Aug2011_Report - American Intellectual Property Law Association


Dec 1, 2012 (4 years and 8 months ago)



American Intellectual Property Law Association

Biotechnology Committee

Biotechnology in the Courts Subcommittee


Summaries of Recent Decisions of Interest to the Biotechnology Community

Prepared for the AIPLA Biotechnology Committee


15, 20

Edited By:

Melanie Szweras

Subcommittee Chair

Bereskin & Parr LLP



Daniel Feigelson

Lynn Tyler

Jennifer Schuster

Nicholas Landau

Melanie Szweras

Adam Bobker

Daniel Lev

The AIPLA Biotechno
logy 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
stood 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 clients, to other contributors, or to the editor. To req
uest an electronic copy of the
Report, or if you are interested in summarizing a case for a future edition, please contact Melanie
Szweras at



Daniel Feigelson

is an American expat who lives in Rehovot, Israel, wh
ere he tries to
take his work seriously and himself not so much so. A holder of degrees in chemistry
from Princeton University and the Weizmann Institute, as well as a law degree from Tel
Aviv University (please don't tell his mother he's a lawyer), he is
a principal at
Dimension IP
. Much of his current practice involves patent preparation and prosecution
before both the USPTO and the Israel PTO, but he has experience with many other
aspects of patent practice, in m
any technologies; if you're curious, or just masochistic,
you can read a longer description of that experience
. He also authors the
Israel Patent Law

g, though

not nearly as often as he'd like.

Lynn C. Tyler

is a partner and registered patent lawyer in the Intellectual Property
Department of Barnes & Thornburg LLP in Indianapolis. He concentrates his practice in
litigation of intellectual property matt
ers, representing clients at all stages of the process.

Mr. Tyler is listed in
Best Lawyers in America®

Indiana Super Lawyers®
. He is the
author of several published articles on issues of intellectual property or federal procedure
in a variety of peer
reviewed publications. In 2010, one of his articles won the prestigious
Burton Award for Legal Achievement. The first of his two articles on inequitable conduct
has been cited by two Federal Circuit Judges in published opinions.

Mr. Tyler graduated
cum laude

in 1981 from the University of Notre Dame and in
1984 received his J.D.
magna cum laude

from the University of Michigan Law School. In
2007, he received a M.S. in Biology from Purdue University (Indianapolis campus).

Mr. Tyler’s civic activities
include being a co
founder, past president, and volunteer for
the Neighborhood Christian Legal Clinic. For his work on behalf of the Clinic, he
received the Indianapolis Bar Association's Pro Bono Award in 2002 and was a co
recipient of the firm's inaugura
l Joseph A. Maley Pro Bono Award in 2009.

Jennifer L. Schuster

is an associate in Barnes & Thornburg LLP’s Indianapolis, Indiana
office, where she is a member of the firm’s Intellectual Property and Litigation

Ms. Schuster completed her under
graduate and graduate work at Purdue University,
where she was a recipient of the Steven C. Beering Scholarship and Fellowship. She
received her B.S. in molecular biology with honors in research and B.A. in creative
writing in 2004, both with highest disti
nction, and her M.S. in genetics in 2005. While at
Purdue, she was selected as an outstanding senior in the School of Science and was a
member of Phi Beta Kappa.

Ms. Schuster received her J.D.
magna cum laude

from Indiana University School of Law

ngton in 2008, where she was awarded the Chancellor’s Fellowship. She was an
Executive Competition Coordinator for the Sherman Minton Moot Court Board and a


Notes and Comments Editor for the
Indiana Law Journal.
graduation, she was
elected to the Orde
r of the Barristers and Order of the Coif.

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
intellectual property. Dr. Landau has drafted,
prosecuted, and successfully appealed dozens of patent applications. He has worked with
patents in a broad array of technological disciplines and has extensive knowledge in the
areas of biotechnology, pharmace
uticals, nutraceuticals, and environmental technology.

Prior to becoming an attorney

Dr. Landau studied the genetics and metabolism of
bacteria involved in pollution remediation.

He is a graduate of the University of Virginia
School of Law.

Melanie Sz

is an associate lawyer with Bereskin & Parr LLP. She is a registered
patent agent in both Canada and the United States.

Melanie has a B.Sc. and Ph.D. in medical genetics from the University of Toronto. She
graduated from Osgoode Hall Law School with

her law degree and was the Bronze
Medalist for her class of 2003. Melanie received numerous awards throughout her
education including the Medical Research Council Studentship and a University of
Toronto Open Scholarship.

As a member of both the firm's bi
otechnology & pharmaceutical, and litigation groups,
Melanie's practice focuses on biotechnology and pharmaceutical patents and related
litigation. She also works with the firm's regulatory, marketing & advertising group
advising on matters of regulatory l

Adam Bobker

is a partner with Bereskin & Parr LLP. He was called to the Bar in 1997,
and after spending several years in general commercial litigation practice, joined
Bereskin & Parr’s Intellectual Property Litigation Practice Group in 2000.

Adam ha
s been involved in litigating a wide range of intellectual property disputes. He
has acted for clients in a number of industries, including oil production equipment, farm
equipment, wind turbines, building materials, pharmaceuticals, financial services,
smetics, toys and games, video distribution, image companies, office supplies, among
others. He acts as counsel on motions, trial and appeals.

He has written and spoken on a variety of subjects relating to intellectual property
litigation, including paten
t litigation, the use of expert evidence, interlocutory injunction
practice, and anti
counterfeiting and grey marketing. He has been published in a variety
of media, including the
Canadian Bar Review


Adam has appeared before all levels of the Ontario Supe
rior Court and Federal Court of
Canada and is a member of the Advocate’s Society and the Intellectual Property Institute
of Canada (IPIC).

Daniel Lev
is a


Cambridge, Massachusetts, office of Finnegan,
Henderson, Farabow, Garrett &
Dunner LLP
. His practice touches on all areas of
intellectual property related to the life sciences and chemical industries, including
licensing, transactional due diligence, patent prosecution and strategic portfolio analysis,
and patent litigation. He
received his B.S. in chemistry, biology, and biochemistry from
Brandeis University in 1998, Ph.D. in chemistry from UC San Diego in 2004, and J.D.
from Northwestern University in 2007.




Eli Lilly and Company v. Actavis Elizabeth LLC e
t al.
, Appeal No. 2010
1500 (Fed.
Cir. July 29, 2011) (non



Ass’n for Molecular Pathology v. U.S. P.T.O.,
Case No. 2010
1406, slip op. (Fed. Cir.
July 29, 2011)………..


Sherley v. Sebelius
, No. 10
5287 (D.C. Cir. April 29, 2011)
dismissed on motion for
summary judgment
No. 09
1575 (D.D.C. July 27, 2011)


Corlac Inc. et al. v. Weatherford Canada Ltd. et al.,

10, 2011 FCA 228, July 18,


U.S. Supreme Court to Hear Three Patent Cases in 2011 Term


Case Summaries


Eli Lilly and Company v. Actavis Elizabeth LLC et al.
, Appeal No.
1500 (Fed. Cir. July 29, 2011) (non
Newman and Lourie; Judge Friedman died a few weeks before the
ruling was given)

Reported by:
el J. Feigelson


Reversing a district court’s finding, a Federal Circuit panel ruled that (a) a patent
claiming a new medical use for a known compound was not invalid for lack of utility,
and (b) the defendant not only induced infringement of the
patent by dint of copying the
innovator’s label, but also contributorily infringed, inasmuch as the only approved use for
the compound in commerce was the labeled use. The panel also affirmed the district
court’s rejection of the defendants’ challenges on

the grounds of inequitable conduct,
anticipation, obviousness, and non


Eli Lilly (“Lilly”) is the owner of U.S. Patent No.
, which claims the use
of the compound
commonly known as tomoxetine or atomoxetine, in the treatment of attention

deficit/hyperactivity disorder (ADHD).
Tomoxetine was approved by the FDA on
November 26, 2002 for use in the treatment of ADHD, and the ‘590 patent was
accordingly listed in the
Orange Book
. Actavis and others filed Paragraph IV challenges
to the patent under Waxman
Hatch, and in response Lilly sued the defendants for
infringement in the District Court for New Jersey. As explained by the CAFC, the DCNJ

sustained th
e ‘590 patent against the defendants’ challenges on the grounds of
inequitable conduct, anticipation, obviousness, and non
enablement. However,
the court held the claims invalid for lack of utility, which the court called
‘enablement/utility.’ The court a
lso held that if the claims were valid the
defendants would be liable for inducement to infringe, but that they would not be
liable for contributory infringement.”

Lilly appealed the findings of invalidity and lack of contributory infringement.
The Fed
eral Circuit panel reversed with respect to utility, finding the patent not invalid
for lack of utility, and affirmed the District Court with respect to inequitable conduct,
anticipation, obviousness, and non
enablement, finding that the patent was not inv
alid or
unenforceable on any of these grounds either. The panel also affirmed with respect to
inducement to infringe, and further held that the defendants contributorily infringed the



Factual summary

Tomoxetine was described and claime
d in an earlier Lilly patent, No. 4,314,081,
which issued on February 2, 1982. Tomoxetine was studied through Phase II clinical
trials for the treatment of urinary incontinence, and through Phase III clinical trials for
treatment of depression, but never
approved for either use.

In 1993 two Lilly scientists suggested that tomoxetine might be useful in treating
ADHD. At the time, the cause of ADHD was unknown and the mechanism of drug
treatment of the condition unclear, and the lack of an animal model f
or experimental
evaluation of the effect of any particular treatment made research concerning ADHD
difficult. Moreover, products extant at the time suffered from various drawbacks, such as
the need for multiple daily doses, unwanted side effects, and “reb
ound” effects between

Despite skepticism about the likelihood of tomoxetine being an effective ADHD
treatment, Lilly submitted an Investigational New Drug application (IND), and on
January 3, 1995 the FDA authorized the investigation. The ‘590 pat
ent application was
filed eight days later. FDA approval for the new drug was granted on November 26,
2002, and it is currently marked under the name STRATTERA
, in various dosages. The
‘590 patent was granted on August 19, 1997, and under 35 U.S.C. §156

received a Patent
Term Extension of 685 days, until November 26, 2016. The ‘590 patent has 16 claims,
claim 1 being the only independent claim and the only claim considered by the CAFC.
This claim reads,


A method of treating attention
activity disorder comprising
administering to a patient in need of such treatment an effective amount of

(The specification states that the term “tomoxetine” as used therein also encompasses
salts; it is the HCl salt that is the active ingredi
ent in Strattera

In filing Abbreviated New Drug Applications, defendants sought to market
competing tomoxetine products having identical labeling, including indications identical
to those listed on the label for Strattera

Court’s analysis


The defendants challenged the validity of the claims on grounds of obviousness,
asserting that (a) since both tomoxetine and another compound, desipramine, were known
norepinephrine uptake inhibitors, and the latter was known to treat some of the sympt
of ADHD, it was obvious to use tomoxetine to treat ADHD, and (b) alternatively, at the
very least, it was obvious to try tomoxetine in this regard, and therefore the claims were
invalid under


Regarding the first point, the district court found
that (i) although tomoxetine and
desipramine were functionally similarly, reports that desipramine caused sudden death in
children mitigated against using tomoxetine to treat ADHD, (ii) although the scientific
literature at the time indicated that norepine
phrine reuptake inhibition was important in
treating ADHD, that literature did not indicate that this property by itself was sufficient to
treat ADHD, and (iii) the entirety of the prior art must be considered in determining
obviousness, and here there was

nothing to indicate that even if tomoxetine were to work,
it would be devoid of the known drawbacks of similar products. Hence it was not
obvious to a person of ordinary skill in the art at the time that tomoxetine would make an
effective ADHD treatment.

Regarding the second point, the district court found, in the words of the Federal
Circuit, that (i) “there was no evidence that use of atomoxetine had been identified as a
possible solution to the problems of treating ADHD, nor that the exercise of com
sense would have led a person of ordinary skill to test atomoxetine for treatment of
ADHD”, (ii) the evidence “was contrary to the likelihood that atomoxetine would be
effective to treat ADHD” and (iii) the “experts for both sides were in agreement tha
t they
would not have expected that atomoxetine would be a successful treatment of ADHD”.
Hence it was not even obvious to try tomoxetine as an ADHD treatment.

The Federal Circuit said it “discern[ed] no error in the district court’s ruling”
rejecting th
e defendants’ contentions on obviousness, thus affirming the district court’s


The panel next discussed enablement. The defendants had argued that claim 1 is
sufficiently broad to encompass the administration of all dosage for
ms, but (a) since the
specification only provided specific examples for a few immediate release dosage forms
at particular doses, undue experimentation would be necessary to determine the specific
formulation and the effective amount to be administered to
a specific patient, and
therefore (b) the claims were invalid for lack of enablement.

Here too, the Federal Circuit affirmed the district court’s conclusion: the
invention lay not in the particular formulations, but the use of tomoxetine to treat ADHD;
and in addition to the specific examples, the specification contained general description
of the preparation of known dosage forms (“[tomoxetine] thus is easily formulated in the
usual oral pharmaceutical forms, such as tablets, capsules, suspensions, and
the like. The
usual methods of pharmaceutical scientists are applicable. It may be usefully
administered, if there is any reason to do so in a particular circumstance, in other
pharmaceutical forms, such as injectable solutions, depot injections, supposit
ories and the
like, which are well known to and understood by pharmaceutical scientists”). For one
skilled in the art, it would not have involved undue experimentation to prepare such
forms and determine the proper dosages, and, distinguishing over
orp. v. Andrx
Pharmaceuticals LLC
, 603 F.3d 935 (Fed. Cir. 2010), the panel noted that here “There


was no evidence that known procedures for determination of dosages and formulation did
not apply.”


The panel then turned to the distri
ct court’s invalidation of the patent for lack of
what it termed “enablement/utility”. The district court had held that since the
specification did not include experimental results showing that tomoxetine would be
effective in treating ADHD, the patentee
had not established utility for the invention,
going so far as to state that “there was no credible disclosure of utility to begin with”.
Dryly noting that experimental results were unavailable at the time the application was
filed, since human testing wa
s not allowed without FDA approval, the Federal Circuit
reversed for several reasons.

First, the specification included statements that clearly and unambiguously set
forth the utility, viz. the treatment of ADHD (of both the inattentive type the hyperac
impulsive type) by administration of tomoxetine, and those statements were not
challenged at trial.

Second, even though at trial, one of the inventors admitted that at the time, he
didn’t know if tomoxetine could successfully be used to treat ADHD,

in cases where
human testing is necessary,


PTO policy (MPEP 2107.03) establishes that the commencement of
human trial is indicative of presumptive utility: “Thus, as a general rule, if
an applicant has initiated human clinical trials for a therapeu
tic product or
process, Office personnel should presume that the applicant has
established that the subject matter of that trial is reasonably predictive of
having the asserted therapeutic utility”. During examination of the ‘590
patent, the PTO did not fi
nd the asserted utility to be so incredible as to
require proof of that utility.


The PTO’s position is consistent with CCPA/CAFC case law, as
expressed in
In re Langer
, 503 F.2d 1380, 1391 (CCPA 1974) (“[A]
specification which contains a disclosure o
f utility which corresponds in
scope to the subject matter sought to be patented
be taken as
sufficient to satisfy the utility requirement of §101 for the entire claimed
subject matter
there is reason for one skilled in the art to question
objective truth of the statement of utility or its scope.”) and
In re
, 51 F.3d 1560 (Fed. Cir. 1995).

The panel noted that although CCPA case law establishes a burden
mechanism under which the PTO may provide evidence that the claimed utili
ty is
unlikely, at which point the applicant needs to rebut the PTO’s evidence, that mechanism
is only applicable in extreme cases, e.g. perpetual motion machines, and in any event was
not implemented vis
vis the ‘590 patent. The panel also said that ot
her cases cited by
the defendants, in which applicants/patentees had been required to furnish experimental


evidence of utility, arose in the context of adverse proceedings such as interferences, in
which proof of conception and reduction to practice are at


When priority is not at issue, generally the applicant may provide data obtained
either before or after the patent application was filed. With reference to
demonstration of utility, in
, 51 F.3d at 1567 n.19 the court noted that post
g evidence ‘can be used to substantiate any doubts as to the asserted utility
since this pertains to the accuracy of a statement already in the specification.’
Here, the utility of tomoxetine is accurately stated in the specification; there is no
n of falsity in the disclosed utility, and the patent examiner did not
require the presentation of additional data.

Since before issuance of the patent the claimed invention was shown to have the
claimed utility, and since at the time of filing the claim
ed utility was a scientific
possibility, even according to the defendants’ expert, there was no basis to say the
invention lacked utility, or in the words of the panel, “
There was no evidence that the
disclosure is “on its face, contrary to generally accep
ted scientific principles”

re Marzocchi
, 439 F.2d 220 (CCPA 1971)


Finally, the panel turned to the question of infringement. The panel sustained the
district court’s finding that since the only approved use of tomoxetine was
the use
claimed in the ‘590 patent, the defendants would necessarily induce infringement of the
patent. In so doing, the district court and the panel distinguished over Warner
Lambert v.
Apotex, 316 F.3d 1348 (Fed. Cir. 2003), as in that case the court fo
und that labeling for
an authorized use covered by an expired patent could not be deemed inducement to
infringe a different, unauthorized use covered by a still
in force patent. Similarly, the
panel held that the fact that off
label uses for tomoxetine h
ad been developed was
immaterial: “We have long held that the sale of a product specifically labeled for use in a
patented method constitutes inducement to infringe that patent, and usually is also
contributory infringement”.

Similarly, regarding contr
ibutory infringement, the panel ruled that since the only
authorized use of tomoxetine was for the treatment of ADHD, the theoretical (and in
practice apparently not infrequent) off
label prescribing of the drug by physicians did not
turn it into a “

article of commerce suitable for substantial non
infringing use
”, which
under 35 U.S.C. §271(c) would allow the defendants to avoid contributory infringement
liability. The only authorized used was an infringing use, and therefore, determined the
panel i
n reversing the district court, the defendants also contributorily infringed the


The announcement that both Judges Newman and Lourie would be on the panel
hearing this case undoubtedly brought a smile to Lilly’s attorneys, as this cons
practically ensured a victory for Lilly. However, that should not detract from the


importance of their reaffirmance of the case law regarding utility with respect to
pharmaceutical inventions. Clearly, if conclusive test data in humans was requ
ired in
patent applications, there would be few patents for new drugs and consequently very few
new drugs, period. While typically an application can include some
in vitro

data (e.g.
binding affinity for a receptor known to be implicated in a particular d
isease) or
in vivo

data supporting the asserted utility, here the mechanism of action was not known,
reducing the usefulness of the former type of data in demonstrating utility, and the lack of
animal models for ADHD precluded the generation and inclusion
of the second kind of
data. Allowing the PTO to shift the burden of proof of utility to the applicant, and
allowing the use of post
filing evidence “to substantiate any doubts as to the asserted
utility”, is an eminently sensible policy, in that it ensure
s that the utility requirement be
met, but does in a way that accords with the realities of the drug development process.

Curiously, it seems that nothing was made of the apparent contradiction between
the defendants’ obviousness argument and their lack

of utility argument. The former was
predicated on the fact that tomoxetine was known to be a norepinephrine reuptake
inhibitor, and that another norepinephrine reuptake inhibitor was already being used to
treat ADHD. But if, as the defendants asserted,
it was therefore obvious to use
tomoxetine to tread ADHD, then tomoxetine necessarily possessed the requisite utility,
undermining the lack
utility argument.


Ass’n for Molecular Pathology v. U.S. P.T.O.,
Case No. 2010
slip op. (Fed. Cir. Ju
ly 29, 2011).

Reported by: Lynn C. Tyler and Jennifer L. Schuster


The Federal Circuit held that composition claims to “isolated” DNA molecules
cover patent
eligible products of nature under 35 U.S.C. § 101 because the molecules as
claimed do not
exist in nature. The Court also held that a method claim to screening
potential cancer therapeutics via changes in cell growth rates is directed to a patent
eligible scientific principle. Finally, the Court affirmed the district court’s decision that
d’s method claims directed to “comparing” or “analyzing” DNA sequences are not
eligible because they do not include a transformative step and cover only patent
ineligible abstract, mental steps.
Slip op.

at 8.


In 2009, numerous plaintiffs

filed suit against the U.S. Patent and Trademark
Office (“PTO”), Myriad Genetics, Inc. (“Myriad”), and the University of Utah Research
Foundation (“URF”) alleging, among other things, that fifteen claims in seven Myriad
U.S. patents covered non

subject matter under 35 U.S.C. § 101.
. at 8
9. The
challenged composition claims covered two “isolated” human genes,
and certain mutations, in these genes associated with a predisposition to breast and


ovarian cancers. Most of the chal
lenged method claims covered methods of “analyzing”
or “comparing” a patient’s
sequence with the wild
type sequence to identify the
presence of cancer
predisposing mutations. One of the challenged method claims covered
a method of screening potential
cancer therapeutics.
. at 10

After a challenge to the plaintiffs’ standing was resolved in their favor, the parties
filed cross
motions for summary judgment on the §101 issue. The district court held that
all the challenged claims, composition and m
ethod, were invalid because they did not
cover patentable subject matter. The district court ruled that the composition claims
covered non
patentable “products of nature” because the isolated DNA was not
“markedly different” from natural DNA. The district
court held that the challenged
method claims covered “analyzing” or “comparing” DNA sequences by any method, and
thus covered mental processes independent of any physical transformations.
at 23
Alternatively, the district court ruled that, even if
the claims were limited to isolating and
sequencing human DNA, such transformations were mere preparatory data
at 24. Finally, the district court held that the one method claim to “comparing”
the growth rate of cells claimed a basic sc
ientific principle and that the transformative
steps again were mere preparatory data gathering.

On appeal, the Federal Circuit reversed the district court’s rulings on the
composition claims and method claim in Myriad’s patent.
. at 8 and 41. The Co
found that “isolated” DNA molecules do not exist in nature, so the composition claims to
such molecules cover patentable subject matter.
. at 8 and 41. The Court reversed the
district court’s decision regarding the method claim to “comparing” the gro
wth rate of
cells, finding that it claimed patent
eligible subject matter.
. at 8 and 54. The Court
affirmed the district court’s decision on summary judgment that Myriad’s method claims
to “comparing” or “analyzing” DNA sequences did not cover patentab
le subject matter.
In the Court’s view, such claims did not include a transformative step but rather
contained only abstract, mental steps.
. at 8 and 52


Factual summary

The Federal Circuit’s decision devotes several pages to a general discu
ssion of
DNA and genetic testing. We assume most readers of this summary are familiar with this
material and will not condense it here. The inventors of the Myriad patents identified the
genetic basis of
related cancers by relying on a larg
e set of DNA
samples from families with inherited breast and ovarian cancers and correlating the
occurrence of cancer in individual family members with the inheritance of certain marker
DNA sequences. This allowed the inventors to map the physical location

of the
genes and to isolate the
genes and determine their exact nucleotide sequences. This
in turn allowed Myriad to provide
diagnostic testing services to women.

Myriad filed the first patent application leading to the patents covering is
DNA and associated diagnostic methods in August, 1994. The first patent issued
in December, 1997. Myriad filed the first application leading to the patents covering
DNA and associated diagnostic methods in December, 1995 and the

patent issued in November, 1998. Myriad asserted the patents against numerous parties,


including some of the plaintiffs, by sending cease
desist letters, making license
offers, and litigating.

Court’s analysis

Judge Lourie’s Opinion for the Cou


Composition claims

The Court began its analysis of the merits (as distinct from the issue of the
plaintiffs’ standing) by reciting some general principles of subject matter eligibility under
§ 101, including that § 101 includes “compositions of matter”

in the definition of eligible
subject matter, but that Supreme Court decisions exclude laws or products of nature. The
Court stated that the Supreme Court’s decisions in
Funk Bros. Seed Co. v. Kalo Inoculant

333 U.S. 127 (1948), and
Diamond v. Chakra
, 447 U.S. 303 (1980), set the
parameters for determining the eligibility of the composition claims to isolated DNA
. at 39. Those two decisions drew “a line between compositions that, even if
combined or altered in a manner not found in
nature, have similar characteristics as in
nature, and compositions that human intervention has given ‘markedly different,’ or
‘distinctive,’ characteristics.”
. at 41.

Applying this test, the Court first stated that it was undisputed that Myriad’s
imed isolated DNA is chemically different from native DNA.
. Native DNA is
wrapped around histones into chromatin structure and further packaged into
chromosomes. In contrast, isolated DNA is a “free
standing portion of a native DNA
molecule, often a sin
gle gene.”
. at 42. Isolating the DNA involves breaking covalent
bonds, which supports the conclusion that DNA is a distinctive chemical entity from
native DNA.
. at 42 and 44.

The court pointed out that isolating DNA is not the same as purifying DNA
distinguish cases such as
Davis Co. v. H.K. Mulford Co.
, 189 F. 95 (C.C.N.Y.
1911) (finding purified adrenalin was patent eligible).
. at 41
42. The court also
disagreed with the district court’s reliance on the fact that the claimed isolated DN
sequence contains the same genetic information as native DNA. The court stated that “it
is the distinctive nature of DNA molecules as isolated compositions of matter that
determines their patent eligibility rather than their physiological use or benefit.

. at 44.

The Solicitor General had proposed a “magic microscope” test for determining
whether isolated DNA molecules are patentable. Under the proposed test, if the claimed
isolated molecule could be seen by a person using a “magic microscope” to foc
us in on
the correct portion of native DNA, then the isolated sequence would not be patentable.
The court rejected this argument: “One cannot visualize a portion of a complex molecule,
including a DNA containing a particular gene, and will it into isolatio
n as a unique entity.
Visualization does not cleave and isolate the particular DNA; that is the act of human
. at 46.

The court noted that the parties had offered a variety of hypotheticals or analogies
in support of their positions. These in
cluded whether elemental lithium, diamonds,
minerals, atomic particles, organs, and loose tree leaves would be patentable subject
matter. The court addressed these only briefly, noting that “courts decide cases, they do


not draft legal treatises.


at 4
6. The court dismissed these arguments by noting that the
record did not permit the court to assess the significance of the different hypothetical
forms of these compositions.

The court concluded the portion of its opinion on the composition claims by
ng its decision was consistent with the longstanding practice of the PTO.
. at 47
In light of the settled expectations of inventors based on this practice, the court stated that
any change to the eligibility of isolated DNA should be made by Congress


Method claims to “comparing” or “analyzing” DNA sequences

Turning to the method claims, the court concluded that most of the challenged
method claims covered only the abstract, mental step of comparing two different DNA
sequences and thus were not patent

. at 49
50. The court declined to construe
these claims to include the steps of extracting and sequencing DNA, which would involve
a transformation.
. at 50 and 51
52. The court further ruled that limiting the context of
the method to the cl
aimed BRCA genes or their mutations did not salvage the claims.
The court quoted
Bilski v. Kappos
, 130 S. Ct. 3218 (U.S. 2010), for the proposition that
“the prohibition against patenting abstract ideas ‘cannot be circumvented by attempting
to limit th
e use of the formula to a particular technological environment.’”

at 3230.


Method claim to potential therapeutics

Finally, the court examined Myriad’s claim to a method for screening potential
cancer therapeutics by comparing changes in cell growth ra
tes. Citing

again, this
time for the proposition that the machine
transformation step provides an “important
clue” in determining patent eligibility,
slip op.

at 53, the court stated that this claim
included the transformative steps of “growing”
cells transformed with an altered BRCA1
gene in the presence and absence of the potential therapeutic, among other steps.
Further, this step was central to the purpose of the claim.
. at 53
54. Lastly, the court
noted that claim was not so abstract a
s to cover a scientific principle; rather, it was
limited to specific cells, genes, and therapeutics.
. at 54.

Judge Moore’s concurring opinion

Judge Moore wrote a separate opinion to express her reasons for joining Judge
Lourie’s opinion on the patenta
bility of Myriad’s method claims and claims to cDNA and
for concurring in the judgment as to other composition claims.
Moore concurrence

at 1
”). She also began by reviewing general principles relevant to the § 101 analysis
and prior decisions, incl
Funk Bros
. and
Chakrabarty, supra
. She then devoted
several pages, including illustrations, to noting the chemical differences between an
isolated DNA sequence and native DNA.

at 7
11. These differences can be
overlooked when just comparing a s
equence of As, Cs, Gs and Ts that represent the
bases, but Judge Moore’s illustrations remind the reader of basic points such as that the 3’
and 5’ ends of an isolated DNA end with a hydroxyl and a phosphate group, respectively,
whereas a native DNA sequen
ce is typically part of a much larger molecule.
. at 11.
Judge Moore then points out that cDNA is even more different from native DNA because
its sequence corresponds not to a DNA molecule but to a RNA molecule (made from a


segment of DNA, but from which

introns have been excised), and thus does not exist in
that form in nature.
. at 12. She noted that isolated DNA of either type has additional
utility, for example, as a primer.

Judge Moore then divided the DNA composition claims into two categories
corresponding to gene sequences (both long and short) and cDNA.
. at 13. For her, it is
easy to conclude that cDNA is patentable:

Although the plaintiffs (now plaintiff) in the suit argue, and the district court held,
that cDNA falls within the “la
ws of nature” exception to section 101 patentability, I
cannot reconcile this argument with the fact that the claimed cDNA sequences do not
exist in nature. Moreover, since cDNA has all of the introns removed, and only
contains the coding nucleotides, it c
an be used to express a protein in a cell which
does not normally produce it.

. (emphasis added). Echoing the Supreme Court’s test for patent eligibility in
, Judge Moore concluded that “cDNA sequences thus have a distinctive
name, character,

and use, with markedly different chemical characteristics from either the
naturally occurring RNA or any continuous DNA sequence found on the chromosome.”
. at 14.

Judge Moore then turned to DNA sequences that correspond to genes and found
that they pre
sent a more difficult issue.

She acknowledged the chemical differences
between isolated and native DNA, but expressed the view that these differences alone do
not make isolated DNA patentable.
The differences also suggested that the isolated
DNA se
quences are not necessarily products of nature, so Judge Moore turned to the
question of whether the isolated sequences have additional utility when compared to
native DNA.
Considering first short sequences of isolated DNA, Judge Moore wrote:

The short
er isolated DNA sequences have a variety of applications and uses in
isolation that are new and distinct as compared to the sequence as it occurs in nature.
For example, these sequences can be used as primers in a diagnostic screening
process to detect gen
e mutations. These smaller isolated DNA sequences

isolated radiolabeled sequences mirroring those on the chromosome

can also be
used as the basis for probes.

. at 15. Given these additional utilities, Judge Moore concluded that short isolated
sequences have “markedly different characteristics” from any product of nature under

and thus are patent eligible.

at 17.

For longer isolated DNA sequences, Judge Moore again found that they are
patentable, but for different reasons. I
n short, given the broad definition of patentable
subject matter Congress has included in the patent statute for years, and the PTO’s
longstanding practice of issuing patents on isolated DNA and purified chemicals, Judge
Moore concluded that any change in
this area must be made by Congress.
. at 19
31. In
the course of supporting this conclusion, Judge Moore criticized the Solicitor General’s
proposed “magic microscope” test as scientifically imprecise, inconsistent with Supreme
Court and Patent Office pr
ecedent, inconsistent in application, and overly broad.
. at


Judge Bryson’s concurrence
part and dissent

Judge Bryson also concurred in the judgment that the cDNA claims and the claim
to a method of evaluating potential cancer therape
utics were drawn to patentable subject
matter and the remaining method claims were not.
Bryson Opinion

at 1 (“
”). Judge
Bryson dissented, however, from the judgment that the composition claims to isolated
DNA sequences covered patentable subject matt

Judge Bryson began his opinion
with the following summary: “In its simplest form, the question in this case is whether an
individual can obtain patent rights to a human gene. From a common
sense point of view,
most observers would answer, ‘Of cours
e not. Patents are for inventions. A human gene
is not an invention.’”
. at 1

Judge Bryson agreed with the majority’s categorization of the types of claims at
issue and also summarized the Supreme Court’s

decision early in his
opinion, con
cluding that a challenged composition claim needs to possess “markedly
different characteristics” from a product of nature and significant utility to be patent
. at 5
6. Judge Bryson believes that the primary difference between the isolated

and native genes is that the isolated genes have been extracted from their natural
environment. Thus, they are like a newly
discovered mineral or plant, which the Supreme
Court stated are not patentable in

and other cases.

at 6. Genes, min
and plants may all be attached to other matter in their natural state; separating them from
the other matter may be difficult and may involve breaking some type of chemical bonds.

at 6
7. If new minerals and plants are not patentable despite the
se facts, new genes
should not be either in Judge Bryson’s view.

Judge Bryson argued that the majority is inconsistent in finding that isolated DNA
is patentable because of its chemical differences from native DNA, shown in part by the
chemical bonds t
hat are broken in the isolation process, yet stating that elemental lithium
is not patentable even though it is not found in nature, is isolated by breaking chemical
bonds, and has significant utility.
. at 8.

Judge Bryson argued that one of the composit
ion claims covers the BRCA gene
as it exists in nature

the same sequence, for coding the same protein, representing the
same unit of heredity.

at 10. The only difference between the isolated and natural
gene, according to Judge Bryson, is that the is
olated gene has been extracted at points
defined by nature.

He thus analogizes the isolated gene to a leaf plucked from a
tree, which no one would argue is patentable subject matter.

After discussing cases finding that purified chemicals did no
t qualify as
patentable subject matter in the absence of significant changes in functionality,
. at 12,
Judge Bryson returned to

and noted that it directs the focus to the similarity
in structure and utility between the claimed composition an
d the product of nature.
. at
13. Judge Bryson summarized the results of his focus on those issues as follows: “What is
claimed in the BRCA genes is the genetic coding material, and that material is the same,
structurally and functionally, in both the na
tive gene and the isolated form of the gene.


Turning to claims to shorter isolated DNA sequences, Judge Bryson analyzed
specific challenged claims and found them so broad as to cover not only portions of the


BRCA genes, but also portions of nearly all

human genes.
. at 15. In light of this
breadth, the claims cover products of nature and are ineligible.
Judge Bryson also
noted that the breadth of the claims was likely to hamper, rather than promote, innovation
in the biotechnology industry.
. a
t 15

Finally, Judge Bryson criticized the majority’s deference to the PTO’s
longstanding practice of issuing patents on isolated DNA. In his view, the question is one
of law on which the PTO is owed no deference, as shown in part by the PTO not allowin
claims to microorganisms prior to
. at 17


One may question whether it makes sense to write extended commentary on this
case given that it is a virtual certainty that the parties will seek further review. The issues
are impor
tant; both parties won some issues and lost others; and, the three judge panel
produced three opinions totaling 105 printed pages. Further review is not a given,
however, and lawyers and their clients need to consider what to do in the interim in any

Despite the mass of opinions, the decision does provide some clarity. The judges
were unanimous that composition claims to cDNA are patent eligible. They were also
unanimous that all but one of the method claims were not eligible, and were unanimous

the method claim to evaluating potential cancer therapeutics was eligible. Whether or
not one agrees with the decision on the ineligible method claims, the judges explained
their decision in sufficient detail to help practitioners know how to draft eligib
le claims,
particularly when compared to the result for the therapeutic method claims. Claims that
are limited to “abstract, mental steps” of “comparing” and “analyzing” or otherwise
cogitating on some subject are likely, if not certain, to be found inelig
ible. Method claims
should expressly include a transformative step, such as the step of growing cell as in the
therapeutic method claim. The transformative step should be express to avoid the
problem Myriad encountered of having to try to have the claims c
onstrued to include a
transformative step that was not apparent on their face according to the court.

Thus, the disagreement among the judges was limited to isolated DNA claims
and, at least Judges Moore and Bryson had different reasons for their conclusio
ns with
respect to the eligibility (or not) of short and long sequences. Both short and long
sequences were found eligible, however, so patentees should continue to seek claims to
both until further notice. Defendants should continue to oppose the eligibil
ity of both,
preserving the issue, until further notice.

Doubtless many things have been, can, and will be said and written about the
three opinions and we cannot hope to cover them all here. We will raise some issues,
however. The § 101 jurisprudence is
somewhat unsatisfactory because of inconsistency
of overlap with other validity issues. In some cases, the Supreme Court (and likely
others) states that eligibility is a separate issue from novelty and, at other times, the issues
appear to overlap. For exa
mple, in
Parker v. Flook
, 437 U.S. 584 (1978), the Supreme
Court held “that a claim for an improved method of calculation, even when tied to a
specific end use, is non
patentable subject matter under Section 101.”
. at 595. In the
course of its opinion,
the Court stated that “the algorithm itself is treated as a familiar


piece of prior art.”
. at 591
see also id
. at 592 (“this case must be … considered as
if the mathematical principle were well known”). All of the judges’ opinions in
AMP v.


for the proposition that whether the composition in a
challenged claim has additional utility compared to the natural product is an important
factor in determining its eligibility. The judges’ opinions also considered the breadth (or
owness) of the claims at issues, and it appears that the parties raised enablement
arguments as well (that were likely related to the relative breadth arguments).

All the judges devoted the most attention to the Supreme Court’s decisions in
Funk Brothers

, presumably because those involved biological subject
matter. The Supreme Court has several other decisions on § 101 issues, some of which
were cited. Should at least some of these cases have been given more consideration? For
example, shoul
d the statements quoted above in
Parker v. Flook

have been considered
and what would the impact on the cDNA claims be if corresponding RNA were
considered to be “a familiar piece of prior art” (if this really is a proper test under § 101)?

From a scientifi
c perspective, one wonders why there was no discussion of
methylation or other epigenetic modifications of DNA, especially in light of all the
discussion of differences and similarities between isolated and native DNA. The
scientific literature seemingly g
rows daily with articles on the importance of such
modifications as a mechanism for the regulation of transcription. The 29 October 2010
issue of

was practically devoted to the subject. The district court noted the
phenomenon briefly in a footnote
and dismissed it as a potential basis for patent
eligibility, which suggests it was argued by the parties and could have been discussed by
the Federal Circuit.

The Biotechnology Committee is working to present a webinar featuring lawyers
who participated i
n the case for a party or amicus, so keep your eyes focused on your
Inbox for your invitation.


Sherley v. Sebelius
No. 10

(D.C. Cir.

April 29, 2011),
dismissed on motion for summary judgment


July 27,

Reported by: N
icholas Landau


This case involves a challenge to the validity of regulations promulgated by the
National Institutes of Health (NIH) allowing federal funding to be used for research
involving human embryonic stem cells (hESC). The plaintiffs argued

that the Dickey
Wicker Amendment (DWA) prohibits federal funding of any research using hESC. The
U.S. Court of Appeals for the District of Columbia ruled in April that the regulations do
not violate the DWA. Upon remand, the U.S. District Court for the
District of Columbia
dismissed the suit on cross
motions for summary judgment.


Although appeal is still possible, at present federal funds may be used for hESC
research. This is a significant reversal of the virtual moratorium on such research that has
en in place since 2001. It should be expected that hESC research activity will increase,
and that patent filings directed to hESC technology will increase.


The use of public funds for stem cell research is a contentious issue in the United
es. This is especially true of research on hESC, which are derived from human
embryos. At present the only means to obtain pluripotent embryonic stem cells is from
human embryos, which are destroyed in the process. Despite the great promise of
nt stem cells in medical applications, there has been staunch political opposition
to any use of hESC, because of fears such uses could encourage the creation and
destruction of human embryos for research purposes.

The DWA forbids the use of federal funds
for research that involves the creation
or destruction of human embryos. The DWA prohibits NIH from funding:

(1) the creation of a human embryo or embryos for research purposes; or

(2) research in which a human embryo or embryos are destroyed,
or knowingly subjected to risk of injury or death greater than
that allowed for research on fetuses
in utero

under 45 CFR §

and section 498(b) of the Public Health Service Act (42 U.S.C. 289g(b)).

Consolidated Appropriations Act, 2010, Pub. L. 11
117, § 509(a), 123 Stat. 3034, 3280

81 (2009). The DWA is a perennial appropriations rider, present in every federal budget
since 1996, and most recently passed in 2009 (the U.S. Congress has failed to provide a
budget since 2009, instead relying on a s
eries of continuing resolutions).

The restrictions of the DWA were supplemented by an executive order by
President Bush in 2001 prohibiting the use of federal funds for any research involving
human embryonic stem cells, except for those cells lines that ha
d been isolated prior to
issuance of the executive order. 37 Weekly Comp. Pres. Doc. 1149 (Aug. 13, 2001). In
2009, President Obama lifted the restrictions imposed by Bush’s executive order. Exec.
Order No. 13,505, 74 Fed. Reg. 10,665 (Mar. 11, 2009); a
nd NIH promulgated
regulations under which federal funds may be used for embryonic stem cell research,
except as prohibited by the DWA. 74 Fed. Reg. at 32170 (July 7, 2009). The regulations
limit federal funding to cases in which the embryonic stem cells

had been derived from
unneeded embryos created for the purpose of
in vitro

, and in which the
donor gives informed consent that such unneeded embryos may be used for this purpose.

Numerous parties challenged the new regulations under the Ad
Procedure Act, 5 U.S.C. §

706, arguing that the DWA prohibits the funding of all
research involving human embryonic stem cells.


n vitro

fertilization is a method of improving fertility by combining isolated ova with isolated sperm to
create several embryos
outside of the body. A small number of the embryos are implanted very early in
development, often resulting in an excess of embryos that are generally destroyed.



The U.S. District Court for the District of Columbia granted the plaintiffs a
preliminary injunction a
gainst implementation of the new regulations, holding that the
plaintiffs were likely to prevail on the merits of the case. Defendants appealed, and the
U.S. Court of Appeals for the District of Columbia reversed, vacating the preliminary
injunction, and
holding that the plaintiffs were not likely to prevail on the merits of the
case. Subsequently the district court adopted the reasoning of the appellate court, and
dismissed all claims on motion for summary judgment.


In reviewing the decision to
grant a preliminary injunction, the appellate panel of
three judges considered (among other things) the plaintiff’s likelihood of prevailing on
the merits of the case. Because the action was brought under the Administrative
Procedure Act, the case rests e
ntirely on legal determinations.
Am. Bioscience, Inc. v.
, 269 F.3d 1077, 1083 (D.C. Cir. 2001).

For this reason, a determination of
whether a movant is likely to succeed on the merits of the case by an appellate court in
the context of a prelimi
nary injunction is dispositive of the case, because the trial court is
obliged to follow the appellate court’s decisions on questions of law. The majority of the
panel decided the plaintiff was not likely to prevail on the merits, and denied the

The crux of the decision was whether NIH properly interpreted the phrase
“research in which a human embryo or embryos are destroyed.”

The court’s analysis
focused on the word research. It was undisputed that the act of deriving hESC from an
embryo de
stroys the embryo.

The defendant argued that the language of DWA prohibits funding of research
that includes destruction of embryos, but does not prohibit funding research on hESC that
were isolated using non
federal funds. Although the United States conc
eded that the
isolation of hESC from human embryos qualifies as research, it argued that a distinction
can be drawn between research using previously isolated hESC and research that directly
involves the actual isolation.

The plaintiff argued that all acts

involving a given hESC cell line should be
considered the same act of research, none of which may be federally funded under the

The court relied on the two
step analysis of
Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc.
, 467 U.S. 837

), and concluded that NIH’s
interpretation was not “
arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law
,” and so could not be reversed judicially.


The plaintiff also argued that, by creating a legal use for hESC, NIH was funding research

to risk of injury or death
; the analysis under

as to whether the regulations fund research
that destroys embryos or subjects them to risk was essentially the same.


The dissent took the opposite position, opining that the term “resea
rch” has an
unambiguous meaning, and that in any case the interpretation adopted by NIH was
arbitrary and capricious for the reasons presented by the plaintiffs.

On remand to the district court, Chief Judge Royce Lamberth decided the
summary judgment motio
ns based almost entirely on the holdings of the appellate court,
granting the defendant’s motion and dismissing the plaintiffs’ motion.


This decision is still eligible for appeal to the U.S. Court of Appeals for the
District of Columbia. Altho
ugh the three
judge panel has already decided every issue
addressed in the district court decision, it is possible that appeal will be granted
en banc
in which case all judges in the circuit will form an opinion. If
en banc

review is not
granted, then th
e panel will almost certainly reach the same conclusion as the district
court. Of course, there is a possibility that the U.S. Supreme Court will opt to review the
decision of the D.C. Circuit and grant certiorari.

At least until such review is granted,
federal funding is available for research on
hESC derived from embryos created for IVF if the donor gives informed consent. This
should result in an accelerated pace of research on hESC, and a consequent increased
number of patent filings directed to hESC
. To date both the U.S. Patent and Trademark
Office and the courts have had little occasion to develop policy regarding the
patentability of hESC, and it should be expected that this will become a rapidly evolving
area of the law for the foreseeable futur


Corlac Inc. et al. v. Weatherford Canada Ltd. et al.,

10, 2011
FCA 228, July 18, 2011

Reported by: Melanie Szweras

and Adam Bobker


The Canadian Federal Court of Appeal, among other things, clarified the scope of
application of the

duty of good faith owed to the Patent Office during patent prosecution.
In particular, the Court held that section 73(1)(a) of the Patent Act, which provides for
the deemed abandonment of an application for failure to reply in good faith to a
by an Examiner within six (6) months or such shorter time established by the
Commissioner, only applies during prosecution of a patent application. The section
ceases to have any effect once the patent issues. Once issued, section 53(1) applies with
t to allegations of misrepresentation in the petition of the Patent.


The defendant also alleged that the plaintiffs had no standing
to bring the case under Article III of the
Constitution. This issue had been disposed of previously by the D.C. Circuit, and consistent with that
decision the district court held that the plaintiffs had standing due to increased competition for research
rants by researchers working on hESC.



This was an appeal from an infringement action and counterclaim in relation to
Canadian Patent No. 2,095,937 entitled “Sealing Assembly for Rotary Oil Pumps and
Method of Using

Same”. Weatherford et al. alleged that Corlac et al. infringed the ‘937
Patent by making and selling their sealing systems for rotary oil well pumps. Corlac
denied infringement and attacked the validity of the patent.

At trial, the judge found the patent
valid and infringed and ordered injunctive
relief. Corlac et al. appealed on several grounds. Intervener status was granted to the
Intellectual Property Institute of Canada (IPIC) to make submissions with respect to the
construction of section 73(1)(a) of
the Patent Act.


The Canadian Patent Act has the following two provisions that were at issue in
relation to the duty of good faith and alleged misrepresentations to the Patent Office:

Subsection 53(1):

(A) A patent is void if any material allegat
ion in the petition of the applicant in
respect of the patent is untrue, or if the specification and drawings contain more
or less than is necessary for obtaining the end for which they purport to be made,
and the omission or addition is willfully made for

the purpose of misleading.

Paragraph 73(1)(a):

(1) An application for a patent in Canada shall be deemed to be abandoned if the
applicant does not

(a) reply in good faith to any requisition made by an examiner in
connection with an examination, within si
x months after the requisition is made or
within any shorter period established by the Commissioner.

On appeal, Corlac et al. argued that the inventor, Grenke, intentionally misled the
Patent Office by removing one inventor and by failing to identify anoth
er inventor in the
petition for the ‘937 Patent and thus the patent should be void under Subsection 53(1) of
the Patent Act. Corlac et al. further argued that an affidavit provided by Grenke in
support of removing the inventor was not a reply in good faith

to a requisition, resulting
in deemed abandonment of the patent application.


The Federal Court of Appeal upheld the trial judge’s findings that the alleged
misrepresentations made by Grenke in his affidavit and petitions had no impact on the
idity, abandonment or enforceability of the ‘937 Patent.

With respect to Subsection 53(1) of the Patent Act, the Court upheld the trial
judge’s decision that the alleged misrepresentation regarding inventorship in the Petition
was not material. The noti
on of materiality is a fact
specific determination and as there
was no evidence that showed a palpable and overriding error in relation to the judge’s

deference was owed to the trial judge on appeal.


With respect to Paragraph 73(1)(a) of the Pate
nt Act, the Court focused on the
question of whether this section has any effect once a patent has issued. Both the
respondents and IPIC argued against a general duty of good faith as a condition for
validity of a patent. The Court noted that this Paragrap
h of the Patent Act is situated in a
provision relating to communications and steps for the prosecution of patent applications
in the Patent Office and that other provisions within the section deal with deadlines or
requirements related to procedural steps

and fees. The Court further noted the mutual
exclusivity of Subsection 53(1), which speaks to misrepresentations in relation to issued
patents, versus Paragraph 73(1)(a), which speaks to good faith in the prosecution of the
patent application.

In summary
, the Court held at paragraph [150] of the decision: “
To be clear, the
concept of abandonment in paragraph 73(1)(a) operates during the prosecution of the
application for a patent. Its operation is extinguished once the patent issues. Post
issuance, the pr
ovisions of subsection 53(1) must be utilized with respect to allegations of
misrepresentation. To conclude otherwise would result in absurdity.

An issued patent
would be subject to retroactive scrutiny by the courts in relation to the submissions made
an applicant to the Patent Office during prosecution (generally many years prior),
judged against unknown criteria. It is for the Commissioner to determine whether an
applicant’s response to a requisition from an Examiner is made in good faith, not for the

courts. The courts do not issue patents.


This decision is of great interest to the entire patent profession because it
addresses the scope of application of section 73(1)(a) of the Patent Act. The decision
clarifies that there is no general d
uty of good faith as a condition of the validity of a
Canadian Patent. This is in direct contrast to the American doctrine of inequitable

Third parties will now need to consider monitoring the prosecution of pending
applications of their competit
ors. Any suspected lack of good faith will need to be
brought to the Commissioner’s attention prior to issuance of the patent.


U.S. Supreme Court to Hear Three Patent Cases in 2011 Term

Reported by:
Daniel A. Lev

The United States Supreme Court has
decided to hear three patent cases in the
coming 2011
12 term: (1)
Mayo Collab. Servs. v. Prometheus Labs, Inc.
, (2)
Kappos v.
, and (3)
Caraco Pharm. Labs. Ltd. v. Novo Nordisk A/S
. On one hand, the Court’s
grant of certiorari in three patent case
s is unsurprising,


the Court
’s recent interest in

patent cases. On the other hand, individually, the Court’s decision to grant cert

these three cases is surprising, because one case was already the subject of a “GVR”
decision in view of the

Bilski v. Kappos

decision and the other two
cases involve


of statutory interpretation and
administrative law

that apply to a narrow
subset of patent cases
. Once again, this promises to be an interesting year for IP
professionals a
nd Court
watchers alike.


Mayo Collaboration Services v. Prometheus Labs., Inc.

On J
une 20, 2011, the Supreme Court granted certiorari in
Mayo Collaboration
Services v. Prometheus Labs., Inc.
Supreme Court
No. 10

Mayo petitioned the
Court for cert
iorari from a Federal Circuit panel decision in favor of Prometheus. The
issue presented by Mayo’s petition relates to whether a method of performing a
biological diagnostic test is patentable subject matter under 35 U.S.C. § 101, specifically:

Whether 3
5 U.S.C. § 101 is satisfied by a patent claim that covers
observed correlations between blood test results and patient health,
so that the claim effectively preempts all uses of the naturally
occurring correlations, simply because well
known methods used
o administer prescription drugs and test blood may involve
"transformations" of body chemistry.

This is the second Federal Circuit panel decision in favor of Prometheus. After
the first panel decision, which was decided after the Federal Circuit’s
en ban
c Bilski

decision but before the Supreme Court’s

decision, Mayo petitioned the Court for
certiorari. Soon after the Court issued its

decision late in its 2009
10 term, the
Court granted Mayo’s petition for certiorari, vacated the Federal Cir
cuit’s decision, and
remanded the case to the Federal Circuit for reconsideration in view of the Court’s


a “G
VR” decision. On the same

day, the Court also issued a G
VR decision in
Classen v. Biogen
, which involves similar issues related to

whether a method of obtaining
a medical diagnosis is patentable subject matter. On remand, the Federal Circuit reheard
Prometheus v. Mayo
and issued a decision that was generally in line with its first
decision. Specifically, the court decided that Prom
etheus’s claims are directed to
patentable subject

, because they involve a “transformation” in the form of the
metabolism of a drug in the subject’s body (i.e., the “administering” step) and/or the
testing of the subject’s blood to measure levels of

metabolites (i.e., the “determining”

Mayo again petitioned the Court for certiorari, arguing that the Court had
previously recognized the importance of the issue presented when it granted certiorari in
Laboratory Corp. of America Holdings v. Met
abolite Laboratories, Inc.

In the
Lab Corp.

case, a majority of the justices reversed their grant of certiorari, because they found that
Lab Corp. had not preserved the Section 101 issue on appeal. However, Justices Breyer,
Souter, and Stevens dissented
from the court’ denial of certiorari and indicated that the
claims presented in that case were not directed to patentable subject matter.

The Supreme Court has not addressed this many cases related to patentable
subject matter since the


cases in the early 1980s. In view of the
Federal Circuit’s recent decision in the
case, which is also summarized in this


case report, this second patentable subject matter case in three years will hopefully
provide additional guidance regardi
ng the metes and bounds of Section 101. Many
commentators believe that this clear guidance was lacking from the Court’s

decision, which held that the “machine or transformation” test is not the only test for
determining when a claim satisfies Secti
on 101, as the Federal Circuit had decided in an
en banc

ruling. Amici curiae, including AIPLA, are sure to line up to submit briefs
arguing for both parties in this dispute.


Kappos v. Hyatt

On June 27
, 2011, the Supreme Court granted the PTO’s petitio
n for certiorari in
Kappos v. Hyatt
Supreme Court
No. 10

The case relates to whether an applicant
may introduce new evidence when appealing the PTO’s decision to the district court
pursuant to 35 U.S.C. § 145. The issues presented for the Court’s
consideration are:

1. Whether the plaintiff in a Section 145 action may introduce new
evidence that could have been presented to the agency in the first

2. Whether, when new evidence is introduced under Section 145,
the district court may decid
e de novo the factual questions to
which the evidence pertains, without giving deference to the prior
decision of the PTO.

The PTO has appealed to the Court from the Federal Circuit’s
en banc

which held that “35 U.S.C. § 145 imposes no limitatio
n on an applicant’s right to
introduce new evidence before the district court.”

The Patent Act provides two avenues for judicial review of a final determination
of the PTO. Under 35 U.S.C. § 141, an applicant may appeal directly to the Federal

which reviews the PTO’s decision on the record before the agency. Under 35
U.S.C. § 145, an applicant may seek judicial review of the PTO’s final decision by filing
an action in the U.S. District Court for the District of Columbia. In this case, Hyatt t
the latter approach and sought to introduce a new declaration that was not before the
PTO. The district court excluded the declaration and granted summary judgment to the
PTO. The Federal Circuit panel affirmed the district court’s decision, holding
that an
applicant may not introduce new evidence in a Section 145 action without justification.
The Federal Circuit then agreed to hear the case
en banc
, and the
en banc

court reversed
the panel. The
en banc

Federal Circuit held that an applicant may int
roduce new
evidence in a Section 145 action and the district court should review
de novo
the issue for
which the applicant introduces new evidence.

In its petition for certiorari, the PTO argued the Federal Circuit’s
en banc
is not in line with t
he Supreme Court’s and the regional Circuit Courts’ jurisprudence
related the Administrative Procedures Act. The PTO also argued that the issue presented
is related to the issue of agency deference presented in
i4i v. Microsoft
, which had not
been decided

at the time of the petition. Since the PTO filed its petition, the Court ruled
in favor of i4i, upholding the Federal Circuit’s deferential standard that a challenger


seeking to invalidate a patent with prior art must do so by clear and convincing eviden

The Acting Solicitor General supported the PTO’s petition for certiorari.

The issue of whether new evidence may be introduced in a Section 145 or a Section
146 action (the analogous provision related to PTO decisions in interferences) has long
been a
n open question due to differing decisions in prior cases. The Supreme Court’s
decision in this case is certain to affect the calculus when a party decides how to proceed
after an unfavorable PTO decision and, hopefully, will provide clarity to those seek
judicial review of the PTO’s decisions.


Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S

Also o
June 27
, 2011, the Supreme Court granted certiorari in
Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S
Supreme Court
No. 10


please insert citation)

This case relates to the “counterclaim” provision of the
Waxman Act. The “counterclaim” provision of 21 U.S.C. § 355(j)(5)(C)(ii)(I)
allows a defendant in an ANDA case, i.e. a putative generic pharmaceutical
ufacturer, to file a counterclaim seeking an order requiring the patent holder to
correct or delete the patent information listed in FDA’s Orange Book when a listed patent
does not claim an approved method of using the approved drug. A Federal Circuit pan
decision in favor of Novo Nordisk interpreted the “counterclaim” provision as limited to
deleting improperly listed patents. Caraco’s petition for certiorari asks the Court to
consider the following issue:

Whether this counterclaim provision applies w
here (1) there is "an
approved method of using the drug" that "the patent does not
claim," and (2) the brand submits "patent information" to the FDA
that misstates the patent’s scope, requiring "correct[ion].”

When an abbreviated new drug application (“AN
DA”) applicant seeks approval to
market a drug that is covered by a patentee’s Orange Book
listed method of use patents,
21 U.S.C. § 355(j)(2)(A)(viii) (i.e., “Section viii”) allows the ANDA applicant to “carve
out” the patented uses from its label, thereb
y avoiding a charge of induced infringement.

Caraco initially filed an ANDA application seeking approval to market repaglinide
together with a Paragraph IV certification. This provoked a patent infringement suit by
Novo Nordisk. Caraco’s ANDA sought ap
proval for two uses that Novo Nordisk
conceded do not infringe its listed patents. However, Caraco’s carve
out label was
covered by the new use code that Novo Nordisk submitted to the FDA during the course
of the litigation. A “use code” is a descriptio
n that a patent holder must submit to FDA
describing what its patent covers, because FDA lacks the expertise in patent law to
substantively review the listed patents. Because Caraco’s label was covered by Novo
Nordisk’s use code, FDA could not approve Car
aco’s ANDA. Therefore, Caraco filed a
counterclaim under 21 U.S.C. § 355(j)(5)(C)(ii)(I) seeking correction of Novo Nordisk’s
use code. The district court agreed with Caraco and issued a decision ordering Novo
Nordisk to restore its original use code, up
on which Caraco had based its carve
out label.
In a 2
1 panel decision Federal Circuit interpreted the “counterclaim” provision to allow
delisting o
f an Orange Book
listed patent “
only if the listed patent does not claim any


approved methods of using the
listed drug.” The Federal Circuit’s decision also
interpreted the term “patent information” in the statute as limited to delisting erroneously
listed patents or expiration dates, and not correcting a patents use code. Caraco requested
en banc

review of t
he Federal Circuit’s decision, but the court denied it.

In its petition for certiorari, Caraco argued, in line with the dissent from the denial
en banc

review, that the Federal Circuit majority decision applied an incorrect
interpretation of the “count
erclaim” provision of the statute. Caraco also argued that the
Federal Circuit’s decision would result in gamesmanship by patent holders that would
hold up FDA’s approval of numerous ANDAs and that FDA’s admittedly ministerial role
in listing patents in t
he Orange Book does not provide a

adequate remedy for an
overbroad use code.

The Acting Solicitor General supported Caraco’s petition for

This case raises interesting issues of statutory interpretation and the FDA’s
administrative role in th
e Hatch
Waxman framework. The Court has generally left the
fine tuning of the Hatch
Waxman framework to the Federal Circuit. But the Federal
Circuit’s decision in this
has a practical and economic impact on the use of “carve
out” labels under Sectio
n viii. Thus, this case will be one to watch as the amici curiae
line up on both sides of the innovator
generic divide.