Chemical & Life Sciences
Total Page:16
File Type:pdf, Size:1020Kb
CHEMICAL & LIFE SCIENCES ChemicalYEAR IN REVIEW 2016 & Life Sciences Year in Review 2016 Washington,ARENT FOX LLP DC /DC Los / AngelesLA / NY // NewSF York / San Francisco / arentfox.com CHEMICAL & LIFE SCIENCES Table of Contents 2 YEAR IN REVIEW 2016 3 Introduction At the Supreme Court 4 As in previous years, 2016 brought us Subject Eligibility 8 a combination of both expected and On-Sale Bar unexpected holdings by the Supreme 10 Anticipation/ Court and the Federal Circuit. Obviousness The Supreme Court decided three patent cases in 2016, but the Court’s denial of certiorari in Ariosa v. Sequenom will have the most lasting impact on the prospects for 18 patenting in the life sciences. The Federal Circuit’s Ariosa decision—left undisturbed by Written Description the Court—precludes patenting most diagnostic methods that rely on generally known techniques, as being drawn to ineligible subject matter under 35 U.S.C. § 101. Combined 19 with the Federal Circuit’s decision in Genetic Techs. v. Merial that allows adjudicating Indefiniteness § 101 eligibility questions on a motion to dismiss, the Ariosa decision rapidly changes the landscape for patenting diagnostics and potentially other life sciences inventions. 20 Claim Construction/ But there was at least one silver lining for life science patent owners this year. In Infringement Rapid Litigation Management Ltd. v. CellzDirect, Inc., the Federal Circuit upheld claims to a method of producing hepatocytes, finding that the claims are “directed 28 to” patent eligible subject matter, and although the method steps were individually Inequitable Conduct known, the process of repeating the steps was not routine and conventional. 29 In two decisions affecting chemical and life science patenting, the Supreme Biologics Price Court weighed in on the standard for willfulness in Halo, and the procedures for Competition and inter partes review (IPR) in Cuozzo. Halo overruled the Federal Circuit’s Seagate Innovation Act of standard of “objective recklessness,” making it easier for patent owner to prove 2009 (BPCIA) willful infringement and obtain treble damage awards. This decision increases the importance of timely non-infringement opinions of counsel for potential infringers. 31 Conclusion In Cuozzo, the Court blessed the Patent Office’s approach to claim construction in an inter partes (IPR), and agreed that institution decisions based on slightly different grounds than presented in the petition are not appealable. The Court cast some doubt upon the Federal Circuit’s blanket practice of finding anything related to the institution decision non-appealable. As a result, the Federal Circuit granted en banc rehearing in WiFi One, Inc. v. Broadcom Corp., where it will reassess its standards for what issues may be appealed to the Federal Circuit in an IPR. The Federal Circuit largely affirmed the Patent Trial and Appeal Board’s decisions whether they related to IPRs or ex parte examinations. For example, the court held that the Board has discretion regarding whether to permit new arguments late in an IPR proceeding, and to rely on references showing the “state of the art” even if not cited in the institution decision. The Federal Circuit also weighed in on several issues of substantive patent law of interest to chemical and life sciences, including anticipation, obviousness, indefiniteness, written description, and claim construction. Most notably for pharmaceutical patent owners, the en banc court reversed an earlier panel holding that a contract manufacturer’s “sale” of manufacturing services to the patentee presented an on-sale bar. ARENT FOX LLP DC / LA / NY / SF CHEMICAL & LIFE SCIENCES 3 YEAR IN REVIEW 2016 For example, judicial review may be proper where a petition At the Supreme fails to give “sufficient notice” such that there is a due process problem with the entire proceeding; or the agency acts outside Court its statutory limits by, for example, canceling a patent claim for indefiniteness under §112 in an IPR. Such “shenanigans” may In Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 be properly reviewable because reviewing courts may “set aside (2016), the Supreme Court considered two questions regarding agency action” that is “contrary to constitutional right,” “in excess inter partes reviews (“IPRs”) namely (1) does the “No Appeal” rule of statutory jurisdiction,” or “arbitrary [and] capricious.” Id. at 2155. (making the PTO’s determination to institute an IPR final and non- appealable) bar a court from considering whether the PTO wrongly The Supreme Court’s language apparently softening the instituted an IPR on grounds not specifically mentioned in the IPR “No appeal” rule resulted in a successful en banc petition Request; and (2) does the statute permitting PTO issuance of challenging the Federal Circuit’s case law that severely regulations governing IPRs authorize the PTO’s claim construction restricted judicial review of almost all issues decided on standard of broadest reasonable construction (“BRC”) in institution of IPR. In WiFi One, Inc. v. Broadcom Corp.,1 the light of the specification of the patent in which it appears? Federal Circuit requested briefing on the following question: The “No appeal” rule making the PTO’s determination Should this court overrule Achates Reference to institute an IPR final and non-appealable applies Publishing, Inc. v. Apple Inc., 803 F.3d 652 even against claims not specifically identified in (Fed. Cir. 2015)2 and hold that judicial review is the IPR Request, where such claims were logically available for a patent owner to challenge the PTO’s linked to the claims subject to the Request. determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing Garmin argued that the IPR petition had to specifically mention all the filing of petitions for inter partes review? claims to which the obviousness argument applied. The government argued that because the claims were “all logically linked and ’rise Should the Federal Circuit loosen the “No appeal” rule, Patent and fall together,’ the ’petition need not simply repeat the same Owners would be able to argue the Patent Office erred in instituting argument expressly when it is so obviously implied.’” Id. at 2139. IPR where one or more statutory requirements for IPR were not The Government also argued that because Garmin’s argument met. For example, as in Achates, where the patent owner had filed a relates to a matter determined during the institution phase of an civil lawsuit for patent infringement against petitioner, or its privies, IPR, judicial review of that decision is precluded by the “No appeal” more than one year before the petition’s filing date in contravention rule codified in 35 U.S.C. § 314(d), which provides that “[t]he of the one-year time bar of § 315(b). Because this will impact a determination by the Director whether to institute an inter partes large number of IPR decisions, an en banc reversal in WiFi One review under this section shall be final and nonappealable.” would be the largest lasting effect of the Cuozzo decision. The Court agreed with the government, concluding that “the ‘No Appeal’ provision’s language must, at the least, forbid an appeal PTO had authority to mandate the “broadest that attacks a ‘determination . whether to institute’ review by reasonable construction” standard for IPRs because raising this kind of legal question and little more.” § 314(d). The the statute (1) does not unambiguously dictate a Court noted that “a contrary holding would undercut one important standard and thus leaves a “gap” and (2) expressly congressional objective, namely, giving the PTO significant allows the PTO to enact reasonable rules for IPRs. power to revisit and revise earlier patent grants.” Id. at 2140. The The Court next addressed whether the PTO had the authority to Cuozzo holding in this regard gives the PTAB flexibility in crafting mandate the BRC standard for IPRs. Citing Chevron3, the Court final written decisions including final grounds that go beyond noted that “[w]here a statute is clear, the agency must follow the merely repeating verbatim the grounds proposed in the petition. statute,” “[b]ut where a statute leaves a ‘gap’ or is ‘ambigu[ous],’ we typically interpret it as granting the agency leeway to enact Court does not preclude review of all appeals of rules that are reasonable in light of the text, nature, and purpose IPR institution decisions, such as where the appeals of the statute.” Cuozzo, 136 S. Ct. at 2142. Because “[n]o implicate Constitutional questions, are in excess of statutory jurisdiction or arbitrary and capricious. 1 Case No. 2015-1944, -1945, -1946 (Fed. Cir. January 4, 2017) (granting petition for en banc review). However, the Court did not preclude review of appeals that (i) 2 Achates held that the patent owner could not seek review of the PTAB’s implicate constitutional questions, (ii) depend on other less closely determination that a petitioner had met the one-year time bar of § 315(b). related statutes, or (iii) present other questions of interpretation 3 Chevron, U.S.A., Inc. v. Natural Resources Defense that reach, in terms of scope and impact well beyond “this section.” Council, Inc., 467 U.S. 837 (1984) ARENT FOX LLP DC / LA / NY / SF CHEMICAL & LIFE SCIENCES 4 YEAR IN REVIEW 2016 statutory provision unambiguously directs the agency to use one On review, the Supreme Court noted that 35 U.S.C. § 284 provides standard or the other,” “[t]he statute contains such a gap.” Id. simply that “the