Before I finally waded through the 135-page monstrosity called the en banc decision in CLS Bank International v. Alice Corp. (seven opinions, one a brief per curiam opinion, and six full opinions, including Chief Judge Rader at the end “waxing lyrically” about the “good old days” when he first joined the Federal Circuit), out came last Friday the remand decision in Ultramercial, LLC v. Hulu, LLC (Ultramercial II). I’ve already observed that Rader had “thrown down the gauntlet” at his Federal Circuit colleagues in Ultramercial I by stating that “breadth and lack of specificity does not render the claimed subject matter impermissibly abstract.” See Throwing Down the Gauntlet: Rader Rules in Utramercial that Breadth and Lack Specificity Does Not Make Claimed Method Impermissibly Abstract*. In Ultramercial II, Rader (again joined by Judge O’Malley but not completely by Judge Lourie) has squarely “thrown down the gauntlet” again, now before the Supreme Court to either clarify their “fuzzy” Bilski ruling, or “get out of the way” and let the Federal Circuit do the job it was created by Congress to do in 1982, namely be the primary arbiter of patent law jurisprudence, including patent eligibility under 35 U.S.C. § 101.
In Ultramercial I and II, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent, Inc. (“WildTangent”). The ‘545 patent relates to a method for distributing copyrighted products (e.g., songs, movies, books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content. WildTangent’s motion to dismiss for failure to state a claim was granted by the district court based on the claimed method being patent-ineligible under 35 U.S.C. § 101. (Hulu and YouTube were dismissed from the case apparently for other reasons.)
Chief Justice Roberts and Justice Kagan, August 7, 2010. Justice Kagan delivered the opinion for a unanimous Court in Monsanto v. Bowman.
In the case of Bowman v. Monsanto Co., Farmer Bowman may have believed that the “third time” would be “charm.” In two prior cases, Monsanto Co. v. Scruggs and Monsanto Co. v. McFarling, the Federal Circuit had ruled in favor of Monsanto, the owner of the patented Roundup Ready® soybeans, and against Farmer Scruggs and Farmer McFarling. Even so, Farmer Bowman, as probably did his legal counsel, may have believed that the Supreme Court’s 2008 decision in Quanta Computer, Inc. v. LG Electronics, Inc. would undermine the Federal Circuit’s view that patent exhaustion didn’t apply to Monsanto’s patented Roundup Ready® soybeans. But in a unanimous decision, the Supreme Court affirmed the Federal Circuit’s 2011 ruling that Farmer Bowman’s unlicensed planting of these patented Roundup Ready® soybeans (sold for commodity use only) was an infringing use that was not subject to the doctrine of patent exhaustion. Alas, Farmer Bowman found no solace in Quanta.
To understand the ruling in Bowman, you must first understand Monsanto’s patented Roundup Ready® soybean technology, its Technology Agreement with purchaser’s of those soybeans delineating the licensed use thereof, as well as the fairly complex fact situation of Farmer Bowman’s use (or more appropriately wily misuse) of the “commodity” soybeans he purchased from a local grain elevator and subsequently planted for the express purpose of harvesting the resulting seed. Monsanto’s patented technology involved genetically modified soybeans that exhibited resistance to N-phosphonomethylglycine-based herbicides (commonly known as “glyphosate” or “glyphos”), such as Monsanto’s Roundup® herbicide product. These genetically modified soybeans were known as Roundup Ready® soybeans because of their resistance to such herbicides.
In my first installment on Paragraph IV Certifications under Hatch-Waxman, I explored the basics of this “beast.” See A Primer on Paragraph IV Certifications: Into the Belly of the Hatch-Waxman Beast Part 1. In my second installment on Paragraph IV Certifications under Hatch-Waxman, I discussed one of the more litigated “trouble spots” for Paragraph IV Certifications, namely the “carve out” cases. See Carve Outs: Into The Belly of the Hatch-Waxman Beast Part 2. In my third and final installment, I’ll focus on probably the most contentious “trouble spot,” namely Hatch-Waxman “reverse payment” cases, now before the Supreme Court in FTC v. Watson Pharmaceuticals(renamed as FTC v. Actavis, Inc.) for which oral argument was recently heard. So let’s strap on our safety belts one last time, and dive back into the “belly” of this Hatch-Waxman “beast” to look at “reverse payment” cases.
“Reverse payment” cases are an outgrowth of a key feature I noted in my first article on the basics of Paragraph IV Certifications: the filing of an Abbreviated New Drug Application (ANDA) by the generic drug maker with a Paragraph IV Certification is treated as a technical act of patent infringement. After receiving notice of the Paragraph IV Certification, the patent owner/NDA holder has 45 days to bring suit, otherwise the FDA can move forward on approving the ANDA. Conversely, if the patent owner/NDA holder does bring an infringement suit within the prescribed 45 day period, the FDA cannot approve that ANDA for 30 months, unless the patent(s) that are the subject of the Paragraph IV Certification are earlier deemed invalid or not infringed in that suit.
In my first installment on Paragraph IV Certifications under Hatch-Waxman, I explored the basics of this “beast.” See A Primer on Paragraph IV Certifications: Into the Belly of the Hatch-Waxman Beast Part 1 . And as promised, in this second installment, I’ll now focus on one of the more litigated “trouble spots” for Paragraph IV Certifications, namely the “carve out” cases. (In my third and final installment, I’ll talk about the other “trouble spot,” namely Hatch-Waxman “reverse payment” cases, which is now before the Supreme Court in the 11th Circuit case of FTC v. Watson Pharmaceuticals, renamed as FTC v. Actavis, and for which oral argument was recently heard.) So strap on your safety belts again, and let’s dive back into the “belly” of Hatch-Waxman Paragraph IV Certification “beast” to look at “carve outs.”
“Carve outs” essentially involve a situation where there is an FDA approved drug for which the generic drug maker seeks to market that drug, again through an Abbreviated New Drug Application (ANDA), but instead for an FDA approved use, where also that FDA approved use is unpatented. While these “carve outs” also involve the filing of a Paragraph IV Certification, there is a slight but important twist in that Certification: inclusion of what is called a “section viii statement” that the generic drug maker “is not seeking approval for a method of use that is claimed in the patent.” When submitting the “section viii statement,” the generic drug maker must also provide a proposed label that removes or “carves out” the claimed method of use. The FDA will then approve this “carve out” statement only if: (1) there is no overlap between the proposed label submitted by the generic drug maker and a use described in the Orange Book; and (2) removing the information about the claimed method of use from the label doesn’t render the drug less safe or effective.
In a moment of extreme weakness, I agreed to Gene’s request to doing a primer on Paragraph IV Certifications under the Drug Price Competition and Patent Term Restoration Act, commonly referred to as Hatch-Waxman. I don’t know if you would call me an expert, but I’ve studied many, many cases involving Paragraph IV Certifications under Hatch-Waxman. The courts have found Hatch-Waxman to be a hydra-like monster with a labyrinth of sections that are frequently confusing (or worse yet, conflicting). Paragraph IV Certifications are a particular trouble spot in Hatch-Waxman. So if you’re up to diving into the “belly of this beast,” let’s examine the characteristics of this most infamous of the Hatch-Waxman monsters.
To understand Paragraph IV Certifications, you must first address what an Abbreviated New Drug Application (ANDA) is. ANDAs are how generic drug manufactures expedite the approval of their generic drugs. To use the language of the Federal Circuit, “[g]eneric drug companies are not required to conduct their own independent clinical trials to prove safety and efficacy, but can instead rely on the research of the pioneer pharmaceutical companies.” See the 2008 Federal Circuit case of Janssen Pharmaceutica, N.V. v. Apotex, Inc. which provides an excellent explanation of what the ANDA and Paragraph IV certification process is all about. Instead, in the ANDA process, the generic drug company may rely upon this clinical safety and efficacy of the “pioneer pharmaceutical company” if it can “show show bioequivalence of its generic drug to the NDA drug.” “Bioequivalence” is defined by the FDA as “the absence of a significant difference in the rate and extent to which the active ingredient or active moiety in pharmaceutical equivalents or pharmaceutical alternatives becomes available at the site of drug action when administered at the same molar dose under similar conditions in an appropriately designed study.” I’ll get to where those “pioneer pharmaceutical companies” and “NDA drugs” enter the ANDA approval process next.
Given the remand of the Federal Circuit’s original panel decision for reconsideration in view of Mayo Collaborative Services v. Prometheus Laboratories, Inc., I’m not surprised that the Supreme Court granted the ACLU’s/Pubpat’s petition for certiorari in AMP v. Myriad. What is somewhat surprising is that the Supreme Court granted certiorari only as to the first question (“Are Human Genes Patentable”) posed by the ACLU/PubPat. The patent-eligibility under 35 U.S.C. § 101 of Myriad’s claimed method of screening potential cancer therapeutics that was (again) unanimously upheld by the Federal Circuit panel, but will not be before the Supreme Court. Nor will the issue of “lack of standing” with respect to but one of the plaintiffs be considered.
I’ve been following the various meanderings and wanderings of the Myriad case for almost three years now. One unfortunate aspect of this case is that, from the beginning, the ACLU/PubPat has manipulated and fabricated what this case is about in terms of the applicable “science,” as well as the applicable “patent law.” In fact, in distorting what this case is really about (i.e., the patent-eligibility of Myriad’s claimed “isolated” DNA sequences under 35 U.S.C. § 101), the ACLU/PubPat has also tried to hide the fact that the real plaintiffs in the Myriad case are none other than the ACLU/PubPat themselves; that has become readily apparent, given that all but one of the “alleged” plaintiffs have been knocked out of this case on “lack of standing” grounds.
Before the Myriad case becomes further obscured by the “pseudoscientific” nonsense foisted by the “real plaintiffs,” as well as the PR smokescreen of “politics, policy and philosophy” that the ACLU/PubPat has used to manipulate the applicable “patent law,” the Supreme Court needs to understand, to use Judge Lourie’s words, what this case “is not about.”
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