Winter.2010.Case.Summaries - American Intellectual Property Law ...

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Dec 3, 2012 (4 years and 10 months ago)

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NY02:676012.1


1

American Intellectual Property Law Association

Biotechnology Committee


Biotechnology in the Courts Subcommittee

Report



Summaries of Recent Decisions of Interest to the Biotechnology Community



Prepared for the AIPLA
Winter

Meeting

January 27
-
30
, 20
10


La Quinta, California



Edited By:


Lisa Tyner

Subcommittee Chair

Baker Botts, L.L.P.

E
-
mail:lisa.tyner@bakerbotts.com



Larissa Piccardo

Subcommittee
Co
-
C
hair

Baker Botts, L.L.P.

E
-
mail:larissa.piccardo@bakerbotts.com



C O N T R I B U T O R S



Nicholas
J. Landau

Anna Volftsun

Lisa Tyner



The AIPLA Biotechnology in the Courts Subcommittee Report is a forum for members of the
subcommittee to present summaries and commentary on recent
judicial
decisions of interest to
the biotechnology community. Any view

of a contributor expressed in a summary should be
understood to reflect only the present consideration and views of the contributor
,

and should not
be attributed to the AIPLA or any of
its committees, the contributor’
s firm, employer, or past or
present c
lients, to other contributors, or to the editor.

To request an electronic copy of the
Report, or if you are interested in summarizing a case for a future edition, please contact
Lisa
Tyner at
lisa.tyner@bakerbotts.com

or
Larissa Piccardo

at
larissa.piccar
do@bakerbotts.com
.


NY02:676012.1


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CONTRIBUTORS:


Nicholas Landau

is an associate in the Intellectual Property group of Bradley Arant Boult
Cummings LLP. He is experienced in the procurement, protection, and litigation of patents,
trademarks, and other forms of intellec
tual property. Dr. Landau has worked with patents in a
broad array of technological disciplines including biotechnology, pharmaceuticals,
nutraceuticals, and environmental technology.


Prior to
joining

Bradley Arant, he was Associate
Counsel at the Headqua
rters of the U.S. Army Corps of Engineers in Washington, DC, and
worked as an associate at a major regional law firm in South Florida.


Prior to studying law at the
University of Virginia, Dr. Landau studied environmental microbiology, earning a Masters
de
gree from the University of Maryland and a doctorate from Rutgers Un
i
versity.

H
e may be
contacted at

nlandau@babc.com.


Anna Volftsun

is a law clerk
in the Intellectual Property group of Baker Botts LLP

(admission
to practice law in New York pending)
. Her
practice focuses on chemical and life sciences patent
prosecution and patent litigation. Prior to obtaining her J
.
D
.

from Harvard Law School, she
studied chemistry and earned a Masters degree from Brandeis University. She may be contacted
at anna.volftsun@
bakerbotts.com.


Lisa Tyner
is an associate in the New York office of Baker Botts, L.L.P. and is a member of the
Intellectual Property Group. Ms. Tyner’s practice focuses on
patent prosecution

and opinion
work in the biotechnology and pharmaceutical areas
. She has experience preparing due diligence,
patentability, val
idity and infringement opinions
and prosecuting domestic and foreign patent
applications in the areas of
proteins, peptides and antibodies,
genomics,
nucleic acids, and drug
development techno
logies.

She

may be contacted at
lisa.tyner@bakerbotts.com
.



NY02:676012.1


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TABLE OF CONTENTS



I.

In re ‘318 Patent Infringement Litigation
,
No. 2008
-
1594 (Fed. Cir.
September
25,
2009
)
……
….3


II.

Board of Trustees of the Leland Stanford Junior University v. Roche Molec
ular
Systems
,
Inc.

583 F.3d 832 (Fed. Cir.

2009)

……

6


III.

Prometheus Laboratories, Inc. v. Mayo Collaborative Services
, 581 F.3d 1336
(Fed. Cir.
2009),
petition for cert. filed (
U.S. Oct
.

22, 2009)(No. 09
-
490)

……
8

IV.

Wyeth and Elan

Pharma International
Limited v. David J. Kappos
,

No. 07
-
CV
-

1492 (Fed. Cir. January 7, 2010
)
……
1
0


Case Summaries


I.

In re ‘318 Patent Infringement Litigation
,

No. 2008
-
1594 (Fed. Cir.
September 25,
2009)

Reported by: Nicholas Landau

Summary


The U.S. Court of Appeals for the

Federal Circuit recently issued a decision
regarding the standard for enablement under 35 U.S.C. §

112 for a patent that contained
no working example of an embodiment of the claimed method of treating Alzheimer’s
disease (“AD”). Based on the absence of w
orking examples, and based on evidence that
the prior art disclosed in the patent would not have rendered the claims obvious at the
time of filing, the majority of the three judge panel held that the claims were not enabled.
The basis of the lack of enabl
ement finding was the failure of the specification to provide
a plausible explanation of the utility of the claimed method.

Invention

Bonnie Davis conceived and patented a method of treating AD comprising
administering the compound galanthamine (or a pharm
aceutically acceptable salt of
galanthamine) to an afflicted patient in a therapeutically effective amount. Galanthamine
is an alkaloid that is obtained synthetically or f
rom plants of the amaryllis family.
Galanthamine had recognized medicinal propertie
s in the prior art. The patent recites
several such properties in the background section, for example: anticholinesterase
activity, enhancement of plasma cortisol concentration, enhancement of plasma ACTH
concentrations, alteration of brain wave patterns,

improvement of short term memory,
and amelioration of scopolamine
-
induced amnesia.

Procedure

The Davis application was filed on January 16, 1986, and received an adverse
office action prior to allowance. The office action rejected the claims as obvious

in light
of the prior art disclosed in the specification and as indefinite for reciting a “method of

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treating and diagnosing” AD. In response to the office action, the applicant amended the
claims to delete a method of diagnosing AD, and presented argume
nt that it would not
have been obvious to use galanthamine to treat AD based on the prior art disclosed in the
specification.

The amended claims were subsequently allowed. Galanthamine proved to be a
safe and effective means of treating AD, and was licens
ed by the FDA for this use. A
patent term extension of 1,064 days was granted in 2004. In 2005, nume
rous generic
drug manufacturers
filed nearly simultaneous abbreviated new drug applications
(ANDAs) and paragraph IV certifications for galanthamine. Jans
sen Pharmaceutica,
N.V. (the current owner of the patent; “Janssen”) filed complaints alleging infringement
against all parties f
iling ANDAs. These cases were
consolidated into a single case. The
defendants counterclaimed invalidity of the patent.

The U.
S. District Court for the District of Delaware held that the claims were non
-
obvious, but found that the claims lacked utility under 35 U.S.C. §

101. Janssen appealed
the district court’s decision to the Federal Circuit.

Decision


Circuit Judge Dyk author
ed the majority opinion, and was joined by Circuit Judge
Mayer. Circuit Judge Gajarsa dissented. The court analyzed the disclosure of the patent,
which cited prior art scientific journal articles reporting that galanthamine has positive
effects on memory

and cognition in animals, although no

data were provided regarding
the effects of galanthamine on animal models of AD. One of the cited articles described
positive effects of galanthamine on animal models of acetylcholine deficiency, and the
specificatio
n provided reasons that animal models of acetylcholine deficiency are also
sufficient models of AD. No
in vitro

data were provided regarding the activity or
mechanism of galanthamine in treating AD. The court also considered testimony
provided at trial,
giving particular weight to testimony from the inventor regarding the
obviousness of the claims.


The court reaffirmed the existence of a prong of the enablement requirement
under 35 U.S.C. § 112 in which the specification must assert a use for the claimed

invention that represents more than a merely hypothetical possibility or objective that the
invention could possibly achieve, but for which the claimed invention has never in fact
been used. The court articulated that “the utility requirement prevents th
e patenting of a
mere research proposal or an invention that is simply an object of research.” Thus, the
enablement requirement encompasses an aspect of the utility requirement under 35
U.S.C. § 101. The court went on to review some of its prior decision
s which had held
that utility in this context can be shown by presentation in the specification of animal
experiments,
in vitro

experiments, and experiments using structurally similar compounds.
The court neither affirmed nor remanded the district court’s

analysis under 35 U.S.C. §
101, instead analyzing whether the claims were enabled under 35 U.S.C. § 112.


In applying the facts at bar, the court held that the specification, which contained
no experimental data relating to the effects of galanthamine on
AD, did not demonstrate
that a person of ordinary skill in the art would have recognized that the claimed method
had a credible utility. In reaching this decision, the court relied on testimony that was
submitted by both defendants and plaintiffs, althoug
h the plaintiff’s testimony was on the

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issue of obviousness. Notably, the court relied on the testimony of the inventor that the
claimed invention was non
-
obvious at the time of filing as evidence that it was not
enabled.


Circuit Judge Gajarsa dissented.

The dissent stated that the utility of the claimed
invention need not have been recognized by one of ordinary skill in the art at the time of
filing, as long as the utility was recognized by the inventor and was clearly stated in the
specification. Judg
e Gajarsa pointed out that, as in this case, the inventor may be a
person of greater than ordinary skill, and thus may be able to recognize utility where one
of ordinary skill would not.

Commentary


This case focuses on one of the less frequently considere
d aspects of the
utility

requirement: the utility requirement as it relates to the enablement requirement. This case
illustrates the distinction between the utility requirement under section 101 and the utility
prong of the enablement requirement under se
ction 112. The general standard for utility
under 35 U.S.C. § 101 is that there must be one
speci
fic, substantial, and credible use for
the claimed invention.
35 U.S.C. § 112
, first paragraph re
quires an indication of
how the
invention can be used.


The

Davis patent was invalidated not because the claimed invention lacked utility,
but rather because the specification failed to make a “credible” case that the claimed
invention had utility. In this case, there is no doubt that the claimed method in fact ha
d
utility as defined under section 101: the claimed method has been established to treat AD
safely and effectively.


Another noteworthy aspect of this case is the probative value given to the
inventor’s testimony by the court on the issue of utility. The
inventor’s quoted
statements were directed to the question of whether, given the state of the prior art, the
claimed invention would have been obvious to one of ordinary skill in the art at the time
of filing. The court considered this evidence of non
-
obv
iousness as evidence of lack of
utility (and
,

thus, lack of enablement). The lack of examples and data in the specification
created a “catch
-
22” dilemma, because the specification relied completely on the prior art
to show utility. As stated by the distr
ict court: “...since plaintiffs rely exclusively on the
prior art to establish enablement... the ‘318 patent cannot both be non
-
obvious and
enabled.”
In re ‘318 Patent Infringement Litigation
, 578 F.Supp.2d 711, 736 (D.Del.
2008) (citation and footnote om
itted). Because the applicant admitted that the cited prior
art did not render the claimed invention obvious, the court found that the specification did
not make a credible case that the claimed invention had utility. The lesson for patent
drafters is th
at one should not rely too heavily on the prior art to provide a basis for
enablement of the claims; instead, data that does not constitute prior art should always be
provided to enable the claims.





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II.

Board of Trustees of the Leland Stanford Junior Uni
versity v.
Roche Molecular Systems
,
Inc.

583 F.3d 832 (Fed. Cir., 2009)

Reported by: Nicholas Landau

Summary


The U.S. Court of Appeals for the Federal Circuit issued a decision on September
30, 2009 regarding the ownership of a patent when conflicting as
signment agreements
have been executed by an inventor. The
Board of Trustees of the Leland Stanford Junior
University

(“Stanford”) filed a complaint in the U.S. District Court for the Northern
District of California against
Roche Molecular Systems, Inc.

a
nd other Roche
subsidiaries (“Roche”) alleging infringement of three patents directed to Stanford’s PCR
-
based HIV assay. The district court found that Roche’s counterclaim to establish
ownership of the asserted patents was barred by the statute of limitat
ions, and that all
asserted claims were obvious under 35 U.S.C. §

103. Both parties filed cross
-
appeals. On
appeal, the U.S. Court of Appeals for the Federal Circuit held that Stanford lacked
standing and vacated the finding of obviousness. This decision

was based on the court’s
finding that Stanford’s employment agreement with the inventor failed to effectively
transfer ownership of the inventor’s intellectual property at the time of execution,
whereas a later
-
executed agreement between the inventor and
a company subsequently
acquired by Roche did effectuate a transfer in ownership.

Invention


The invention at issue was a method of using PCR to measure HIV virus
concentration in blood plasma. Since the invention was conceived in the late 1980s and
early
1990s, assays based on PCR have become widely accepted as a rapid, accurate, and
sensitive means to detect nucleic acids that are indi
cative of pathogenic organisms.

Procedure


Dr. Mark Holodniy was a post
-
doctoral researcher at Stanford working on a
feder
ally
-
funded project to address the HIV epidemic during the late 1980s, in
collaboration with researchers at Cetus, Inc., a company with particular expertise with
PCR. When Dr. Holodniy began his employment with Stanford, he signed an
employment agreement
that obligated him to assign any future inventions that emerged
from his employment to Stanford. During the project, Dr. Holodniy visited Cetus’s
facilities and executed a confidentiality agreement that assigned to Cetus all of Dr.
Holodniy’s inventions
conceived “as a consequence of” his work at Cetus. Shortly
thereafter, the PCR operations of Cetus were purchased by Roche. Following the visits to
Cetus, Dr. Holodniy and others at Stanford conceived and reduced to practice the assays
that were the subj
ect of the asserted claims, and Stanford applied for patents. Dr.
Holodniy executed an assignment of rights of the asserted patents to Stanford, and
Stanford duly recorded the assignment with the U.S. Patent and Trademark Office.
Stanford disclosed the a
pplication to the National Institutes of Health (which
administered the Federal grant under which the project was funded), acknowledged that
the United States was granted a non
-
exclusive, non
-
transferrable, irrevocable license to
practice the subject matte
r of the asserted patents; Stanford also chose to retain title to the
inventions under the Bayh
-
Dole Act (35 U.S.C. §§

200
-
212).


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Roche subsequently sold an HIV detection kit that infringed claims of the asserted
patents. Licensing negotiations between Sta
nford and Roche did not result in an
agreement, and Stanford sued for infringement in 2005. Roche counterclaimed,
asserting

in relevant part

that Stanford lacked standing to
enforce the patents;

that Roche possesse
d

ownership, license, and/or shop rights
to the patents through Roche's ac
quisition of
Cetus’s PCR assets;

and that the asserted patent claims were invalid. Roche pleaded its
ownership theory in three forms: as a declaratory judgment counterclaim, an affirmative
defense, and a challenge to Stanfo
rd

s standing to sue for infringement
.

The parties filed cross
-
motions for summary judgment regarding ownership of the
patents, each party alleging that its agreement with Dr. Holodniy effectively conferred
title in the patents, exclusive of the other’s.
The district court held that Roche’s
assertions that it was the rightful owner of the patents were counter
-
claims (as opposed to
affirmative defenses), and subject to the statute of limitations. Because the statutory
period had expired, the court dismisse
d Roche’s ownership claims. The court further
found that the ownership claims were barred by the equitable doctrine of laches, and by
the rights of the United States in the patents under the Bayh
-
Dole Act. After a Markman
hearing, Roche again moved for s
ummary judgment on the issue of claim invalidity under
35 U.S.C. §

103. The district court granted Roche’s motion, finding all asserted claims
obvious. Roche and Stanford then filed cross
-
appeals on the issues of ownership and
validity.

Decision


A three

judge panel of the U.S. Court of Appeals for the Federal Circuit reversed
in part and vacated in part the decision of the district court, and remanded the decision for
further proceedings. The only issue explicitly addressed was the ownership of the pate
nts
(although the district court’s invalidity determination was also vacated for reasons not
explained). The appellate court first determined that Roche’s assertions regarding
ownership of the patents were affirmative defenses, at least insofar as they ch
allenged the
standing of Stanford to enforce the patents. As affirmative defenses and not
counterclaims, such assertions were not subject to the statute of limitations. The
appellate court went on to analyze the ownership of the patents.


Although the em
ployment agreement with Stanford was executed prior to the
confidentiality agreement with Cetus, the court held that the confidentiality agreement
controlled the ownership of the patents. The employment agreement recited in relevant
part “
I agree to assig
n or confirm in writing to Stanford and/or Sponsors that right, title
and interest in ... such inventions as r
equired by Contracts or Grants.” Citing its prior
decisions, the court interpreted this not as an assignment of rights, but as a promise to
assig
n rights in the future. The confidentiality agreement, on the other hand, stated in
relevant part “
I will assign and do hereby assign to CETUS, my right, title, and interest in
each of the idea
s, inventions and improvements.” The court interpreted the la
nguage of
the confidentiality agreement to have created an immediate and effective grant of
equitable title to Cetus. As a result, when Dr. Holodniy later executed an assignment to
Stanford of the patent application, he no longer held those rights.


Stanf
ord argued that, under 35 U.S.C. §

261, Stanford was a bona fide purchaser
of the rights to the invention, because Roche failed to record its assignment of rights from

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Dr. Holodniy. Stanford argued that, in the absence of recordation by Roche, Stanford ha
d
no notice of the assignment, and thus became a bona fide purchaser when it duly recorded
its assignment. The court found that Stanford was not a bona fide purchaser, because
Stanford had actual or constructive notice of the confidentiality agreement. T
he court
reasoned that Dr. Holodniy was Stanford’s employee at the time he signed the
confidentiality agreement, and so Dr. Holodniy’s awareness of the agreement was
imputed to Stanford.


The appellate court also opined that the rights of the United States

under the
Bayh
-
Dole Act did not affect the ownership of either Stanford or Roche. The appellate
court also found that the confidentiality agreement was not an unlawful restraint on the
practice of a lawful profession under California Business and Profess
ional Code §

16600
(2009), because it only affects the ownership of certain of Dr. Holodniy’s inventions, and
not his ability to practice as a scientist generally.


In conclusion, the appellate court held that Stanford lacked standing to bring the
suit, as

Stanford had no interest in any of the asserted patents. However, the appellate
court agreed with the district court that Roche’s ownership counterclaim is barred by the
statute of limitations. The appellate court remanded the case to the district court
with
instructions to dismiss Stanford’s claim for lack of standing.

Commentary

One important legal conclusion that was not explicitly reached in this decision is
exactly who owns the asserted patents. The court found that Stanford did not, but held
that t
he district court properly dismissed Roche’s counterclaims for a judgment of
ownership. It is significant that two inventors of the asserted patents joined with Stanford
in suing Roche for infringement. It is possible that the inventors have retained own
ership
of the patents due to the execution of conflicting assignment agreements.

Clearly the most important point of law from the practitioner’s perspective are the
pitfalls in drafting “agreements to assign” that do not immediately and unambiguously
assig
n an inventor’s rights at the time of execution. Had Stanford’s employment
agreement been more carefully drafted, Stanford would have retained the rights in the
HIV assay without dispute.


III.

Prometheus Laboratories, Inc. v. Mayo Collaborative Services
,

581
F.3d 1336

(Fed. Cir. 2009),
petition for cert. filed (U.S. Oct. 22, 2009)(No.
09
-
490).


Reported by: Anna Volftsun
(admission to practice law in New York pending)


Summary

The Federal Circuit reversed the district court

and held that

the process clai
ms in

the patents
-
in
-
suit were drawn

to patent
-
eligible subject matter under 35 U.S.C. § 101.

The court applied

its

Bilski
“machine
-
or
-
transformation” test
and held
that
a method of
treatment claim is patentable subject matter when it involves administeri
ng defined drugs

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9

to ameliorate a particular condition. It also found that a process claim can satisfy
§ 101

even if it contains a mental step.

Invention


The
patents
-
in
-
suit are U.S. Patents 6,355,623 (“the
‘623
patent”) and 6,680,302
(“the ‘302 patent”).

These patents

claim

methods of optimizing the proper dosages of
thiopurine drugs to treat autoimmune diseases so as to minimize toxicity and maximize
efficacy of treatment.

The
process

claims involved the measurement of two metabolites,
6
-
methyl
-
mercapt
opurine (“6
-
MMP”) and 6
-
thioguanine (“6
-
TG”), and their nucleotides.
A representative independent

claim was

drawn to
a method
of “administering” a
thiopurine drug, “determining” the level of one or both metabolites, and then comparing
the level(s) to pre
-
determined levels “wherein” such measured level(s) “indicates a need”
for adjusting the administered level of the
drug.

Procedure


Prometheus Laboratories, Inc. (“Prometheus”) filed suit against Mayo
Collaborative Services and Mayo Clinic Rochester (collec
tively “Mayo”) alleging
infringement of its ‘302 and ‘623 patents. Upon filing of cross
-
motions for summary
judgment, the district court held that Mayo’s product
-
at
-
issue directly infringed claim 7
of the ‘623 patent. Mayo then filed a summary judgment m
otion for patent invalidity
under § 101. The district court granted the motion and entered final judgment dismissing
all of Promethe
us’s claims and counterclaims.
Prometheus appealed the grant of
summary judgm
ent for invalidity under § 101.

Decision

The
Federal Circuit reversed and remanded the district court’s grant of summary
judgment for patent invalidity. The
appellate
court began its analysis by stressing that

the
sole issue it was deciding was
whether the claims satisfied § 101
;

it
was not consider
ing
whether

the claims at issue satisfied the other statutory requirements of the Patent Act
such as

novelty and nonobviousness.

The

Federal Circuit
relied on

its recently articulated
Bilski
“machine
-
or
-
transformation” to hold that the claims were patenta
ble subject matter. A process is
patentable under the
Bilski
two
-
prong test if it is “tied to a particular machine or
apparatus” or “transforms a particular article into a different state or thing.”
In re Bilski,

545 F.3d 943, 953

(Fed. Cir.
1989).
In o
rder to satisfy the second prong, t
he use of a
specific transformation must both impose meaningful limits on the claim’s scope and
must not merely be “insignificant extra
-
solution activity” or “a mere data
-
gathering step.”
Id
. at 963.

The Federal Circuit

held that the claimed methods satisfied th
e transformation
prong

of the
Bilski
test
. Unlike the district court, the Federal Circuit did not view the
claims
-
in
-
suit as merely claiming natural correlations and data
-
gathering steps, but rather
as effectivel
y being method of treatment claims. Significantly, the court held that such
method of treatment claims “are always transformative when a defined group of drugs is
administered to the body to ameliorate the effects of an undesired condition.” Th
e step of
administering a drug wa
s
found to be
transformative because it cause
d

the human body to
convert
an
artificial drug
into metabolites.
The step of determining the levels of

NY02:676012.1


10

metabolites
was also

found
transformative because human blood or tissue
wa
s modified

via some physical or chemical reaction. Both steps
we
re central to the claims because
they enable
d

possible adjustments to the drug dosage for optimizing the course of
treatment by increasing efficacy and/or decreasing toxicity.

Because it found the cla
ims
satisfied the transformation prong of the “machine or transformation” test, the Federal
Circuit did not consider whether the clai
ms satisfied the machine prong.

As to the “wherein” clause, the Federal Circuit found it to be a mental step. This
step in
volved comparing the measured level of metabolite intermediates to a particular
range, and adjusting the dosage accordingly to bring the level of intermediates within that
range. While such claim limitations are not patentable on their own, the court note
d that
a subsequent mental step would not prevent a process claim from being transformative if
the rest of the claim was drawn to
patent
-
eligible subject matter.

The Federal Circuit distinguished the case from that of
In re Gram
s,
in which the
process clai
m involved performing a clinical test and then applying an algorithm to the
results of that test to determine possible causes of any abnormality found
.

888 F.2d 835
(Fed. Cir. 1989).

Unlike the claims
-
at
-
issue in the instant case, the
Grams
claim step of
performing a clinical test was mere data
-
gathering and neither it nor the application of an
algorithm to this data was sufficiently transformative to make the
Grams
process
patentable.

The Federal Circuit also rejected the district court’s finding that t
he claims
-
at
-
issue preempted fundamental principles by being drawn to the correlation between drug
dosage and concentrations of metabolite intermediates. Instead, the Federal Circuit held
that since the claims satisfied the

Bilski
machine
-
or
-
transformatio
n test, as a matter of law
they did not preempt a fundamental principle.

Commentary

The Federal Circuit’s ruling that method of treatment claims satisfy the
transformative prong of its recent decision in

Bilski

has helped allay the concerns of the
medical
and pharmaceutical industries that
Bilski
would threaten the ability to obtain
patent protection for diagnostic testing, method of treatment claims, and personalized
medicine. However, the issue is far from settled.
Bilski
is on appeal
at

the Supreme
Cou
rt
; oral arguments have already been made

and a decision is expected in the latter half
of this year. Additionally, Mayo filed a certiorari petition with the Supreme Court to hear
Prometheus

and the petition is

still pending.


IV.

Wyeth and Elan Pharma In
ternational Limited v. David J. Kappos
,

No. 07
-
CV
-
1492 (Fed. Cir. January 7, 20
10
)


Reported by: Lisa Tyner

Summary


The
U.S. Court of Appeals for the Federal Circuit
addressed the issue of how
patent term adjustment (PTA) granted due to delays during pro
secution is calculated by
the U.S. Patent and Trademark Office (“PTO”), and found that the PTO has been
miscalculating PTA based on an incorrect interpretation of the relevant statute.
This

NY02:676012.1


11

decision positively impacts the PTA for
certain

issued patents an
d pending applications,
which may now
be eligible for additional PTA.

Procedure


U.S. patents filed after 1995 have a term of 20 years from the filing date.
However, The Patent Term Guarantee Act of 1999 (the “Act”), codified into the Patent
Statute as 35

U.S.C. § 154(b), provides for the extension of the patent term where there
have been certain delays by the PTO during prosecution of the patent. The Act provides
three distinct guarantees of a patent’s term which are categorized as “A delays,” “B
delays,
” and “C delays.” An “A delay” extends the term of a patent one day for each day
that the PTO fails to act with certain specified periods of time during prosecution.

35
U.S.C. § 154 (b)(1)(A)
. A “B delay” extends the term of a patent one day for every da
y
over three years that an application is pending. 35 U.S.C. § 154(b)(1)(B). A “C delay,”
provides extensions of patent term “for delays due to interferences, secrecy orders, and
appe
als.” 35 U.S.C. § 154(b)(1)(C).


At issue in
Wyeth

was the PTO’s interp
retation of 35 U.S.C. § 154(b)(2)(A),
which limits the patent term adjustment by noting that “[t]o the extent that periods of
delay attributable to grounds specified in paragraph (1) overlap, the period of any
adjustment granted under this subsection shall

not exceed the actual number of days the
issua
nce of the patent was delayed.” Wyeth and Elan,
owners of two patents relating to
treatments for Alzheimer’s disease (U.S. Patent Nos. 7,179,892 and 7,189,819),
challenged the PTO’s interpretation of the over
lap provision
of
35 U.S.C. § 154(b)(2)(A)
and

filed suit against

the PTO in the U.S. District Court fo
r the District of Columbia. The
PTO had been calculating PTA based on the understanding that any “A delay” overlaps
any “B delay
.”

That is, according to

the PTO, the applicant would get credit for ‘A
delay’ or for ‘B delay,’ whichever is larger, but never A + B.”
Wyeth et al. v. Dudas
, 580
F.Supp.2d 138,
139
-
140 (D.D.C. 2008) at 140.


The plaintiffs in
Wyeth

successfully challenged the PTO’s interpretat
ion of the
statute and their calculation of PTA, arguing that under the law as written, the two
separate delay periods should both be considered, and only the calendar days of delay
from subsections A and B that actually overlap are properly counted only o
nce. In
Wyeth's interpretation,

A delay


and

B delay


can only overlap once the

B delay


clock has started (
i.e
., three years after filing of the patent application). The PTO
a
ppealed to the Federal Circuit.

Decision


The Federal Circuit, on summary ju
dgment, affirmed the district court’s decision
and agreed with Wyeth’s interpretat
ion of the statute. The court
stated that 154(b)

makes it clear that no

overlap


happens unless the violations occur at the same time …
[and] [b]efore the three
-
year mark,

no

overlap


can transpire between the A delay and
the B delay because the B delay has yet to begin or take any effect. If an A delay occurs
on one day and a B delay occurs on a different day, those two days do not 'overl
ap' under
section 154(b)(2).




The Federal Circuit did not afford deference to the PTO’s interpretation of the
statute

under either
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467

NY02:676012.1


12

U.S. 837 (1984) or
Skidmore v. Swift & Co
.,

323 U.S. 134 (1944),
stating that
“[b]ecau
se the
language of the statute controls this case and sets an unambiguous rule for overlapping
extensions, this court detects no reason to afford special deference

to the PT
O
s
interpretation.”

Commentary


The PTO
may

petition for
en banc

rehearing of the
Federal Circuit’s

decision
or

seek a writ of certiorari from the Supreme Court
. Absent
a contrary decision based on
rehearing
or cert, the
PTO must revise it
s PTA calculations

so that
they are

consistent
with the court’s ruling
.
Certain patents
that
issu
e from applications that were

pending for
more than three years will be entitled to more PTA than they would have received prior
to
this decision
.


Once the PTO implements the
Wyeth

decision
,

PTA for patents that
have not yet
issued
should be properly calc
ulated.
However, it is not clear when the
PTO will
begin
utilizing

the revised calculation
. In the meantime, patentees should consider filing
requests for correction of PTA for recently issued patents within the time pe
riods
provided for in the rules.
A p
atentee may

request a correction of
incorrect PTA

from the
Patent and
Trademark Office under 37 C.F.R. 1.705(b)

after receipt of the Notice of
Allowance but no later than payment of the issue fee
. The patentee may
also
request
reconsideration by the PTO wi
thin two months from the issue date under 37 C.F.R.
1.705(d).


In addition to the administrative steps that can be taken at the PTO, Congress has
set a deadline of 180 days from the date the patent issues to appeal an unsatisfactory
patent term adjustmen
t recalculation to the D.C. District Court under 35 U.S.C. §
154(b)(4)(A).


For patents that issued more than
180 days

ago, it is unclear what
steps

patentees
should take

to correct PTA calculated before
Wyeth
.
While the two
-
month window in 37
C.F.R. § 1
.705(d) is clear,
a reasonable

argument
could

be made that
such a petition
should be accepted beyond the two month time period because
under the PTO's
procedures at the time of issuance,
the Patentee

did not have a reasonable basis to pursue
the additional

B
-
type delay to which it was in fact entitled under the law.