This Newsletter was originally posted to the articles section of the Harness IP website in July 2015. To receive the most up-to-date BioPharma news and tips, please visit www.harnessip.com and subscribe to the BioPharma emails.

1) The U.S. Patent Eligibility Saga Continues …

In Ariosa v. Sequenom, the Federal Circuit held a diagnostic method claim involving fetal DNA in the mother’s blood was an ineligible law of nature. The court acknowledged that the inventors were first to discover the existence of this fetal DNA in maternal blood, such that the claims were novel and nonobvious. However, the court held the claim as a whole amounted to an ineligible product of nature because: (i) the method involved routine blooding-drawing and PCR, and (ii) fetal DNA was a natural phenomenon. Judge Linn concurred in the judgment because — while he believes that the claim at issue is ineligible under the Supreme Court’s rule from Mayo and Alice — he thinks that the claim should be patent eligible. Judge Linn explained that the Ariosa outcome exemplifies how broad and unworkable the Supreme Court’s Mayo/Alice rule is in practice.

Practice Tip:

In addition to writing diagnostic method claims, write method of treatment claims, in which the
infringer applies one treatment according to one diagnostic result, and another treatment (or non-treatment) according to another diagnostic result.

2) U.S. Litigation Updates:

1. What’s the latest with direct infringement? On remand from the Supreme Court, the Federal Circuit in Akamai v. Limelight confirmed that method claims can only be infringed if all the steps are performed by or attributed to a single entity. While the decision generally recognizes this creates a gaping hole in patent infringement liability rendering many method patents unenforceable, it will fall within the province of Congress to broaden 35 U.S.C. §271(a).
2. Is a good faith belief in invalidity a defense to induced infringement? Answer = No. In Commil USA v. Cisco Sys. the Supreme Court held that validity and infringement are separate and distinct issues. Therefore, although you cannot induce infringement by encouraging another person to do something that you believe in good faith would not infringe, you can incur liability for inducing another party to engage in infringing conduct, even if you believe in good faith that the patent claim is invalid.
3. How do you measure molecular weight? On remand from the Supreme Court, the Federal Circuit held in Teva Pharmaceuticals v. Sandoz claims reciting “molecular weight” or “average molecular weight” were indefinite. Neither the claims nor the specification defined which method of measurement of molecular weight was intended (e.g., peak average (M_p), number average (M_n), weighted average (M_w )). During prosecution of the patent family, the patentee provided inconsistent definitions—in one application defining it as M_n, but later in another application as M_p. Because there was “no reasonable certainty” as to the meaning of the term, the claims were again held to be indefinite under the new indefiniteness standard. Further, interpreting claim language in view of the intrinsic evidence (e.g., claims, specification, and prosecution history) ultimately remains a legal determination.

3) IPRs, Hedge Funds and Pharma – Oh my! (Continued from May 2015):

IPR Attack: Celgene is attacking four of Kyle Bass’ IPRs (filed by his Coalition for Affordable Drugs). On 3 June 2015, Celgene requested authorization to file sanction motions to dismiss the four IPR petitions for abuse of process. Celgene stated that the real parties-in-interest (RPI) who filed the IPR petitions “have stated publicly that they intend to use the IPR process for the purpose of affecting the value of public companies . . . [which] is not the purpose for which the IPR process was designed.” The Patent Trial and Appeals Board indicated it will consider a motion for sanctions and ordered Celgene to brief the issue. We will keep you updated!

Congressional Action? Recent proposed amendments to the IPR process appear responsive, at least in part, to the IPR filings by the Coalition. Rep. Bob Goodlatte’s 9 June 2015 proposed amendment to the Innovation Act of 2015 precludes institution of IPR petitions unless the petitioner certifies:

1. it does not own a “financial instrument . . . designed to hedge or offset any decrease in market value of an equity security of the patent owner or an affiliate,” and
2. it has not demanded payment from the patent owner or an affiliate in exchange for foregoing filing an IPR unless the petitioner or RPI has been sued for infringement under the patent at issue.