Earlier today the Office of the United States Trade Representative released its annual Special 301 Report on the adequacy and effectiveness of U.S. trading partners’ protection of intellectual property rights. The Report is an annual review of the global state of intellectual property rights (IPR) protection and enforcement, conducted by the Office of the United States Trade Representative (USTR) pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994). For 2010 the US Trade Representative reviewed 77 trading partners for this year’s Special 301 Report, and placed 41 countries on either the Priority Watch List, Watch List, or the Section 306 monitoring list.
“Intellectual property theft in overseas markets is an export killer for American businesses and a job killer for American workers here at home. USTR’s Special 301 report is important because it serves as the foundation for a year-round process used to secure meaningful reforms that bolsters our exports and supports American jobs in IPR-intensive industries,” said Ambassador Ron Kirk. “I am pleased that this year’s Special 301 Report will highlight several successes in the fight against intellectual property theft. The Czech Republic, Hungary, and Poland have taken significant steps to clamp down on piracy and counterfeiting and will be removed from the Watch List.”
Earlier today, in In re Ciprofloxacin Hydrochloride Antitrust Litigation, the United States Court of Appeals for the Second Circuit issued a ruling addressing whether so-called reverse payments, payments made under a negotiated settlement by a pharmaceutical patent owner to a would-be generic entrant in exchange for not entering the market, are a violation of U.S. Antitrust Law. The appeal came from a judgment of the United States District Court for the Eastern District of New York (Trager, J.) granting summary judgment for defendants, manufacturers of the antibiotic ciprofloxacin hydrochloride (“Cipro”) or generic bioequivalents of Cipro. In a per curiam decision the Second Circuit panel (Judges Newman, Pooler and Parker) affirmed, determining in accordance with Second Circuit precedent (see In re Tamoxifen Citrate Antitrust Litig.) that reverse payments stemming from a patent settlement do not violate U.S. Antitrust Laws.
The plaintiffs had argued that defendants had in fact violated Section 1 of the Sherman Act when they settled their dispute concerning the validity of Bayer’s Cipro patent by agreeing to a reverse exclusionary payment settlement. Bayer agreed to pay the generic challengers, and in exchange the generic firms conceded the validity of the Cipro patent. The Second Circuit panel affirmed the granting of summary judgment, finding themselves confined by the previous Second Circuit ruling in Tamoxifen. The panel did, however, make the extraordinary invitation to petition the Second Circuit for rehearing in banc, citing the exceptional importance of the antitrust implications, the fact that the primary authors of the Hatch-Waxman Act have stated reverse payments were never intended under the legislation and the fact that the Second Circuit in Tamoxifen simply got it wrong when they said that subsequent generic entrants could potentially obtain a 180 exclusive period even after the first would-be generic entrant had settled.
Last week Dow Jones & Company filed a lawsuit in the United States District Court for the Southern District of New York alleging that Briefing.com is misappropriating headlines and articles content. According to the complaint filed, Dow Jones Newswires is a family of electronically-delivered proprietary news services that provide paid subscribers with a constantly-updating feed of breaking news and financial and business information. The complaint goes on to explain that Briefing.com, without permission from Dow Jones and without compensating it, systematically copies verbatim or nearly verbatim substantial portions of Dow Jones’ copyrighted articles from the Newswire service and distributes them in competition with Dow Jones to Briefing.com subscribers and to other vendors. The complaint alleges that in some cases the republication and distribution occurs within a minute or two after the article is published by Dow Jones. In just one two-week period, Briefing.com copied a substantial portion of at least 100 articles and republished more than 70 headlines within three minutes of the initial publication on Dow Jones Newswires. Dow Jones alleges that this conduct violates Dow Jones’ copyrights and also amounts to “hot news” misappropriation.
In a decision handed down earlier today in Avid Identification Systems v. The Crystal Import Corporation, a bad acting President of a closely-held company managed to create potentially bad inequitable conduct law for the rest of us. Intent to deceive was admitted, if you can believe that, but as it turns out the prior art withheld, a prior sale, was not invalidating and would not have lead to an appropriate rejection by the Patent Office. Nevertheless, the prior sale of an earlier version of the invention in question was the closest prior art and the Federal Circuit, per Judge Prost, explained that materiality does not require that the the withheld prior art lead to a good rejection. So Judge Prost applied the Patent Office law relative to materiality as it existed prior to the 1992 revision of 37 CFR 1.56. In a feat of mental gymnastics, however, Judge Prost quoted the current Rule 56 to support her decision, muddying the waters even further in the area of inequitable conduct. Who would have thought muddying the inequitable conduct waters was even possible!
Almost two weeks ago, on Thursday, April 15, 2010, the Duke Institute for Genome Science & Policy issued a study that explained that it was their learned view that “exclusive licenses to gene patents… do more to block competition in the gene testing market than to spur the development of new technologies…” See Patents Block Competition, Slow Innovation in Gene Testing. In the news report published by Duke University, Robert Cook-Deegan, director of the IGSP Center for Genome Ethics, Law & Policy, is quoted saying that exclusive licenses, and presumably patents, are valuable for developing drugs and biologics that would not otherwise be developed without such protections. Cook-Deegan then laments the fact that patent protection is afforded to genes and explains that broad gene patent claims do such harm to innovation and do not help patients. I wonder if that includes the incredibly broad gene patents owned by Duke University?
The United States Court of Appeals for the Federal Circuit earlier today decided to take up important issues relating to inequitable conduct en banc, vacating the earlier panel decision in Therasence, Inc. v. Becton Dickinson and Co., which issued January 25, 2010. See en banc order.
The en banc appeal will be heard on the basis of the original filed briefs, additional briefing and oral argument, with the oral argument date and time to be determined. Appellees’ briefs are due within 20 days from today, and appellants’ en banc brief is due 45 days from today. The en banc response brief is due within 30 days of service of the appellants’ new en banc brief, and the reply brief within 10 days of service of the response brief. Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29. The Court officially invited the United States Patent and Trademark Office to participate and submit an amici brief.
Senator Patrick Leahy (D-VT), Chair of Judiciary Committee
Senate Judiciary Committee Chairman Patrick Leahy (D-VT) recently came to agreement with Committee Ranking Republican Jeff Sessions (R-AL) on changes to the Patent Reform Act of 2009 (S. 515), winning Senator Sessions’ support for passage and making it extremely likely that patent reform will happen this year, and likely very soon. An individual involved in the ongoing patent reform debate on Capitol Hill tells me that the Leahy-Sessions language would substitute for the Committee-passed language, and then be considered by the Senate as a whole. This is an important procedural step toward passing patent reform, and could mean that patent reform will be passed by the full Senate any day now. Leahy’s procedural move is called a “hot line”, in which Senate Majority Leader Harry Reid (D-NV) will ask all Senate offices for unanimous consent to proceed to the bill, substitute the new language, and consider it passed.
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