Post-Grant Proceedings

Indian tribes ability to shield patents from review at the United States Patent and Trademark Office’s (“USPTO”) Patent Trial and Appeal Board (“PTAB”) took another blow at the Federal Circuit.  The Federal Circuit in a precedential decision, affirming the decision of the PTAB, held that tribal sovereign immunity cannot be asserted in inter partes review (“IPR”) proceedings before the PTAB.[1]

The Federal Circuit based the decision on two principles extrapolated from Supreme Court decisions.  First, the general proposition that “immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action.”[2]  Second, the Supreme Court’s recognized distinction between adjudicative proceedings brought by a private party against a state, on the one hand, and federal agency-initiated enforcement proceedings, on the other.  According to the Federal Circuit, immunity may generally be invoked in the private party actions, but not in the federal agency-initiated enforcement proceedings. Continue Reading Tribal Immunity Cannot Be Asserted to Escape IPR Proceedings

Per Senator Orrin Hatch, the America Invents Act has disrupted the “careful balance” he struck with Senator Waxman in the development of the decades-old Hatch-Waxman Act governing the adjudication of generic drug litigation. On June 13, 2018, Senator Hatch filed an amendment in the Senate Judiciary Committee to remedy the perceived conflict between the “carefully calibrated requirements” of Abbreviated New Drug Application (“ANDA”) litigation under the Hatch-Waxman Act and the “much blunter instrument” of post-grant proceedings before the United States Patent Trial and Appeal (“PTAB”).   According to Senator Hatch, the amendment “will ensure that Hatch-Waxman continues to operate as originally intended by protecting the ability of generic drug companies to develop low-cost drugs while at the same time ensuring brand-name companies have sufficient protections in place to recoup their investments.”  A press release of Senator Hatch’s remarks is available here.

The “Hatch-Waxman Integrity Act” by Senator Hatch is an amendment to the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act), legislation designed to help generic drug companies acquire the samples they need to develop generic drugs, particularly for products subject to a risk evaluation and mitigation strategy (“REMS”). The CREATES Act advanced to the Senate from the Judiciary Committee on June 14, 2018, and was been placed on the Senate Legislative Calendar on June 21, 2018.

The Amendment would add to the CREATES Act a section entitled “Preventing the Inter Partes Review Process for Challenging Patents from Diminishing Competition in the Pharmaceutical Industry and with Respect to Drug Innovation; Preventing the Manipulative and Deceptive Use of Inter Partes Review.” The section has three parts and targets both generic drug manufacturers and biosimilar companies.

In the first portion of the Amendment, an ANDA applicant must certify that they have not and will not file an Inter Partes Review (“IPR”) or Post-Grant Review (“PGR”) or forfeit the ability to participate in the Hatch-Waxman litigation procedures.  Additionally, the ANDA applicants must certify that they are not relying in whole or in part on any decision reached by the PTAB in an IPR or PGR proceeding.

Second, the Amendment forces a similar choice for biosimilar applicants.  Those who file an abbreviated Biologics License Application (“aBLA”) must decide, with respect to any patent that is or could be included in the lists of patents that are exchanged as part of the “Patent Dance,” whether to challenge patents in an IPR/PGR or take the path outlined in the Biologics Price Competition and Innovation Act (“BPCIA”).

Third, the Amendment aims to end certain market practices and appears to apply broadly to all parties filing for post grant proceedings. To “prevent[] the Manipulative and Deceptive Use of Inter Partes Review,” the Hatch-Waxman Integrity Act amends the Securities Exchange Act of 1934 to address market manipulation tied to inter partes review petitions, such as that attempted by the Coalition for Affordable Drugs.  Specifically, “a person shall be considered to be using a manipulative or deceptive device” if they file a petition for an IPR and engage in a short sale of any publicly traded security of the owner of the patent at issue in the IPR for the 90 days before and after the filing of the petition.

We will continue to monitor the CREATES Act and the Hatch-Waxman Integrity Act in the future. For more information, please feel free to contact Jamaica Potts Szeliga at any time.

The USPTO announced today proposed rulemaking for changing its policy related to claim interpretation in Patent Trial and Appeal Board (“PTAB”) proceedings (not including patent examination). Currently, the broadest reasonable interpretation (“BRI”) standard is applied when analyzing claims. The proposed new rules would result in “the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings;” i.e., “ordinary and customary meaning” according to “a person of ordinary skill in the art in question at the time of the invention,”[1] and “reasonable certainty” for definiteness analysis[2]. In addition, it is proposed that the USPTO/PTAB “will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding.” Continue Reading USPTO Announces Notice of Proposed Rulemaking for Claim Construction Standard used in PTAB Proceedings

SAS Institute Inc. v. Iancu

As we recently noted in our companion piece Part 1 of 2: Supreme Court and Inter Partes Review, the Supreme Court issued decisions in two intellectual property appeals relating to inter partes review (“IPR”) before the U.S. Patent and Trademark Office. In Oil States Energy Services LLC v. Greene’s Energy Group LLC, No. 16-712, the Court decided 7–2 that the inter partes review process does not violate Article III of the Constitution or the Seventh Amendment. In SAS Institute Inc. v. IANCU, No. 16-969, the Court decided that the Patent Trial and Appeal Board (“PTAB”) must decide the patentability of all of the claims the petitioner has challenged rather than selectively picking and choosing which claims to review. In response to the Court’s decision in SAS, the PTAB has already issued new guidance regarding the institution of IPRs. Continue Reading Part 2 of 2: Supreme Court and Inter Partes Review

Oil States Energy Services LLC v. Greene’s Energy Group LLC

On April 24, 2018, the Supreme Court issued decisions in two intellectual property appeals relating to inter partes review (“IPR”) before the U.S. Patent and Trademark Office. In Oil States Energy Services LLC v. Greene’s Energy Group LLC, No. 16-712, the Court decided 7–2 that the inter partes review process does not violate Article III of the Constitution or the Seventh Amendment. In SAS Institute Inc. v. IANCU, No. 16-969,  the Court decided that the Patent Trial and Appeal Board (“PTAB”) must decide the patentability of all of the claims the petitioner has challenged rather than selectively picking and choosing which claims to review.  In response to the Court’s decision in SAS, the PTAB has already issued new guidance regarding the institution of IPRs. Continue Reading Part 1 of 2: Supreme Court and Inter Partes Review

As a special feature of our blog, we include special guest postings by experts, clients, and other professionals—please enjoy this blog entry which includes guest author Rolf J. Haag.[1]

It has been impossible to miss the surreal volatility in Bitcoin’s per unit price—having gone from $1,000 in January 2017 to almost $20,000 (~$750B mkt. cap) toward the end of last year and retracting to under $8,000 (~$500B mkt. cap) in February 2018. Whether these G-LOC-inducing price undulations are reflective of a radical paradigm shift in the mode of financial transactions, history’s greatest pyramid scheme, or some mix thereof, remains to be seen. Continue Reading Will Blockchain Revolutionize Bio/Pharma R&D, Tech Transfer, and IP?

In an unprecedented move by the U.S. Patent and Trademark Office (USPTO), the Patent Trials and Appeals Board (PTAB) has permitted the filing of amicus briefs on whether the Saint Regis Mohawk Tribe (“Tribe”) should be permitted to terminate the inter partes review of Allergan’s patents contested in IPR2016-00127, IPR2016-01128, IPR2016-01129, IPR2016-01130, IPR2016-01131, and IPR2016-01132. Allergan assigned the patents challenged in these IPRs to the Tribe, while retaining an exclusive license in exchange for ongoing payments. As a sovereign entity, the Tribe seeks to terminate the IPR challenges of these patents, a move which the PTAB had ruled in 2016 shielded the University of Florida Research Foundation as a sovereign entity from IPRs. See Covidien LP v University of Florida Research Foundation Inc., IPR2016-01274, Paper 21 (PTAB Jan. 25, 2016). Amicus briefs of no more than 15 pages are due to be filed by December 1, 2017, and the Petitioners and Tribe are each authorized to file a single response to any amicus brief by December 15, 2017.

This maneuvering has caught the attention of many, including members of Congress and the district court specifically addressing the validity of these patents. In response to a bipartisan committee investigating the Allergan-Tribe deal, Senator McCaskill has already drafted a bill to block tribal claims of sovereign immunity, which could otherwise preclude USPTO review of patents assigned to tribes. Court of Appeals for the Federal Circuit Judge William Bryson, sitting by “designation” in the Eastern District Court of Texas, expressed concerned that Allergan sought to “rent” sovereign immunity from the Tribe. On the other hand, heralded as an innovative defense, patent attorneys now seek such a defense to patent challenges before the USPTO. The Saint Regis Mohawk Tribe has reportedly already taken ownership of patents from SRC Labs and is in discussion with another technology company.

Interestingly, the district court under Judge Bryson recently found four of the six patents invalid, a decision which will likely be appealed to the CAFC. However, the PTAB nevertheless will need to answer, inter alia, the question of  whether the Tribe’s right as a sovereign immunity will shield the Allergan patents from IPRs. Due to additional parties joining as Petitioner and the complicated issues surrounding this challenge, the PTAB has extended a deadline to render its final decision in the IPR from December 8, 2016, to April 6, 2018.

The America Invents Act (“AIA”) provides for post grant challenges of U.S. patents in the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. One type of AIA proceeding, Inter Partes Review (“IPR”), came into effect in September 2012, and provides a process for relatively quick determination of invalidity of challenged patent claims based on published prior art. [1] IPR decisions rendered in the past five years have created a body of law addressing a variety of issues related to invalidity challenges before the PTAB. In a recent IPR proceeding, a novel strategy has arisen that posts an interesting question of first impression, whether the assignment of a patent involved in an IPR proceeding to a U.S. Indian tribe can avoid an IPR proceeding based on a sovereign immunity defense. The present blog post summarizes the new issue that the PTAB will be required to decide in the IPR. Continue Reading Indian Tribal Sovereign Immunity Asserted in an IPR

shutterstock_350539772In a recent case involving Apotex’s proposed biosimilar product to Amgen’s Neulasta® (pegfilgrastim), Amgen sought a preliminary injunction to enforce the Biologic Price Competition and Innovation Act (BPCIA) provision that requires an applicant to give notice 180 days before marketing an FDA-licensed product.1 In Amgen v. Sandoz, a divided Federal Circuit held that “the 180-day period runs from post-licensure notice.”2 In that case, the biosimilar applicant defaulted on the statutory process for exchanging patent information and channeling patent litigation (“information exchange”) required by 42 U.S.C. § 262(l), by not providing the reference product sponsor with a copy of the biosimilar application, as required by 42 U.S.C. § 262(l)(2)(A).

In the instant case, Apotex argued that the commercial marketing provision of the BPCIA was not mandatory because it did engage in the information exchange.3 Apotex filed a biologics application for Amgen’s Neulasta® in October 2014, and the FDA accepted the application for review on December 15, 2014.4 Apotex and Amgen engaged in the required information exchange, during which Apotex provided notice of future commercial marketing pursuant to paragraph (l)(8)(A) of the BPCIA, even though Apotex lacked an FDA license.5 In October 2015, Amgen asked the district court to issue a preliminary injunction that would require Apotex to provide paragraph (l)(8)(A) notice “if an when it receives a license, and to delay any commercial marketing from that notice.”6 The district court agreed with Amgen, and granted a preliminary injunction.7

On appeal, a unanimous Federal Circuit affirmed the district court ruling, and determined that the notice provision is mandatory regardless of whether the applicant provides the paragraph (2)(A) notice that begins the information-exchange process.8 The court also rejected Apotex’s argument that its decision would give reference product sponsors 12.5 years of exclusivity, rather than the 12 years envisioned by the statute.9

The court stated:

[I]t is implicit in the Biologics Act that any such delay beyond 12 years should occur less and less as time goes by. Doubtless, there will be some exclusivity periods beyond 12 years in the early years of the Biologics Act, as biosimilars are introduced for reference products licensed well before the Act was adopted in 2010. But as time passes, more and more of the reference products will be newer, and a biosimilar-product applicant, entitled to file an application a mere four years after licensure of the reference product … can seek approval long before the 12-year exclusivity period is up.10

The court concluded that the purpose of paragraph (8)(A) is “to ensure that, starting from when the applicant’s product, uses, and processes are fixed by the license, the necessary decision-making regarding further patent litigation is not conducted under time pressure that will impair its fairness and accuracy,” covers applicants that file paragraph (2)(A) notices as well as those who do not.11

1 42 U.S.C. § 262(l)(8)(A).
2 Amgen v. Sandoz Inc., 794 F.3d 1347, 1357-68 (Fed. Cir. 2015).
3 Amgen v. Apotex Inc., No. 16-1308, slip op. at 4 (Fed. Cir. 2016).
4 Id. at 11.
5 Id. at 11-12
6 Id. at 13.
7 Id. at 14
8 See id. at 15.
9 See id. at 16.
10 Id. at 17.
11 Id.

shutterstock_533480197On May 9, 2016, the U.S. Court of Appeals for the Federal Circuit upheld the U.S. Patent and Trademark Office (PTO) Patent Trial and Appeal Board (PTAB) inter partes review determination that claims 1-6 and 8 of U.S Patent Number 7,566,537 (the ‘537 patent) were not invalid for obviousness under 35 U.S.C. § 103.1

Intelligent Bio-Systems (IBS) filed a revised petition requesting inter partes of review of some of the claims of the ‘537 patent, owned by Illumina Cambridge Ltd. (Illumina) on August 30, 2013, alleging the claims were invalid as obvious under section 103 in view of certain prior art.2 The ‘537 patent relates to the sequencing by synthesis (SBS) method of labelling nucleotide bases. Claim 1, the only independent claim under review, states:

1. A method of labeling a nucleic acid molecule, the method comprising incorporating into the nucleic acid molecule a nucleotide or nucleoside molecule, wherein the nucleotide or nucleoside molecule has a base that is linked to a detectable label via a cleavable linker and the nucleotide or nucleoside molecule has a ribose or deoxyribose sugar moiety, wherein the ribose or deoxyribose sugar moiety comprises a protecting group attached via the 2′ or 3′ oxygen atom, and said protecting group can be modified or removed to expose a 3′ OH group and the protecting group comprises an azido group.3

There were three prior art references at issue, Ju and Tsien, which PTAB determined “describe[] a process of labeling, and ultimately sequencing, a nucleic acid molecule,” by a polymerase, but did not “disclose protecting a protecting group that comprises an azido group.”4 Zavgorodny, however, taught “that an azidomethyl moiety is a suitable protecting group for … precisely the position requiring protecting in Ju’s [or Tsien’s] process.”5

Before PTAB, Illumina argued that “an ordinary artisan would not expect the azidomethyl group of Zavgorodny to meet the specific criteria or Tsien or Ju,” in particular, the “quantitative and rapid removal [essentially 100% removal]” required by Tsien.6 The Board agreed, deciding that IBS failed to prove the claims were obvious under the prior art.7 IBS challenged the Board’s decision.8

Before the Federal Circuit, IBS argued that the Board erred by imposing a quantitative cleavage requirement into the claims “through the reasonable expectation of success analysis.”9

The Federal Circuit stated:

The reasonable expectation of success requirement refers to the likelihood of success in combining references to meet the limitations of the claimed invention.

The Board seemed to believe that the “reasonable expectation of success” inquiry looked to whether one would reasonably expect the prior art references to operate as those references intended once combined. That is not the correct inquiry—one must have a motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent-at-issue. The Board’s reliance on the absence of a reasonable expectation of success was, thus, improper.10

However, the Federal Circuit agreed with the Board’s ultimate decision of nonobviousness.11

[W]hile the Board conflated two different legal concepts—reasonable expectation of success and motivation to combine—it nevertheless made sufficient factual findings to support its judgment that the claims at issue are not invalid. It was IBS’s burden to demonstrate both “that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention, and that the skilled artisan would have had a reasonable expectation of success in doing so.

Despite the loose language employed by the Board, its factual findings support its conclusion that the claims are not invalid.12

Secondarily, because IBS presented a new argument in its reply brief, the Board refused to consider the brief and accompanying expert declaration “because it found that IBS’s reply was improper under two regulations: first under 37 C.F.R. § 42.23(b), which provides that a ‘reply may only respond to arguments raided in the corresponding opposition or patent owner response,’ and then under 37 C.F.R. § 42.6(a)(3), which states that ‘[a]rguments must not be incorporated by reference from one document into another document.’”13

The Federal Circuit found that the “reply brief and accompanying declaration exceeded the scope of the reply under § 42.23(b), and therefore, that the Board did not abuse its discretion in excluding those documents.”14 Thus, the court found that it did not need to reach a determination as to whether the brief complied with § 42.6(a)(3).15

The Federal Circuit emphasized that:

Unlike district court litigation—where parties have greater freedom to revise and develop their arguments over time and in response to newly discovered material—the expedited nature of IPRs bring with it an obligation for petitioners to make their case in their petition to institute. While the Board’s requirements are strict ones, they are requirements of which petitioners are aware when they seek to institute an IPR.16

1 Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., No. 15-1693, slip op. at 2 (Fed. Cir. May 9, 2016).
2 Id.
3 Id. at 4. emphases in original
4 Id. at 5.
5 Id.
6 Id. at 7.
7 Id.
8 Id. at 10.
9 Id. at 12.
10 Id.
11 Id. at 12.
12 Id. at 13.
13 Id. at 10.
14 Id. at 17.
15 Id.
16 Id. at 16.