The Stanford Law School

Conference on Intellectual
Property Law and Biosciences

Friday, September 15, 2006

Patent Litigation in the Biosciences:
A View from the Bench
Moderator:
William F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP

Panel:
Hon. Susan Illston, United States District Judge, Northern District of
California
Hon. Elizabeth LaPorte, United States Magistrate Judge, Northern District
of California
Hon. Pauline Newman, Circuit Judge, United States Court of Appeals for
the Federal Circuit
Hon. Ronald M. Whyte, United States District Judge, Northern District of
California
Reach-Through Claims and Reach-Through
Royalties: The Evolving Legal Landscape
Relating to Reach-Through Rights
Moderator:
Alfred C. Server, Wilmer Cutler Pickering Hale and Dorr LLP

Panel:
Rebecca S. Eisenberg, University of Michigan Law School

Robin C. Feldman, UC Hastings College of the Law

Robert P. Merges, Boalt Hall School of Law, University of California at

Berkeley
 Introduction

Alfred C. Server
Wilmer Cutler Pickering Hale and Dorr LLP
Timeline for Drug Discovery and
Development

M
A
Drug Pre- Clinical
Discovery clinical IND Studies NDA R
Studies K
E
T
Transmembrane Receptor: The Drug Target
Screening Assay
High-Throughput Screening: Finding a Hit
Discovery Effort Success: A Hit Is Found
Target-Based Drug Discovery
A Summary
Reach-Through Claim

A claim that “reaches-through” the drug discovery

screening tool to cover a yet-to-be-discovered compound
that may be found through the use of such tool, and/or a
method of treating disease using such a compound.
Limit on Enforcement of Patent Right
Common-Law Experimental Use Exception

Statutory (Drug Development) Exemption

(35 U.S.C. §271(e)(1))
Target-Based Drug Discovery
A Summary
Reach-Through Royalty

A royalty that is paid on the sale of a drug discovered by

a licensee using a licensed patented drug discovery tool
where the licensed tool patent does not cover the drug.
Panel Presentation Overview

Reach-Through Enforceability of Reach-Through

Claim Patent Right Royalty
The Issue of Statutory and Common A Question of Patent
Claim Scope Law Exceptions Misuse

Professor Merges Professor Eisenberg Professor Feldman

 Reach-Through Claims:
Issues of Patent Scope

Robert P. Merges
Boalt Hall School of Law,
University of California at Berkeley
Doctrines Relevant to Scope

• Enablement

• Written description

• Utility?
Enablement

Traditional “undue experimentation” standard

Query: Does it require “undue experimentation” to go

from disclosure in spec. of screening tool, to a claim that
covers any successful candidate screened for by the
tool?
Sawyer and Mann Patent
Claimed: “All Fibrous
and textile material”
(6,000-plus
embodiments)

Enabled:
Carbonized
paper, plus?
The Incandescent Lamp Patent,
159 US 465 (1895)
Incandescing
conductor

Bamboo discovered as an incandescing conductor.

Query: Does it require “undue
experimentation” to go from disclosure in
spec. of screening tool, to a claim that
covers any successful candidate screened
for by the tool?
Written Description:

• What is it?

• Relationship to enablement
Patent Specification
Enabled subject matter:
everything the inventor
teaches to one of skill in
the art.
Specification
Enabled
Described embodiments of
the invention: everything
Described the inventor “adequately
describes” to one in the art;
everything the inventor
shows she is in
Claim 1
“possession of” or
contemplates as embraced
by her invention
Application to Reach-Through Type
of Claims?

Univ. of Rochester v. GD Searle & Co.,

358 F.3d 916 (Fed. Cir. 2004) –application of the
written description requirement
Patent for a method of treating inflammation
using inhibitors of prostaglandin
H synthase-2 (PGHS-2) enzyme activity,
also known as “COX-2”
Claimed method of using a compound
acting upon a polypeptide did not comply with
the written description requirement where such
a compound was not disclosed.

Spec. did not disclose which, if any,

compounds selectively inhibit PGHS-2
Enforceability of Patent Right

Rebecca S. Eisenberg
University of Michigan Law School
35 U.S.C. § 271(e)(1)
“It shall not be an act of infringement to make, use, offer to sell,
or sell within the United States or import into the United State a
patented invention (other than a new animal drug or veterinary
biological product (as those terms are used in the Federal
Food, Drug, and Cosmetic Act and the Act of March 4, 1913)
which is primarily manufactured using recombinant DNA,
recombinant RNA, hybridoma technology, or other processes
involving site specific genetic manipulation techniques) solely
for uses reasonable related to the development and
submission of information under a Federal law which regulates
the manufacture, use, or sale of drugs or veterinary biological
products.”
Reach-Through Royalty

Robin Feldman
UC Hastings College of the Law
 The Stanford Law School Conference on
Intellectual Property Law and Biosciences

Lunch
 John M. Whealan

Deputy General Counsel for Intellectual Property and

Solicitor, United States Patent and Trademark Office
ANDA Patent Challenges under Hatch-
Waxman: Reconciling Antitrust, FDA and
Patent Interests
Moderator:
James C. Burling, Wilmer Cutler Pickering Hale and Dorr LLP

Panel:
Donald O. Beers, Arnold and Porter LLP
Thomas B. Leary, Hogan & Hartson LLP
Marc Schildkraut, Heller Ehrman LLP
Carl Shapiro, Walter A. Haas School of Business, University of California at
Berkeley
Hatch-Waxman Act Issues
Raising Antitrust Concerns

Donald O. Beers
Arnold & Porter LLP
Hatch-Waxman and Market Access
Hatch-Waxman amendments to Federal Food, Drug and
Cosmetic Act control market access for generic drugs
• Requirement that the generic match the innovator
• Non-patent market exclusivity
• Linkage between FDA drug approval and patent
rights
Hatch-Waxman Issues Raising Potential
Antitrust Concerns
• Patent listing decision
• Petitioning FDA
• Successive improvements in products, delaying effective
generic erosion
• Authorized generics
• Settlement of pharmaceutical patent litigation
Patent Listing (1)

• An innovator must provide information concerning

certain types of patents to FDA as part of its new drug
application
• FDA lists those patents in the “Orange Book”
• A generic applicant must either wait until those patents
expire, or challenge them
Patent Listing (2)

• To argue that a listed patent is invalid or not infringed,

the generic applicant submits a “paragraph IV”
certification in its application.
• The generic applicant then sends notice to NDA and
patent holder.
• The patent holder can then sue, and in some
circumstances, gets a 30-month stay of the generic
approval by doing so.
Patent Listing (3)

• It is not always clear whether a patent meets the criteria

for listing.
• It is argued that listing a patent inappropriately, and thus
delaying or discouraging generic competition, violates
the antitrust laws.
Petitioning FDA (1)

An innovator concerned that FDA will approve a generic

that
– does not match the innovator
– will otherwise be unsafe or ineffective
– will violate exclusivity rights
may file a “citizen petition” with FDA asking FDA not to
approve the generic.
Petitioning FDA (2)
• FDA is not required to hold up approval of a generic
application until it responds to a citizen petition.
• Nevertheless, FDA will generally respond to the petition
on the same day as the approval, suggesting a delay.
• While petitioning is protected activity, sham petitioning,
which may be an antitrust violation, is sometimes
alleged.
Extending the Franchise (1)
• Generic companies do little marketing of their products.
Instead, they count on substitution of their product when
the innovator is prescribed.
• Once a new chemical entity is approved, most
pharmaceutical companies look for ways to improve the
product, e.g.;:
– a more convenient dosage form
– a formulation that does not have a food effect.
Extending the Franchise (2)
• If, when the generic version of the product is approved,
physicians no longer prescribe the copied product
because they now prescribe the improved version, the
generic market is diminished.
• In the Abbott v. Teva decision, the court declined to
dismiss an antitrust case based on successive
improvements.
Authorized Generics
• The first ANDA applicant to challenge a patent may earn
a 180-day head start over any generic competitor.
• NDA applicants can launch their own “authorized
generics,” marketed pursuant to NDA, to compete during
that 180-day period.
• This has been challenged on antitrust grounds.
Patent Settlements
• There are obvious economic incentives to settle:
because generic competition will be at a lower price,
both parties may make more money sharing the
innovator’s profits.
• If the patent holder settles a patent case against the first
ANDA applicant to challenge a patent, and the
agreement permits eventual market entry near patent
expiration,180-day exclusivity may prevent all other
ANDA applicants from coming to the market until patent
expiration.
 Donald O. Beers
Arnold & Porter LLP
202-942-5012
donald_beers@aporter.com
The Antitrust Challenge to Patent
Settlements

Marc G. Schildkraut
Heller Erhman LLP
The Reasons That Courts Have Been
Rejecting Patent Settlements
The Big Reasons

• Court want to encourage settlements

• Courts do not believe that litigants must act in the

public interest when settling litigation

• Accepting the theory of the challengers would

require rejection of settlements where damages
were compromised

• Risk aversion: insurance against catastrophic results

More Reasons
• Difficult to reconcile condemnation of reverse
payments with the right of patent holders to exclude

• Cannot be reconciled with the Guidelines on

Intellectual Property, which permits patent holders to
exclude if it is more likely than not that the patent is
valid and infringed

• Focuses on intent evidence rather than effect

evidence

• Ignores the reduction in output that might be caused

by generic entry
The Growing Role of the Supreme Court in
Patent Cases
Moderator:
John F. Duffy, George Washington University Law School

Panel:
Barbara A. Caulfield, Affymetrix
Mark A. Lemley, Stanford Law School
The Return of the Supreme Court to the
Bar of Patents

John F. Duffy
George Washington University Law School
 0
2
4
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16
18
Feb 1810
Feb 1818
Feb 1825
Jan 1832
Jan 1839
Jan 1846
Dec 1852
Dec 1859
Dec 1866
Oct 1873
Oct 1880
Oct 1887
Oct 1894
Oct 1901
Oct 1908
Oct 1915
Oct 1922
Oct 1929
Oct 1936
Oct 1943
Oct 1950
Oct 1957
Oct 1964
Oct 1971
S.Ct. Patent Cases: Five Term Running Average (1810-Current)

Oct 1978
Oct 1985
Oct 1992
Oct 1999
Oct 2006
Three Periods in the Supreme Court’s
Patent Jurisprudence

1. Before 1891: S.Ct. is the appellate patent court –

mandatory appellate jurisdiction from trials in all patent
cases.

2. 1891-1982: Certiorari power over regional circuits.

3. After 1982: Certiorari over the CAFC.

O
ct
1

0
0.5
1
1.5
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2.5
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O 00
ct 0
2
S.Ct. Patent Cases: Five Term Running Average (1952-Current)

O 00
ct 3
20
06
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ct
1

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0.5
1
1.5
2
2.5
3
3.5
O 95
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ct 1
1
O 96
ct 4
1
O 96
ct 7
1
O 97
ct 0
1
O 97
ct 3
1
O 97
ct 6
1
O 97
ct 9
1
O 98
ct 2
1
O 98
ct 5
1
O 98
ct 8
1
O 99
ct 1
1
O 99
ct 4
1
O 99
ct 7
2
S.Ct. Patent Cases: Ten Year Running Average (1952-Current)

O 00
ct 0
2
O 00
ct 3
20
06
October 2006 Term: Patent Cases
Granted Certiorari
1. MedImmune v. Genentech – Licensor Estoppel &
Declaratory Judgment Act

2. KSR v. Teleflex – Nonobviousness

October 2006 Term: Patent Cases
Pending on “CVSG”
1. Microsoft v. AT&T – Section 271(f) / International
Infringement

2. Apotex v. Pfizer – Declaratory Judgment Act

Note: Increasingly, the Court is asking the Solicitor

General for an opinion at the certiorari stage (Calling
for the Views of the Solicitor General – CVSG).
 CVSG's in Federal Cases vs. Patent Cases
2000-2005 Terms

Patent
CVSG's:
17 cases
(20%)

Non-patent
CVSG's:
68 cases
(80%)
 CVSG's in Federal Cases vs. CAFC "Core" Patent Cases
2000-2005 Terms

CAFC Patent
CVSG's:
15 cases
(18%)

Non-patent
CVSG's:
70 cases
(82%)
 CVSG's in Federal Cases vs. Patent Cases
1994-1999 Terms

Patent
CVSG's:
1 case (1.7%)

Non-patent
CVSG's:
57 cases
(98.3%)
 CVSGs
19

0
5
10
15
20
25
94
19
95
19
96
19
97
19
98
19
99
20
00

Term
20
01
20
CVSGs per Term (all cases)

02
20
03
20
04
20
05
 CVSGs

0
1
2
3
4
5
6
199
9

200
0

200
1

200
2

Term
Patent CVSGs Per Term

200
3

200
4

200
5
The Growing Role of the Supreme Court in
Patent Cases
Moderator:
John F. Duffy, George Washington University Law School

Panel:
Barbara A. Caulfield, Affymetrix
Mark A. Lemley, Stanford Law School
Thank You