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Legislators Propose Framework To Reform Patent Eligibility Under Section 101

Legislators Propose Framework To Reform Patent Eligibility Under Section 101

On April 17, 2019, Senators Chris Coons and Thom Tillis, and Representatives Doug Collins, Hank Johnson, and Steve Stivers unveiled a framework to reform 35 U.S.C. §101. Section 101 of the Patent Act currently makes patentable “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Although the statute is relatively permissive, courts have limited patentable subject matter beyond the statutory mandate by creating judicial exceptions. Under these exceptions as articulated in Alice Corp. v. CLS Bank International, “[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” The proposed framework seeks to address these exceptions to patent eligible subject matter through statute versus an ever-growing list of case law. Under the lawmakers’ proposed framework, reformed Section 101 would: Keep existing statutory categories of process, machine, manufacture, or composition of matter, or any useful improvement thereof. Eliminate, within the eligibility requirement, that any invention or discovery be both “new and useful.” Instead, simply require that the invention meet existing statutory utility requirements. Define, in a closed list, exclusive categories of statutory subject matter which alone should not be eligible for patent protection. The sole list of exclusions might include the following...

Supreme Court Holds That Non-Public Sales are Invalidating Under Post-AIA Section 102

Supreme Court Holds That Non-Public Sales are Invalidating Under Post-AIA Section 102

In a closely watched case directly addressing open questions after the enactment of the America Invents Act (AIA), a unanimous Supreme Court (Thomas, J.) held in Helsinn v. Teva that a sale to a third party, despite being confidential, nevertheless triggered the long-standing meaning of “on sale” under §102(a). Gibbons previously reported on this much anticipated decision. As background, Helsinn owns patents directed to reducing the likelihood of a serious side effect of chemotherapy treatment. Almost two years before applying for a patent, Helsinn and a third party entered into a license agreement and a supply and purchase agreement. The agreements were publicly announced, but required the third party “to keep confidential any proprietary information received under the agreements.” The Federal Circuit held that because the sale between Helsinn and the third party was publicly disclosed, the on-sale bar applied. Before enactment of the AIA, 35 U.S.C. §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...

Recently Created USPTO Precedential Opinion Panel to Decide Joinder Issues in First Review

Recently Created USPTO Precedential Opinion Panel to Decide Joinder Issues in First Review

In September, the United States Patent and Trademark Office (USPTO) revised its Standard Operating Procedures 2, addressing among other things, the new Precedential Opinion Panel and the processes the panel will follow during any review. The newly created panel recently accepted its first case where it will consider issues of party and subject matter joinder as part of a larger review of patentability of patents directed to fracking technology. Proppant Express Investments v. Oren Technologies, IPR2018-00914, Paper 24 (PTAB Dec. 3, 2018). This blog post will provide an overview of the Precedential Opinion Panel and the issues it will address in its first review. USPTO Standard Operating Procedures 2, “sets forth the composition of the Precedential Opinion Panel, describes the mechanisms for invoking Precedential Opinion Panel review of a Board decision recently issued in a pending case, and explains the Precedential Opinion Panel review process.” The panel will typically consist of the USPTO Director, the USPTO Commissioner for Patents, and the Chief Judge of the Patent Trial and Appeal Board (PTAB). The resulting decisions will be precedential and have binding authority. Under USPTO procedures, there are three ways to obtain a rehearing from the Precedential Opinion Panel: “The Director may...

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...