Patent Costs Pending

Image: Erica Johnson The idea behind the US patent system is relatively simple: register an invention with the government and get a 20-year monopoly to sell it, after which point your idea goes into the public domain. Sounds straightforward, right? Not if you're a patent lawyer. Underneath that basic framework is a legal infrastructure filled with so many loopholes, twists, and turns that, were it pipework, it would make any plumber sweat. That system became a lot more complicated when the US Supreme Court, ruling in a case now known as Festo,1 set new standards for inventors' descriptions of patents. The high court decision, which set aside an onerous lower court ruling, should still worry most patent holders--especially those with life sciences patents--and fatten patent lawyers' paychecks. "There were two parts of the Festo ruling, and everybody forgets that only one of them was overturned," says Dianne Elderkin, a partner with Philadelphia-based Woodcock Washburn. The first part of the ruling would have rendered almost half of all patents practically valueless--that was the part that was overturned. The Supreme Court upheld the second part, which does not have as much historical import as the first, but will, nonetheless, affect the way patents are filed and defended. The patent holder must prove that amendments designed to clarify an application are made not just for the sake of broadening claims to future inventions. NARROW CLAIMS FOR CASH To understand the significance of this ruling, one should be familiar with the patent application process. Rather than filling a claim for a patent that includes every possible description of an invention, a lawyer might decide it is wiser to assert a broad claim. For example, a claim for a machine that washes round widgets would describe it in the most general terms, such as "an electrical appliance that cleans things." The Festo File Supreme Court brief of the Festo patent ruling supreme.lp.findlaw.com/supreme_court/briefs/00-1543/00-1543.mer.ami.usa.html Celltech's amicus brief supreme.lp.findlaw.com/supreme_court/briefs/00-1543/00-1543.mer.ami.celltech.pdf A lay description of Festo's legal details www.cafezine.com/index_article.asp?id=600&deptId=4 One lawyer's advice on writing patent applications post-Festo www.ssiplaw.com/publications/festo.pdf An analysis of the Festo decision http://www.kensei-con.net/cgi-bin/artman/exec/view.cgi/1/1808 After the initial application, a patent examiner will request amendments. Continuing the example, the examiner might point out that someone already holds a patent for a dishwasher. The claim would be amended to clarify that the widget washer isn't meant to wash dishes, or that it can't possibly wash square widgets, only round widgets. Each change is an amendment, and almost every biotechnology patent includes amendments. "Unless it's a completely new area that you've discovered by yourself, your patent is going to be filled with amendments referring to prior patents, or speculation about what other uses your patent might have down the line," says William Rudy, an intellectual property attorney with the Kansas City, Mo.-based law firm Lathrop & Gage. "Most areas of biotech interest are extremely crowded with patents, which means that you have to narrow your claim with amendments to an exceedingly small scope." Before the high court ruled on the Festo case, judges considered amendments simply as pieces of the patents, and the courts enjoyed discretion in their interpretations. But in the Festo case, the Supreme Court ruled that patent holders must prove they made amendments in good faith, and not just to expand claims into areas that shouldn't be covered. If a patent holder can not prove good faith, then he or she can not use the legal principle called doctrine of equivalents to prove the case. The judicial doctrine of equivalents allows the judge to use discretion in interpreting the original patent application and its amendments, and it lies at the heart of almost all patent infringement claims. The case of Amgen v. Hoechst Marion Roussel provides an example of the doctrine. Amgen sued Hoechst for infringing on its patent for a protein similar to erythropoietin. Amgen's patent described a protein with 166 linked amino acids, whereas Hoechst's product had 165 amino acids. The absence of only a single, nonessential amino acid distinguished the two proteins. Hoechst claimed that Amgen's patent specifically described a compound comprising 166 amino acids, making Hoechst's product a new invention. In 2001 the Federal Circuit Court used the doctrine of equivalents to rule that Hoechst was infringing on Amgen's patent. Even though Amgen's patent said nothing about a protein with 165 amino acids, the court ruled that, upon reasonable examination, Hoechst's product was equivalent to Amgen's original invention. If that case were to be heard today--after the Supreme Court's Festo ruling--Amgen would probably still win the case because of the doctrine of equivalents. The case would be more complex, however, because the court would require Amgen to prove that each one of the dozens of patent amendments were made for explanatory purposes only and not to bar future patents. But if Amgen were filing the patent today, it would probably do so in a very different way. The new watchword is to avoid amendments at all costs, though the best way to do that is still up for debate. Rudy says he will make more claims in a patent application and be more precise in his description of the invention. Elderkin says she might divide a single patent into multiple patents, each with narrower claims. The real effect of Festo, she says, is that filing a defensible patent has become more complicated and more time-consuming. "The system will work pretty much the same as before, but it's going to be a lot more expensive," Elderkin says. Photo: Courtesy of Palmer & Dodge Paula Campbell Evans SAVED BY THE COURT If the Supreme Court had upheld the Festo ruling in its entirety, its effects would have had serious repercussions for the biotechnology industry. "So many patents are based on compounds that could be easily altered by adding a molecule here or there and ending up with the same therapeutic effect," says Paula Campbell Evans, a partner in Boston-based Palmer & Dodge. Under the first part of the Festo ruling, challenging patent amendments by using the doctrine of equivalents would have been severely hampered. The British biotechnology firm Celltech used the doctrine to its advantage. An agreement with MedImmune in Gaithersburg, Md., allowed the company to sell Celltech's humanized antibody in the United States. But MedImmune began selling its own version of the antibody. In an echo of the Hoechst case, MedImmune's antibody was disturbingly similar to Celltech's, according to a friend-of-the-court brief submitted to the Supreme Court on behalf of Celltech by Donald Chisum, a law professor at Santa Clara University. Of 1,320 amino acids comprising the antibody, only one was different, according to the Celltech suit. MedImmune had substituted the amino acid threonine at the same spot where Celltech's protein had a serine molecule. Serine and threonine are interchangeable from a biological point of view, which means that the antibody had the same effect. Celltech asserted that it had been denied an important part of its income stream and that its financial health was endangered, said Chisum in the brief. Now, as a result of the Supreme Court's ruling in Festo, Celltech can use the doctrine of equivalents in its US case, which will make its patent much easier to defend. Other biotechs willing to pay the high costs of litigation will now be able to defend their patents against competitors who make legally insignificant changes to patented compounds. Sam Jaffe (sjaffe@verizon.com) is a freelance writer in Philadelphia 1. Festo v. Shoketsu Kinzoku Kogyo Kabushiki, 95-1066, 234 F3d 558, 56 USPQ2d BNA 1865, (Fed Cir 2000). COUNCIL URGES CAUTION IN GENE PATENTING As battles over the rights to biological materials intensify, a respected British bioethics group has recommended prudence in issuing patents for DNA sequences. The Nuffield Council on Bioethics (NCB) in London recently released a discussion paper on the ethics of patenting DNA sequences. Concluding a two-year roundtable on the ethical and legal issues surrounding patenting, and their implications in healthcare, the council recommends that patents on DNA sequences be more of an exception than a rule. "We're not ruling out gene patenting, we just think the system has been overly generous and should grant DNA patents with greater caution," says Sandy Thomas, director of the NCB. The decision comes amid a flurry of court battles over biological discoveries--including an infringement claim filed by Rochester University on the Cox-2 inhibitors that led to the development of two blockbuster drugs, and a suit filed by Ariad Pharmaceuticals, a Cambridge, Mass.-based biotechnology firm that owns the exclusive license to the NF-kB messenger pathway. Gene patenting encourages investment into research and boosts the development of accurate and reliable genetic testing, but it can also tie up the rights to genetic material. The scientist who holds a gene patent receives full rights to it for any use, even when he or she is unaware of all its other potential functions. These patents can give the researcher or institution a monopoly, and tie up research in public and private sectors. "People have to take out licenses or negotiate waivers if they want to work on a particular area," Thomas says. With sequencing and massive genetic databases available to the public, attorney Diana Sternfeld, a member of the intellectual property advisory committee of the BioIndustry Association, says that finding a gene is no longer inventive anyway. "You shouldn't be rewarded just for identifying the diseases connected to the gene," Sternfeld says. "The therapy for it is much more sensibly patentable." --Hal Cohen

Patent Costs Pending

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