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U.S.-Mexico-Canada Trade Agreement to Promote Innovation in Biotechnology

U.S.-Mexico-Canada Trade Agreement to Promote Innovation in Biotechnology

On September 30, 2018, the United States, Mexico, and Canada reached an agreement in principle to replace the North American Free Trade Agreement (NAFTA). The pending United States-Mexico-Canada Agreement (USMCA) includes provisions governing the protection and enforcement of intellectual property rights. This blog post will cover the IP provisions of the USMCA, particularly as applied to pharmaceuticals and biologics. It’s important to note that the provisions of the USMCA prescribe a minimum requirement, some of which is already met or surpassed by the individual countries’ respective patent regimes. 1. Data protection for biologics Under Article 20.F.14, each country must provide, with respect “to the first marketing approval” of a product that “is or contains a biologic,” protection of undisclosed test or other data concerning the safety and efficacy of the product for “a period of at least ten years from the date of first marketing approval of that product.” This ten-year data exclusivity applies “at a minimum” to “a product that is produced using biotechnology processes and that is, or, alternatively, contains, a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein, or analogous product, for use in human beings for the prevention, treatment, or cure...

Federal Circuit Affirms PTAB Finding That CRISPR-Cas9 Inventions Are Patentably Distinct

Federal Circuit Affirms PTAB Finding That CRISPR-Cas9 Inventions Are Patentably Distinct

The Federal Circuit in Regents of the University of California v. The Broad Institute weighed in on the disputed inventorship of the breakthrough CRISPR-Cas9 technology, holding that the University of California (“UC”)’s invention of the mechanism in vitro did not render obvious Broad’s claims to the mechanism in eukaryotic cells. Gibbons previously reported on the technical background of CRISPR-Cas9. This post will focus on the inventorship issue and the implications of the Federal Circuit decision. In August 2012, UC researchers published an article showing that the CRISPR-Cas9 system, derived from prokaryotic cells like bacteria, could be used in vitro in a non-cellular experimental environment. Several research groups independently applied CRISPR-Cas9 in eukaryotic cells within months of UC’s disclosure. In February 2013, Broad researchers published an article describing the use of CRISPR-Cas9 in a human cell line. Both UC and Broad sought patent protection. UC, the senior party, claims the CRISPR-Cas system without referring to a particular cell type or environment. Broad, the junior party, claims the CRISPR-Cas system limited to use in eukaryotic cells, i.e., plant and animal cells. The Patent Trial and Appeal Board (PTAB) determined there was no interference-in-fact because, given the differences between eukaryotic and prokaryotic systems, a person...

Surveying the CRISPR-Cas9 Patent Landscape in the United States

Surveying the CRISPR-Cas9 Patent Landscape in the United States

This post will discuss the patent landscape of the groundbreaking CRISPR-Cas9 systems in the United States, including pending legal disputes. A CRISPR-Cas9 system is a combination of protein and ribonucleic acid (“RNA”) that can alter the genetic sequence of an organism. CRISPR-Cas systems occur naturally in bacteria and help the bacteria target and cut identified virus deoxyribonucleic acid (“DNA”). The CRISPR-Cas9 system is being developed as a powerful tool to modify specific DNA in the genomes of more complicated organisms, including plant and animal cells. For the purpose of this overview, the mechanism of CRISPR-Cas9 is explained in the Patent Trial and Appeal Board (PTAB)’s Broad Institute v. The Regents of the University of California interference decision. As the decision explains, the CRISPR-Cas9 system comprises three effective parts: a guide-RNA sequence, an activator-RNA sequence, and a protein called Cas9. CRISPR-Cas9 alters a target DNA molecule by first binding the guide-RNA sequence to a specific sequence in the DNA of interest. The activator-RNA sequence then interacts with the Cas9 protein, and the Cas9 protein cuts the target DNA at a specific site. By linking a DNA-cutting protein (Cas9) to a specific site on the target DNA, the CRISPR-Cas9 system achieves specific targeted...

Supreme Court To Review Whether Non-Public Sales Are Invalidating Under Post-AIA Section 102

Supreme Court To Review Whether Non-Public Sales Are Invalidating Under Post-AIA Section 102

The Supreme Court recently agreed to review Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., a case with broad implications for the pharmaceutical industry. In the opinion below, the Federal Circuit held that after the America Invents Act (“AIA”), “if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of sale” for the sale to be invalidating under Section 102. The Court granted Helsinn’s petition for certiorari to answer “[w]hether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.” Before the AIA, § 102(b) barred the patentability of an invention that was “patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent.” By enacting the AIA, Congress amended § 102 to bar the patentability of an “invention [that] was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before...

Senator Hatch Proposes Legislation Forcing Challengers to Choose Between Filing a Hatch-Waxman Action or Filing an IPR

Senator Hatch Proposes Legislation Forcing Challengers to Choose Between Filing a Hatch-Waxman Action or Filing an IPR

On June 13, Senator Orrin Hatch, co-author of the Hatch-Waxman Act, proposed an amendment in the Senate Judiciary Committee to modify the inter partes review (“IPR”) process for pharmaceuticals. The senator published a press release summarizing and explaining the proposed legislation. The amendment, titled the Hatch-Waxman Integrity Act of 2018, intends to “restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development” by “prevent[ing] alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design.” The proposed legislation would amend Sections 505(b)(2) and 505(j)(2)(A) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 355(b)(2) and 355(j)(2)(A) respectively) to require the applicant to certify to the FDA that “neither the applicant nor any party in privity with the applicant, has filed, or will file, a petition to institute inter partes review” in order to be eligible for abbreviated regulatory approval under the Hatch-Waxman Act. The applicant would further need to certify that it “is not relying in whole or in part on any decision issued by the Patent Trial and Appeal Board in an [IPR]” in making the certification that the relevant listed patent is invalid or will not be infringed. According to Senator...

Incentivizing Global Monetization of U.S. Based IP Rights – The Carrot and the Stick of the 2017 Tax Act

Incentivizing Global Monetization of U.S. Based IP Rights – The Carrot and the Stick of the 2017 Tax Act

The 2017 Tax Act, signed into law on December 22, 2017, encompasses the most significant and wide-ranging changes to the U.S. Internal Revenue Code (“IRC”) since 1986. This article addresses both the new taxation of global intangible low-taxed income (“GILTI”) and a new deduction for foreign-derived intangible income (“FDII”), as they relate to patent rights. GILTI and FDII will significantly affect the tax strategies of multinational corporations, particularly those with valuable intellectual property rights held abroad. The new tax laws do not define intangible property through a list of specific types of assets, including intellectual property like patents. Rather, intangible property under the new laws encompasses anything not strictly considered a tangible asset. This expanded definition applies when determining the GILTI and FDII amounts. GILTI New IRC Section 951A effectively imposes a minimum tax on U.S. shareholders who own at least 10% of controlled foreign corporations (“CFCs”) to the extent the CFCs have “global intangible low-taxed income.” The Tax Act provides a formula for calculating GILTI, which exempts the deemed returns on tangible assets. The GILTI amount is calculated by subtracting the “net deemed tangible income return” from the “net CFC tested income.” The remainder is deemed intangible income subject to...

A Domestic Corporation Can Reside in Only One District in the State of Its Incorporation for Patent Venue

A Domestic Corporation Can Reside in Only One District in the State of Its Incorporation for Patent Venue

The Federal Circuit in In Re BigCommerce recently held in a mandamus opinion that a domestic corporation incorporated in a state having multiple judicial districts “resides” for the purposes of 28 U.S.C. § 1400(b) only in a single judicial district within that state. In so holding, the Federal Circuit resolved a district court split with competing interpretations from the Eastern District of Texas and the Central District of California. The court’s opinion provides further guidance to practitioners and clarifies jurisprudence post TC Heartland. The patent venue statute provides that patent infringement suits may be brought (1) “in the judicial district where the defendant resides,” or (2) “where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. §1400(b) (emphasis added). The Central District of California in Realtime Data LLC v Nexenta System held that a domestic corporation “resides” in the state of its incorporation “only in the judicial district in which it maintains in principal place of business.” No 2:17-cv-07690, Dkt. 28 (C.D. Cal. Jan. 23, 2018). The Eastern District of Texas in Diem v. BigCommerce came to a different conclusion, holding that “a domestic corporation resides in the state of its incorporation and if that...

USPTO Proposes a New Rule to Use Narrower Phillips Standard During Claim Construction in AIA Trial Proceedings

USPTO Proposes a New Rule to Use Narrower Phillips Standard During Claim Construction in AIA Trial Proceedings

On May 9, 2018, the United States Patent and Trademark Office (USPTO) proposed to amend the current rules to change the claim construction standard used in America Invents Act (AIA) reviews and bring it in line with the standard used in district court and ITC proceedings. Under the amended rules, the Patent Trial and Appeal Board (PTAB) would no longer use the broadest reasonable interpretation (BRI) standard for claim construction, and instead would use the narrower Phillips standard. The proposed rules would apply to claim interpretations occurring in inter partes review (IPR), post-grant review (PGR), and covered business method (CBM) patents proceedings. The Board currently construes unexpired patent claims and proposed claims in AIA trial proceedings using the BRI standard, as directed by 37 CFR 42.100(b), 42.200(b), and 42.300(b). Each of these sections currently provides that “[a] claim in an unexpired patent that will not expire before a final written decision is issued shall be given its broadest reasonable construction in light of the specification of the patent in which it appears.” This standard differs from the Phillips standard used by district courts. Under the proposed changes to these sections, the PTAB will adopt the Phillips standard and construe claims “given their...

USPTO Issues Guidance Applying SAS Institute to Pending and Future PTAB Trials

USPTO Issues Guidance Applying SAS Institute to Pending and Future PTAB Trials

On April 26, 2018, the United States Patent and Trademark Office (USPTO) issued a guidance, applying SAS Institute v. Iancu to the America Invents Act (AIA) trial proceedings. The U.S. Supreme Court in SAS Institute held that when the Patent Trial and Appeal Board (PTAB) institutes an inter partes review, it must decide the patentability of all claims challenged in the original petition. The USPTO guidance gives a general outline of how the PTAB will review patents in the future, and how it will handle cases that are already pending. The memo makes clear that the PTAB will no longer have partial institutions: “if the PTAB institutes a trial, the PTAB will institute on all challenges raised in the petition.” For pending trials in which the PTAB has instituted trial on only some of the petitioned claims, “the panel may issue an order supplementing the institution decision to institute on all challenges raised in the petition.” The final written decision will address, to the extent claims are still pending at the time of decision, “all patent claims challenged by the petitioner and all new claims added through the amendment process.” When supplementing the institution decision, the panel has discretion to manage the...

While the PTO Director has Discretion to Institute an IPR, the Board Must Review All Petitioned Claims Upon Institution

While the PTO Director has Discretion to Institute an IPR, the Board Must Review All Petitioned Claims Upon Institution

The U.S. Supreme Court in SAS Institute v. Iancu held that when the Patent Trial and Appeal Board (PTAB or “the Board”) institutes an inter partes review (IPR), it must decide the patentability of all claims challenged in the original petition. Here, in a case with wide-reaching implications, the questions centered on the United States Patent and Trademark Office (USPTO) Director’s discretion and subsequent control of an IPR. In the underlying case, SAS filed a petition for IPR alleging that all 16 claims of a particular patent were unpatentable. The Board instituted review on nine of the challenged claims and denied review on the rest, eventually finding eight of the instituted claims unpatentable in a final written decision. The Federal Circuit rejected SAS’s argument on appeal that 35 U. S. C. §318(a) required that the Board decide the patentability of all 16 claims challenged in the petition. The Supreme Court, in a 5-4 opinion authored by Justice Gorsuch, reversed the Federal Circuit, striking down partial IPR decisions. The Supreme Court held that the plain text of §318(a) conclusively answers the question presented. The section directs that “[i]f an inter partes review is instituted and not dismissed under this chapter, the [Board]...