USPTO Memo Addresses Eligibility of Method-of-Treatment Claims in View of Federal Circuit Decision

In a memorandum dated June 7, 2018 (Memo), the U.S. Patent and Trademark Office (USPTO) set out new guidance concerning method-of-treatment claims, which should be welcome news for patentees. The memo addressed the decision by the U.S. Court of Appeals for the Federal Circuit in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals, 887 F.3d 1117 (Fed. Cir. 2018). In particular, the guidance suggests that claims directed to methods of treating a disease will typically meet patent eligibility standards under step one of the U.S. Supreme Court’s Mayo test.[1]

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Additional Discovery of Clinical Trial Data in Inter Partes Review

In Apotex, Inc. et al. v. Novartis AG (IPR 2017-00854, paper 47 dated Feb. 5, 2018), petitioner Apotex sought, and was granted, discovery of a Phase III clinical trial protocol from patent owner Novartis.

The patent at issue in the IPR, U.S. 9,187,405, claims a method for treating relapses in relapsing-remitting multiple sclerosis by orally administering fingolimod “at a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.” In its petition for IPR, Apotex alleged that the prior art taught that 0.5 mg of fingolimod was known to be an effective maintenance dose for treating multiple sclerosis. Novartis responded that to the extent that the prior art taught the use of 0.5 mg of fingolimod, it was only in the context of a treatment wherein the maintenance dose is preceded by a loading dose, something that is explicitly absent from the claimed methods. See paper 8 at 25.

After the Patent Trial and Appeal Board (PTAB) instituted the IPR, Novartis elaborated on its position in its response (paper 27), stating that the effectiveness of 0.5 mg as a maintenance dose in the absence of a loading dose, as required by the claims, was a surprising discovery. Although its briefing is heavily redacted, it appears that Novartis asserted that its Phase III clinical trial was aimed at showing the effectiveness of a 1.25 mg per-day dose, and that the study included a 0.5 mg dosing only at the suggestion of the U.S. Food and Drug Administration (FDA). Novartis supported this assertion with an expert declaration authored by a member of the advisory board that helped Novartis design the Phase III clinical trial. After deposing Novartis’s expert, Apotex moved for additional discovery, seeking several documents, including Novartis’s Phase III clinical trial protocol.

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Core Wireless: Moving Beyond Eligibility as the Exception to the Exception?

January was an exciting month for patent professionals still attempting to make sense of the fallout from the Supreme Court’s 2014 Alice Corp. v. CLS Bank International decision. Hot on the heels of its Jan. 10 decision in Finjan, Inc. v. Blue Coat Systems, Inc., the Court of Appeals for the Federal Circuit decided Core Wireless Licensing v. LG Elecs., Inc. on Jan. 25, affirming denial of LG’s summary judgment motion seeking to invalidate Core Wireless’ display interface patent claims for being directed to an exception to statutory subject matter under 35 U.S.C. § 101. In combination with Finjan and earlier decisions, this potentially establishes a trend that courts are increasingly comfortable differentiating between patent claims done on a computer and the maligned “do it on a computer” claims that are the target of much eligibility exception concern.

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Finjan v. Blue Coat Systems: Attaching Security Profile to a Downloadable Is Patent Eligible

In Finjan v. Blue Coat Systems, the Court of Appeals for the Federal Circuit rendered a decision containing interesting rulings on patentable subject matter (affirming the District Court determination that certain claims were patent eligible) and reasonable royalty damages (vacating part of a jury verdict for failure to adequately apportion the royalty base). This article examines the patent-eligibility ruling, which is interesting in itself and also because the opinion was authored by Judge Dyk and joined by Judge Hughes, both of whom have a pronounced history of finding claims ineligible. Continue Reading

Federal Circuit Finds Lanham Act Clause Banning Immoral and Scandalous Trademarks Unconstitutional

On December 15, 2017, the Court of Appeals for the Federal Circuit struck down as unconstitutional the clause within 15 U.S.C. § 1052(a) (“Section 2(a)”) banning registration of a trademark that “[c]onsists of or comprises immoral…or scandalous matter.”

The In re Brunetti decision came in the wake of Matal v. Tam, a recent Supreme Court case holding that Section 2(a)’s ban on registering “disparaging” trademarks amounts to unconstitutional viewpoint discrimination.

Federal Circuit Judges Dyk, Moore and Stoll concluded that the refusal to register trademarks consisting of immoral or scandalous matter necessarily bans speech based on content, in violation of the First Amendment. Such content-based restrictions are subject to strict scrutiny review, which requires the government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest. Continue Reading

Patent Portfolio Management – a Team Approach to Patent Drafting

On my drive to work, there was a trash bag on the freeway, then a box, and later a couple of bags flying around. I wondered where this garbage came from. There were a number of likely candidates: a small pickup truck loaded with miscellaneous junk, a dump truck and a large truck with a cargo box full of construction debris. In the end, I never could identify the source because I never saw any trash fall out of these vehicles. This reminded me of the debate over patent quality. Certainly, the U.S. Patent Office has taken sharp criticism for issuing so-called garbage patents, and procedures like inter partes review, covered business method review and post-grant review were created by Congress to address the quality of issued patents. While some of the criticism is a reaction to troll activity, it is clear that careful scrutiny of patents will only increase as the U.S. patent system continues to evolve.  Continue Reading

Strategic Use of a Reissue Application in the Context of an Inter Partes Review (IPR) Proceeding

In Legend3D, Inc. (Petitioner) v. Prime Focus Creative Services Canada Inc. (Patent Owner), Case IPR2016-00806, the Patent Trial and Appeal Board (Board) lifted a stay of a pending reissue application following a Final Written Decision, thereby allowing the Patent Owner another opportunity to pursue amended claims. Although the Federal Circuit recently determined that the PTAB can no longer place the burden of establishing the patentability of amended claims on the patent owner in IPR proceedings,[1] patent owners may want to consider pursuing alternative claims in a reissue proceeding, given the ex parte nature and procedural flexibility that reissue offers.

Here, the sequence of events was as follows:

  • March 28, 2016: IPR filed.
  • Dec. 29, 2016: Reissue application filed.
  • Feb. 2, 2017: Order staying reissue application.
  • Sept. 18, 2017: Final Written Decision and denial of Patent Owner’s motion to amend.
  • Dec. 8, 2017: Stay of reissue application lifted following lapse of appeal period.
  • Dec. 23, 2017: Second preliminary amendment filed in reissue application.

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Federal Circuit Provides Guidance on Joint Infringement Standard

In Travel Sentry, Inc. v. Tropp, Appeal No. 16-2386 (Fed. Cir. Dec. 19, 2017),[1] the Federal Circuit clarified the scope of joint infringement under 35 U.S.C. § 271(a).[2] Specifically, the court provided guidance on performing analysis under Akamai’s two-pronged joint infringement test, which states that joint infringement may arise when an alleged infringer (1) conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method, and (2) establishes the manner or timing of that performance. Broadly speaking, Travel Sentry reaffirms the lessons from Akamai and subsequent cases; namely, the standard for joint infringement has been relaxed, and attribution may be found despite the absence of a principal-agent relationship, contractual obligation or joint enterprise. Travel Sentry, slip op. at 15. Continue Reading

Federal Circuit Splits on Approach to Analyzing Graham Factors

In Merck Sharp & Dohme Corp. v. Hospira, Inc.,[1] the Federal Circuit affirmed the lower court’s ruling that the asserted claims of Merck’s U.S. Patent No. 6,486,150 (the ’150 patent) were obvious despite evidence of commercial success and copying by others. Concerned that the majority’s opinion constituted a shortcut around a proper Graham analysis, Judge Newman dissented and highlighted the court’s inconsistent application of secondary considerations of nonobviousness in the context of establishing a prima facie case of obviousness. The decision is also noteworthy for its clarification of the so-called blocking patent and the effect of such a patent on evidence of commercial success.

Ertapenem is an antibiotic known to be susceptible to degradation by hydrolysis of the lactam nitrogen (red circle) and dimerization at the pyrrolidine nitrogen (blue square). Although the prior art taught that ertapenem stabilized from dimerization, the claims at issue in the ’150 patent were directed to methods of manufacturing a formulation of the drug stabilized from both dimerization and hydrolysis.  Intending to manufacture a generic version of Merck’s ertapenem formulation, Invanz®, Hospira informed Merck that it had filed an abbreviated new drug application (ANDA) with a paragraph IV certification, and Merck sued for infringement.

At trial, the district court found that the asserted claims of the ’150 patent were obvious even though the prior art was silent regarding multiple steps of Merck’s claimed process, because the “recipe” was known in the art and the previously untaught steps were merely routine manufacturing steps.[2] Agreeing with the district court’s analysis, the Federal Circuit explained that the steps were simply “experimental details.” Thus, one skilled in the art and having knowledge of the principles in the prior art would have employed the steps to solve the problems of degradation of ertapenem.[3]

Having found that the district court did not commit legal error in ruling that the previously untaught steps “would have been discovered by routine experimentation while implementing known principles,” the court next addressed Merck’s objective evidence of nonobviousness.[4] The Federal Circuit agreed with the district court that Merck’s product enjoyed commercial success but determined that the lower court’s analysis that such evidence was weakened because of the existence of a blocking patent (a patent directed to ertapenem itself) was flawed.[5] The court acknowledged that it previously held that when a patent precludes market entry and has exclusive statutory rights stemming from FDA marketing approvals, objective evidence of commercial success can be discounted.[6] But here, the court noted that developers of new compounds often obtain a package of patents protecting the product, including compound, formulation, use, and process patents, and that such patents often result from a restriction requirement or from continuing improvements in a product or process. Accordingly, the court stated that multiple patents do not necessarily detract from evidence of commercial success of a product or process, which speaks to the merits of the invention, not to how many patents are owned by a patentee. Instead, the court clarified that commercial success is a fact-specific inquiry that may be relevant to an inference of nonobviousness, “even given the existence of other relevant patents.”[7]  Nonetheless, the majority did not find clear error in the district court’s holding that the evidence of commercial success would not overcome the weight of evidence that the asserted claims were obvious.[8]

Evidence of copying by others as indicia of nonobviousness was also presented to the district court. Specifically, the evidence indicated that Hospira, after multiple alternative processes failed to yield a stabilized ertapenem, resorted to a process that the lower court found would infringe the ’150 patent.[9] Here, Hospira argued that evidence of copying is not compelling in the context of ANDA cases because the Hatch-Waxman Act requires generic manufacturers to copy the approved drug. The Federal Circuit agreed with the lower court that the Act does not require the generic manufacturer to copy the New Drug Application (NDA) holder’s process of manufacturing the drug. In any event, the Federal Circuit agreed with the district court that the evidence of copying by Hospira of Merck’s patented process would not “overcome the weight of the competing evidence of obviousness.”[10]

In her dissenting opinion, Judge Newman admonished the Federal Circuit for its inconsistent approach to analyzing obviousness cases and argued for a return to the standard of evaluating obviousness recited in Graham and reconfirmed in KSR International Co. v. Teleflex, Inc., 550 U.S. 398, 399 (2007), that “established the factual premises and fixed the placement of burdens.”[11] She cited several cases in which the court, in her opinion, “recognized and correctly applied the Graham factors” and several cases as evidence of a “shortcut” analysis in which the court “converted three of the four Graham factors into a self-standing ‘prima facie’ case, whereby the objective considerations must achieve rebuttal weight.”[12] This analysis, according to Judge Newman, diminishes objective evidence to a rebuttal role and “distorts the placement and the burden of proof,” even though the court has previously said that the most probative evidence pertaining to obviousness may often be objective indicia and that they should be “considered as part of all the evidence, not just when the decision maker remains in doubt after reviewing the art.”[13] Because the district court stated that secondary indicia such as copying and commercial success “simply cannot overcome a strong prima facie case of obviousness,” Judge Newman would have remanded the case to the lower court for reconsideration under a proper Graham analysis, i.e., with the proper “analytic criteria under the four Graham factors.”[14]

This case is a reminder that the Federal Circuit’s approach to analyzing the Graham factors is not consistent and, according to at least Justice Newman, evidence of secondary considerations of nonobviousness needs to be part of all the evidence, not a rebuttal to the first three factors. The case also sets forth that the existence of a blocking patent or requirements of the Hatch-Waxman Act do not necessarily diminish evidence of commercial success or copying.


[1] Merck Sharp & Dohme Corp. v. Hospira, Inc., No. 2017-1115 (Fed. Cir. Oct. 26, 2017).
[2] Slip op. at 4.
[3] Id. at 9.
[4] Id.
[5] Id. at 10.
[6] Merck Sharp & Dohme Corp. v. Hospira, Inc. at 10 (citing Merck & Co. v. Teva Pharm. USA, Inc., 395 F.3d 1364, 1377 (Fed. Cir. 2005).
[7] Id. at 10-11. However, it is not clear whether the existence of FDA rights in combination with another patent would have diminished the evidence of commercial success.
[8] Id. (emphasis included).
[9] Id. at 5.
[10] Id. at 11 (emphasis added).
[11] Merck Sharp & Dohme Corp. v. Hospira, Inc., at 2-3 (Newman dissent).
[12] Id. at 3.
[13] Id. at 4 (citing Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538-39 (Fed. Cir. 1983).
[14] Id. at 6.

The Federal Circuit Provides a Tutorial on Patent Venue

The Federal Circuit in In re Cray, Inc., Appeal No. 2017-129 (Fed. Cir. Sept. 21, 2017), has provided extensive guidance to district courts on the meaning of an alleged infringer’s “regular and established place of business” under the second prong of the patent venue statute, 28 U.S.C. § 1400(b). It granted a petition for a writ of mandamus to do so in order to carry out its mandate to bring uniformity to patent law. Slip op. at 6-7 (citing Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574 (Fed. Cir. 1984); In re Queen’s Univ. at Kingston, 820 F.3d 1287, 1291 (Fed. Cir. 2016)).

Although § 1400(b) and its substantively identical predecessor statute date back to 1897 and have received numerous interpretations by federal courts of appeals, for almost the past three decades patent owners could sue alleged infringers wherever they did business under the general venue statute, 28 U.S.C. § 1391, rendering § 1400(b) null. See Allen Sokal, The Supreme Court, Reversing the Federal Circuit, Holds That “Residence” in the Patent Venue Statute Refers to Only a Domestic Corporation’s State of Incorporation (May 24, 2017). The Supreme Court resurrected § 1400(b), however, in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 614 (overruling VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)), by holding that § 1400(b) is the exclusive provision for determining venue in patent infringement suits. Consequently, alleged infringers sued in what they regard as unfavorable districts, such as, in this case, the Eastern District of Texas, or districts where the plaintiff/patent-owner maintains its principal place of business, are now moving under § 1400(b) to dismiss or to transfer venue. In In re Cray, the Eastern District of Texas denied the defendant’s motion to dismiss or transfer, and the defendant’s petition for a writ of mandamus provided the Federal Circuit an opportunity to expound on the requirements of § 1400(b) in a discussion that goes far beyond the facts of the case. Continue Reading

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