lead to a patent eligible invention, but concluded that in this case the claims "add nothing to the laws of nature that is not already present when the steps are considered separately." In particular, he concludes that "anyone who wants to make use of these laws must first administer a thiopurine drug and measure the resulting metabolite concentrations, and so the combination amounts to nothing significantly more than an instruction to doctors to apply the applicable laws when treating their patients.”

But once again, what would be the implications for method of treatment claims? According to Justice Breyer's interpretation of the term "natural phenomenon," the ability of Drug X to treat Disease Y seems clearly to fall within the realm of "natural phenomena." After all, the drug interacts with the body according to "entirely natural processes." But anyone who wants to make use of this "natural phenomenon" would of course need to administer Drug X to a patient requiring treatment, so how could the claim amount to anything more than, in the words of Justice Breyer, "an instruction to doctors to apply the applicable [natural phenomenon] when treating their patients”?

No clear demarcation between Diehr and Flook/Prometheus
Justice Breyer asserts that the Court's decision in Prometheus is reinforced by a “detailed consideration” of earlier Supreme Court precedent, particularly Diehr and Flook. But his opinion provides no convincing rationale as to why the process steps recited in the Diehr claims were sufficient to establish patent eligibility, but not so in the case of Flook or Prometheus.

Justice Breyer suggests that the Supreme Court upheld the patent eligibility of the Diehr claims because they include steps of “installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly re- calculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time.” According to Justice Breyer, the Diehr decision

"nowhere suggested that all these steps, or at least the combination of those steps, were in context obvious, already in use, or purely conventional. And so the patentees did not seek to pre-empt the use of [the] equation, but sought only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These other steps apparently added to the formula something that in terms of patent law’s objectives had significance—they transformed the process into an inventive application of the formula.”
Note that Justice Breyer never identifies which step or steps in the Diehr process transformed the patent ineligible equation into a patent eligible process, beyond the conclusory statement that one or more of the steps "apparently added . . . something that in terms of patent laws objectives had significance." Will the lower courts, not to mention patent examiners, actually be required to assess the significance to the overall objectives of patent law of the individual steps in any method claim that applies a natural phenomenon? It seems unworkable, precisely the sort of vague standard that the Federal Circuit sought to address by means of the machine or transformation test when it initially decided Bilski.

Patent eligibility as a doctrine to address obvious and/or overbroad patent claims
I am of the opinion (and I believe this opinion is shared by at least some judges on the Federal Circuit) that patent eligibility should not function as a primary doctrinal gatekeeper of patentability, but that instead the more conventional doctrines of nonobviousness, enablement and written description are better doctrinal tools for addressing the concerns that have been expressed with respect to claims of the type at issue in Prometheus, LabCorp and Myriad. However, Justice Breyer is adamant that patent eligibility performs an important function distinct from the requirements of 102, 103 and 112, and constitutes a fundamental and dynamic doctrine for addressing the problem of "too much patent protection,"

Nonetheless, it is clear from reading Prometheus that he views patent eligibility as inseparable from questions of obviousness and overbreadth, concerns more conventionally (and appropriate) addressed under Sections 103 and 112. For example, he repeatedly faults the Prometheus claims for including steps that are "well known, routine and conventional,” and indicates that the Diehr claims were patent eligible because they included a combination of steps that were not "in context obvious, already in use or purely conventional.” In other words, the patent eligibility of the Diehr claims seems to be inextricably linked with novelty and nonobviousness, at least in the mind of Justice Breyer.

In a similar manner, the Prometheus opinion states that patent eligibility is the appropriate mechanism for guarding against patent claims that "foreclose more future invention than the underlying discovery could reasonably justify." It goes on to complain about the breadth of the Prometheus claims, pointing out, for example that the "’determining’ step is set forth in highly general language covering all processes that make use of the correlations after measuring metabolites, including later discovered processes that measure metabolite levels in new ways.” Again, these are concerns more conventionally and appropriately addressed using the enablement requirement of section 112, not the blunt instrument of patent eligibility.

The US government, in fact, argued that the requirements of Sections 102, 103 and 112 are the more appropriate vehicles for addressing the concerns expressed with the Prometheus claims. However, Justice Breyer rejected this argument, asserting that to follow the government's advice in this regard would be to render the doctrine of patent eligibility a "dead letter." He also voiced concern that shifting the patentability inquiry entirely to Sections 102, 103 and 112 would "risk creating significantly greater legal uncertainty, while assuming that those sections can do work that they are not equipped to do."

I would disagree with both of these assertions. The doctrines of novelty, nonobviousness and enablement are all more firmly established and predictable than the recently reinvigorated patent eligibility doctrine. Shifting the focus from these better established doctrines to section 101 and patent eligibility increases rather diminishes legal certainty.

And I don't think there is any justification for thinking that the other doctrines of patentability are not flexible enough to address all of the concerns that have been express with respect to the Prometheus claims, and similar claims such as those at issue in the Myriad case. In fact, in Prometheus and Myriad the courts have never addressed the issue of whether the claims satisfy these other requirements of patentability, so how can one conclude that nonobviousness and enablement are not equipped to deal with any asserted problems with the claims? Ariad v. Eli Lilly provides an example of this - Eli Lilly initially sought to invalidate the Ariad claims using the doctrine of patent eligibility, but ultimately prevailed using the more established Section 112 doctrine of written description.

The machine or transformation test
The Federal Circuit relied heavily on the Bilski machine or transformation test in upholding the patent eligibility of the Prometheus claims. In particular, the court found that administering a drug to a patient is a method of treatment and always transformative (because it transforms the patient's body). The court also found that the step of determining metabolite levels in the patient is inherently transformative, because it necessarily relies on laboratory processes that entail physical transformations of matter.

Justice Breyer, however, rejected the Federal Circuit's machine or transformation analysis. He found the "administering" step irrelevant because it "simply helps pick out the group of individuals that are likely interested in applying the law of nature." I have a hard time getting my head around that one, it makes no sense to me to analyze the patent eligibility of a claim in terms of the intended audience for specific method steps recited in the claim. But in any event, if the administering step is irrelevant because it simply targets doctors as the relevant audience for the claim, the same rationale would seem to apply to any method of treatment claim that involves administering a drug to the patient.

He went on to find the "determining" step irrelevant because "science [might] develop a totally different system for determining metabolite levels that [does not inherently involve a] transformation.” I guess in principle one cannot exclude the possibility that a method might be developed for determining metabolite levels that does not involve any transformation, but I'm fairly certain that even if the claim had explicitly recited that the determining step must involves a physical transformation Justice Breyer would have still declared the claim to be patent ineligible.

Ever since the Supreme Court decided Bilski, Federal Circuit judges have continued to rely heavily on the machine or transformation test, pointing out that the Supreme Court had identified it as an "important and useful clue" to determining patent eligibility. But in Prometheus Justice Breyer points out that while it might be a useful clue, the machine or transformation test does not trump the fundamental test for patent eligibility, i.e., whether the claim impermissibly embodies a natural phenomenon.

Implications for diagnostics, personalized medicine pharmaceutical method of treatment claims
Prometheus and some amici argued that were the court to declare the Prometheus claims patent ineligible, it would have a chilling effect on future innovation in medical diagnostics. However, Justice Breyer swept aside this concern, stating that it was irrelevant to the question of patent eligibility of the claims, and suggesting that it was for Congress to intervene if it turns out that it is necessary to “more finely tailor” the rules of patent eligibility in order to protect innovations in diagnostics.

On its face, Prometheus appears to severely limit the ability of some innovators in diagnostics and personalized medicine to obtain effective patent protection. Indeed, if implemented literally, the standard of patent eligibility set forth in Prometheus would seem to deny patent protection to much of biotechnology, including drug method of treatment claims. However, I think in practice the lower courts will attempt to limit the impact of the decision, and find ways to maintain patent eligibility for drug methods of treatment, and at least to some extent for diagnostics and personalized medicine. It might require clever claim drafting in the area diagnostics and personalized medicine, and Prometheus clearly creates much uncertainty in this increasingly important sector of healthcare.

At one point in his opinion Justice Breyer states that "unlike, say, a typical patent on a new drug or a new way of using an existing drug, the patent claims do not confine their reach to particular applications of those laws.” I'm guessing that this sentence was intended to assuage fears that the decision had negative implications for the patenting of pharmaceuticals. Unfortunately, I don't see anything in the Prometheus decision that provides a basis for making a principled distinction between drug method of treatment claims and the Prometheus claims. Nonetheles, I think that the pharmaceutical industry will latch onto this sentence and successfully argue that claims of this type remained patent eligible.

In particular, I predict that if a court were faced with a patent eligibility challenge to a drug method of treatment claim, it would take advantage of the ambiguities in the Supreme Court's precedent in this area to find the claim patent eligible. The court would most likely perform some hand waving, and ultimately conclude that the method of treatment claims at issue in the case are more closely analogous to the Diehr claims than to the claims in Prometheus, and declare the claim patent eligible. I don't think the Federal Circuit or Supreme Court would want to overturn such decision, because I think the importance of these sort of claims for the pharmaceutical industry is widely understood and accepted.

Friday, March 16, 2012

District Court Decision in Case Involving Centocor's IL-12 Antibody Stelara

In the 1990s Centocor and Abbott both developed human antibodies specific for interleukin 12 ("IL-12", a cytokine), and filed patent applications broadly claiming isolated antibodies that bind IL-12. Abbott's work has resulted in a pharmaceutical composition (briakinumab )that is currently in late stage clinical trials, and two US patents, (6,914,128 and 7,504,485). Centocor's has resulted in the FDA approved drug Stelara. In 2007 an interference was declared between Abbott's ‘128 patent and a pending Centocor patent application, and in 2009 the BPAI decided the interference in favor of Abbott.

Both companies’ antibody products bind to the P40 subunit of IL-12 (it was not clear to me from reading the decision whether the products bind to the same epitope, although I suspect they do not). The antibodies have substantially different amino acid sequences, and were developed independently using different methodologies.

Abbott has sued Centocor, seeking a declaration that Stelara infringes its ‘128 and ‘485 patents. Centocor has sued Abbott seeking a declaration that its product does not infringe the patents, and that the patents are invalid. Centocor has also petitioned the district court for judicial review of the interference decision pursuant to 35 USC 146. All three actions are currently pending before the District Court of Massachusetts.

On March 9, the District Court issued an order deciding multiple motions of summary judgment filed by both parties. Here is a quick summary of some of those decisions.

Issue Preclusion
Abbott filed a motion arguing that Centocor is precluded from raising invalidity of the ‘128 patent as a defense because it raised the issue during the interference and lost. The District Court denied this motion, based on its determination that the BPAI’s decision in the interference was not a "binding final judgment." The court found that under 35 USC 146 a party that loses the interference before the BPAI can seek a de novo trial in Federal District Court on validity issues previously decided by the BPAI, and thus the decision of the board cannot be a "binding final judgment" with preclusive effect in a subsequent infringement action.

A number of Abbott's claims define the claimed antibody in terms of the dissociation constant, or "Kd” value, for the interaction between the antibody and its target IL-12. Kd is a measure of the affinity of the antibody-antigen interaction, i.e., the strength with which the antibody binds, or attaches to, the antigen. Kd can be determined by measuring the rate constants at which the antibody attaches to and detaches from the antigen. One way of measuring these on and off rates is by use of a technique called surface plasmon resonance ("SPR"), using for example a BIAcore instrument. Abbott's patent specifications disclose that Kd can be determined by SPR using the BIACore System, and identify four scientific articles describing the process.

Centocor argued that the specification did not provide specific instructions that would permit a person reasonably skilled in the art to unambiguously determine the KD value of an antibody using SPR, and asked the court to rule the claims invalid for indefiniteness. Specifically, Centocor argued that SPR could yield different Kd values for the same antibody when tested using different experimental parameters. In particular, Centocor pointed out that the claims do not specify surface density or flow rate parameters.

The district court rejected this argument however. The court read Federal Circuit precedent as establishing that when multiple acceptable standards or methods exist for testing whether a product meets a claim limitation, the patent is indefinite if it does not specify the appropriate standard or method to be used. However, a claim is not indefinite when it does specify the method of measurement, even if it omits details about how to implement the method, so long as a person of ordinary skill could infer those details using industry standards or professional judgment. In this case, the court held that a person skilled in conducting SPR assays could determine the appropriate parameters and adequately discern the bounds of the Kd limitations.

The court found that Centocor had provided no expert testimony refuting Abbott's expert’s testimony that best practices take these parameters into account, and can provide reliable Kd data. The lack of rebuttal testimony probably was a factor in the District Court deciding the issue of definiteness in favor of Abbott on a motion for summary judgment.

The court also found it significant that many issued US patents claim include claims encompassing antibodies defined in terms of particular binding characteristics as measured by SPR, and none of these patents recite the specific experimental parameters for the SPR assays. Centocor itself is the named assignee on three such patents.

Written Description
The court denied Centocor's motion seeking summary judgment that certain claims in the patent are invalid for lack of adequate written description. All of the challenged claims are directed to genuses of functionally defined antibodies. Abbott conceded that its patents do not disclose common structural features for the claimed genuses.

According to the court, the sole issue with respect to adequate written description is whether the patents disclose species that constitute a representative set within each genus claim, reciting the ambiguous standard set forth in UC v. Eli Lilly and its progeny.

Abbott's patent specification discloses multiple antibodies falling within the scope of the claims, but Centocor argued that this disclosure was inadequate because all of the disclosed antibodies share very similar amino acid sequences, while the functionally defined claims would encompass a broad range of amino acid sequences. The high degree of sequence homology of the examples arises from the fact that they are all derived from a single common precursor antibody.

In contrast, Centocor's product Stelara originated from a different antibody, and different methodology, and has amino acid sequence that is substantially different from the set of examples disclosed in Abbott's patents. Centocor makes the not unreasonable argument that if Abbott's claims are broad enough to encompass Stelara, then they are too broad to be adequately represented by the group of highly similar antibodies disclosed in Abbott's patents.

However, the court found that compliance with the written description requirement, a question of fact, could not be decided on summary judgment. Significantly, the parties’ experts disputed the significance of the differences in amino acid sequence between the disclosed antibodies and the range of amino acid sequences encompassed by the claims.

It is interesting to compare the adequacy of written description in this case with the Federal Circuit's decision last year in Centocor v. Abbott, discussed here. Both cases involve the same parties and claims directed towards antibodies, but the earlier decision involved antibodies to human TNF-alpha. In the earlier decision, the Federal Circuit held the antibody claim at issue to be invalid for inadequate written description as a matter of law. The Federal Circuit’s decision seemed to hinge on the facts that the antigen (TNF-alpha) had been previously characterized, and the production of the claimed antibody "comprising a human constant region" was not routine. Both of those criteria seem to be satisfied in the current case involving IL-12 antibody. In distinguishing the Federal Circuit's decision in the earlier Centocor case, the district court pointed out that in the TNF-alpha case the specification did not describe a single antibody falling within the scope of the claim.

Prior Art
Centocor also asked the court to rule that Abbott's earlier work on IL-12 antibodies, and also Centocor's on Stelara, constitute 102(g) prior art with respect to Abbott's claims. The court denied these motions.

I found one aspect of the court's decision particularly interesting. The court assigned Centocor's invention of Stelara a priority date of April 30, 1998. Centocor pointed out that one of the inventors listed on the Abbott patents, Stuart Friedrich, was not employed by Abbott earlier than August 1998, and hence could not have contributed to Abbott's IL-12 research project before then. Centocor argued that the inclusion of Mr. Friedrich as a joint inventor proves the conception was not complete before August 1998.

The district court rejected this argument, however, stating that the proof of priority to a genus claim requires less than what is required to establish adequate written description of that claim. The court went on to conclude that "it is plausible that Abbott invented a species of pharmaceutical composition within the scope of this claims before Centocor's priority date of April 30, 1998, but nevertheless required contributions from Mr. Friedrich after that date in order to establish the patentability of Abbott's genus claims under 35 USC 112.”

In other words, the district court seems to be saying that an individual can be a joint inventor of a chemical genus even if he does not contribute to the conception of the genus, but only contributes to providing adequate disclosure to establish compliance with section 112. I don't know if there is any precedent to support this unconventional definition of joint inventorship - the District Court does not seem to cite to any.

The court held some of Abbott's claims infringed by Stelara.

All of the claims include a limitation to "human antibody," and Centocor unsuccessfully argued that its product is not a human antibody as that term is properly construed in the claims. In particular, the court had construed "human antibody" to mean "an antibody that is derived from human DNA and not from the DNA of any non-human species." Centocor argued that the DNA that encodes its antibody is likely to contain nucleotide sequences that were inserted through N-nucleotide addition inside the cell of a transgenic mouse during production of the antibody. While Abbott conceded that N-nucleotide addition could have occurred, the court concluded that any nucleotide added by this non-template based phenomenon would not be derived from a non-human germline, and thus would not constitute the DNA of a non-human species. It went on to conclude that Stelara satisfies the "human antibody" limitation of the claims.

Based on this interpretation of "human antibody," the court held that Stelara infringes some of the asserted patent claims broadly directed towards pharmaceutical compositions comprising isolated human antibody capable of binding to an epitope on the P40 subunit of IL-12 (see for example claim 1 of US patent 7,504,485).

However, many of the asserted claims also include limitations that can only be ascertained by analytical testing, such as threshold Kd value or IC50. The district court declined to determine the infringement of these claims on summary judgment, given the fact that the experts disputed the results of tests that had been performed, and disagreed as to the methodology to be employed in performing the tests.

Thursday, March 1, 2012

Life Technologies Found Liable for Infringing Promega’s DNA Analysis Patents

On February 23, a district court in the Western District of Wisconsin granted a summary judgment motion finding that various Life Technologies products for DNA analysis, including AmpFISTR PCR kits, infringe Promega’s Patent Numbers 6,221,598; 6,479,235; 7,008,771; and Re37,984. The court awarded $52 million in damages to Promega.

Promega & Max Planck v. Life Technologies, Docket No. 10-cv-281-bbc (W.D.W).