The Patents At Issue

Uship asserted infringement of two patents, U.S. Patent No. 5,831,220 and U.S. Patent No. 6,105,014, directed to systems and methods of processing packages for shipment. Only claim 1 of each patent was at issue on appeal. Claim 1 of the ‘220 patent is representative:

1. A method of mailing parcels and envelopes using an automated shipping machine, comprising the steps of:
receiving payment information from a customer;
receiving package type information identifying a parcel or envelope to be mailed;
weighing said parcel or envelope to be mailed;
receiving shipping information from said customer including at least a destination of said parcel or envelope to be mailed;
computing from said package type information, shipping information, and weight information, a delivery date and cost for delivery of said parcel or envelope to said destination via each delivery service option available to said customer;
receiving an indication of the delivery service option desired by the customer;
printing a shipping label including at least said destination printed thereon;
printing a shipping receipt for an amount including at least the cost of delivering said parcel or envelope to said destination via the delivery service chosen by said customer;
validating receipt of said parcel or envelope as the parcel or envelope for which said shipping label was printed; and
an attendant of said customer storing a validated parcel or envelope in a secure storage area until said parcel or envelope is subsequently picked up by a commercial delivery person.

The Claim Construction Issue

As summarized by the Federal Circuit:

The central issue in this appeal is whether the claimed “validating” step can be carried out only by an automated shipping machine, or whether a human being may perform this step.

 The Claim Language

The Federal Circuit rejected the Appellees’ argument “that the appearance of the phrase ‘using an automated shipping machine’ in the preamble raises a presumption that every step of the claimed method must be performed by a machine.” Rather, the court found that “[t]he plain meaning of ‘using an automated shipping machine’ does not clarify whether the machine must be used in one, several, or all of the steps.” Thus, the court considered intrinsic evidence.

The Specification

While the patents describe methods where the validating step is performed by a machine, they also disclose a “semi-attended” embodiment, where validation is performed by a retail clerk. Ass set forth in the ‘220 patent:

In this embodiment of the invention, information provided by the customer is used to generate an appropriate mailing label which is then applied to the parcel, package or envelope by the customer. The parcel, package or envelope with the label is then provided to a retail clerk who validates receipt of the package and provides an appropriate receipt to the customer. The retail clerk then places the package in an appropriate location for subsequent pick-up by a commercial carrier. The embodiment of FIGS. 20-22 thus differs from the previous embodiments in that it is semi-attended, i.e., a clerk is needed to take the parcel or envelope from the customer, to store the parcel or envelope in a secure storage area, and to validate receipt of the parcel or envelope.

The Federal Circuit found that the specification arguably supports Uship’s claim construction.

The Prosecution History

As noted above, the asserted prosecution history disclaimer arises from statements Uship made in response to a Restriction Requirement. As an initial matter, the Federal Circuit rejected Uship’s arguments that “prosecution disclaimer applies only when applicants attempt to overcome a claim rejection.” Instead, the court noted:

Our cases broadly state that an applicant’s statements to the PTO characterizing its invention may give rise to a prosecution disclaimer.

As characterized by the Federal Circuit, “the examiner required restriction of the method and apparatus claims based on a belief that the method claims could be carried out entirely by hand.” (As set forth in MPEP § 806.05(e) one ground for restricting method and apparatus claims is that the method can be performed with a materially different apparatus or by hand.)

According to the Federal Circuit, “Instead of arguing that the restriction was improper because the claims required that the machine perform at least one of the steps, the applicant stated that the claims ‘specifically recite in the preamble a method of mailing parcels . . . “using an automated shipping machine” rather than specifically reciting at each step that the step is performed by the automated shipping machine.’ Thus, the applicant explicitly represented that reciting ‘using an automated shipping machine’ in the preamble is equivalent to ‘specifically reciting’ that phrase at each step of the method.”

The court noted further:

The fact that the applicant may have given up more than was necessary does not render the disclaimer ambiguous. The analysis focuses on what the applicant said, not on whether the representation was necessary or persuasive.

The court also found relevant the fact that the argument “persuaded the examiner, who noted in the ensuing Office Action that the restriction requirement was overcome.” Thus the court concluded:

From this exchange, a competitor would reasonably conclude that the applicant clearly and unmistakably limited all of the method claim steps to performance by an automated shipping machine except where the claim itself expressly requires an attendant.

The court also explained the prosecution history disclaimer may trump embodiments disclosed in the specification:

 Even if the specification had disclosed an embodiment where a human performed the entirety of the validation step, prosecution disclaimer could result in that embodiment not being covered by the claims.

The court therefore affirmed the Court of Federal Claims’ claim construction and judgment of non-infringement.

Is Traversing A Restriction Requirement Worth The Risk?

When an application with 10 claims faces a 50-way restriction requirement, it is tempting to argue vigorously and pick apart the examiner’s theories as to why the claims are directed to patentably distinct subject matter. This case underscores some of the risks associated with such a strategy, but I also note that traversing a restriction requirement usually is an exercise in futility. Even when the claims plainly recite corresponding subject matter, examiners rarely withdraw restriction requirements. Thus, unless the applicant is prepared to pursue the issue in a petition, the safest and most cost-effective approach may be to respond without traverse, or traverse on the ground that examining the restricted claims together would not impose a significant burden on the examiner.

(Is “prosecution history disclaimer” the new term for “prosecution history estoppel”?)

AFCP 

The original After Final Consideration Pilot program was launched in March of 2012, and authorized “extra time” for examiners to consider responses filed after a final rejection. The goal of the program was to encourage consideration of after final responses that might otherwise have been refused entry under 37 CFR § 1.116 and MPEP § 714.12 – 714.13. The program was informal in that no special request was required to invoke the program. Rather, examiners were supposed to determine whether an after final response was appropriate for the program, and use their professional judgment to decide whether a given after final  response could be considered within the additional three hours provided. While most stakeholders supported the goals of the AFCP, many found it to be unevenly implemented.

AFCP 2.0

As explained on the USPTO’s AFCP 2.0 webpage, AFCP 2.0 is “[d]esigned to be more efficient and effective than the AFCP.” The new program is more formal in that five specific requirements must be satisfied to have an after final response considered under the program:

1. A transmittal form, such as form PTO/SB/434, that identifies the submission as an AFCP 2.0 submission and requests consideration under AFCP 2.0 must be filed with the response.
2. The response must include an amendment to at least one independent claim that does not broaden the scope of the independent claim in any aspect.
3. The response or transmittal must include a statement that the applicant is willing and available to participate in any interview initiated by the examiner concerning the response.
4. Any necessary fees due with the response (such as extension of time fees) must be paid. (No additional fee is required for the AFCP 2.0 program itself.)
5. All documents must be filed via the USPTO’s Electronic Filing System-Web (EFS-Web).

Practitioners also should know that “[o]nly one request for consideration under AFCP 2.0 may be filed in response to a given final Office Action,” and that “[r]eissue applications and reexamination proceedings are not eligible to participate.”

Processing Of Responses Under AFCP 2.0

The Federal Register Notice outlines a multi-step process for consideration of a response under AFCP 2.0:

First, “the examiner will review the submission to ensure that the transmittal form, amendment, interview statement, and any necessary fees are provided.” If not, the response will be considered in accordance with usual after final practice.

If the submission complies with the formal requirements, the examiner will perform “an initial review of the amendment . … [to] determine if additional search and/or consideration would be required to determine whether the amendment would distinguish over the prior art, and if such search and/or consideration would be possible within the time allotted to them under the AFCP 2.0 program.” If the examiner determines that more than the additional allotted time would be required, the response will be considered in accordance with usual after final practice, “e.g., by mailing an advisory action.”

If the examiner determines that any required search and/or consideration could be completed within the additional allotted time, “then the examiner will consider whether the amendment places the application in condition for allowance.”

If the examiner determines that the amendment places the application in condition for allowance, then the examiner will enter the amendment and mail a notice of allowance.

If the examiner determines that the amendment does not appear to place the application in condition for allowance, then the examiner will contact the applicant to schedule an interview to discuss the amendment. …. Following the interview, the examiner will proceed with an appropriate response to the submission after final rejection according to current practice.

If the applicant declines the interview, or is unable to schedule the interview within ten (10) calendar days from the date the examiner first contacts the applicant, then the examiner may proceed with an appropriate response to the submission after final rejection according to current practice.

Thus, even if the AFCP 2.0 program does not result in allowance, applicants participating in this program may be granted an after final interview that may help advance prosecution, even if an RCE still is required.

Examiner Credit

According to the USPTO’s AFCP 2.0 Guidelines, examiners will be given up to three hours of additional non-production time for plant and utility applications and up to one hour (plus interview time) of additional time for design applications. The following schedule provides the breakdown for utility and plant applications:

If the application is being allowed:

a. If an interview was conducted, up to 2 hours of non‐production time may be charged to the AFCP 2.0 consideration code and up to 1 hour of non‐production time may be charged to the AFCP 2.0 interview code.

b. If an interview was not conducted, up to 3 hours of non‐production time may be charged to the AFCP 2.0 consideration code.

If the application is not being allowed:

a.The examiner must request an interview with the applicant. If an interview is conducted, up to 2 hours of non‐production time may be charged to the AFCP 2.0 consideration code and up to 1 hour of non‐production time may be charged to the AFCP 2.0 interview code.

b. If the applicant declines the interview or the interview cannot be conducted within ten (10) calendar days from the date the examiner requests the interview, up to 3 hours of non‐production time may be charged to the AFCP 2.0 consideration code.

Will AFCP 2.0 Reduce RCE Filings?

As explained by the USPTO, requiring applicants to make a formal request for consideration under AFCP 2.0 will help focus the program on applications most likely to benefit from the program (assuming that applicants are selective when making such requests!) and permit better tracking and data collection under the program. Further, the specific process steps outlined in the Federal Register Notice lend more transparency and clarity to the program. It will be interesting to see what percentage of cases are given additional consideration under this program, and whether different trends are seen in different technologies or art units.

The Patents At Issue

The patents at issue are U. S. Patent No. 5,352,605 and RE39,247, relating to Monsanto’s Roundup Ready technology, including its Roundup Ready soybean seeds.

Roundup Ready soybean seeds are sold under a licensing agreement that “permits a grower to plant the purchased seeds in one (and only one) season.” In accordance with the agreement, the grower can consume the resulting crop or “sell it as a commodity (e.g., for consumption), usually to a grain elevator or agricultural processor,” but “may not save any of the harvested soybeans for replanting,” or “supply them to anyone else for that purpose.” Thus, if a grower wants to grow Roundup Ready soybean seeds in another season, he or she must purchase new seeds.

The Alleged Infringement

Bowman purchased Roundup Ready soybean seeds from Monsanto once, and planted and harvested them. He did not save and replant seeds from that harvest, but rather purchased seeds from a grain elevator (allegedly knowing that a substantial portion likely was  harvested from Roundup Ready soybean seeds), and planted, harvested, saved, and replanted and reharvested and resaved those seeds.

Monsanto alleged that this activity infringed its patents, while Bowman alleged that Monsanto’s patent rights were “exhausted” by the authorized sale of the harvested soybean seeds to the  grain elevator.

Patent Exhaustion

The Supreme Court summarized the doctrine of patent exhaustion as follows:

The doctrine of patent exhaustion limits a patentee’s right to control what others can do with an article embodying or containing an invention. Under the doctrine, “the initial authorized sale of a patented item terminates all patent rights to that item.” ….  And by “exhaust[ing] the [patentee’s] monopoly” in that item, the sale confers on the purchaser, or any subsequent owner, “the right to use [or] sell” the thing as he sees fit.

We have explained the basis for the doctrine as follows:

“[T]he purpose of the patent law is fulfilled with respect to any particular article when the patentee has received his reward . . . by the sale of the article”; once that “purpose is realized the patent law affords no basis for restraining the use and enjoyment of the thing sold.” …. Consistent with that rationale, the doctrine restricts a patentee’s rights only as to the “particular article” sold, …  it leaves untouched the patentee’s ability to prevent a buyer from making new copies of the patented item. …. That is because the patent holder has “received his reward” only for the actual article sold, and not for subsequent recreations of it.

The Court noted that “the ‘well settled’ principle ‘that the exhaustion doctrine does not extend to the right to “make” a new product” … decides this case against [Bowman.]

Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased from the grain elevator; so too he could consume the beans himself or feed them to his animals. …. But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission (either express or implied). …. Because Bowman thus reproduced Monsanto’s patented invention, the exhaustion doctrine does not protect him.

In a rare (at least in recent times) show of concern for the patent holder, the Court explained:

Were the matter otherwise, Monsanto’s patent would provide scant benefit. After inventing the Roundup Ready trait, Monsanto would, to be sure, “receiv[e] [its] reward” for the first seeds it sells. …. But in short order, other seed companies could reproduce the product and market it to growers, thus depriving Monsanto of its monopoly. And farmers themselves need only buy the seed once, whether from Monsanto, a competitor, or (as here) a grain elevator. The grower could multiply his initial purchase, and then multiply that new creation, ad infinitum—each time profiting from the patented seed without compensating its inventor. …. The exhaustion doctrine is limited to the “particular item” sold to avoid just such a mismatch between invention and reward.

The Court concludes:

In the case at hand, Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article. Patent exhaustion provides no haven for that conduct. We accordingly affirm the judgment of the Court of Appeals for the Federal Circuit.

Supreme Court Steers Clear Of Self-Replicating Technology

In reaching its decision, the Supreme Court rejected Bowman’s arguments that he was not liable for infringement because the seeds were “self-replicating.”

[W]e think that blame-the-bean defense tough to credit. Bowman was not a passive observer of his soybeans’ multiplication; or put another way, the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops. …. He purchased beans from a grain elevator anticipating that many would be Roundup Ready; applied a glyphosate-based herbicide in a way that culled any plants without the patented trait; and saved beans from the rest for the next season. He then planted those Roundup Ready beans at a chosen time; tended and treated them, including by exploiting their patented glyphosateresistance; and harvested many more seeds, which he either marketed or saved to begin the next cycle. In all this, the bean surely figured. But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto’s patented invention.

Thus, the Court expressly reserved for another day cases where a patented article’s “self-replication might occur outside the purchaser’s control,” or “might be a necessary but incidental step in using the item for another purpose.”

The Federal Circuit Decision

The en banc appeal was heard by Chief Judge Rader and Circuit Judges Newman, Lourie, Linn, Dyk, Prost, Moore, O’Malley, Reyna, and Wallach. The en banc decision is set forth in a one page per curium opinion:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101.

An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.

AFFIRMED.

The Federal Circuit Opinions

Judge Lourie wrote a concurring opinion that was joined by Judges Dyk, Prost, Reyna, and Wallach.

Chief Judge Rader wrote an opinion concurring-in-part and dissenting-in-part that was joined by Judges Linn, Moore and O’Malley with regard to its dissent, but only joined by Judge Moore with regard to its concurrence.

Judge Moore wrote an opinion dissenting-in-part that was joined by Chief Judge Rader and Judges Linn and O’Malley.

Judge Newman wrote a dissenting opinion.

Judges Linn and O’Malley jointly wrote a dissenting opinion.

Chief Judge Rader wrote an opinion with “Additional Expressions.”

In this article, I focus on Judge Lourie’s “majority” opinion and Chief Judge Rader’s “runners-up” opinion.

Patent-Eligibility Scorecard

As summarized by Judge Lourie, the patents relate to “computerized methods, computer-readable media, and systems that are useful for conducting financial transactions using a third party to settle obligations between a first and second party so as to mitigate ‘settlement risk,’” e.g., the risk that only one party will satisfy its obligations.

Briefly, the claimed process requires the supervisory institution to create shadow records for each party that mirror the parties’ real-world accounts held at their respective “exchange institutions.” At the start of each day, the supervisory institution updates its shadow records to reflect the value of the parties’ respective accounts. Transactions are then referred to the supervisory institution for settlement throughout the day, and the supervisory institution responds to each in sequence by adjusting the shadow records and permitting only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations. At the end of each day, the supervisory institution irrevocably instructs the exchange institutions to carry out the permitted transactions.

Judge Lourie also noted that “the parties have agreed that the recited shadow records and transactions require computer implementation.”

The CRM claims recite “[a] computer program product comprising a computer readable storage medium having computer readable program code embodied in the medium for use by a party to exchange an obligation between a first party and a second party, the computer program product comprising program code ….”

The system claims recite “[a] data processing system to enable the exchange of an obligation between parties, the system comprising: a data storage unit … and a computer, coupled to said data storage unit, that is configured to ….”

The following table shows how each judge came down on the patent-eligibility of each type of claim. (According to Judge Rader, Alice had conceded that the CRM claims would stand or fall with the method claims.)

Judge Lourie’s “Integrated Approach To § 101”

Judge Lourie’s 38-page decision offers the following framework for assessing the patent-eligibility of “a computer-implemented claim.”

The first question is whether the claimed invention fits within one of the four statutory classes set out in § 101. Assuming that condition is met, the analysis turns to the judicial exceptions to subject-matter eligibility.

A preliminary question in applying the exceptions to such claims is whether the claim raises § 101 abstractness concerns at all. Does the claim pose any risk of preempting an abstract idea? In most cases, the answer plainly will be no.

Where bona fide § 101 concerns arise …. it is important at the outset to identify and define whatever fundamental concept appears wrapped up in the claim so that the subsequent analytical steps can proceed on a consistent footing.

With the pertinent abstract idea identified, the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.

The requirement for substantive claim limitations beyond the mere recitation of a disembodied fundamental concept has “sometimes” been referred to as an “inventive concept.” …. An “inventive concept” in the § 101 context refers to a genuine human contribution to the claimed subject matter. …. [A]n “inventive concept” under § 101—in contrast to whatever fundamental concept is also represented in the claim—must be “a product of human ingenuity.” …. In addition, that human contribution must represent more than a trivial appendix to the underlying abstract idea.

Judge Lourie found no such substantive limitations in any of the claims at issue. Judge Lourie characterized the CRM claims as “merely method claims in the guise of a device,” and the system claims as ”a Trojan horse designed to enable abstract claims to slide through the screen of patent eligibility.” (!!!)

Chief Judge Rader’s Familiar Framework

Chief Judge Rader’s opinion presents a more familiar statement of § 101 jurisprudence:

As the Supreme Court has explained, the relevant inquiry under the exceptions is whether the claim covers merely an abstract idea, law of nature, or natural phenomenon; or whether the claim covers a particular application of an abstract idea, law of nature, or  natural phenomenon.

Responding to Judge Lourie’s analysis of the claims at issue, Chief Judge Rader emphasized:

The claims are key to this patent eligibility inquiry. A court must consider the asserted claim as a whole when assessing eligibility …. And, a court must consider the actual language of each claim. ….

Any claim can be stripped down, simplified, generalized, or paraphrased to remove all of its concrete limitations, until at its core, something that could be characterized as an abstract idea is revealed. Such an approach would “if carried to its extreme, make all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious.” … A court cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims.

According to Chief Judge Rader, instead of ignoring claim language, we should ask “whether a claim includes meaningful limitations restricting it to an application, rather than merely an abstract idea.” Chief Judge Rader offers a few guideposts to aid such an analysis:

• [A] claim is not meaningfully limited if it merely describes an abstract idea or simply adds “apply it.”
• Pre-emption is only a subject matter eligibility problem when a claim preempts all practical uses of an abstract idea.
• It is not the breadth or narrowness of an idea that is relevant, but whether the claim covers every practical application of that abstract idea.
• [E]ven if a claim does not wholly pre-empt an abstract idea, it still will not be limited meaningfully if it contains only insignificant or token pre- or post-solution activity—such as identifying a relevant audience, a category of use, field of use, or technological environment.
• [A] claim is not meaningfully limited if its purported limitations provide no real direction, cover all possible ways to achieve the provided result, or are overly-generalized.
• [A] claim is meaningfully limited if it requires a particular machine implementing a process or a particular transformation of matter.

Drawing on the Supreme Court’s 1981 decision in Diamond v. Diehr, Chief Judge Rader states:

A claim also will be limited meaningfully when, in addition to the abstract idea, the claim recites added limitations which are essential to the invention. In those instances, the added limitations do more than recite pre- or post-solution activity, they are central to the solution itself. And, in such circumstances, the abstract idea is not wholly pre-empted; it is only preempted when practiced in conjunction with the other necessary elements of the claimed invention.

With regard to “computer implemented claims,” Chief Judge Rader provides the following additional guidance:

[W]hile the mere reference to a general purpose computer will not save a method claim from being deemed too abstract to be patent eligible, the fact that a claim is limited by a tie to a computer is an important indication of patent eligibility. … The key to this inquiry is whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing something; if so, they likely will be patent eligible, unlike claims directed to nothing more than the idea of doing that thing on a computer. While no particular type of limitation is necessary, meaningful limitations may include the computer being part of the solution, being integral to the performance of the method, or containing an improvement in computer technology.

With regard to the claims at issue, Chief Judge Rader characterized the method claims as being directed to “the general and theoretical concept of using a neutral intermediary in exchange transactions to reduce risk that one party will not honor the deal, i.e., an escrow arrangement.” Considering the recited steps, Chief Judge Rader found:

[E]ach step individually recites merely a general step inherent within the concept of an escrow, using a third party intermediary in this fashion. While the claim certainly limits use of an escrow to the context of this particular field, that attempted limitation is not enough.

As noted above, this aspect of Chief Judge Rader’s opinion was joined only by Judge Moore.

Chief Judge Rader reached a different conclusion with regard to the system claims:

Here, the claim recites a machine and other steps to enable transactions. The claim begins with the machine acquiring data and ends with the machine exchanging financial instructions with other machines. The “abstract idea” present here is not disembodied at all, but is instead integrated into a system utilizing machines. In sum, the system claims are indistinguishable from those in Diehr. For these reasons, the system claims are not directed to patent ineligible subject matter.

This aspect of Chief Judge Rader’s opinion was joined by Judges Linn, Moore and O’Malley.

Can The Supreme Court Glue  § 101 Back Together?

In her opinion, Judge Moore offers this case up to the Supreme Court as an “opportunity for the Supreme Court to distinguish between claims that are and are not directed to patentable subject matter,” assuming that the Court will agree with her assessment that the system claims must satisfy § 101. Since I felt the same way about the method claims that the Court invalidated in Mayo Collaborative Services v. Prometheus Laboratories, Inc., I am less optimistic that the Supreme Court will resolve this issue an a way that will prevent the “free fall in the patent system” that concerns Judge Moore or restore the degree of predictability that Judge Newman believes is necessary for the proper functioning of the patent system to promote  innovation.

Reshuffling The Deck

In late 2009, when the USPTO focused its resources on reducing the backlog of unexamined applications, it delayed the examination of RCEs by moving them from the “Amended” docket to the “Special New Case” docket, which also includes continuation and divisional applications. Under that system, RCEs were docketed for examination in order of the RCE filing date, which placed them at the back of the line behind continuation and divisional applications, which are docketed for examination in order of their filings dates.

Now, RCEs will be docketed as of  the application filing date, not the RCE filing date, which should put them ahead of newer continuation and divisional applications.

Credit Where Credit Is Due

The USPTO also reduced the count value of RCEs in 2009, in an effort to promote compact prosecution and disincentivize RCEs. (Clearly that strategy backfired, as it disincentivized the examination of RCEs without reducing the filing of RCEs!)

Now, at least for the rest of the current fiscal year (e.g., through September 30, 2013), examiners will be able to earn two full counts for examining an RCE, putting them on par with other applications.

RCE or New Continuation Application?

With post-RCE examination delays extending to months or years, many applicants now consider filing a new continuation application instead of an RCE, because a continuation application may be examined sooner. (Indeed, several examiners have suggested such a strategy to my clients.) Even if the USPTO’s new efforts are successful in reducing the RCE backlog, applicants may continue to consider this strategy because of the USPTO’s new fee structure, which makes a second or subsequent RCE more costly than a new application. On the other hand, if an application has accrued patent term adjustment due to USPTO examination delays, or has an extensive record that would be difficult to recreate in a new continuation application, an applicant may decide to wait out the RCE delay.

Getting To The Root Of The RCE Problem

While I am hopeful that the USPTO’s RCE Outreach will lead to more substantive changes that get to the root of the RCE problem and reduce the need for RCEs, I appreciate the USPTO’s efforts in taking these interim steps to address the RCE problem.

The Patents At Issue

The patents at issue are four patents listed in the Orange Book for Allergan’s Combigan® product: U.S. Patent 7,642,258, U.S. Patent 7,320,976, U.S. Patent 7,323,463, and U.S. Patent 7,030,149.

The Federal Circuit identified claim 1 of the ’463 patent as representative of the claims that it held invalid:

1. A composition comprising about 0.2% timolol by weight and about 0.5% brimonidine by weight as the sole active agents, in a single composition.

Other claims recite methods of treating glaucoma or ocular hypertension by administering such a composition twice daily, or articles of manufacture comprising packaging material indicating that twice daily administration of the composition is useful for treating glaucoma or ocular hypertension.

The District Court Litigation

The district court litigation was brought under the Hatch-Waxman ANDA litigation framework, after the defendants filed Abbreviated New Drug Applications seeking approval to market generic version of Combigan®, with Paragraph IV certifications against the Allergan patents.

Before trial, the district court granted summary judgment of non-infringement of claims 1-3 of the ’149 patent, and the parties stipulated to infringement of the other asserted claims. Thus, the only issue before the district court was invalidity.

The Federal Circuit summarized the evidence of obviousness as follows:

• Both timolol and brimonidine were commercially available drugs used for opthamalic conditions at the time of the invention. Moreover, they were available in their claimed concentrations, contained the preservative BAK, and the commercially available form of brimonidine—Alphagan®—contained BAK in the claimed concentration.
• At the time of the invention, it was known that the serial administration of brimonidine and timolol reduced intraocular pressure greater than either timolol or brimonidine alone.
• DeSantis expressly provided a motivation to formulate fixed combinations of alpha2-agonists and beta blockers, including timolol, in order to increase patient compliance.

Nevertheless, the district court upheld the claims based on the following findings:

• [T]here would be no motivation to create the combination product because the FDA did not view patient compliance as a factor for approval.
• [T]he formulation arts are unpredictable.
• [T]here were some teachings in the prior art that taught away from the claimed invention.
• [T]here were secondary considerations that support the finding of nonobviousness including long-felt need and unexpected results.

The Federal Circuit Decision

For all but one of Allergan’s claims, the Federal Circuit rejected each of the findings that supported the district court’s non-obviousness determination, or found the finding insufficient to overcome the evidence supporting obviousness.

The Federal Circuit’s comments on FDA-related motivation are interesting.

FDA approval may be relevant to the obviousness inquiry …. [but] [t]here is no requirement in patent law that the person of ordinary skill be motivated to develop the claimed invention based on a rationale that forms the basis for FDA approval. Motivation to combine may be found in many different places and forms; it cannot be limited to those reasons the FDA sees fit to consider in approving drug applications.

The Federal Circuit’s comments on unexpected results are more troubling.

[The district] court found that there was increased efficacy of the drug and a reduction in side-effects. The court found that previous attempts to treat patients twice per day with brimonidine resulted in a loss of efficacy eight to nine hours post administration. This loss of efficacy is referred to as the “afternoon trough.” The court found that a twice per day dosage regimen of Combigan® unexpectedly did not suffer from the afternoon trough issue.

We agree with the court’s finding that this result was unexpected. However, we do not find that these unexpected results are sufficient to outweigh the other evidence of obviousness as to these formulation claims. While the unexpected benefits of twice a day dosing of the combination formula are relevant to Sandoz’s attack on the validity of the method claims, we do not find it similarly meaningful to our analysis of the formulation claims. There is extensive evidence in the prior art showing the concomitant administration of brimonidine and timolol multiple times per day, that the combination had benefits over the administration of either alone, and that there was a motivation to combine the two to achieve better patient compliance. …. Whether or not that combination also solved problems associated with the afternoon trough, we find the motivation to make the combination was real. Accordingly, we conclude that the claims of the ’463 patent are invalid as obvious.

I am troubled by the court’s conclusion that the claims are obvious despite the unexpected results, particularly because the court does not discredit the evidence of unexpected results or find that the results were not actually unexpected. I also am troubled by the line the court draws between composition claims and method claims, as other Federal Circuit jurisprudence plainly holds that unexpected results achieved when a composition is used in a particular method support non-obviousness of composition claims.

The Federal Circuit reached a different conclusion with regard to method claim 4 of the ’149 patent:

4. A method of reducing the number of daily topical ophthalmic doses of brimondine administered topically to an eye of a person in need thereof for the treatment of glaucoma or ocular hypertension from 3 to 2 times a day without loss of efficacy, wherein the concentration of brimonidine is 0.2% by weight, said method comprising administering said 0.2% brimonidine by weight and 0.5% timolol by weight in a single composition.

The Federal Circuit found no evidence that the claimed method would have been expected to achieve the recited result of twice daily dosing without loss of efficacy. To the contrary,

The record firmly establishes that when brimonidine is dosed twice per day as opposed to three times per day, there is a loss of efficacy in the afternoon—the so called, afternoon trough.

I am concerned with this caveat in the Federal Circuit opinion:

At the outset, we note that Sandoz does not argue that this efficacy limitation is inherent to fixed combination products containing timolol and brimonidine, nor that a dose reduction without loss of efficacy would inherently flow from the obvious fixed-combination of timolol and brimonidine.

*****

The evidence of record does not establish that the dose reduction “from 3 to 2 times a day without loss of efficacy” limitation is an inherent property or a necessary result of the administration of 0.2% brimonidine and 0.5% timolol in a single composition. Of course, it may be true that the mere administration of 0.2% brimonidine and 0.5% timolol twice daily in any fixed combination formulation inherently produces the claimed result. Alternatively, it may also be true that only certain fixed combination formulations produce this result. On the present record, we cannot draw a conclusion in favor of either proposition.

Does this rationale place claim 4 between a rock and a hard place? If the recited result is not inherent to the recited compositions, is the claim adequately described and enabled?

Judge Dyk’s Concurrence-In-Part And Dissent-In-Part

Judge Dyk concurred in the majority decision invalidating most of Allergan’s claims, but dissented from the decision upholding claim 4 of the ’149 patent.

While a new and nonobvious method of using an existing (or obvious) composition may itself be patentable … a newly-discovered result or property of an existing (or obvious) method of use is not patentable. …. In this case, the method of claim 4 consists of a single step: applying a fixed combination of 0.2% brimonidine and 0.5% timolol twice a day. …. Avoiding a “loss of efficacy” is not a separate step, but rather a result of the claimed method. … We should recognize in this case, as we did in Bristol-Myers Squibb [v. Ben Venue Labs (Fed. Cir. 2001)], that “[n]ewly discovered results of known processes directed to the same purpose are not patentable.”

Judge Dyk also criticized the line the majority’s discussion of “inherency.”

The majority appears not to dispute that claiming the result of an otherwise unpatentable process cannot render the process patentable, but suggests that this rule should not apply here because there may exist specific and 0.5% timolol that do not inherently achieve this result. … . Claim 4, however, is not limited to any particular formulation. ….The majority’s argument therefore only suggests that the claim would have been even more clearly obvious, since it would cover the use of compositions that do not even achieve the allegedly unexpected result. “Claims [that] are broad enough to read on obvious subject matter are unpatentable even though they also read on nonobvious subject matter.”

 Building A Wall Around An Invention

This case illustrates the potential value of pursuing a variety of claims that focus on different aspects of the same invention. Allergan asserted several claims from four different patents against the defendants. Although the Federal Circuit invalidated most of Allergan’s claims, it only takes one relevant claim to keep would-be competitors off the market. Here, because the claim 4 of the ’149 patent was upheld, the defendants will not be able to enter the market until that patent expires on April 19, 2022.

The Patent At Issue

The patent at issue was Biosig’s U.S. Patent 5,337,753, directed to a heart rate monitor associated with an exercise apparatus and/or exercise procedures. As set forth in the Federal Circuit decision, the claimed heart rate monitor is said to “eliminate[] signals given off by skeletal muscles (“electromyogram” or “EMG” signals), which are brought about when users move their arms or squeeze the monitor with their fingers.

Claim 1 recites:

1. A heart rate monitor for use by a user in association with exercise apparatus and/or exercise procedures, comprising[:]
an elongate member;
electronic circuitry including a difference amplifier having a first input terminal of a first polarity and a second input terminal of a second polarity opposite to said first polarity;
said elongate member comprising a first half and a second half;
a first live electrode and a first common electrode mounted on said first half in spaced relationship with each other;
a second live electrode and a second common electrode mounted on said second half in spaced relationship with each other;
said first and second common electrodes being connected to each other and to a point of common potential;
said first live electrode being connected to said first terminal of said difference amplifier and said second live electrode being connected to said second terminal of said difference amplifier;
a display device disposed on said elongate member;
wherein, said elongate member is held by said user with one hand of the user on said first half contacting said first live electrode and said first common electrode, and with the other hand of the user on said second half contacting said second live electrode and said second common electrode;
whereby, a first electromyogram signal will be detected between said first live electrode and said first common electrode, and a second electromyogram signal, of substantially equal magnitude and phase to said first electromyogram signal will be detected between said second live electrode and said second common electrode;
so that, when said first electromyogram signal is applied to said first terminal and said second electromyogram signal is applied to said second terminal, the first and second electromyogram signals will be subtracted from each other to produce a substantially zero electromyogram signal at the output of said difference amplifier;
and whereby a first electrocardiograph signal will be detected between said first live electrode and said first common electrode and a second electrocardiograph signal, of substantially equal magnitude but of opposite phase to said first electrocardiograph signal will be detected between said second live electrode and said second common electrode;
so that, when said first electrocardiograph signal is applied to said first terminal and said second electrocardiograph signal is applied to said second terminal, the first and second electrocardiograph signals will be added to each other to produce a non-zero electrocardiograph signal at the output of said difference amplifier;
means for measuring time intervals between heart pulses on detected electrocardiograph signal;
means for calculating the heart rate of said user using said measure time intervals;
said means for calculating being connected to said display device;
whereby, the heart rate of said user is displayed on said display device.

The alleged indefiniteness relates to the physical configuration of the electrodes, as reflected in the “spaced relationship” claim language.

The District Court’s Indefiniteness Determination

As summarized by the Federal Circuit, the district court construed the term “spaced relationship” to mean that “there is a defined relationship between the live electrode and the common electrode on one side of the cylindrical bar and the same or a different defined relationship between the live electrode and the common electrode on the other side of the cylindrical bar.”

As the Federal Circuit noted:

 Notwithstanding that this disputed term was amenable to construction, the district court determined that the term was indefinite. Specifically, the district court stated that “a spaced relationship did not tell me or anyone what precisely the space should be . . . . Not even any parameters as to what the space should be . . . . Nor whether the spaced relationship on the left side should be the same as the spaced relationship on the right side.”

Thus, the district court found that the claims were invalid as indefinite under 35 USC § 112, second paragraph.

The Federal Circuit Decision

The Federal Circuit decision notes that indefiniteness is an issue of law that it “reviews without deference.” The court stated the legal standard as follows:

A claim is indefinite only when it is “not amenable to construction” or “insolubly ambiguous.”

The court also noted that “[g]eneral principles of claim construction apply when determining indefiniteness.” Thus, when evaluating a claim for indefiniteness, the court primarily considers “the claim language, the specification, and the prosecution history,” and also “may consider certain extrinsic evidence.” The court explained further:

When a “word of degree” is used, the court must determine whether the patent provides “some standard for measuring that degree.” …. Similarly, when a claim limitation is defined in “purely functional terms,” a determination of whether the limitation is sufficiently definite is “highly dependent on context (e.g., the disclosure in the specification and the knowledge of a person of ordinary skill in the relevant art . . . ).”
*****
[W]e have not insisted that claims be plain on their face in order to avoid a determination of invalidity for indefiniteness.” …. In addition, “[p]rovided that the claims are enabled, and no undue experimentation is required, the fact that some experimentation may be necessary to determine the scope of the claims does not render the claims indefinite.” …. Therefore, objections relating to the mere fact that there may be some need for experimentation to determine the scope of the claims carry little weight.

Turning to the case at hand, the Federal Circuit noted that “the district court is correct that the specification of the ’753 patent does not specifically define ‘spaced relationship’ with actual parameters, e.g., that the space between the live and common electrodes is one inch.” Nevertheless, the Federal Circuit found the “claim language, specification, and … figures” of the ‘753 patent to “provide sufficient clarity to skilled artisans as to the bounds of this disputed term.”

In particular, the Federal Circuit noted:

[O]n the one hand, the distance between the live electrode and the common electrode cannot be greater than the width of a user’s hands because claim 1 requires the live and common electrodes to independently detect electrical signals at two distinct points of a hand. On the other hand, it is not feasible that the distance between the live and common electrodes be infinitesimally small, effectively merging the live and common electrodes into a single electrode with one detection point.

Thus, the Federal Circuit determined that “the ’753 patent discloses certain inherent parameters of the claimed apparatus, which to a skilled artisan may be sufficient to understand the metes and bounds of ‘spaced relationship.’” The court also found guidance in the reexamination prosecution history and extrinsic evidence that supported the definiteness of claims.

The court concluded:

[T]he record shows that the variables here, including the spacing, size, shape, and material affecting the “spaced relationship” between the electrodes, can be determined by those skilled in the art. Thus, “spaced relationship” cannot be said to be insolubly ambiguous.

The Federal Circuit therefore reversed the district court’s invalidity judgment and remanded for further proceedings.

European Patents

Most entities secure patent protection in European countries by obtaining a patent from the European Patent Office (EPO) and then validating that EP patent in specific countries of interest. The prosecution and grant of EP patents is governed by the European Patent Convention (EPC), which specifically provides for the patenting of biotechnological inventions. As explained in the EPO brochure, “Patents on life?”

[A] gene which existed in an organism before but was “hidden” from the public in the sense of having no recognized existence, can be patented when it is isolated from this organism or when it is produced by means of a technical process and all other requirements of patentability are fulfilled.

This means that

[A]n invention related to gene sequences can be patented as long as the industrial application [e.g., usefulness] of the sequence is disclosed in the application.

Thus, genes, proteins, enzymes, antibodies, viruses, cells, microorganisms, plants and animals generally can be patented in Europe. On the other hand, DNA sequences without a known function, genetically modified animals which suffer but are not associated with a substantial medical benefit, plant varieties, animal varieties, human embryos and processes which involve the use and destruction thereof, human germ cells and human-animal chimeras cannot be patented.

The French and German Exceptions

France and Germany do have restrictions on patenting human genes, but these restrictions apply only to national patents (e.g., patents obtained directly in France or Germany), not to EP patents that are validated in France or Germany.

France prohibits patents to human genes, in article L611-18 of the Code de la propriété intellectuelle:

Le corps humain, aux différents stades de sa constitution et de son développement, ainsi que la simple découverte d’un de ses éléments, y compris la séquence totale ou partielle d’un gène, ne peuvent constituer des inventions brevetables.

On the other hand, the same article expressly provides for patents on specific uses of genes

Seule une invention constituant l’application technique d’une fonction d’un élément du corps humain peut être protégée par brevet. Cette protection ne couvre l’élément du corps humain que dans la mesure nécessaire à la réalisation et à l’exploitation de cette application particulière. Celle-ci doit être concrètement et précisément exposée dans la demande de brevet.

The legality of these restrictions does not appear to have been tested, and some believe that they may be invalid because they conflict with European law. See, e.g.,  Gold and Carbone, “Myriad Genetics: In the Eye of the Policy Storm,” Appendix B (Detailed Legal Analysis of Gene Patents, Competition Law and Privacy Law) (The Innovation Partnership).

Germany expressly provides for the patenting of “isolated” human genes, but requires a “use” restriction in the claims.

Section 1a of the German Patent Act provides in paragraph (2):

An element isolated from the human body … including the sequence or partial sequence of a gene, may constitute a patentable invention even if the structure of that element is identical to that of a natural element.

Under paragraph (3), such sequences only can be patented if the application describes “the function fulfilled by the sequence.” This requirement is similar to the EPC “industrial applicability” requirement and the U.S “utility” requirement.

On the other hand, paragraph (4) states:

Where the subject matter of an invention is a sequence or a partial sequence of a gene, the structure of which is identical to the structure of a natural sequence or partial sequence of a human gene, the use thereof … shall have to be included in the patent claims.

Notably, even the French and German restrictions are limited to human genes. While the Myriad patents relate to human gene sequences, because the Supreme Court is analyzing patent-eligibility under the “product of nature” exception to § 101, its decision is not likely to draw a distinction between human genes and genes from other organisms.

Australia, Canada, and Japan

Australia, Canada, and Japan also permit the patenting of human genes, under circumstances similar to the EPC. That is, the genes must be “isolated” and the patent application must teach how the genes are useful or have “industrial applicability.” Further, these countries (and the EPO) grant patents on genetic tests, which the Supreme Court made more difficult to patent in the U.S. by its decision in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, which held that the discovery of a correlation between a physical parameter (e.g., blood metabolite levels) and a medical condition (e.g., a need for an increased or decreased dose of a drug) is not patent-eligible because it relates to a natural phenomenon.

The U.S. Will Stand Alone

As the foregoing review shows, if the Supreme Court decides that even “isolated” forms of naturally occurring DNA sequences cannot be patented under 35 USC § 101, the U.S. will stand alone among countries such as Australia, Canada, Europe, and Japan. The U.S. already stands apart with the difficult decision in Prometheus v. Mayo. It is disappointing to see the Supreme Court take U.S. patent law down a path that restricts the types of inventions that can be patented regardless of how novel, non-obvious and useful they are.

The Patent At Issue

The patent at issue was Bayer’s RE37,564, which was a reissue of U.S. Patent 5,824,667, and covers Bayer’s Yaz® product.

As summarized by the Federal Circuit, Yaz® was different from available combined oral contraceptive (COC) products in that it included a lower dose of ethinylestradiol (EE) and the synthetic progestin drospirenone (DRSP), and a shorter pill-free interval of 24 days, which reduced the risk of “escape ovulation” and unintended pregnancy associated with the lower dose of EE. As described in the Federal Circuit opinion, Bayer’s YAZ® birth control bill product “includes four placebo pills and twenty-four active pills each containing 20 μg EE and 3 mg DRSP.”

The district court found that claims 13 and 15 were not obvious.

13. A combination product for oral contraception, comprising
(a) 23 or 24 daily dosage units, each containing 0.020 mg of ethinylestradiol, and 2.5 to 3.0 mg of drospirenone, and
(b) 5 or 4, respectively, active ingredient-free placebo pills or other indications to show that the daily administration of the 23 or 24 dosage units, respectively, is to be followed by 5 or 4, respectively, pill-free or placebo pill days, wherein each of the dosage units containing drospirenone contains the same amount of drospirenone.

15. A combination preparation of claim 13, which comprises 24 dosage units and 4 placebo pills or other indications to show that no dosage unit or placebo pill is administered during the last 4 days of the menstrual cycle.

The District Court ANDA Litigation

The defendants (Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., Sandoz, Inc., Lupin Ltd., and Lupin Pharmaceuticals, Inc.) filed Abbreviated New Drug Applications (ANDAs), seeking approval to market generic versions of YAZ®, and making Paragraph IV certifications against the ’564 patent, under 21 USC § 355(j)(2)(A)(vii)(IV). Bayer brought suit under the ANDA litigation framework, asserting patent infringement under 35 USC § 271(e)(2).

All parties moved for summary judgment on the issue of obviousness, and the district court granted summary judgment in favor of Bayer. The defendants appealed.

The Federal Circuit Decision

The defendants had cited six prior art references alleged to render the claims obvious:

• Australian Patent Application 55094/90 (November 22, 1990)
• European Patent Application Publication 0 253 607 (April 29, 1992)
• B.G. Molloy et al., “Missed Pill” conception: fact or fiction?, 290 Brit. Med. J. 1474 (1985)
• John Guillebaud, The forgotten pill—and the paramount importance of the pill-free week, 12 Brit. J. Fam. Plan. 35 (1987)
• B-M. Landgren & E. Diczfalusy, Hormonal Consequences of Missing the Pill During the First Two Days of Three Consecutive Artificial Cycles, 29 Contraception 437 (1984) (“Landgren”)
• N.D. Goldstuck et al., Use and misuse of oral contraceptives by adolescents attending a free-standing clinic, 3 Advances in Contraception 335 (1987)

The Federal Circuit summarized the obviousness arguments as follows:

[T]he Defendants argue that AU’094 discloses a COC combining 20–40 μg EE and 1–10 mg DRSP per active pill—dosage ranges that encompass those recited in claims 13 and 15 of the ’564 patent. The Defendants further contend that EP’607, Molloy, Guillebaud, Landgren, and Goldstuck each disclose 23/5 and/or 24/4 dosing regimens and that those references provided motivation to combine such regimens with the low-dose COCs disclosed in AU’094 by identifying the problem of missed-pill conceptions and suggesting a shortened pill-free interval as a solution.

The Federal Circuit discussed Bayer’s three main arguments:

• Bayer argues that AU’094 and EP’607 were directed to narrow subpopulations of patients primarily in need of hormone-replacement therapy, so those references would not have been combined by a person of ordinary skill seeking to develop a COC in 1993.
• [T]he prior art as a whole taught away from the claimed COC preparations at that time in view of the entrenched use of traditional 21/7 dosing and the perceived risks from increasing total synthetic hormone administration by shortening the pill free interval.
• The district court correctly relied on evidence of unexpected results, expert skepticism, industry praise, and copying as secondary indicia of nonobviousness.

The Federal Circuit agreed with the defendants:

In this case, the cited prior art references set forth every limitation required by the asserted claims and provide express motivation to combine those teachings to derive the claimed COC products. Accordingly, the asserted claims are invalid under § 103.

In particular, the Federal Circuit found, “AU’094 discloses COC preparations that encompass the claimed doses of EE and DRSP, and EP’607 discloses similar COCs, also comprising the claimed dose of EE, administered via the claimed 24/4 and 23/5 regimens.” Further, the court found that the secondary references both recognized the problem of missed-pill conception and proposed the claimed solution (the 24/4 dosing regimen).

The Federal Circuit considered and rejected Bayer’s arguments:

• With regard to the subject matter of AU’094 and EP’607, the Federal Circuit stated, “those references plainly disclose preparations with hormone replacement and contraceptive applications,” and also noted that “the product claims at issue do not distinguish between target patient populations, whether by age or otherwise.”
• With regard to the alleged “teaching away,” the Federal Circuit found that the cited passage regarding “conventional wisdom” favoring a 21/7 dosing regimen did not overcome other express teachings of the cited references.
• The Federal Circuit also determined that “Bayer’s evidence of secondary indicia of nonobviousness … is legally insufficient:”
  • With regard to Bayer’s data “showing that 23/5 administration results in reduced follicular activity compared to 21/7 dosing of the same COC formulation,” the court found that those results “merely confirm that administering additional active pills results in additional follicular suppression,” which was not unexpected, but rather “would have been a matter of ‘common sense.”
  • With regard to expert skepticism, the court found that the fact that the FDA had asked for “clinical safety data and data demonstrating efficacy benefits sufficient to justify the added synthetic hormone exposure required for the proposed 24/4 dosing regimen …  in no way indicates that FDA experts would have been surprised to receive such data.” Instead, the court found that the FDA request was in line with its “normal duties.”
  • With regard to Bayer’s evidence that the invention “was widely praised by experts in the COC field,” the court found that many cited journal articles simply referred to Bayer’s findings, and others were authored by one of the inventors. As summarized by the court, “Such bare journal citations and self referential commendation fall well short of demonstrating true industry praise.” Moreover, the Federal Circuit stated that “industry praise of what was clearly rendered obvious by published references is not a persuasive secondary consideration.”
  • The Federal Circuit seemed to reject  Bayer’s evidence of copying as a matter of law:

Such evidence of copying [by generic manufacturers] in the ANDA context is not probative of nonobviousness because a showing of bioequivalence is required for FDA approval.

The Federal Circuit therefore determined that claims 13 and 15 “are invalid for obviousness,” and thus reversed the judgment of the district court.

Did Bayer’s Patent Serve Its Purpose?

While Bayer no doubt would have preferred that the Federal Circuit had upheld its patent, the patent did keep generic competitors off the market for more than 5 years. The FDA approved YAZ® for marketing on March 16, 2006. From the Federal Circuit decision, it appears that Watson was the first ANDA filer in 2007. Further, the twenty-year term of the patent was set to expire June 30, 2014. Thus, Bayer benefited from all but the last 14 months of the original patent term.

The Patent at Issue

The patent at issue is Biogen’s U.S. Patent 7,682,612, directed to “Treatment of Hematologic Malignancies Associated with Circulating Tumor Cells using Chimeric Anti-CD20 Antibody.” Claim 1 recites:

1. A method of treating chronic lymphocytic leukemia in a human patient, comprising administering an anti-CD20 antibody to the patient in an amount effective to treat the chronic lymphocytic leukemia, wherein the method does not include treatment with a radiolabeled anti-CD20 antibody.

Chronic lymphocytic leukemia (CLL) is marked by overproduction of malignant B-cells. The anti-CD20 antibody binds to CD20, a protein on the surface of B-cells, targeting the cells for destruction. The specification describes Biogen’s product Rituxan® (rituximab) as a preferred embodiment. Rituximab binds to a large loop of the CD20 protein that is exposed on the cell surface. This loop constitutes the particular “epitope” recognized by the rituximab antibody.

The District Court Proceedings

Biogen sued GSK for infringement of the ‘612 patent by GSK’s anti-CD20 antibody Arzerra® (ofatumumab). Arzerra® binds to a smaller  loop of the CD20 protein than rituximab. (At the time the ‘612 patent application was filed, it was believed that the loop (epitope) recognized by Arzerra® was hidden inside the cell, and thus unavailable for binding by antibodies.) Arzerra® binds to CD20 with higher affinity than Rituxan®, making it more effective in destroying B cells.

One of the claim construction issues decided by the district court was whether the “anti-CD20 antibody” recited in the claims encompasses antibodies that bind to any CD20 epitope, or only antibodies that bind to the epitope bound by rituximab.  The court adopted the narrow construction based on prosecution history disclaimer. In particular, the court determined that Biogen had limited the scope of the claims by arguments presented to overcome an enablement rejection. Because GSK’s antibody binds to a different epitope than rituximab, the district court found that there was no infringement.

The Enablement Rejection

The USPTO Examiner made the following enablement rejection:

Claims 1 and 12 are broadly drawn to ‘. . . an anti-CD20 antibody or fragment thereof’. This is broadly interpreted for examination purposes to be any and all anti-CD20 antibodies, no matter the specificity or affinity for the specific epitope on the circulating tumor cells. While the specification is enabling for the application of RITUXAN®, RITUXIMAB® and 2B8-MX-DTPA in the treatment of hematologic malignancies, the specification is not enabling in the application of all other anti-CD20 antibodies, which may have different structural and functional properties.

(February 29, 2000 Non-Final Rejection, page 6.)

In response, the applicants argued:

Applicants respectfully submit that even though antibodies directed to the same antigen might have different affinities and functional characteristics, one of skill in the art could readily identify an antibody that binds to CD20 with similar affinity and specificity as does RITUXAN® using techniques that are well known in the art. . . . With that knowledge in hand, the skilled artisan could readily produce anti-CD20 antibodies using similar techniques, and screen such antibodies for those having an affinity and functional activity similar to Rituxan®.

(August 29, 2000 Reply, pages 8-9.)

The USPTO Examiner accepted these arguments and withdrew the enablement rejection.

The Federal Circuit Decision

Judge Reyna authored the Federal Circuit decision, which was joined by Judge Dyk. Judge Plager dissented, as discussed below.

The Federal Circuit agreed with the district court’s finding of prosecution history disclaimer.  In discussing this doctrine, the Federal Circuit  noted that “a ‘clear and unmistakable’ disavowal during prosecution overcomes the ‘heavy presumption’ that claim terms carry their full ordinary and customary meaning,” quoting from its 2003 decision in Omega Engineering, Inc. v. Raytek Corp.

[W]hen the patentee unequivocally and unambiguously disavows a certain meaning to obtain a patent, the doctrine of prosecution history disclaimer narrows the meaning of the claim consistent with the scope of the claim surrendered.

The Federal Circuit framed the issue as follows:

This case requires us to analyze how the PTO and the inventors understood the disputed term, “anti-CD20 antibody,” in the ’612 patent to determine if the inventors disclaimed claim scope during prosecution of that patent. Biogen maintains that all the evidence—including the claims, the specification, and statements made by all parties recorded in the prosecution history—indicates that the term was used according to its plain and ordinary meaning, “an antibody that binds to a cell surface CD20 antigen.” ….  The question becomes whether statements in the prosecution history are sufficient to overcome the “heavy presumption” that the term carries its full ordinary and customary meaning advanced by Biogen.

The Federal Circuit inferred the USPTO Examiner’s understanding of the claim term from the enablement rejection:

During prosecution of the ’612 patent, the examiner rejected all pending claims because the specification did not enable a person skilled in the art to practice the full scope of the claims, which could have encompassed “any and all anti-CD20 antibodies, no matter the specificity or affinity for the specific epitope on the circulating tumor cells.” …. Instead, according to the examiner, the specification only enabled Rituxan®, rituximab, and 2B8-MX-DTPA.4 It was not enabling for other antiCD20 antibodies, which had different structural and functional properties.

(Doesn’t this rejection indicate that the USPTO Examiner had interpreted the claims broadly?)

The Federal Circuit found that disclaimer arose from the applicants’ response:

In response, rather than challenging the examiner’s understanding of the crucial terms, the applicants argued that the specification was enabling for anti-CD20 antibodies with similar affinity and specificity as Rituxan®.

The court interpreted the applicants’ arguments as “conced[ing] that other ‘antibodies directed to the same antigen [i.e., CD20] might have different affinities and functional characteristics,’” and “limit[ing] their claims to antibodies similar to Rituxan® nonetheless.”

[I]t is clear that they were limiting their invention to what the examiner believed they enabled: antibodies that have a similar specificity and affinity for the specific epitope to which Rituxan® binds.

(But the Examiner allowed the claims with the language he had interpreted broadly … )

Biogen argued that the fact that dependent claims are specifically directed to rituximab supports a broader construction of the independent claim, but the court rejected this argument, stating that prosecution history disclaimer can overcome any presumption arising from claim differentiation.

The Federal Circuit therefore upheld the district court’s claim construction and finding of non-infringement.

Judge Plager’s Dissent

Judge Plager dissented, because he found no “clear and unmistakable evidence of disclaimer.” Judge Plager criticized the majority for “teas[ing] out” disclaimer from the prosecution history, and for keying disclaimer to statements made by the USPTO Examiner, not the applicants:

Applicants’ statements—when considered in light of either the range of antibodies included in the claim, or the specific epitope to which the antibodies might attach—fail to meet the “clear and unmistakable” standard set forth in our case law. This is especially true given our case law that it is the applicant, not the examiner, who disclaims claim scope. …. It was the examiner, not the applicants, who invoked the concept of epitopes. …  But it is the applicant, not the examiner, who must give up or disclaim subject matter that would otherwise fall within the scope of the claims, and an applicant’s silence regarding statements made by the examiner during prosecution cannot amount to a clear and unmistakable disavowal of claim scope.

Judge Plager emphasized that the applicants’ response did not refer to a particular epitope, but simply stated that “one of skill in the art could readily identify an antibody that binds to CD20 with similar specificity and affinity.” Judge Plager noted that when an argument is subject to more than one reasonable interpretation, it cannot rise to the level of a clear and unmistakable disclaimer.

A Miranda Warning? 

The decision here brings to mind the Miranda warning: anything you say during prosecution can and will be used against you during a claim construction proceeding.