SEPTEMBER 2014 NEWSLETTER NEWS AND INTELLIGENCE FROM LIFE SCIENCES INTELLECTUAL PROPERTY REVIEW

HIGHLIGHTS THIS ISSUE: 4 EPIRUS, RANBAXY WIN An alliance INDIAN APPROVAL FOR for science ARTHRITIS DRUG Biotech in the Bay Page 10

6 PHARMACEUTICAL IP “UNDER THREAT FROM MALWARE”

12 US BIO/PHARMA PATENTS UNDER ATTACK

14 LSIPR ROUNDTABLE

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Life Sciences IP Review is published by: Newton Media Limited Kingfisher House, 21-23 Elmfield Road Our first roundtable Bromley, Greater London BR11LT, United Kingdom Having driven up the coast from San Diego to San Francisco after the BIO International Telephone: +44 203 301 8201 Convention in June, I was fascinated to learn from our latest “cluster focus” that the Bay Area of Director Nicholas Lipinski California has one of the greatest concentrations of life sciences companies in the world. Publisher Yet apparently, even though there are law firms in the area to support the technology industry, Peter Garner Telephone: +44 203 301 8217 there’s a shortage of life sciences IP lawyers there. Of course, some lawyers will be able to apply their Email: [email protected] high-tech experience to the life sciences industry but it still seems too good an opportunity to miss: Managing editor Martin Essex to set up in the warm, sunny Bay Area to serve companies urgently looking for your expertise. Telephone: +44 203 301 8211 Email: [email protected] Back home, it was time to chair the first LSIPR roundtable discussion, which took place in a Deputy editor hotel with superb views of the Tower of London, Tower Bridge and the River Thames. There were Ed Conlon six invited guests—including both patent attorneys and patent litigators—and the discussion News editor Max Walters began, inevitably, with the USPTO’s guidelines on patent-eligible subject matter in the wake of Editorial assistant the Myriad and Mayo court decisions. David Brooke Sub-editor That had been a focus of attention in the IP stream at BIO—at times it seemed the only focus—and Ros Bromwich the debate in London was lively and animated. There were plenty of other topics discussed in a session Consultant John Haley that lasted for several hours, and we’ll be bringing you those in a special report to be published shortly. Production and design However, in this issue of the LSIPR Newsletter, we’ve included as an hors d’oeuvre some of the Fisherman Creative ©Newton Media Limited 2014 debate on the USPTO guidelines, which readers will know have been roundly criticised by all and All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any sundry. Key questions debated included whether they will be changed and what the implications form or by any means, electrical, mechanical, photocopying, are this side of the pond. recording or otherwise without the prior written permission of the publisher. The views expressed in LSIPR are not necessarily Next time, it’s been suggested, a good topic would be the Unified Patent Court and its implications those shared by the publisher, Newton Media Limited. Wishing to reflect the true nature of the market, we have included articles for pharma but if you think we should include something else then just let me know. from a number of sources, and the views expressed are those of the individual contributors. No responsibility or liability is Martin Essex, Managing editor accepted by Newton Media Limited for any loss to any person, legal or physical, as a result of any statement, fact or figure contained in LSIPR. This publication is not a substitute for advice on a specific transaction. The publication of advertisements does not represent endorsement by the publisher. Life Sciences IP Review (LSIPR): ISSN 2049-2359 (Print)

EDITORIAL PANEL MaryAnne Armstrong, partner, Birch, Stewart, Kolasch & Birch LLP Victoria Beniac-Brooks, partner, Marks & Clerk LLP Wolfgang Bublak, partner, Bardehle Pagenberg Trevor Cook, partner, Wilmer Cutler Pickering Hale and Dorr LLP Gabriel Di Blasi, partner, Di Blasi & Associates Paul England, Taylor Wessing LLP Janis Fraser, principal, Fish & Richardson PC Contents Penny Gilbert, partner, Powell Gilbert Andrew Jenner, director of IP innovation and trade, 4 News IFPMA Ashwin Julka, managing partner, Remfry & Sagar 4 Cipla agrees rifaximin licensing deal Lars Kellberg, corporate vice president, corporate 4 Epirus, Ranbaxy win Indian approval for arthritis drug patents, Novo Nordisk A/S 5 Gilead announces Sovaldi generic deal Judith Kim, partner, Sterne, Kessler, Goldstein & Fox Simon Kremer, partner, Mewburn Ellis LLP 6 Pharmaceutical IP “under threat from malware” Nathalie Moll, secretary general, EuropaBio 6 Bristol-Myers Squibb hits Merck with cancer patent lawsuit Matthew Nielsen, partner, Marshall Gerstein & Borun LLP 8 Australia suggests uprooting plant rights Caroline Pallard, partner, Nederlandsch Octrooibureau 8 Myriad cancer patent upheld in Australia Michael Pitzner-Bruun, partner, Kromann Reumert Nabeela Rasheed, shareholder, McAndrews, Held & 10 Cluster Focus Malloy Ltd. Jason Rutt, head of patents, Rouse An alliance for science: Biotech in the Bay Area of California José Trigueros, partner, Leyva Montenegro Trigueros Abogados SC 12 Expert comment Joachim Wachenfeld, partner, Vossius & Partner US bio/pharma patents under attack Jane Wainwright, partner, Potter Clarkson LLP Gordon Wright, partner, Elkington & Fife LLP, on 14 Expert comment behalf of CIPA Franz-Josef Zimmer, patent attorney, Grünecker The firstLSIPR roundtable discussion

www.lifesciencesipreview.com 4 NEWS LSIPR Newsletter 09:14

Cipla agrees rifaximin licensing deal

MUMBAI, INDIA Subhanu Saxena, global CEO at Cipla, said: “As we look to go live with our own front-end Indian drug maker Cipla has signed a deal presence in North America, we are happy that with Salix Pharmaceuticals allowing the through this association we can demonstrate US-based company exclusive rights relating to the wider industry that we are open to to the ‘Rifaximin Complexes’ patent family. global partnerships for the development and The agreement excludes Asia, other than commercialisation of complex products.” Japan, and Africa. Salix is required to make an up-front payment Rifaximin is used for the treatment of as well as additional regulatory milestone travellers’ diarrhoea caused by non-invasive payments. It will also pay royalties on net sales strains of Escherichia coli. of products covered by the patents. According to Cipla, the agreement is an Cipla, along with several other Indian expansion of a 2009 exclusive licence drug makers, has also reached a licensing agreement in which Cipla granted Salix agreement with Gilead, enabling it to sell exclusive rights in the US, Canada and a generic version of the hepatitis C drug n Mexico. / SHUTTERSTOCK.COM WAVEBREAKMEDIA Sovaldi (sofosbuvir). See next page

Epirus, Ranbaxy win Indian approval for arthritis drug

BOSTON, US drug controller general of India has approved disease, psoriasis and other inflammatory the similar version of Remicade (infliximab) conditions. Biopharmaceutical company Epirus has said and that it will be sold by Epirus’s Indian In India, it sells at about 70,000 rupees ($1,145) that India’s drug regulator has approved a partner, Ranbaxy Laboratories, early next year. per month. biosimilar application to produce a version of Remicade, produced by pharmaceutical a popular arthritis treatment drug. Boston-based Epirus, which focuses on companies Johnson & Johnson and Merck, developing biosimilar drugs for sale, said it Epirus announced on September 15 that the is used to treat rheumatoid arthritis, Crohn’s would launch the Remicade biosimilar in India under the name Infimab before the first quarter of next year. “With these final clearances, we are now able to deliver a high-quality product to patients who may not be able to afford current treatment options,” Amit Munshi, president of Epirus, said in a statement. “We also intend to leverage this clinical data package to support additional regulatory filings in targeted global markets.” Ranbaxy and Epirus signed a licensing agreement for the Remicade biosimilar in January 2014. Under the terms of the agreement, Epirus will develop and supply the drug and Ranbaxy will register and commercialise it in India. In July, LSIPR reported that the US Food and Drug Administration (FDA) accepted what was thought to be the first successful biosimilar application in the US since a law was passed introducing them in 2010. The application was related to Amgen’s Neupogen (filgrastim) drug, used to treat

MELODIA PLUS PHOTOS / SHUTTERSTOCK.COM patients with insufficient white blood cells. n

www.lifesciencesipreview.com LSIPR Newsletter 09:14 NEWS 5

Gilead announces Sovaldi generic deal

FOSTER CITY, US working to make its medicines “accessible to as many patients, in as many places”, as quickly US biotechnology company Gilead has agreed as possible. a licensing deal with seven Indian drug makers that will enable them to sell a generic version “In developing countries, large-volume generic of a drug used to treat hepatitis C. manufacturing and distribution is widely regarded as a key component in expanding Gilead will license its Sovaldi (sofosbuvir) access to medicines. These agreements drug to generic manufacturers Cipla, Ranbaxy are essential to advancing the goals of our Laboratories, Cadila Healthcare, Sequent humanitarian programme in these countries,” Scientific, Strides Arcolab, Hetero Drugs and Alton said. Mylan Laboratories, which will in turn market it to more than 90 developing countries. According to Reuters, Sovaldi is normally The companies will set their own rates for the given to patients for either three or six months sale of the drug but will pay a royalty fee to and costs $84,000 for a 12-week course in the Gilead. US. Gilead said it would launch the drug in India at a price of $300 a month. According to Gilead, the agreement will allow the companies to manufacture the drug in 91 The drug was approved by the FDA last developing countries. December and then by the European Commission in January. Gregg Alton, executive vice president at Gilead, said hepatitis C is a “significant public In the first nine weeks after its launch in the health issue” worldwide and that Gilead was US, sales totalled $484 million. n MARIA / SHUTTERSTOCK.COM CARLOS E. SANTA

www.lifesciencesipreview.com 6 NEWS LSIPR Newsletter 09:14

Pharmaceutical IP ‘under threat from malware’

ST. LOUIS, US

A newly revealed malware could be seeking to attack the pharmaceutical sector in order to steal IP, a report has claimed. The research, compiled by electronics company Belden Incorporated, said the Dragonfly malware, previously believed to be attacking the energy sector, could instead be linked to the pharmaceutical industry. In the report, Defending against the Dragonfly cyber security attacks, part A—identifying the targets, the first of four, the victims of Dragonfly and its methods of attack are researched. According to software security company Symantec, Dragonfly has been monitored since 2013 and uses two main pieces of LOLLOJ / SHUTTERSTOCK .COM malware, both remote access tools that allow an external operator to control a system. offered products and services commonly used industrial espionage against pharmaceutical by the pharmaceutical industry. companies,” the report said. The Belden report was compiled by Joel Langill, an independent integrated computer The report also found that the Dragonfly attack “It also appears that the attackers are not just solutions (ICS) security expert who was is similar to another threat called Epic Turla looking for the IP associated with the product, commissioned by Belden. and is likely to be managed by the same team. but also information related to building facilities.” According to the report, various factors led That malware has been shown to have Langill told the MarketWatch news website: Langill to believe that the IP belonging to specifically targeted the IP of pharmaceutical “The potential damage could include the theft pharmaceutical organisations was the top companies as well, the report said. of proprietary recipes and production batch priority for attackers. “It seems likely that the Dragonfly and Epic sequence steps, as well as network and device Langill found that out of thousands of possible Turla campaigns are being run by the same information that indicate manufacturing plant ICS suppliers, the companies targeted all masters for the same primary motive, namely volumes and capabilities.” n Bristol-Myers Squibb hits Merck with cancer patent lawsuit

NEW YORK, US It covers the use of anti-PD-1 antibodies scientific breakthrough and has the potential to treat cancer, and, in a lawsuit filed on to revolutionise cancer treatment by using a Bristol-Myers Squibb (BMS) has accused September 4, BMS said Merck’s patent would patient’s own immune system to eliminate pharmaceutical company Merck of “threaten to exploit that innovation”. cancer cells,” it claimed in the lawsuit. infringing a patent covering a method used The lawsuit asked for damages and also asked BMS added it has put the invention of the to treat cancer. the court to declare that Merck had infringed ’474 patent into practice by developing the The lawsuit, filed at the US District Court the patent. “breakthrough biologic drug” nivolumab, for the District of Delaware, came just a If the court rules in favour of BMS and Ono’s which it described as a monoclonal day after Merck won approval from the argument of infringement it would boost the antibody that recognises and binds to the FDA for its Keytruda (pembrolizumab) case that they are owed royalties on sales of PD-1 protein. immunotherapy drug, one of a new wave of PD-1 drugs. cancer treatment drugs designed to boost According to news website FiercePharma, “On information and belief, Merck has the patient’s immune system. other drug companies, including AstraZeneca known about the ’474 patent and has The patent asserted by BMS, US number and Roche, have also tried to market drugs known that the use of pembrolizumab will 8,728,474, was initially granted to Ono using the innovative method, which BMS said infringe claims of the ’474 patent since at Pharmaceutical in May and subsequently could “revolutionise” cancer treatment. least approximately May 20, 2014,” BMS licensed to BMS. “Treating cancer using immunotherapy is a claimed. n

www.lifesciencesipreview.com Intellectual Property… It’s in our DNA

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From biotech to pharma, few law firms know life sciences better than we do… and we have the PhDs to prove it.

www.powellgilbert.com 8 NEWS LSIPR Newsletter 09:14

Australia suggests uprooting plant rights

CANBERRA, AUSTRALIA However, it has now recommended replacing “This option also has the benefit of actively the committee. involving stakeholders on a regular basis,” The Australian government department the document said, adding that it would be “It is proposed that all references to the responsible for IP has suggested abolishing analogous to other non-statutory consultative committee are removed from the PBR Act and a committee that looks after plant breeders’ groups for patents, trademarks and designs. the committee is replaced with a non-statutory rights (PBRs) as it looks at alternative means for mechanism to provide specialised advice on The second option suggests the possibility of a giving advice to breeders. plant breeders’ rights matters,” the consultation cross-government advisory committee, while IP Australia has launched a consultation that document said. the third suggests implementing an expert panel comprising appropriate specialists to consider suggests making changes to the existing plant It has outlined three potential options for and provide advice on plant breeders’ rights. breeder’s rights advisory committee (PBRAC), change, including replacing the committee with which provides advice on the IP rights available. a group supported by IP Australia. Respondents are invited to answer questions on what their preferred option is and if they have According to the consultation report, the According to the consultation document, the other suggestions. PBRAC’s usefulness “resides in its specialised group may “comprise wider representation and technical knowledge of plant breeding from stakeholders in academia, industry and The government body invited interested and utilisation” available to the government on government, creating the potential for wider parties to make a submission on its website by request. stakeholder engagement”. October 31. n

Myriad cancer patent upheld in Australia

SYDNEY, AUSTRALIA testing of predisposition to hereditary breast and matter that had previously existed and, as ovarian cancer risk at an affordable cost,” it said. such, constitutes patentable subject matter. Companies in Australia will be able to continue The decision reaffirms a ruling from February Writing on the Patently-O blog, Ben McEniery, to patent human genes after a court rejected an last year when Federal Justice John Nicholas appeal by a breast cancer survivor. a senior lecturer in law at the Queensland ruled at the same court that isolating the gene University of Technology and an IP barrister, The decision, on September 5, upheld the from the body constituted something new. said while it was difficult to fault the court’s validity of Myriad Genetics’ BRCA1 gene reasoning it is unlikely to be the final chapter. patent, used to help diagnose breast cancer, Cases at the Federal Court are heard in the after it was challenged by cancer survivor first instance by single judges but if a decision “It is likely that the unsuccessful applicant in Yvonne D’Arcy. is appealed against it can be referred to the Full this instance will appeal to the High Court of Court, where it is heard before all the court’s The case D’Arcy v Myriad Genetics Inc, heard by Australia, Australia’s final court of appeal, and judges. the full bench of the Federal Court of Australia, that that the High Court will give leave to hear ruled that isolating a DNA sequence from the The court’s five judges ruled unanimously that the appeal, given the importance of the subject gene’s surrounding genetic material involves the patent claims something other than subject matter concerned,” he wrote. n structural and functional changes that create a new composition, meaning it can be patented. Law firm Maurice Blackburn, which argued for D’Arcy, had claimed that mutations in the BRCA1 gene were naturally occurring components of the human body that had been discovered, rather than an invention that could be patented. It feared that fewer tests and research could be carried out as a result of the ruling. But, in a statement, law firm Jones Day, which acted for Myriad, said patents drove innovation. “Myriad invested hundreds of millions of dollars in research and development, patient and physician education … which has resulted

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An alliance for science

The Bay Area of California has one of the greatest concentrations of life sciences companies in the world, but its biotech community is being threatened by the seemingly unstoppable rise of large technology businesses. LSIPR spoke to Christopher Stewart, chair, and Robert Eyler, vice chair, of the new North Bay Life Science Alliance to find out how it plans to strengthen the network in the area.

www.lifesciencesipreview.com LSIPR Newsletter 09:14 CLUSTER FOCUS 11

ince 1976, when Genentech labelled “One is to help the existing companies that are South San Francisco the “birthplace here, and the other is to help companies that are of biotechnology”, hundreds of life being squeezed out by the high growth of the San “Although there is sciences companies have set up in the Francisco and South San Francisco peninsula by BayS Area of California to take advantage of its the high-tech industry.” a smattering of law proximity to San Francisco and the respected Genentech, for example, had several offices in firms to support the academic centres nearby: the Universities of South San Francisco and the peninsula but, as California Berkeley and San Francisco, and it continued to grow, decided to expand into the technology industry Stanford University. North Bay, establishing a new office in Vacaville, in the area, there in Solano County. According to the self-described custodian of isn’t yet an equivalent the Bay Area life sciences cluster, BayBio, there Moreover, San Francisco and the surrounding are now nearly 1,000 life sciences companies in cities have become so dense, with so many hub of life sciences the Bay Area and Northern California, which businesses, that costs have escalated. As new directly and indirectly employ 125,000 people. companies form and smaller companies grow IP lawyers.” According to BayBio, the cluster generated $13 and need more space, they face the challenges billion in revenue in 2013 and its total market of finding available space in San Francisco at value was about $129 billion. affordable prices. The North Bay is seen as an “Life sciences companies can benefit from the Abbott, Medtronic and Baxter all have bases in alternative because it is a short distance from the experience of the lawyers in the area, who can the Bay Area, and HIV/AIDS drug maker Gilead San Francisco area, yet has ample competitively- apply their high-tech experience to the life has its headquarters there. priced open space to meet the needs of life sciences industry.” science businesses. However, the US’s second-largest life sciences Life sciences companies in the Bay Area cover cluster after Boston, according to Jones Lang “Folks don’t want to leave the Bay Area,” says the entire spectrum of the industry, from LaSalle, is under threat. The rapid expansion Eyler. “They have deep roots across all aspects genetics to medical devices, although given their of big technology companies and start-ups that of the supply chain of that industry. They have proximity to the Buck Institute, many companies open in the area, cash in and move on is driving the option of simply moving and finding lower- in the North Bay focus on degenerative diseases up real estate prices, leaving local pharmaceutical cost space and a better quality of life in the North and orphan drugs. Also, as statistics show that companies and biotechs less room to develop. Bay, rather than relocating to North Carolina, for California ‘feeds the nation’—with higher cash example.” farm receipts than any other state—there is a The rise of big tech In an effort to strengthen those deep roots, earlier strong focus on agriculture too, with plant and “Life sciences just happens to be a business that’s this year the Governor of California Jerry Brown animal science companies based in Napa, Solano relatively space-intensive,” says Robert Eyler, signed the California Competes Tax Credit into and Sonoma. vice chairman of the North Bay Life Science law—legislation that gives corporate income To keep tabs on its progress, the NBLSA will Alliance (NBLSA), an initiative aimed at creating tax credits to California-based life sciences monitor the rate at which new jobs are created, a ‘launch pad’ for the life sciences industry in companies committed to developing in the state. keep an eye on companies expanding in the area the North Bay area by strengthening the bonds “In return for those tax credits, we have agreed and look at the amount of private equity being between researchers, educators and councils in to hire new people in the area over the next invested in the region, while working closely the region. couple of years, which will generate and infuse with BayBio to promote network opportunities He explains that the ephemeral workforces of our North Bay economy with about $89 million,” in the area. says Stewart. the software, internet and mobile businesses The next 24 months are crucial for the industry, that come to the Bay Area are able to deliver fast “We’re working to provide a very attractive Eyler says. “There’s activity in the greater Bay returns on investment to their investors, whereas place for the companies to locate in economic Area that might change the dynamics of life the returns in the life sciences, while no lower than terms,” he adds. sciences businesses deciding to stay in the region those in big tech, tend to take longer to come. or move to some other place such as further The alliance, which launched officially at the BIO IP provisions north, or to Austin, Texas, the research triangle International Convention in June, is backed by California attracts three times more life science in North Carolina, Boston, or San Diego.” an initial investment from the City of Novato, venture capital than any other state, it has a rich Keeping the existing companies in the area is the Buck Institute for Research on Aging and life sciences history on its side and almost 60 more important than attracting new ones, he the Marin Economic Forum, and reaches the percent of California’s patent activity occurs in says. four counties that make up the North Bay Area: the Bay Area. Marin, Sonoma, Napa and Solano. “Our primary message is that we recognise However, Stewart and Eyler say, although there that this industry is a growth engine for any According to Business Wire, the North Bay is a smattering of law firms to support the community and the fact that we have a nucleus currently employs nearly 9,000 people in the life technology industry in the area, there isn’t yet an of companies that work, in that they attract sciences industry, and is home to more than 400 equivalent hub of life sciences IP lawyers. retain and expand talent pools, businesses and life sciences companies and institutions. Nonetheless, the concentration of technology potential financing, is something that from an “We want to do two things with the alliance,” says companies in the area works in the local life economic development standpoint is too good

WONG YU LIANG / SHUTTERSTOCK.COM Christopher Stewart, NBLSA’s chairman. sciences industry’s favour, Stewart says. to pass up.” n

www.lifesciencesipreview.com 12 EXPERT COMMENT LSIPR Newsletter 09:14

of May 1 this year, in 84% of trials with final written decisions, PTAB found at least one claim unpatentable; in more than half the trials with final written decisions, PTAB found all the instituted claims unpatentable. Because abbreviated new drug application (ANDA) disputes relating to generic drug entry dominate the bio/pharma patent JIRI KADERABEK / SHUTTERSTOCK.COM litigation landscape, it is fair to assume that generic companies will comprise the bulk of patent challengers in the bio/pharma post- grant procedure landscape as well. Indeed, later ANDA filers have a strong incentive to file IPRs against all patents for branded drugs listed in the Orange Book, which identifies drugs approved by the US Food and Drug Administration on the basis of their safety and effectiveness. A final decision invalidating those patents based on the subsequent filer’s IPRs could trigger forfeiture of the first ANDA US bio/pharma filer’s 180-day exclusivity—forfeiture can occur 75 days after a court enters a final decision with patents under respect to any ANDA applicant. PTAB’s first bio/pharma IPR decisions attack On June 20, 2014, PTAB issued its first final written decisions invalidating all challenged claims in four bio/pharma patents. These final written decisions resolved four IPRs on four Increasing numbers of patent challengers are patents generally relating to folate compositions for treating folate deficiencies. Petitioner Gnosis finding the USPTO’s post-grant procedures to Pharmaceuticals filed three IPRs (IPR2013- be attractive alternatives to district court 00116, IPR2013-00118, and IPR2013-00119) against three patents (US patent numbers litigation, write Arlene Chow and Peter Noh. 5,997,915; 6,673,381; and 7,172,778) owned by South Alabama Medical Science Foundation (SAMSF); Gnosis also filed one IPR (IPR2013- ore and more pharmaceutical After PTAB’s issuance in June of its first final 00117) against US patent number 6,011,040 companies are turning to written decision invalidating all challenged owned by Merck & Cie. the new US Patent and claims in four bio/pharma patents, it can be Trademark Office (USPTO) anticipated that the upswing in bio/pharma PTAB found all of the challenged claims Mproceedings available under the America IPRs will continue. Moreover, alternative in SAMSF’s three patents unpatentable as Invents Act (AIA) as a way to attack the USPTO proceedings, such as post-grant obvious over prior art combinations. Gnosis validity of bio/pharma patents. review (PGR) and covered business method relied primarily on a combination involving a (CBM) reviews are additional, attractive European patent application (Serfontein) and To date, inter partes review (IPR) proceedings, avenues available to patent challengers. a US patent (Marazza). Gnosis asserted that in particular, have been the focal point of Marazza teaches the claimed folate compound, post-AIA activity and, according to Patent Why are post-grant procedures and that a person of ordinary skill in the art Trial and Appeal Board (PTAB) statistics attractive? (POSA) would use Marazza’s folate compound dated September 18 this year, 5.6% of IPR in Serfontein’s preparations to arrive at the Post-grant procedures provide clear advantages petitions relate to bio/pharma patents. challenged claims. compared to district court litigation, such Those petitions are increasing. Over the past as faster resolution (12 to 18 months), lower SAMSF argued that the art discouraged a five and a half months alone, the number costs, earlier settlement and a lower invalidity POSA from considering folate forms apart of IPR petitions of bio/pharma patents has standard. To date, PTAB’s final written decisions from folic acid. SAMSF asserted that folic acid almost doubled. have heavily favoured patent challengers. As was the “gold standard” and that the claimed

www.lifesciencesipreview.com LSIPR Newsletter 09:14 EXPERT COMMENT 13

folates were considered inferior. PTAB was service”. The generics’ rationale is as follows: not persuaded, finding that a POSA would “The patent • The challenged claims simply recite not have avoided alternatives just because a methods for centralised distribution of standard is suitable and works well, and that owner’s evidence retail goods, specifically drugs, through SAMSF did not credibly explain why the inferior properties would discourage a POSA and arguments are a central pharmacy that encompasses from using the claimed folates. crucial. PTAB placed steps such as interfacing with financial businesses such as insurance companies SAMSF also cited to secondary considerations of more emphasis on in order to secure payment for the non-obviousness based on five products. SAMSF prescription, rendering them incidental submitted evidence of commercial success, dismissing the patent to a financial product or service; and licensing, copying, long-felt need, unrecognised owner’s case than the problem, unexpected results, scepticism, and • As the USPTO has recognised, the AlA’s praise. But PTAB determined that the secondary petitioner’s.” legislative history establishes that “financial considerations were insufficient because there was product or service” should be “interpreted no nexus between the evidence and the claimed broadly”, encompassing patents “claiming invention; SAMSF’s evidence was either based on activities that are financial in nature, formulations featuring combinations not reflected Additional post-grant procedures incidental to a financial activity or by the claims or tied to a prior art folate. complementary to a financial activity”. For similar reasons PTAB likewise found all Even though IPRs have been the focal point to In the interim, at the minimum, for of the challenged claims in Merck’s patent date, they are not the only available post-grant pharmaceutical companies with REMS- unpatentable as anticipated by Serfontein and procedures available to patent challengers. related patents, there is an additional risk of obvious over Serfontein and Marazza. Although similar to IPRs, PGRs include some important differences. They are not limited to CBM patent challenges. As to anticipation, Gnosis argued that prior art prior art challenges; a PGR must be filed no teaching a “suitable active metabolite of folate” In view of the current increase in IPR filings later than nine months after the patent has disclosed the claimed folate; a POSA would alone, it is clear that the USPTO post-grant been granted; and PGRs apply only to patents have envisaged each member of a limited class procedures are important considerations for with a priority date on or after March 16, 2013. of eight relevant compounds that includes any patent holder or challenger in the bio/ the claimed folate. PTAB agreed, dismissing Because of this last requirement, there have pharma patent context. Patent challengers Merck’s argument that a POSA would have been few PGRs to date. But, as bio/pharma should view post-grant procedures as envisioned “thousands” of sub-species within patents issue on a rolling basis, they will be attractive alternatives to district court those eight compounds. vulnerable to attack via PGR. litigation; patent holders should consider There are several lessons to be learned from Even CBMs have been filed against bio/ their strategies now in anticipation of post- the first final written decisions on bio/pharma pharma patents. CBMs are restricted to “a grant challenges taking place in the future. n patents. First, just as in other sectors, PTAB patent that claims a method or corresponding is willing to invalidate all the challenged apparatus for performing data processing Arlene Chow is a partner claims. Second, PTAB is willing to invalidate or other operations used in the practice, in Hogan Lovells’ New York all challenged claims on both anticipation administration, or management of a financial office. She can be contacted at: and obviousness grounds. Based on these two product or service, except that the term [email protected] lessons alone, the first final written decisions does not include patents for technological will incentivise additional bio/pharma inventions.” CBMs are not limited to prior art- Arlene Chow focuses her practice challengers to pursue post-grant proceedings. based challenges. And CBMs need not be filed on patent litigation, post-grant within one year of service of a complaint for proceedings, and due diligence in the Third, the patent owner’s evidence and patent infringement. pharmaceutical, biotechnological, arguments are crucial. PTAB placed more and medical device industries. emphasis on dismissing the patent owner’s Over the past three months, generic drug case than the petitioner’s. Fourth, the patent manufacturers Amneal Pharmaceuticals, Par Peter Noh is an associate in holder must establish a nexus between Pharmaceuticals and Roxane Laboratories Hogan Lovells’ New York secondary considerations of non-obviousness have filed CBMs challenging six Orange Book office. He can be contacted at: and the claimed invention. patents covering risk evaluation and mitigation [email protected] strategies (REMS) for Xyrem (sodium oxybate), As for these latter two lessons, it is clear Peter Noh also focuses his practice case numbers CBM2014-00149, CBM2014- that patent holders anticipating post-grant on patent litigation, post-grant 00150, CBM2014-00151, CBM2014-00153, proceedings should prepare for them as early proceedings, and due diligence in the CBM2014-00161, and CBM2014-00175. as possible. This is particularly the case since pharmaceutical, biotechnological, the patent owners have only limited time to PTAB has yet to accept these CBMs. A threshold and medical device industries. respond preliminarily to challengers’ petitions determination for PTAB is whether REMS- for IPRs: just three months. based patents relate to a “financial product or

www.lifesciencesipreview.com 14 EXPERT COMMENT LSIPR Newsletter 09:14

he US Patent and Trademark Office (USPTO) guidance on the patent eligibility of natural products in the US following theT Myriad and Mayo court cases is LSIPR fundamentally flawed, according to the life sciences IP experts invited to take part in the first LSIPR roundtable discussion held roundtable earlier this month in London. “There are so many things wrong with it,” said Jane Wainwright, a partner at Potter Earlier this month, the firstLSIPR roundtable Clarkson in Nottingham. “I, personally, don’t disagree with the ability to exclude discussion took place in a London hotel, natural products. If it is found in nature chaired by managing editor Martin Essex, then I don’t think it should be patentable. But … they have overstepped the mark.” with six invited experts and deputy editor As reported by LSIPR on September 4 Ed Conlon taking part. We’ll be publishing a [http://www.lifesciencesipreview.com/ article/a-hostile-response-to-the-uspto- special report on the event but, to whet your s-guidelines], the USPTO’s request for appetite, here’s how the discussion began— comment on the guidelines it issued following the decisions in the Association for with a lively debate on the USPTO’s guidelines Molecular Pathology v Myriad Genetics, Inc on patent-eligible subject matter in the wake (Myriad) and Mayo Collaborative Services v Prometheus Laboratories, Inc (Mayo) court of the Myriad and Mayo court decisions. cases prompted an avalanche of replies, which were overwhelmingly negative. Now, the concern is that the USPTO may be unwilling to backtrack. “The difficulty is going to be that, with that sort of wave of anger against it, can the USPTO be big enough to admit it made a mistake?” asked Paul Chapman, a partner at Marks & Clerk in Edinburgh. “It is unprecedented to have this level of objection and I just don’t know whether they 1 2 3 4

will be able to. They have made it clear that Varuni Paranavitane, an associate at Osborne LIST OF ATTENDEES: they are not going to withdraw the guidelines, Clarke, thought the USPTO could be 1 Paul Chapman, partner, although they might amend them,” he added. challenged. “The US Supreme Court decision Marks & Clerk Another concern was whether the USPTO itself is a nuanced decision that brings the law of patentable subject matter in line with the EU 2 Anna Duch, senior associate, should be determining patent eligibility at all. Cambridge IP position,” she said. “It appears that the USPTO “That is one of the biggest problems,” said has gone beyond that. And I really don’t know 3 Paul England, senior associate, Wainwright. “Neither Congress nor the courts why. I can’t speak for the US legal system, but Taylor Wessing has made these rulings. The guidance doesn’t presumably it can be challenged at a higher 4 Varuni Paranavitane, associate, follow what Congress or the courts has said court.” Osborne Clarke and they have taken it too far. Something of 5 Chris Stothers, partner, this magnitude, as fundamental as patent Chapman agreed. “There has been a precedent Arnold & Porter eligibility, should be decided by Congress or in the past where the US has introduced rules 6 Jane Wainwright, partner, the courts. in relation to certain things,” he said. “They Potter Clarkson can be challenged over whether they have the “The USPTO officials have massively right to make those rules because they are 7 Martin Essex, editor, LSIPR overstepped their own remit, but they don’t, guidelines. They are not statute.” 8 Ed Conlon, deputy editor, LSIPR at the moment, acknowledge that. They just say it is the logical extension of the Myriad However, Wainwright and Paranavitane both decision,” she added. suggested there might have to be a patent

www.lifesciencesipreview.com LSIPR Newsletter 09:14 EXPERT COMMENT 15

and we have to adapt what we do. The people “Something of who will really lose out in this are the ones who were granted patents and now have this magnitude, as people questioning whether they are valid.” fundamental as patent This is even more true of patents that are pending, said Chapman. “There is nothing eligibility, should be you can do about those. At least we have decided by Congress an idea and some tricks up our sleeve to adapt the way we draft, to try and address or the courts.” these rules. But if you have a pending case Jane Wainwright then you’re stuck with the language in the application. That is really difficult. Those guys who have built their whole industry, their whole company, around a big IP portfolio are the ones with issues.” According to Chapman, start-up companies could be among the worst hit, while England 8 noted that venture capital investors will be extremely nervous and cautious about what a difference is where you have a monopoly they invest in. market,” he said. “The damaging thing for venture capitalists Nonetheless, Chris Stothers, a partner at Arnold is the fact that this changed retrospectively, & Porter, noted that the guidance marked a so you have a spot in time where people switch for the US. “For years we were seeing the have lost rights where they would have exact same arguments running the other way. A drafted differently if they had known the lot of criticism from the US said European rules rules would be like this,” said Stothers. 7 are just too restrictive on subject matter. Forget The more often it happens, the more damage is about subject matter; you shouldn’t worry done to the market. “This is not a clever place about that. Let’s look at novelty and inventive to invest if you are going to have a sudden step—that is what innovation is about. This decision by the Supreme Court that wipes out subject matter is ethical nonsense you do not a lot of investment. It doesn’t mean you won’t need to worry about. create new products in the future, but it does “Suddenly we have this switch-around, and mean people might be less willing to invest, all the criticism is being fired back at the US. because they are worried about what is going Some of the responses, particularly from the 5 6 to be the next Myriad/Mayo that is going to Europeans, have been saying ‘you’ve been telling strip away the value we saw in this business,” refusal before the matter can be taken through us that we are wrong for years and now you’re Stothers added. the court system and a decision reached. getting it wrong’. Also, the US rules are much However, “there are different types of risk: more court-driven and these guidelines much “They are effectively rules, because they reflect less subject to scrutiny, whereas European rules the risk that can be avoided and the risk that what the USPTO will do,” said Paul England, are in the legislation. You may not like them but cannot be avoided,” said Anna Duch, senior senior associate at Taylor Wessing. “What I they are there, although the US rules seem to be associate at Cambridge IP. “Investors have a find interesting is that the guidelines reflect being made with less scrutiny.” choice between investing in different fields and expand on the logic of the ruling in the and, if they can avoid changing rules, why case. I am looking at it in a different way and Drawing the line would they not do that?” my question as a lawyer is ‘will the Supreme Meanwhile, the billion dollar question for Meanwhile, with so much uncertainty Court in later cases actually follow its own researchers is where the line is drawn between hanging over the patent eligibility of natural logic and fill out those guidelines?’ I suppose those products that are patentable and those products, some investors are now turning to that is one of the big risks for patentees.” that are significantly different from a natural diagnostics, said Chapman. England suggested that the US position is now product, said England. “Where is that line to be “They wouldn’t go into biotech because that somewhat more restrictive than that in the UK drawn? That no doubt will be decided in future is going to take too long. Instead they go into and Europe. But he thought it unlikely that the decisions but is clearly going to be a difficult diagnostics and that has perhaps backfired a guidance would lead to an exodus of research question for those drafting patents to decide.” little at the moment. Medical devices is the from the US. “In fact it really makes no Chapman noted that patent drafters are used obvious area they will start moving into because difference where you’re located. What makes to such problems. “The goalposts move a lot they can see a much quicker exit,” he said. n

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