Strategic Implications for Pharmaceuticals in Recent U.S. Patent Law Developments Bruce D. Sunstein Sunstein Kann Murphy & Timbers LLP Boston ©2010 Sunstein Kann Murphy & Timbers LLP

2 Challenge for Drug Portfolio Managers: Durable Patent Strategies for Survival in a Sea of Changes Judicial developments Legislative developments Administrative developments

3 To Be Discussed: US Patent Strategies for Our Time Develop examples and incorporate them into the patent description—to avoid rejection for inadequate “written description” Get smart about the prior art and tell a convincing story in the patent application about unexpected results—to avoid rejection based on obviousness Anchor descriptions to tools, disposables, and computers—to avoid rejection of diagnostic methods based on lack of eligible subject matter

4 To Be Discussed: Strategies for the Changing Culture of the USPTO Interview

5 Judicial Developments Eligible subject matter challenges to patentability  Myriad  Bilski Written description challenges  Ariad Obviousness challenges  KSR’s legacy Patent term adjustment  Wyeth and PTO response

6 Judicial Developments: Eligible subject Matter Challenges to Patentability Association for Molecular Pathology v. U.S. Patent and Trademark Office (S.D.N.Y. 3/29/10)(the “Myriad decision”). Trial court holds that isolated genes patented by Myriad Genetics and the University of Utah Research Foundation are directed to a “product of nature” and are therefore not eligible to be patented. See news/news-letters/2010/04/201004_JPH- BDSSpecialIssue.html news/news-letters/2010/04/201004_JPH- BDSSpecialIssue.html

7 Myriad decision, cont’d Decision cites questionable Supreme Court authority, such as Gottschalk v. Benson (1972) and Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948), both cases mooted by later decisions of Supreme Court. Decision will likely get reversed by Court of Appeals for Federal Circuit because contrary to current precedent. Decision written with a view to minority (so far) on Supreme Court that would retrench patent eligibility: dissent in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc. (2006). Will the Supreme Court grant review?

8 Judicial Developments: Eligible Subject Matter Challenges to Patentability II Bilski v. Doll (Supreme Court decision expected imminently) addresses patent eligibility of business methods. Important to pharmaceutical industry because the opinion below distinguishes a Supreme Court minority view that would limit patent eligibility of diagnostic methods (dissent in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc.), which Federal Circuit has found to be eligible for patenting. Prometheus Laboratories, Inc. v. Mayo Collaborative (Fed. Cir. 2009).

9 Judicial Developments: Written Description Challenges—Ariad cont’d Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 3/22/10)* Holding: The “written description” requirement of the patent law is separate from the requirement that the description in a patent must enable a person of ordinary skill in the field to implement the invention (the “enablement requirement”). *My firm assisted Ariad’s counsel in the litigation.

10 Judicial Developments: Written Description Challenges—Ariad cont’d “The claims here recite methods encompassing a genus of materials achieving a stated useful result, i.e., reducing NF-κB binding to NF-κB recognition sites in response to external influences. But the specification does not disclose a variety of species that accomplish the result.” Patent held invalid for lack of a sufficient written description.

11 Judicial Developments: Written Description Challenges—Ariad cont’d “The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.” 35 U.S.C. § 112, 1 st par.

12 Judicial Developments: Written Description Challenges—Ariad cont’d “…[T]he description must ‘clearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed.’” The disclosure must “reasonably [convey] to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.”

13 Judicial Developments: Written Description Challenges—Ariad cont’d “[R]equiring a written description of the invention plays a vital role in curtailing claims that do not require undue experimentation to make and use, and thus satisfy enablement, but that have not been invented, and thus cannot be described.  “For example, a propyl or butyl compound may be made by a process analogous to a disclosed methyl compound, but, in the absence of a statement that the inventor invented propyl and butyl compounds, such compounds have not been described and are not entitled to a patent.”

14 Judicial Developments: Written Description Challenges—Ariad cont’d “The written description requirement also ensures that when a patent claims a genus by its function or result, the specification recites sufficient materials to accomplish that function—a problem particularly acute in the biological arts.”  University of Rochester v. G.D. Searle & Co., Inc. 358 F.3d 916 (Fed. Cir. 2004)(patent failing to disclose compound capable of performing the claimed method is invalid for lack of written description) cited with approval.

15 Judicial Developments: Written Description Challenges—Ariad cont’d “Here, the specification at best describes decoy molecule structures and hypothesizes with no accompanying description that they could be used to reduce NF-κB activity. Yet the asserted claims are far broader. We therefore conclude that the jury lacked substantial evidence for its verdict that the asserted claims were supported by adequate written description, and thus hold the asserted claims invalid.”

16 Judicial Developments: Obviousness Challenges, KSR’s legacy. KSR v. Teleflex, 550 U.S. 398 (2007) provided new rationales for rejecting applications on the grounds of obviousness, including: (a) applying a known technique to a known device ready for improvement to yield predictable results and (b) obvious to try. More generally, “The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.”

17 Judicial Developments: Obviousness Challenges Courts and PTO use KSR to reject many patents that might formerly have escaped rejection. Expected results for a controlled release tablet form of oxymorphone rendered claimed subject matter obvious and therefore not patentable. Ex Parte Kao, 2010 WL (Bd.Pat.App. & Interf. Jan 12, 2010) (NO. APL , APP 11/680,432, TECHLOGY CENTER 1600).

18 Judicial Developments: Obviousness Challenges Contested (inter partes) reexamination led to a determination by the Board of Patent Appeals and Interferences that a stem cell patent held by WARF was invalid for obviousness. Foundation for Taxpayer and Consumer Rights v. Wisconsin Alumni Research Foundation, B.P.A.I., No , 4/28/10). “In sum, there were a ‘finite number of identified’ and ‘predictable’ solutions which would have been readily applied by one of ordinary [skill] in the art to produce human embryonic stem cells.”— citing KSR v. Teleflex.

19 Judicial Developments: Obviousness Challenges—Overcome! Abbott Laboratories v. Sandoz, Inc., 544 F.3d 1341 (Fed. Cir. 2008) (patent on extended release formulation of antibiotic clarithromycin upheld in face of obviousness attack)  Must look to particular technology for context in determining whether the claimed technology is an “identified, predictable solution” and “anticipated success”.  No error in holding below of nonobviousness of claimed extended release formulation because its behavior could not have been predicted based on the prior art.  Court below: Although prior art references do not need to explicitly teach or suggest the motivation to combine the references, each of the claimed limitations must still be found to exist somewhere in the prior art.  Note: novel delivery system extended patent life!

20 Judicial Developments: Patent Term Adjustment Duration of US patents can be lengthened two ways: (1) patent term extension, under 35 U.S.C. § 156, up to 5 years, for regulatory processing by the FDA and (2) patent term adjustment, under 35 U.S.C. § 154, for failure of PTO to process the patent application within legislatively determined deadlines. An extension is available for only one patent per each FDA filing, but an adjustment is available for each patent where the deadlines are not met.

21 Judicial Developments: Patent Term Adjustment cont’d Wyeth challenged the method by which the PTO calculated patent term adjustments, and Wyeth won in the Federal Circuit. Wyeth v. Kappos (Fed. Cir. 1/7/10). See news/news-letters/2010/01/201001_Seluga.html news/news-letters/2010/01/201001_Seluga.html The PTO is complying with Wyeth for newly issued patents. ta/wyeth_faqs_ pdf ta/wyeth_faqs_ pdf

22 Legislative Developments Congress passed Biologics Price Competition and Innovation Act, March 21, The Act establishes a regime, analogous to Hatch- Waxman, potentially enabling a generic manufacturer to enter the biologics market. Features: a generic manufacturer can apply to offer a biosimilar product only beginning 4 years (the period of data exclusivity) after the pioneering biologic has been approved and approval cannot be granted until 12 years (the period of market exclusivity) after approval of the pioneering biologic. Instead of an Orange Book listing for patents, the Act contemplates exchanges of patent data between generic and pioneering company.

23 Administrative Developments New Director of United States Patent and Trademark Office, David Kappos, effective August, New direction of the new Director: “Patent quality does not equal rejection.” Efforts to change the examining culture. Backlog in examination of applications: more than 700,000, per Director Kappos, June 2. Backlog in patent appeals: 16,082 as of June, with dispositions of about 600 per month and new cases of about 1200 per month. See ocess/fy2010_may_process_prdn.jsp ocess/fy2010_may_process_prdn.jsp

24 PTO Administrative Responses to the Backlog Encouraging examiners and applicants to confer before first office action (First Action Interview Program), enhanced for period 10/01/ /30/10. Changes made to the “Count System” by which examiner activities are rewarded, in effect February 18, Ombudsman program, per notice April 6, Three-track prosecution, proposed June 4. Optional delay in prosecution after filing of a provisional application, proposed April 2.

25 Strategic Implications of Recent Developments To forestall eligible subject matter challenges:  For diagnostic methods, be cautious of claiming simple blood testing by itself.  Encourage your technical team to engineer a hardware context for any diagnostics, and claim the hardware context as backup. Consider: ―New special purpose diagnostic tools ―New disposables that respond to a mechanism of action to provide a new measurement

26 Strategic Implications of Recent Developments To forestall eligible subject matter challenges (cont’d):  Consider anchoring evaluation of test results to a computer environment and make sure your claim limitations are anchored to the computer environment.  Key to show how the discovery is used either to achieve a “transformation” of data or to be harnessed by a machine—or both.

27 Strategic Implications of Recent Developments To forestall written description challenges:  Examples! Examples! Examples!  Mechanism of action claims should be backed up by real implementations that are described in the application.  Not just mechanism of action claims—any claims might be attacked. Work with your technical teams to develop examples before you file. If a composition is called for, find a way of getting to a composition—preferably multiple compositions— that work.

28 Strategic Implications of Recent Developments To forestall challenges asserting obviousness of the invention  Get smart about the prior art and let your patent application reflect your insight. Check out and use and  Make the application tell a story that includes a convincing showing of results that are unexpected in view of the prior art or synergistic.  The story should make good sense in relation to the prior art.

29 Strategic Implications of Recent Developments To forestall challenges asserting obviousness of the invention (cont’d)  Even when the prior art looks overwhelming, sometimes special claim strategies can make a difference:  When the basic combination may be taught, consider claims to a unit dosage of the combination with specific ranges or ratios that may be novel and unexpected.  Consider method claims that address use of the composition under specific conditions or with specific types of administration that may be novel and unexpected.  Consider novel delivery systems and claims directed to them.

30 Strategic Implications of Recent Developments To address the changing culture of the PTO  Interview! Interview! Interview!—by telephone or in person.  Have your attorney call the examiner before the first office action to explain the technology and to seek an understanding of allowable subject matter.  Consider use of ombudsman or involving the supervisory patent examiner or even the group director.

31 Strategic Implications of Recent Developments To address the changing culture of the PTO (cont’d)  Appeals will lengthen prosecution substantially but can be a way of getting substantial patent term adjustment under Wyeth.  Recent Patent Prosecution Highway Initiatives can facilitate prosecution by coordination with another jurisdiction in which a patent has already been issued.

Good luck!