In Federal Trade Commission v. Actavis, Inc., the Supreme Court held that reverse payment (“pay-for-delay”) settlement agreements made in the context of settling Hatch-Waxman ANDA litigation should be evaluated for antitrust violations under a “rule of reason” analysis. In so doing, the Court rejected both the “scope of the patent” test urged by the patent holders and the “quick look” test urged by the FTC. Coming on the heels of the Court’s decision in Myriad, Justice Breyer’s opinion reads like the second blow of a one-two punch against biotech and pharmaceutical patents.Continue reading this entry
Now that the Supreme Court has issued its decision in the “ACLU/Myriad” gene patents case (Association For Molecular Pathology v. Myriad Genetics, Inc.), people are wondering what the decision means for the Myriad patents and BRCA1/BRCA2 genetic testing. If you missed it, this article provides an overview of the Supreme Court Myriad decision. Here, I review the claims of the seven patents that were at issue, and highlight how they may or may not be affected by the Supreme Court decision. My comments are provided for discussion purposes only, and do not constitute any legal determinations of validity, invalidity, or freedom to operate.
On June 13, 2013, the Supreme Court issued its long-awaited decision in the “ACLU/Myriad” gene patents case (Association For Molecular Pathology v. Myriad Genetics, Inc.). In a unanimous opinion authored by Justice Thomas, the Court held that “a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.”Continue reading this entry
In Bowman v. Monsanto Co., the Supreme Court held that the doctrine of patent exhaustion does not give a farmer who has bought patented seeds the right to “reproduce” them through planting and harvesting without the patent holder’s permission. This decision presents a straight-forward application of the patent exhaustion doctrine, and is refreshing in its recognition of the right of the patent owner to reap the rewards of its invention.Continue reading this entry
On April 15, 2013, the Supreme Court heard oral arguments in one of the most controversial and publicized biotech patent cases–the “ACLU/Myriad” gene patent case (e.g., The Association For Molecular Pathology v. USPTO). While it is always risky to predict the outcome of a Supreme Court case from the oral arguments, the Justices seemed to have accepted the U.S. Solicitor General’s arguments that cDNA molecules satisfy § 101, but seem unlikely to find that human genes can be patented.Continue reading this entry
March 15, 2013 was a big deadline for patent applicants seeking to secure first-to-invent filing dates for U.S. patent applications, but April 15 will be a big day for the biotechnology industry, when the Supreme Court hears oral arguments in The Association of Molecular Pathology v. Myriad Genetics, Inc. (also known as the ACLU/Myriad “gene patent” case). Here I provide a brief summary of the parties’ briefs to the Supreme Court.Continue reading this entry
In Gunn v. Minton, the Supreme Court held that federal courts do not have exclusive jurisdiction over patent malpractice claims. Under 28 USC § 1338(a), federal courts have exclusive jurisdiction over cases “arising under any Act of Congress relating to patents,” but the Court determined that patent malpractice claims do not arise under the patent laws. Continue reading this entry
The Supreme Court granted certiorari in Federal Trade Commission v. Watson Pharmaceuticals, Inc., to address whether and when “reverse payment” agreements made to settle ANDA litigation violate antitrust laws. The Supreme Court may decide whether such reverse payments should be evaluated under the “scope of the patent” test (which upholds most agreements) or the “quick look rule of reason” test (which is more likely to find an antitrust violation). Oral arguments are scheduled for March 25, 2013. Continue reading this entry
On November 30, 2012, the Supreme Court granted certiorari in the “ACLU/Myriad” gene patenting case (Association for Molecular Pathology v. Genetics, Inc.), guaranteeing that the debate over the patent-eligibility of human genes will continue for another round. The Court will review the August 16, 2012 Federal Circuit decision that held for the second time that Myriad’s claims directed to isolated DNA sequences satisfy 35 USC § 101.
The Association for Molecular Pathology (represented by the ACLU) has filed a petition for certiorari to the Supreme Court, seeking review of the Federal Circuit’s August 16, 2012 decision that upheld the patent-eligibility of Myriad’s “isolated DNA” claims. The petition raises three questions for Supreme Court review:
- Are human genes patentable?
- Did the court of appeals err in upholding a method claim by Myriad that is irreconcilable with this Court’s ruling in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)?
- Did the court of appeals err in adopting a new and inflexible rule, contrary to normal standing rules and this Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), that petitioners who have been indisputably deterred by Myriad’s “active enforcement” of its patent rights nonetheless lack standing to challenge those patents absent evidence that they have been personally threatened with an infringement action?
This petition will come as no surprise to those who have been following this case since the district court rendered the first decision on the merits in 2010. We should know by June whether the Supreme Court will grant certiorari, but it could be a year or more before a final decision is rendered.
After the Supreme Court decided that the personalized medicine method claims at issue in Mayo Collaborative Services v. Prometheus Laboratories, Inc. did not satisfy the patent eligibility requirements of 35 USC § 101, it was not surprising that the Court asked the U.S. Court of Appeals for the Federal Circuit to take a second look at Association for Molecular Pathology v. Myriad Genetics, Inc. (the ACLU ”gene patenting”/BRCAI case). Although Myriad’s “isolated DNA” claims raise different patent eligibility issues than Prometheus’s method claims, both patents relate to technology that is applied in the medical diagnostic/therapeutic space.
It was more puzzling when the Supreme Court also asked the Federal Circuit to reconsider Ultramercial, LLC v. Hulu, LLC, where the claims at issue relate to methods of distributing copyrighted content over the internet. True, the patent eligibility of the Ultramercial claims is at issue, but how can the Supreme Court’s explication of the non-patent eligibility of natural phenomena impact the Federal Circuit’s decision that the Ultramercial methods were not disqualified from patenting as merely claiming abstract ideas?
See what I’m afraid all this could mean in my guest commentary for The Legal Pulse Blog of the Washington Legal Foundation.
On April 17, 2012 the Supreme Court issued a unanimous decision in Caraco Pharmaceutical Labs., Ltd. v. Novo Nordisk A/S, reversing the Federal Circuit decision and finding that 21 USC § 355(j)(5)(C)(ii)(I) provides a mechanism for a generic drug manufacturer to challenge the accuracy of a use code associated with an Orange Book listed patent. This decision may permit generic manufacturers to obtain earlier FDA approval for certain generic drugs, but may not solve all of the problems that can arise from an overly broad use code. Continue reading this entry
On April 18, 2012, the U.S. Supreme Court decided Kappos v. Hyatt, which raised questions regarding the ability to introduce new evidence and the applicable standard of review when a patent applicant challenges the USPTO’s refusal to grant a patent in a district court proceeding under 35 USC § 145 (“Civil Action to Obtain a Patent”). The Supreme Court affirmed the decision of the en banc Federal Circuit, holding that “there are no evidentiary restrictions beyond those already imposed by the Federal Rules of Evidence and the Federal Rules of Civil Procedure,” and that “when new evidence is presented on a disputed question of fact,” the district court must “make a de novo finding.” The Court agreed with the Federal Circuit that the district court may “consider whether the applicant had an opportunity to present the evidence to the PTO” when deciding how much weight the new evidence should be given. This decision will be welcomed by patent applicants who have received negative USPTO decisions on patentability, and reflects the realities — and difficulties — of marshalling evidence during patent prosecution.Continue reading this entry
The Supreme Court has issued a “GVR” in Association for Molecular Pathology v. Myriad Genetics, Inc. (the ACLU ”gene patenting”/BRCAI case), granting certiorari only to vacate the Federal Circuit decision that upheld the patent-eligibility of Myriad’s “isolated DNA” claims, and remanding the case to the Federal Circuit for rehearing in view of the Supreme Court’s unanimous decision in Prometheus. While Myriad’s isolated DNA claims raise a different question under 35 § USC 101 than Prometheus’ method claims, this action by the Supreme Court indicates that the Court thinks that the “product of nature” and “law of nature” questions are close enough that the Federal Circuit should revisit its decision in Myriad in view of the analysis the Supreme Court provided in Prometheus.
Stakeholders and practitioners in the fields of personalized medicine, biologics, and pharmaceuticals will be watching closely to see what happens next.
Will the divided panel of Federal Circuit judges who originally decided Myriad be swayed to reach a different conclusion?
Will the Federal Circuit take up the case en banc?
Will the court distinguish Prometheus or decide that the unanimous Supreme Court decision reaches beyond its facts to different patent-eligibilty issues?
Will the court dodge the whole § 101 issue and dismiss for lack of jurisdiction because no plaintiff has standing?
Now that the Supreme Court has issued its unanimous decision reversing the Federal Circuit decision in Prometheus, it is expected to decide the petition for certiorari in Association for Molecular Pathology v. Myriad Genetics, Inc. (the ACLU ”gene patenting”/BRCAI case), as early as Monday (March 26). Many are predicting that the Court will issue a “GVR” to grant certiorari only to vacate the Federal Circuit decision that upheld the patent-eligibility of Myriad’s “isolated DNA” claims, and remand the case to the Federal Circuit for rehearing in view of Prometheus. As I try to understand how the Supreme Court’s decision that Prometheus’ method claims do not satisfy 35 § USC 101 because they “effectively claim underlying laws of nature” would impact the Federal Circuit’s decision that Myriad’s isolated DNA claims satisfy 35 § USC 101 because they “cover molecules that are markedly different—have a distinctive chemical identity and nature—from molecules that exist in nature,” I am frightened by a line of reasoning that could undermine the patent-eligibility of a host of pharmaceutical and biological products. Continue reading this entry
On March 20, 2012, Justice Breyer issued the unanimous decision for the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc., holding that Prometheus’ claims directed to methods of optimizing the dose of specific drugs used in the treatment of specific conditions are invalid under 35 USC § 101 because they impermissibly claim laws of nature. The Court’s decision reverses the Federal Circuit, which had twice upheld the validity of the claims at issue. While the Court’s opinion provides additional touchstones for distinguishing claims directed to laws of nature (not patent-eligible) from claims directed to specific applications of laws of nature (patent-eligible), because it erases the bright line of the Federal Circuit’s machine-or-transformation test, stakeholders will have to undertake a fact-specific, case-by-case, and (at least for the time being) uncertain analysis in order to determine whether given personalized medicine method claims satisfy § 101.Continue reading this entry
On January 9, 2012, the Supreme Court heard oral arguments in Kappos v. Hyatt. The issues before the Court relate to the scope of new evidence that a patent applicant can introduce against the USPTO in a district court action under 35 USC § 145 (“Civil Action to Obtain a Patent”) and the degree of deference the reviewing court must give to the USPTO’s decision not to grant a patent. Continue reading this entry
On December 7, 2011, the Supreme Court heard oral arguments in Mayo Collaborative Services v. Prometheus Laboratories, Inc. While the issue before the Court is patent-eligibility under 35 USC § 101, the arguments veered into the topic of patentability under 35 USC §§ 102 and 103, whether the Court intended to raise that issue or not. Continue reading this entry
This week the Supreme Court will hear oral arguments in two cases that are important to the pharmaceutical industry: (i) Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S and (ii) Mayo Collaborative Services v. Prometheus Laboratories, Inc. Continue reading this entry
In Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., the Supreme Court upheld the basic principle of U.S. patent law that rights to an invention vest initially in the inventor(s), and affirmed the Federal Circuit’s determination that the Bayh-Dole Act does not upset the rule of inventor ownership.
The Patents At Issue
The patents at issue (U.S. 5,968,730, U.S. 6,503,705, and U.S. 7,129,041) relate to polymerase chain reaction (PCR) assays for monitoring the effectiveness of antiviral therapy in the treatment of AIDS.
The Agreements At Issue
One of the named inventors, Mark Holodniy, was a Research Fellow at Stanford, but did some work at Cetus (as a Stanford employee) to learn PCR techniques. For his position at Stanford, Holodiny executed a “Copyright and Patent Agreement” where he “agree[d] to assign” all inventions resulting from his employment. In order to work at Cetus, he executed a “Visitor’s Confidentiality Agreement,” which stated that he “will assign and do[es] hereby assign” inventions made “as a consequence of [the] access” he was granted at Cetus. Holodiny’s work eventually resulted in the patents at issue, which were assigned to Stanford.
Stanford’s HIV research was supported by an NIH grant, which brings the inventions at issue under the Bayh-Dole Act (35 USC 200-212).
The Ownership Dispute
Before the patents were granted, Roche obtained rights to Cetus “PCR business,” including the agreements with Stanford and its researchers. Roche began marketing HIV detection kits, which Stanford alleged infringed the patents. Roche asserted that it could not be sued for infringement because it had rights to the patents. Although the district court disagreed, the Federal Circuit reversed, based on its interpretation of the agreements and the Bayh-Dole Act. The Supreme Court considered and upheld the decision on the Bayh-Dole Act issue only.
The Transfer of Ownership
In accordance with basic principles of U.S. patent law, an invention initially vest in the inventor(s), absent an agreement to the contrary. Under Federal Circuit case law, a contract with “agree to assign” language reflects “a mere promise to assign rights in the future, not an immediate transfer of expectant interests.” On the other hand, a contract with “do hereby assign” language does effect “a present assignment of . . . future inventions.” Thus, the agreements at issue here resulted in the following transfer of ownership:
Execution of Stanford Copyright and Patent Agreement: no effect
Execution of Cetus Visitor’s Confidentiality Agreement: transferred future rights to Cetus
Invention by Holodniy and others: rights vested in inventors, Holodniy rights immediately transferred to Cetus
Roche purchase of Cetus PCR business: transferred Cetus rights to Roche
Holodniy assignment of patent rights to Stanford: no effect because his rights already were transferred to Cetus
The Bayh-Dole Act
Stanford argued that because the patents resulted from research supported by an NIH grant, the Bayh-Dole Act prevented Holodniy from being able to transfer his rights to Cetus.
As summarized by the Supreme Court, the Bayh-Dole Act (35 USC 200-212) was enacted in 1980 in order to “promote the utilization of inventions arising from federally supported research,” “promote collaboration between commercial concerns and nonprofit organizations,” and “ensure that the Government obtains sufficient rights in federally supported inventions.” The Bayh-Dole Act permits a grant recipient to “retain title to any subject invention” as long as certain conditions are met. When the grant recipient elects to retain rights, the granting Federal agency has a “a nonexclusive, nontransferrable, irrevocable, paid-up license to practice . . . [the] invention.” If the grant recipient does not elect to retain title to the invention, the agency can entertain requests from the inventor to retain rights to the invention.
Stanford argued that specific language used in the Bayh-Dole Act (such as the “retain” language highlighted above) indicates that the grant recipient, and not the inventor, is the primary owner of inventions supported by government funding. The Supreme Court disagreed, finding the language to be too indirect, particularly when viewed in contrast with other statutes that expressly provide for government ownership of certain federally supported inventions (such as certain nuclear inventions, certain aeronautics/space inventions, and certain energy inventions). Because the Bayh-Dole Act does not include such express language, the Supreme Court determined that it did not upset “the fundamental precepts of patent law and deprive inventors of rights in their own inventions.”
The Bayh-Dole Act does not confer title to federally funded inventions on contractors or authorize contractors to unilaterally take title to those inventions; it simply assures contractors that they may keep title to whatever it is they already have.
Safeguarding Ownership Of Inventions
This Supreme Court decision largely maintains the status quo regarding the ownership of inventions, but this case as a whole serves as a reminder of the importance of seemingly routine employment and collaboration agreements, and the IP risks associated with multi-entity collaborations. Employers should keep careful track of the agreements their employees execute with other entities, and should closely review any terms relating to IP ownership. As this case demonstrates, an inventor may have the ability to transfer IP rights to another entity without the consent or authority of his employer.
On June 27, 2011, the Supreme Court granted certiorari in Hyatt v. Kappos. This means that the Court will review the en banc Federal Circuit decision which held that there are virtually no limits on the new evidence that a patent applicant can introduce in a district court action under 35 USC § 145 (“Civil Action to Obtain a Patent”).
I wrote about Hyatt’s appeal and the Federal Circuit panel decision last July, and about the Federal Circuit en banc decision last November. Here, I briefly summarize the issues presented to the Supreme Court.
The Questions Presented for Certiorari
The Acting Solicitor General filed a petition for certiorari on behalf of the USPTO. The petition raised two questions:
- Whether the plaintiff in a Section 145 action may introduce new evidence that could have been presented to the agency in the first instance.
- Whether, when new evidence is introduced under Section 145, the district court may decide de novo the factual questions to which the evidence pertains, without giving deference to the prior decision of the PTO.
On the first issue, the majority opinion of the Federal Circuit en banc decision held that “35 USC § 145 imposes no limitation on an applicant’s right to introduce new evidence before the district court.”
On the second issue, the majority opinion of the Federal Circuit en banc decision held that “the district court . . . must make de novo fact findings with respect to factual issues to which the new evidence relates.” On the other hand, the court stated that, for issues for which the applicant does not introduce new evidence, “the court reviews the case on the same record presented to the agency and . . . must apply the APA’s substantial evidence standard to Patent Office fact finding.
Judge Newman filed a separate opinion in which she agreed with the majority on the first issue, but not the second issue. She believes that § 145 provides for de novo review on all issues, regardless of whether new evidence is introduced.
Judge Dyk filed a 37-page dissenting opinion which was joined by Judge Gajarsa. Judge Dyk characterized the majority decision as “a remarkable departure from settled principles of administrative law,” and would have adopted a standard based on the Administrative Procedures Act and limited new evidence in § 145 actions “to evidence, such as live testimony, that could not be presented to the PTO in the first instance.”
How Will The Supreme Court Decide?
Although the Supreme Court has granted certiorari and affirmed patent cases, that outcome is still the exception rather than the rule. While I understand Judge Dyk’s concerns from an administrative law perspective, I hope Hyatt—and amici—explain the realities of patent prosecution that make the ability to present new evidence in a district court proceeding such an important aspect of the right to judicial review.
On June 27, 2011, the Supreme Court granted certiorari in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S. This means that the Court will review the Federal Circuit decision which held that the ANDA litigation counterclaim provision of the Hatch-Waxman Act does not permit a counterclaim to challenge a method patent listing when the listed patent claims at least one approved method of using the drug, and does not permit a challenge of a use code narrative on the basis that it is broader than the relevant patent claims.
Today (June 20, 2011), the Supreme Court granted Mayo’s petition for certiorari in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, which means that the Supreme Court will review the Federal Circuit decision that upheld the patent-eligibility of Prometheus’ personalized medicine claims against a Bilski-type challenge. As I wrote last week, it will be interesting to see if Justice Breyer will be able to use this case to resurrect the anti-patent views he expressed in his opinion dissenting from the GVR in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc.
You can read my summary of the Federal Circuit’s Prometheus decision here and my separate discussion of the court’s treatment of Justice Breyer’s Metabolite opinion here.
The Supreme Court provided additional guidance on the doctrine of induced infringement when it decided Global-Tech Appliances, Inc. v. SEB S.A., but it still affirmed the Federal Circuit’s judgment that the defendant was liable for inducing infringement of SEB’s patent. The Court held that 35 USC § 271(b) requires “knowledge” for liability for induced infringement, but found that “willful blindness” can satisfy that requirement.