Comments of the Biotech Industry Organization
CRITICAL SYNERGY:
THE BIOTECHNOLOGY INDUSTRY
AND
INTELLECTUAL PROPERTY PROTECTION
PRESENTATIONS OF THE
INTELLECTUAL PROPERTY COMMITTEE OF THE
BIOTECHNOLOGY INDUSTRY ORGANIZATION
AT THE OCTOBER 17, 1994, HEARING OF
THE U.S. PATENT AND TRADEMARK OFFICE
SAN DIEGO, CALIFORNIA
Biotechnology Industry Organization
1625 K Street, N.W., Suite 1100
Washington, D.C. 20006
Preface
The U.S. Patent and Trademark Office (USPTO) held a hearing on
intellectual property issues of concern to the biotechnology industry on
October 17, 1994, in San Diego. A copy of the Notice for the hearing is
printed in Appendix A of this report. This report is a compilation of
the presentations on behalf of the Intellectual Property Committee of the
Biotechnology Industry Organization (BIO), which represents over 540
biotechnology companies, biotechnology research centers and others
involved with the biotech industry1. This report outlines the
intellectual property agenda of the biotechnology industry for the USPTO.
These presentations respond to the USPTO case law analysis and questions
regarding each patent issue raised in the Notice.
BIO is printing this compilation of the presentations so that it is
accessible to USPTO officials and examiners, BIO members, the Secretary
of Commerce, other officials of the Clinton Administration, members and
staff of the House and Senate Judiciary Committees, other Members of
Congress, voluntary health organizations, venture capitalists and
investment bankers, and others concerned about the biotechnology
industry.
There is a critical synergy between the biotechnology industry and
intellectual property protection. Implementation of the recommendations
in this report by the USPTO will enhance the competitiveness of the
biotechnology industry, which depends on protection of its intellectual
property to justify its extraordinary research expenditures.
BIO welcomes the opportunity to work with the USPTO and other
interested organizations and individuals to ensure that intellectual
property protection is afforded to the inventions of the biotechnology
industry.
Acknowledgments
BIO wishes to acknowledge and thank Bruce Lehman, Assistant Secretary
of Commerce and Commissioner of Patents and Trademarks, for scheduling
the hearing and for his concern about the competitiveness of the U.S.
biotechnology hearing. We also wish to thank the following officials and
staff of the USPTO: Michael Kirk, Deputy Assistant Secretary and Deputy
Commissioner; Jeff Kushan, Attorney Advisor for the Office of Legislation
and International Affairs; Lawrence Goffney, Assistant Commissioner for
Patents; Barry Richman, Director, Group 18000; and Charles Warren, Deputy
Director, Group 18000.
This report was prepared by members of BIO's Intellectual Property
Committee under the leadership of Chuck Ludlam, BIO's Vice President for
Government Relations, and Allen Norris, Committee Chairman, Director of
Patents at Sandoz Agro, Inc. Kenneth Kero, administrative assistant in
BIO's Government Relations Department made major contributions to the
editing and production of this report.
The Committee's presentations were drafted by fifty-four individuals
working on seven Issue Teams. These drafts were presented in oral
testimony at the hearing in San Diego by sixteen individuals.
BIO wishes to acknowledge the special contributions of the individuals
who helped to draft the enclosed position papers and those who made
presentations at the hearing in San Diego on October 17, 1994. Their
names, affiliations and addressed are listed below.
As this document represents an amalgamation of work by all of these
individuals it must be taken as an expression of the views of various
individuals, rather than the views of any specific individual or the
company or clients they represent. Each of the individuals, clients and
companies do not necessarily subscribe to each and every position
articulated herein. Given the short time available to prepare these
comments, they represent the views of the BIO Intellectual Property
Committee, not the BIO Board of Directors or all members of BIO, and the
views do not necessarily represent the views of all of the members of
this Committee.
Mr. Thomas DesRosier
VP and Chief Patent Counsel
Genetics Institute
87 Cambridge Park Drive
Cambridge, MA 02140
Ms. Stacey Channing
ImmuLogic Pharmaceutical Corporation
610 Lincoln Street
Waltham, MA 02186
Ms. Darlene VanStone
ImmuLogic Pharmaceutical Corporation
610 Lincoln Street
Waltham, MA 02186
Ms. Anne Craig
ImmuLogic Pharmaceutical Corporation
610 Lincoln Street
Waltham, MA 02186
William H. Epstein, Esq.*
Assistant Patent Counsel
Hoffmann-LaRoche Inc.
340 Kingsland Street
Nutley, NJ 07110
Mr. George Johnston*
Associate Patent Counsel
Hoffmann-La Roche Inc.
340 Kingsland Street
Building 86/602D
Nutley, NJ 07110
Dr. Estelle J. Tsevdos
Manager, Biotechnology Section
American Cyanamid Company
One Cyanamid Plaza
Wayne, NJ 07470
Norman C. Dulak, Ph.D.
Director-Patents
Schering-Plough Corporation
One Giralda Farms
P.O. Box 1000
Madison, NJ 07940-1000
Dr. Paul H. Ginsburg
Assistant General Patent Counsel,
Pfizer Inc.
235 East 42nd Street
New York, NY 10017-5755
Ms. Cheryl Agris
Novo Nordisk A/S
405 Lexington Avenue
Suite 6400
New York, NY 10174
T. Andrew Culbert, Esquire
Partner
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Richard P. Burgoon, Jr.
Senior Director & Patent Counsel
Cephalon, Inc.
145 Brandywine Parkway
West Chester, PA 19380
Herbert Jervis, Esq.
Senior Patent Attorney
SmithKline Beecham Pharmaceuticals
709 Swedeland Road
P.O. Box 1539
King of Prussia, PA 19406
Thomas G. Wiseman, Esq.*
Counsel
Cushman, Darby & Cushman
1100 New York Ave., NW
Ninth Floor, East Tower
Washington, DC 20005
Dr. Michele Cimbala, Esq.
Partner
Sterne, Kessler, Goldstein & Fox
1100 New York Avenue, NW
Suite 600
Washington, DC 20005-3934
Evelyn McConathy, Esq.
Sterne, Kessler, Goldstein & Fox
1100 New York Avenue, NW
Suite 600
Washington, DC 20005-3934
Dr. Larry S. Millstein
Patent Agent
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Mr. John P. Isacson, Jr.
Associate
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Dr. Melvin Blecher
Counsel
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Ms. Pat Granados
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Richard C. Peet, Ph.D.*
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Lisa Raines
Vice President of Government Relations
Genzyme Corporation
1020 19th Street, NW Suite 550
Washington, D.C. 20036
Mark A. Hofer, Esq.
Senior Vice President, General Counsel
Genzyme Corporation
One Kendall Square
Cambridge, MA 02139
Ms. Janet Hasak
Manager of Patent Prosecutions & Trademarks
Genentech, Inc.
460 Point San Bruno Boulevard
South San Francisco, CA 94080
Dr. Phillip Jones
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Dr. Bernhard D. Saxe
Partner
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Dr. William J. Scanlon*
Partner
Foley & Lardner
1 South Pinckney Street
P.O. Box 1497
Madison, WI 53701-1497
Mr. Stanley Schlosser
Foley & Lardner
3000 K Street, NW
Suite 500
Washington, DC 20007-5109
Dr. Kate Murashige*
Partner
Morrison & Foerster
2000 Pennsylvania Avenue, NW
Suite 5500
Washington, DC 20016-1812
Mr. Geoffrey M. Karny
Senior Intellectual Property Counsel
Genetic Therapy, Inc.
938 Clopper Road
Gaithersburg, MD 20878
Edward H. Gorman, Esq.
Associate General Counsel, Patents
Abbott Laboratories
Dept. 377, AP6D
Abbott Park, IL 60064-3500
Howard C. Stanley, Esq.
General Patent Counsel
Monsanto Company
800 N. Lindbergh Blvd., A3SA
St. Louis, MO 63167
Mr. Richard H. Shear
Associate General Patent Counsel
Monsanto Company
800 North Lindberg Boulevard
D1S
St. Louis, MO 63167
Mr. Daniel M. Chambers*
Patent Counsel
Viagene, Inc.
11055 Roselle Street
San Diego, CA 92121
Mr. Jerry Caulder, Ph.D.*
Chairman, President & CEO
Mycogen Corporation
4980 Carroll Canyon Road
San Diego, CA 92121
Mr. John Sanders*
Mycogen Corporation
4980 Carroll Canyon Road
San Diego, CA 92121
Mr. Carlton J. Eibl
Executive VP & General Counsel
Mycogen Corporation
4980 Carroll Canyon Road
San Diego, CA 92121
Mr. William Rastetter, Ph.D.*
President & CEO
IDEC Pharmaceuticals Corportation
11011 Torreyana Road
San Diego, CA 92121
Kenneth J. Woolcott, Esquire
Vice President
IDEC Pharmaceuticals Corporation
11011 Torreyana Road
San Diego, CA 92121
Mr. Karl Bozicevic
Fish & Richardson
2200 Sand Hill Road, Suite 100
Menlo Park, CA 94025
Ms. Laura Handley*
Weil, Gotshal & Manges
2882 Sandhill Road
Suite 280
Menlo Park, CA 94025-7022
Ms. Elizabeth F. Enayati*
Associate
Weil, Gotshal & Manges
2882 Sandhill Road
Suite 280
Menlo Park, CA 94025-7022
James Bradburne, Ph.D.
Patent Agent
Weil, Gotshal & Manges
1615 L Street, N.W.
Suite 700
Washington, DC 20036
Ms. Barbara Rae-Venter*
Weil, Gotshal & Manges
2882 Sandhill Road
Suite 280
Menlo Park, CA 94025-7022
Mr. Craig Opperman
Weil, Gotshal & Manges
2882 Sandhill Road
Suite 280
Menlo Park, CA 94025-7022
Edmund J. Fish, Esq.
Attorney
Weil, Gotshal & Manges
2882 Sandhill Road
Suite 280
Menlo Park, CA 94025-7022
Robert P. Blackburn, Esq.
Vice President Intellectual Property
Chiron Corporation
4560 Horton Street
Emeryville, CA 94062
Ms. Barbara Luther
Director, Intellectual Property
Incyte Pharmaceuticals
3330 Hillview Ave.
Palo Alto, CA 94304
Mr. Allen E. Norris
Director, Patents
Sandoz Agro, Inc.
975 California Avenue
Palo Alto, CA 94304
Mr. Timothy Gens*
Counsel
Fenwick and West
Two Palo Alto Square
Suite 800
Palo Alto, CA 94306
Mr. William E. Dickheiser
Patent Counsel
Zeneca Plant Sciences Inc.
1200 S. 47th Street
Richmond, CA 94804
Ms. Susan Perkins
Counsel
Campbell & Flores
4370 La Jolla Village Drive
Suite 700
San Diego, CA 92122
Steven M. Odre, Esq.
Vice President, Intellectual Property
Amgen, Inc.
1840 DeHavilland Drive
Thousand Oaks, CA 91320
Elizabeth Lassen, Esq.*
Vice President, Chief Patent Counsel
Calgene, Inc.
1920 Fifth Street
Suite F
Davis, CA 95616
Mr. Jon Case
Director Corporate Development
Targeted Genetics Corporation
1100 Olive Way
Suite 100
Seattle, WA 98101
Dr. Kenneth J. Widder*
Chairman & CEO
Molecular BioSciences
10030 Barnes Canyon Road
San Diego, CA 92121
* Made presentation at San Diego hearing on October 17, 1994.
Introduction
Mr. Carl Feldbaum
President
The Biotechnology Industry Organization
The biotechnology industry and the Biotechnology Industry Organization
(BIO) appreciates the scheduling by the U.S. Patent and Trademark Office
of a hearing on intellectual property issues affecting our industry on
October 17, 1994, in San Diego.
This hearing provides our industry with an opportunity to outline a
comprehensive presentation covering all of the principal intellectual
property issues for biotechnology inventions and to present our
recommendations for action. This agenda and these recommendations were
drafted by BIO's Intellectual Property Committee
and will be presented at the hearing by a series of witnesses and they
are compiled and published in this report.
This analysis of the issues and recommendations have been developed by
dozens of individuals at companies and law firms and their contributions
are noted throughout this report. One of the great strengths of the
biotechnology industry is the exceptional service we receive from patent
counsel.
Intellectual property protection is critical to the competitiveness of
our nation in general and the biotechnology industry in particular. Our
investors will not risk their capital to create innovative,
state-of-the-art approaches to unique problems if meaningful patent
protection cannot be secured. The USPTO, therefore, plays a critical
role in our industry's ability to fund its research into life saving and
life enhancing products.
The biotechnology industry and BIO look forward to working with the
Commissioner of Patents and Trademarks, Bruce Lehman, and his staff to
enhance the intellectual property protection afforded to the
biotechnology industry and implement these recommendations.
October, 1994
Table of Contents
Preface iii
Acknowledgments v
Introduction xi
Table of Contents xiii
Economic Value of Patent Protection
for the Biotechnology Industry 1
Statements of Biotechnology CEOs 5
Kenneth Widder, Chairman and CEO,
Molecular BioSciences 5
William Rastetter, President and CEO,
IDEC Pharmaceuticals Corporation 7
Introduction to Utility &
Operability Considerations 11
Practical Utility 25
Executive Summary 25
Case Law Review 26
Question 1 42
Question 2 46
Question 3 49
Operability/Enablement 53
Executive Summary 53
Case Law Review 54
Question 1 61
Question 2 65
Question 3 72
Nonobviousness 75
Introduction 75
Case Law Review 78
Question 1 91
Question 2 95
Question 3 97
Question 4 112
Question 5 120
Implications of Legislation 123
Pending Patent Reform Legislation 123
Biotechnology Patent Protections Act 138
Question 1 140
Question 2 143
Question 3 144
Question 4 150
Section 104 interferences 154
Experimental Use 157
Case Law Review 157
Our Concerns 159
Recommendations 161
Plant Patent Issues 163
Question 1 163
Coverage of plants under utility 171
Conclusion and BIO Invitation 173
Appendices 175
Appendix A 176
Notice of Public Hearing and Request for
Comments on Patent Protection Issues for
Biotechnology Inventions, Patent and
Trademark Office, 59 Fed. Reg. 45267(September 1, 1994)
Appendix B 181
Comments Submitted on Behalf of BIO
Concerning Patent Harmonization Issues
in response to Patent and Trademark Office
notice, October 28, 1993 BIO Position on
Changing to a First-to-File Patent System
Appendix C 185
Comments Submitted on Behalf of BIO
Concerning the Standard of Non-obviousness
for Public Hearing of Patent and Trademark
Office, July 20, 1994
Appendix D 191
1. June 27, 1994, Letter to Commissioner Lehman
from Carl Feldbaum and Charles Ludlam
Regarding Draft GATT Implementing Legislation
Attachments:
a) BIO Proposed Amendments to 35 USC 154 to Implement GATT
b) Length of Appeals For Biotechnology
Patents -- CAFC
c) Examples of Biotechnology Interferences
d) BIO Position on S. 1854, the Patent Simplification Act of 1994
e) BIO Comments on "Utility" Standard
2. August 12, 1994, Letter to Commissioner Lehman from Carl Feldbaum
and Charles Ludlam Regarding Draft GATT Implementing Legislation
3. September 27, 1994, Letter to Ambassador Mickey Kantor and
Commissioner Lehman from Carl Feldbaum and Charles Ludlam Regarding
Final GATT Implementing Legislation
Appendix E 214
Membership of Biotechnology Industry Organization
ECONOMIC VALUE OF PATENT PROTECTION
FOR THE BIOTECHNOLOGY INDUSTRY
It is appropriate that this agenda for intellectual property protection
for the biotechnology industry begin with documentation for the economic
value of patent protection for our industry.
This report is premised on the fact that there is a critical synergy
between intellectual property protection and the biotechnology industry.
This fact has now been demonstrated in a just-released, sophisticated
economic analysis of the value of patents to the biotechnology and their
importance in capital formation for the biotechnology industry.
Capital formation is a critical issue for the biotechnology industry.
In 1994 the industry lost $4.1 billion, an increase in losses of 14
percent over 1993. The biotechnology industry, in fact, has never had a
profitable year and only one percent of companies are profitable.
The biotechnology industry is one of the most research intensive
industries in the history of civilian manufacturing, based on research
and development on a per employee basis. In a 1994 survey by Business
Week, six of the top ten firms in the U.S. in terms of research
expenditures per employee were biotechnology companies -- Biogen
($208,724), Genentech ($117,594), Genetics Institute ($107,657), Immunex
($92,693), Amgen ($83,302), and Chiron ($64,263)2. On average, biotech
firms spend $59,000 per employee on research. The U.S. corporate average
was $7,476 for 1993. Ernst & Young reports that biotechnology companies
spent $7 billion on research in 1994, a 23 percent increase over 19923.
The research is expensive for one simple reason; we are advancing basic
and applied science at the same time.
The scientific research by the biotechnology industry is exceedingly
expensive. The Office of Technology Assessment finds that the average
cost per new chemical entity (NCE) is $359 million4. This survey did not
cover the cost of developing a biotechnology drug, but analyses done by
our industry find that the cost of developing a biotechnology drug may be
similar. We know that Genzyme and Amgen, two member companies of BIO,
raised $328 and $406 million, respectively, in equity before they brought
their first products to market. Genentech has spent $1.6 billion on
research and development and has four basic products on the market.
Public financing was especially difficult for biotechnology companies
in 1993. The American Stock Exchange Biotechnology Index lost 32.6
percent. Several public biotech companies were forced to do private
investment in public equity (PIPE) financing, deals where public
companies sell stock to private investors at a discount to their current
stock price. 1993 was a difficult year because in large part investors
were scared by the de facto price controls in the Administration's health
care plan. They feared that some widely discussed points of health care
reform would mean that they would not recoup their investment in a
company that was close to bringing a product to market. According to
many press accounts and three BIO surveys of our companies developing
therapies for AIDS, cancer, and other deadly and costly diseases, our
companies are cutting back on research.
The biotech industry is in a critical stage of research and
development. There are 23 biotech medicines that have been approved for
sale in the U.S. by the Food and Drug Administration (FDA). Two hundred
and seventy biotech therapeutics are in human clinical trials. According
to Ernst and Young, two thousand potential therapies are in early
development stages5. Now is the time when the biotech industry needs
increasing amounts of capital to bring these products to market so that
they can improve our quality of life.
Ernst & Young reports that biotech companies, on average, have 25 months
of capital left at their current burn rates (the rate at which capital is
being expended.) According to a recent report by Dr. Robert Goldberg of
the Gordon Public Policy Center at Brandeis University, 75 percent of
biotechnology companies have 2 or fewer years of capital left. That
means that a staggering 983 companies will need to go to the market in
the next two years or face severely restricting their activities, going
out of business, merging or selling rights to a larger firm.
With this economic environment for the biotechnology industry in mind a
discussion paper has just been released which specifically documents the
vital economic importance of intellectual property protection. Dr.
David Austin, a fellow at Resources for the Future (RFF) in Washington,
D.C. recently finished a paper entitled "Estimating Patent Value and
Rivalry Effects: An Event Study of Biotechnology Patents." The paper
analyzes the value of patents, and their effect on competing companies
and on the biotechnology industry in particular. Dr. Austin confined the
study to biotechnology firms because, "their research intensity is known
to be very high; they rely heavily on patent protection; and their patent
races tend to be extremely competitive."(Pg. 3) Dr. Austin further
states that since there are relatively few biotechnology products yet
brought to the market, "companies need an effective way to signal their
future prospects and attract investment capital. Patents serve this
function."(Pg. 4)
Dr. Austin references earlier economic estimates in this field in the
introduction to the paper. He cites a 1984 paper by Griliches, which
found that a successful patent is worth about $200.000. He also cites a
study by Pakes, 1985, which found that when a firm receives a patent it
"indicates that events have occurred that increase the firm's market
value by $810,000."(Pg. 2)
The results of Dr. Austin's study indicate that there is a significant
reaction in the stock market when certain broad types of patents issue.
When a patent is listed in the Wall Street Journal, it positively affects
the value of the stock for the company receiving the patent, and
negatively affects the stock price of competitors to that company. Dr.
Austin defines a "significant" increase in valuation as $1.7 million on a
company capitalized at an average of $400 million. The report also
indicates that there is a positive correlation between stock price, when
a patent is filed and issued, and research and development expenditures.
In addition, the report indicates that the granting of an important
patent appears to raise the net value of the entire industry.
Dr. Austin concludes the report with a discussion of the policy
implications of the findings. The report states "current patent policy
is very crude, from the standpoint of economic theory, and certainly is
not strongly linked to the value of the patent."(Pg. 32) If patent
examiners were provided with better information, Dr. Austin believes
patent examiners and judges that help determine the scope of a patent
would be able to bring greater economic rationality into their
decision-making. Finally, Dr. Austin concludes the report by suggesting
that a study of the long-term effects of rival patents is a necessary
next step in this line research.
It is easy to see the relationship between the capital formation
pressures faced by the biotechnology industry and Dr. Austin's study.
Stock prices and market value are a critical variable in the ability of a
company to raise capital. Patents give investors confidence and
influence their willingness to put their capital at risk. The shortage
of capital in the biotechnology industry means that the protection of
intellectual property has never been more critical for the ability of the
industry to survive and prosper.
BIO recommends that the United States Patent and Trademark Office
(USPTO) examines the soon to be revised Austin discussion paper as it
reviews the other recommendations in this report. We do not argue that
economic considerations are legally relevant to the implementation of the
patent law. However, with respect to the biotechnology industry, these
considerations highlight the importance of the hearings and the priority
which the USPTO should give to responding to the recommendations which
are made here.
STATEMENTS OF BIOTECHNOLOGY CEOS
Dr. Kenneth J. Widder
Chairman & CEO
Molecular BioSciences
10030 Barnes Canyon Road
San Diego, CA 92121
Good morning and welcome, we very much appreciate you coming to San
Diego to hold this hearing on biotechnology industry patent issues. I
would like to explain why the work of the Patent and Trademark office is
so critical to the biotech industry. I am Kenneth J. Widder, M.D., and
am here today to testifying on behalf of a number of organizations and
Molecular Biosystems. I am President of the San Diego Biomedical
Industry Council (BIC), a Director of the California Health Care
Institute, member of the Environmental Committee, Greater San Diego
Chamber of Congress, Chairman of the San Diego Technology Council, and
serve as a member of the Governor's Council on Biotechnology.
Since 1983 I have been Chairman and CEO of Molecular Biosystems, Inc.,
a biomedical company that manufactures and develops a range of contrast
agents for use with diagnostic ultrasound, Magnetic Resonance Imaging
(MRI) and Computed Tomography (CT). I received my medical degree from
Northwestern University and completed my residency in Pathology at Duke
University Medical Center. I came to San Diego in 1981 and served as
Associate Clinical Professor of Pathology at the University of
California San Diego until founding Molecular Biosystems in 1981.
Recently, Molecular Biosystems received FDA approval for Albunex, the
first transpulmonary ultrasound contrast agent for ultrasound. For
years, heart patients have had to visit cardiologists to receive multiple
tests in order to determine cardiac ailments. Sometimes,
catheterization is required to determine what more non-invasive tests
could not. Today, new technology and drugs have decreased the likelihood
of repeat visits. Albunex, developed by Molecular Biosystems is one of
these latest advancements.
When used with ultrasound imaging techniques, Albunex helps reflect
sound waves in the blood about a hundred times better than blood alone,
thus providing cardiologists with a brighter, clearer picture of the
heart's inner lining. We believe Albunex is another important patented
innovation that may become very useful in diagnosing heart disease.
Mark Twain called ininventors "the creators of the workd-after God."
Connecticut Yankee at King Arthur's Court, Twain remarked that the very
first thing he would do in his administration -- and it was on the very
first day of it, too - was to start a patent office; "that a country
without a patent office and good patent laws was just a crab, and
couldn't travel any way but sideways or backwards." Patents help
society move forward, they advance all innovations. Patents teach
inventions to the public, in exchange for this teaching, inventors get 17
years of monopoly on that invention. If the patent system did not exist,
the inventors would tend to keep inventions secret, and society would not
have the benefits of many new technologies and advances.
Patents can be used to put boundaries around intellectual property.
The only right a patent holder has is to prevent others from practicing
the invention. No one will invest in an Idea that is not patented
because if it is a good idea all other companies will copy it. An
invention that is patented is more valuable than one that's not because
they can be sold to someone else. Investors now view patents as tangible
assets of a company.
One way a biotechnology company can raise money is through licenses
with big Pharmaceutical companies. These license agreements permit
royalties to be collected during the term of the patent. One industry
model becoming more prevalent is the Royalty Income Trust Company (RITCO)
where biotechnology companies have found that the marketing, development,
manufacturing, and clinical development of a drug is too expensive, so
they sell the rights of the patent for a royalty stream.
Patents are imperative to our industry, our survival depends on it, we
must continue to preserve the technological innovations our industry is
creating. One of the greatest challenges we face as an industry is the
continued funding for the development of innovative products. As public
markets fluctuate as funding sources, strategic alliances become
increasingly more important. The only way a biotechnology company can
get the highest value out of a strategic alliance is for the company to
license intellectual property protected by a patent.
In order for our Industry to remain competitive on a global basis, we
need to have strong intellectual property protection. I urge you to
listen carefully to our presentations today on patent issues raised in
your notice. When the PTO rejects a patent claim it can have very
serious consequences for our industry. It would not have been possible
to develop Albunex without strong patent protection.
In addition, the Patent and Trademark Office will need to be an
increasingly efficient department. We feel that the current high
turnover rate in its office effects both industry and government. The
high turnover rate puts in place more and more inexperienced examiners,
diminishing the level of education of people examining our products.
This lack of skill and your re-education of examiners hinders the
progress of innovations being examined. We as an industry are very
committed to work with you to insure a strong and effective U.S. Patent
and Trademark Office.
Thank you for providing me the time to speak on behalf of this
industry.
William Rastetter, Ph.D.
President & CEO
IDEC Pharmaceuticals Corporation
11011 Torreyana Road
San Diego, CA 92121
Good morning and thank you for coming to San Diego for this meeting.
My name is Bill Rastetter and I am the President and CEO of IDEC
Pharmaceuticals. I also serve on the board of directors of San Diego's
Biomedical Industry Council, the board of San Diego's Biocommerce
Association or BIOCOM, the board of the California Health Care Institute,
and on the Governor's Council on Biotechnology. IDEC is a member of BIO.
IDEC is one of about 150 biotech or biomedical companies in San Diego
which collectively employ about 14,000 individuals. The biomedical
community in San Diego is a very cohesive and active one. San Diego has
embraced our industry as an important part of its economic future. In no
small part, the issues which will be discussed today, and our companies'
ability to timely secure and build intellectual property portfolios will
drive the growth of our companies. Ultimately, growth for our companies
will entail a transition from R&D organizations which consume capital to
larger companies driven by cash flow from product sales. This transition
will truly drive economic growth in the region.
It has been said recently by many that Health Care Reform is dead.
Nothing could be further from the truth! Health Care Reform is occurring
and occurring rapidly without legislation, without direct government
intervention. Private sector market forces are changing the way every
company or group of practitioners engaged in health care does business.
It would appear that the largest pharmaceutical companies are gaining
ground in the market place on the mid-sized companies. Companies like
Merck and SmithKline Beecham have moved aggressively to acquire Pharmacy
Benefit Managers as their paradigm for doing business changes. The
analogy might be that the hardware makers (read the drug developers) will
now also be in the business of software (read pharmacy benefits
management and outcomes research) to optimize how their drugs are used
and to allow them to capture further economic value.
But the pipelines of the large pharmaceutical companies are not as full
as they might be. And revenue growth is eroding with blockbuster drugs
coming off of patent, with generic substitution, and with the broad
pricing pressures that exist from private-sector-driven Health Care
Reform. Well, all of this is actually good news for the small company,
provided that we can continue to innovate -- and provided that we can
timely secure and build intellectual property portfolios.
Revenue erosion and pressure on the bottom line for large "Pharma" is
leading to cutbacks in internal R&D budgets. Large Pharma will
increasingly look to small companies like IDEC for late-stage,
development products where the risk -- both technical risk and
intellectual property risk --has been largely removed. So, small may be
beautiful, provided we can continue to discover and efficiently develop
protectable, proprietary products.
The small company in the era of Health Care Reform may well emerge as
the predominant engine of innovation in partnership with large companies;
the large companies will consolidate their power as the worldwide
marketing partners. Clearly, patent protection is paramount to the
health of such partnerships.
The uncertainty surrounding Health Care Reform has badly damaged the
capital markets for biotech. It is today impossible for small companies
to rely routinely on the public equity markets as a source of capital.
So, increasingly we look to large Pharma to fund R&D and to sustain us as
viable research and development organizations until our products are
launched and royalties and/or profit sharing arrangements begin paying
the bills. And it may take ten to twelve years after a company hires its
first scientist to reach that stage! A critical element in partnership
due diligence is always the small company's intellectual property
position. Let there be no mistake, patents are very important to
securing capital -- very important to our very viability! And issued
patents are far more valuable than patent applications.
From a small company perspective, it might be good to mention a couple
of things:
First, the trend at the USPTO toward requiring human clinical data to
demonstrate utility hurts the small company. Generally, we need to find
corporate partners to fund clinical development-- clinical development is
very expensive. Without a clear patent position it can be hard to get a
partner. Catch 22!
Second, the "first to invent" system in the U.S. helps the small
company. I am glad we have not changed this element of our patent
system. We cannot file patent applications as efficiently or as early as
the large companies. We just don't have the resources. We need to spend
as much as we can on discovery and on development of product leads. A
"first to file" system would divert dollars away from R&D, curtail
innovation, and weaken the small company. You know this as well as I do:
a "first to file" system would also burden the Patent Office with
premature applications on incompletely conceived inventions.
We had the pleasure at IDEC of hosting a group of patent examiners for
a tour of our facility and a "teach-in" on our technology. We told the
examiners about our product candidates which are antibodies for the
treatment of cancer and autoimmune disease. We told them about our
technology which includes gene splicing from cells taken from monkey and
human immune systems to create antibodies for chronic therapy of
autoimmune diseases. We told them about our manufacturing which benefits
from efficient host/vectors systems which drop the cost of goods to
one-tenth of what it would be with older technology.
At IDEC we have been very proactive about patent prosecution. This has
included whenever possible interviews at the Patent Office. In addition
to our patent counsel we believe it is essential to include the
scientist, i.e., the inventor from the Company, in such meetings. We
believe these face-to-face interviews are a very useful, additional way
of educating the examiner on the nuances of our technology. We would
encourage the Patent Office to grant interviews whenever possible
--interviews are a great communication tool, and they can benefit both
parties.
We are eager to continue "teach-ins" and other education programs with
the Patent Office -- I am sure that many of our San Diego companies would
join in that effort. A bewildering array of technologies appears at the
Patent Office: from hybridomas to transfected cell lines, from
host/vector systems to homologous recombination strategies, from
anti-sense oligonucleotides to retroviral genetherapies. Education of
the patent examiner -- to ensure timely, efficient and proper patent
prosecution -- is an obligation that we will gladly share with you!
In closing: let there be no mistake, patent protection for all of our
products and for our technology is essential for our survival as a small
company. Patents increasingly are the way we create product and
technology value. The know-how lead which small companies had in the
biological sciences in the late 70s and early 80s has nearly vanished.
Big Pharma now knows how to"do biotech." But they still need our
patented products, our patented technologies.
Thank you again for coming to San Diego. With your help we can secure
and build patent portfolios as the foundations for economic growth in the
region.
INTRODUCTION TO UTILITY AND OPERABILITY CONSIDERATIONS6
The misapplication by the United States Patent and Trademark Office
("USPTO") of the law of utility and operability is creating severe and
unnecessary economic problems for the biotechnology industry,
particularly for the inventors in universities and small companies. For
most types of inventions, the USPTO considers the invention useful enough
to qualify for a patent if the inventor merely describes in the
specification the invention's use(s); in the vast majority of cases, no
data are required to prove utility. Data are understandably required
when the invention countermands an established law of nature (for
example, a perpetual motion machine). Under the current approach to
defining practical utility and operability, the USPTO appears to have
approached the majority of biotechnology cases with the same jaundiced
eye that it casts on perpetual motion machines or cold fusion inventions.
For years, USPTO rules have treated pharmaceutical preparations by a
standard different than that applied to mechanical, electrical or even
chemical inventions. This was perhaps understandable in the 19th and
early 20th centuries when unscrupulous individuals obtained patents and
sold worthless "patent" medicines to an unsuspecting public, and the
USPTO was the only federal agency empowered to grant drug "licenses."
Eventually the Congress enacted laws to protect the public from false
advertising (enforced by the Federal Trade Commission) and from
ineffective and unsafe medicines (enforced since 1962 by the Food and
Drug Administration (FDA)). Hence, the earlier mission of the USPTO to
protect the public from patent medicines has been reassigned to other
federal agencies who have the expertise necessary to determine whether a
therapeutic modality is safe and effective.
Similarly, the USPTO for years refused to issue patents on living
things, gaming devices and "sin" products, based upon its interpretation
of 35 U.S.C. Section 101. Those prohibitions also have disappeared.
Just as the USPTO over time recognized that it did not have the right to
set policy by refusing to grant such patents, it is time for the USPTO to
cease discriminating against pharmaceutical and biotechnological
preparations and their clinical uses.
Within the last four years, the USPTO's biotechnology examining group
(Group 1800), as well as Group 120, have effectively raised the standard
of utility from "Does this countermand a law of nature?" to "I would like
to see more in vivo human data." In many instances, examiners appear no
longer to recognize the imperative that they must first build a case for
no utility before reflexively assuming that the invention is without
utility and automatically demanding that the inventor produce additional
evidence of utility. Examiners often (and inappropriately) cite a 1966
Supreme Court case (Brenner v. Manson) to support rejections grounded on
a lack of "practical utility." This is a misplaced reliance, as Brenner
was a case in which NO USE AT ALL was given in the patent application as
filed, and no use was provided later by the inventor by affidavit. This
led the Court to call the invention a mere "object of research." By
"object of research," the court obviously meant an activity with no
direction. Today, however, this case is being applied improperly to
inventions for which the inventors have described many types of utility.
The examiners are rejecting claims for proteins which can and are being
widely used by the biomedical industry as, inter alia, diagnostic
reagents, on the grounds that the proteins are "objects of research" and
have no practical utility.
As the result of this misplaced reliance on Brenner, examiners are
making bizarre utility/operability rejections. An examiner will often
first search the technical literature to discover reasons why the
invention might not work. Then, the examiner undertakes a different
technical search and finds references that allegedly make the invention
obvious. The inventor is now faced with the absurd situation in which
the examiner rejects the same claim on the grounds of both lack of
utility and obviousness, a situation that is referred to as the
"squeeze."
The biotechnology examining corps and USPTO management and Board
apparently may not understand the magnitude of the burden when they
require clinical studies to establish practical utility. There is a
misunderstanding of the "real-world" of drug development and the real
import of a USPTO demand for clinical data. There is a misunderstanding
of the high level of respect by skilled workers in the field for the
value of early-stage screening in vitro data. Most telling: the FDA, the
agency with statutory authority for regulating pharmaceuticals,
recognizes the value and importance of in vitro and in vivo animal data
in the early stages of the development of a therapeutic.
The demand for clinical data and occasionally for "significant"
clinical data by the USPTO sets an unreasonable standard and threshold
for patentability and is particularly burdensome for universities and
small companies with limited resources. In the United States, before a
single human being can receive an experimental therapy, an extensive data
package called an Investigational New Drug Application (INA) must be
filed with the FDA. The INA contains extensive toxicity data from tests
in at least one non-human animal species, performed according to Good
Laboratory Practice regulations. The costs associated with obtaining
such studies from reputable contract laboratories frequently can exceed
$1 million. In addition, preparations to perform clinical studies,
according to the Good Clinical Practice regulations, first requires the
manufacture of the product according to Good Manufacturing Practice
regulations. The cost to scale-up and manufacture enough drug to do
toxicology and initial clinical studies can easily cost another $1
million. In addition, the necessary steps to do the initial clinical
safety study typically run over $500,000 to $1 million, which includes
drafting and printing protocols, patient informed consents, case report
forms and other forms; convening Institutional Review Boards; on-site
inspection of clinical study sites; investigator fees; costs of human
testing, etc. Only after this investment of time and money in the human
safety study may the new drug enter Phase II trials to test the
effectiveness of the therapy and thus generate clinical data supporting
utility. A simple Phase II clinical trial for an acute therapy (for
example, stroke) can cost several million dollars. However, if
SIGNIFICANT clinical data are required (as for chronic conditions like
Alzheimer's disease, currently an incurable disease), patient testing
costs run tens of millions of dollars (in addition to several million
dollars for chronic animal tests and more drug supplies). Finally,
pivotal Phase III studies to establish efficacy of the drug in a large
population of the targeted patient population can run into the many
million of dollars. University and small company inventors simply do not
have the resources or wherewithal to do such testing even for the FDA,
and certainly not for the USPTO. Even large pharmaceutical companies
will not proceed to invest millions of dollars without assurance of
patent protection.
In summary, taking into account all the costs, to obtain even a minimum
of clinical data, approximately $2-5 million is invested. To obtain
FDA-level clinical data of effectiveness in Phase II costs an additional
$5-20 million. If the USPTO asks for "significant" clinical data, an
additional investment of $10-20 million may be necessary. For acute
therapy, a minimum of $30 million need to be invested, whereas for
chronic therapy, "significant" clinical data likely will cost more in
the $100 million range. In addition, a decade may elapse from a major
pharmaceutical discovery to "significant" clinical data!
One may ask how universities or small companies will ever persuade
anyone to proceed to develop their products in the face of ill-informed
attitudes of Examiners. For example, one biotech examiner recently asked
a patent attorney: "What is the practical utility of an isolated receptor
protein?" Receptors are informational macromolecules within cells or on
cell surfaces that react with, and respond to, physiological ligands or
their pharmaceutical counterparts. A well known use of receptors is as
reagents in diagnostic assays. Those skilled in the art, such as
scientists at pharmaceutical and diagnostic companies, will see the same
patent application data and consider the receptor useful enough to pay
for a license. Hardly no practical utility! If the USPTO continues to
reject such patent claims, investment, progress and cures will suffer.
A. Proof of Utility and Operability
The introduction of biopharmaceuticals into the patent field resulted
in the shift of the next generation of pharmaceutical related
applications from the examination groups which were experienced in
handling utility issues to a new examination group (Group 1800) at the
USPTO. This, combined with the massive influx of newly-hired patent
examiners at the USPTO to reduce the 1980's backlog of
biotechnology-related applications, has resulted in an increase in
utility rejections and has highlighted the need to establish a model for
handling utility issues.
1. The USPTO's Burden
The examination process at the USPTO is broadly based on a
quasi-judicial model. The process begins with the filing of an
application by the inventor(s). The application is then reviewed by an
Examiner. This review should, at least in theory, involve application of
legally-determined and substantive standards. If the application fails to
meet these standards, the Examiner issues a report to the inventor(s)
listing the deficiencies in terms of claim rejections. These
requirements for patentability include utility, novelty, nonobviousness,
and disclosure. The first of these includes a determination of usefulness
or lack thereof (is the claimed utility "incredible"?). The last of these
includes a determination of operability (is there an adequate description
of how to use the invention?).
In the biotechnology and pharmaceutical sciences, the Examiner is asked
to make these determinations at an early stage of an invention's
development. While an Examiner is not necessarily a true expert in the
field he or she examines, he or she is considered an "expert" by the
USPTO. (Under current USPTO Rules, one cannot depose an Examiner either
to establish technical credentials or to obtain insight into the
reasoning underlying their decisions). Critically, as an Examiner is
unlikely to be a real-life "expert," the Examiner must support his or her
claim rejections with evidence or sound scientific reasoning.
During the examination process, two basic, yet fundamental, guidelines
must be followed by the Examiner at the USPTO in resolving issues
relating to the adequacy of the disclosure of utility in drug cases:
(a) The same basic principles of patent law which apply in the field of
chemical arts shall be applicable to drugs.
(b) The USPTO should confine its examination of the disclosure of
utility by applying patent law principles, recognizing that other
agencies of the Government have been assigned the responsibility of
assuring conformance to the standards established by statute for safety,
efficacy, advertising, use, sale or distribution of drugs.
(c) There is some question amongst members of the patent bar as to
whether these guidelines are being uniformly followed within the USPTO.
Generally, the sworn statements made by the inventor as to the
utility of the invention should be, but are not always, assumed to be
valid and truthful both as to content of the specification and as to the
scope of the claims. This is equally true for operability and for the
sufficiency of the teachings provided within the specification as to how
to use the invention. With this as a starting point, the Examiner has
the initial burden of establishing that a person skilled in the
technology would consider (1) the inventor's statement of use
unbelievable or overly broad, (2) the invention clearly inoperable as
claimed, and/or (3) the teachings provided within the specification
clearly insufficient.
If the Examiner meets this burden, the burden is then shifted to the
inventor to reestablish the original presumptions accorded the
application. The inventor can do this by either affidavits from experts
or placing additional evidence before the Examiner, and/or presenting
arguments as to why the Examiner's initial findings are infirm, mistaken
or in error. It is incumbent upon the inventor to put any evidence into
the record before the last rejection is made final. After the final
rejection, the entry of evidence is not the inventor's right but rather
is at the discretion of the Examiner.
In the prosecution of biotechnological applications, suitable legal
precedents are slow to emerge and to develop relative to other
established technologies, which places an additional burden on the
inventors, as does the pendency reduction program at the USPTO which
typically results in premature final action. The petition remedy for a
premature final action does not stay the examination deadlines or really
help the inventor. In essence, because obtaining a patent, and not
creating legal precedent, is what drives our biotechnology innovators,
taking an Examiners misplaces or incorrect reflections to the courts is
almost always avoided, given the incredible time delay of such an
approach.
The disclosure of multiple utilities presents no unusual difficulties
for most biotechnology inventions. For example, and of benefit to
society as a whole, many inventions from the biotechnology fields are
applicable to both research and therapeutic settings. The biotechnology
Examiners are supposed to review each disclosed utility on its own
merits. Critical to this issue is that only one utility is required to
support patentability of the claimed subject matter. This is true even
when there is a human treatment utility disclosed but only a non-human
utility exemplified. Under established case law, the non-human utility
should support patentability, a fact that is frequently ignored by
biotechnology Examiners.
2. Example Illustrating Approaches in Handling Utility Issues
It is useful to provide a hypothetical example illustrating our views
on the utility issue. Immunoconjugates are hybrid molecules composed of
an antibody or a binding fragment thereof coupled via a linking molecule
(linker) to a drug. In our hypothetical, the inventor selected (1) an
antibody which selectively binds the conjugate to the desired tissue or
cell, (2) a drug which has the desired biological activity, and (3) a
linker group which attaches the drug to the antibody with minimal loss in
activity for either molecules. The functional groups and size of the
linker were selected by the inventor to avoid the loss of biological
activity of the drug and antibody molecules.
In the present hypothetical, the immunoconjugate is a immunotoxin
composed of known entities. The toxin (drug) is available commercially.
The antibody is a monoclonal antibody available commercially and known to
be selective for a specified cancer antigen. The linker used is also
available commercially from a supply house and is known to be suitable
for preparing enzyme labelled antibodies (another type of
immunoconjugate). The invention lies in the design of the immunotoxin
and the development of a protocol for its use.
The specification of the application teaches dosages, protocols and
methods for assembly and use of the immunotoxin. The application
discloses previous attempts to use analogous conjugates to treat leukemia
or alleviate symptoms. The prior art conjugates differ in the antibody
employed. Neither the prior art immunoconjugates nor those of the
inventor are in clinical trials.
The inventor's conjugates have been tested in animal models and in
vitro (tested in the laboratory) tests and have been found to be active.
The immunotoxins are effective in killing cancer cells in vitro as
measured by art recognized protocols. The immunotoxin is also active in
vivo (tested in animal or man) animal models.
The claims of the application are directed to immunotoxins, methods of
inhibiting the growth of leukemia cells using the inventive immunotoxins,
and methods of treating leukemia in mammals. No claim specifies therapy
in humans although such a use is mentioned in the specification.
Let us assume that rejection of all the claims based on Section 101
appeared in the first Office Action on the merits. The rationale
presented by the Examiner was a concern with effectiveness at the cancer
site which is based on the suspect ability of the conjugate to reach the
site. A noncurrent review article discussing immunoconjugates and
enumerating the problems generally expected with immunoconjugates is
provided with the Office Action as evidence to support the utility
rejection.
The Examiner's reasoning in the Office Action is that the utility
statement as to treating leukemia provided in the specification would not
be believed by one skilled in the art based on the concerns expressed in
the review article. In this hypothetical, the Examiner does not dispute
the sufficiency of the protocols taught or enablement of the invention
generally but merely questions operability, and hence utility, of the
immunoconjugate.
If the Examiner's case rests on the assumption that one of skill in the
art has the biases reflected in the review article and would look
skeptically upon the utility statements as a cancer therapeutic, no prima
facie case has been made, and this should be pointed out to the Examiner
forcefully. In no other art unit would an Examiner's vague concern be
considered adequate, particularly in the light of the data in the
application. Unfortunately, the threshold as to the evidence required to
shift the burden to the inventor is not high for biotechnology inventions
such as the hypothetical. A reasonable basis for the Examiner's belief
is all that is required. A review or similar journal article of any
quality or antiquity may suffice even though the progression of the art
as a whole, and those skilled in this art, may have advanced
substantially since the article forming the basis of the rejection was
written -- critically, in the biotechnology field, this advancement may
have taken place in less than a few years.
B. Proof Of Safety
Related to the general issue of "practical utility" is the specific
issue of "safety" of an invention. It has long been assumed that, in
order to be statutorily useful, an invention must be reasonably safe in
operation, as well as achieving its prescribed purpose. In most art
units, issues of safety rarely arise; it is generally recognized that
such issues are the province of OSHA, EPA, FDA or other regulatory
agencies.
The issue of safety has been raised most often in the USPTO in
connection with drugs and therapeutic inventions, and this issue has been
resolved by the federal courts which have established the following legal
principles:
1. An inventor for a patent on a drug need only show a "sufficient
probability of safety in human therapy," which need not necessarily
involve clinical evidence;
2. A drug may be "useful" for patent law purposes even though it has
not yet been proven to be safe for use under the FDA standards;
3. The task of protecting the public from the advertising and sale of
harmful drugs belongs to the FDA, Federal Trade Commission, and analogous
state agencies, not to the USPTO; and
4. "commercial usefulness" is not a prerequisite for a reduction to
practice and the subsequent patentability of any of the classes of
subject matter set forth in Section 101, much less the particular class
of compositions called "drugs."
Other legal decisions from the federal courts have made these
principles clear: the USPTO should not be determining drug safety for any
reason, and certainly not for the purpose of determining practical
utility. The Board of Patent Appeals and Interferences, the PTO
reviewing body has accepted this limitation in a 1983 decision. The
Board held that a relative lack of safety of an invention cannot
establish a lack of utility in the sense of Section 101, and that the
USPTO does not have the authority to refuse a patent because it deems the
risk to the user to be too great.
Unfortunately, as an indication of the problems faced by our nation's
entrepreneurs, the USPTO does not surrender easily. The Manual of Patent
Examining Procedure, to which Examiners strongly adhere, now states in
paragraph 608.01(p):
"Although absolute safety is not necessary to meet the utility
requirements under this Section, a drug which is not sufficiently safe
under the conditions of use for which it is said to be effective will not
satisfy the utility requirement. Proof of safety shall be required only
in those cases where adequate reasons can be advanced by the Examiner for
believing that the drug is unsafe, and shall be accepted if it
establishes a reasonable probability of safety."
From this language, it appears that the USPTO is still reserving to
itself the possibility of determining that an invention is not safe, and
the invention therefore without utility, despite legal mandates to the
contrary.
C. Practical Utility vs Proof of Operability
There should be no distinction between practical utility and proof of
operability. If the disclosure in a patent application satisfies the
requirement for practical utility, then no proof of operability is
required. In the USPTO Notice for this hearing discussing this Section7,
the CCPA decision in In re Jolles, 628 F.2d 1322, 1327, 206 USPQ 885
(CCPA 1980) is cited as holding
When utility as a drug, medicant, and the like in human therapy is
alleged, it is proper for the Examiner to ask for substantiating evidence
unless one with ordinary skill in the art would accept the allegations as
obviously correc." 206 USPQ 890
The statement was used by the CCPA in connection with the Board opinion
which they reversed. On the contrary, the CAFC in Jolles, supra, held
the character and amount of evidence needed may vary, depending upon
whether the alleged utility appears to accord with or contravene
established scientific principles and beliefs.
Nowhere does Jolles decision require the presentation of substantiating
evidence for human therapy. In fact, the CAFC in In re Jolles, supra,
specifically cited the decision of the CCPA in In re Gazave, 154 USPQ 92
(CCPA 1967) where the CCPA reversed a rejection for a requirement for
proof of therapeutic utility in humans stating
Appellant's discovery here does not appear to us to be of such a
'speculative', abstruse or esoteric nature that it must inherently be
considered unbelievable, 'incredible' or 'factually misleading'. Nor
does operativeness appear 'unlikely' or an assertion thereof appear to
run counter 'to what would be believed would happen by the ordinary
person' in the art. id. at 96
Iizuka, supra, is that a practical utility be disclosed. That is the
requirement sufficient to meet 35 USC 101 and 112. Nothing this
statement requires proof of such utility. Hence, it is only in the case
where the practical utility relied upon to satisfy 35 USC 101 and 112 is
incredible on its face that proof of operability is required. In such
cases, without proof of operability, the inventors have not disclosed a
practical utility.
For practical utility of a therapeutic compound, all that is required
under the existing law, is that the compound have pharmacological
activity. As seen from the CCPA decisions in In re Krimmel, 292 F.2d
948, 130 USPQ 215 [CCPA, 19961]; In re Bergel, 292 F.2d 955, 130 USPQ 206
and In re Dodson, 292 F.2d 943, the disclosure that a compound exhibits
some pharmacological property is sufficient to satisfy utility
requirements for this compound under this statute. There is no
requirement that one must demonstrate that a compound having
pharmaceutical utility must be operable in humans for the therapy
disclosed, much less present proof demonstrating this effectiveness. In
In re Anthony, 162 USPQ 594 [CCPA 1969] the drug Monase was removed due
to toxic side effects. The CCPA in Anthony, supra, held that even
despite the fact that Monase could not be used for the purpose set forth
in the patent application, this was not a sufficient reason for failing
to meet utility requirements of patent law. As stated by the CCPA in
Anthony, supra, in holding that whether Monase could be administered in
human therapy was irrelevant to the issue of satisfying the requirements
of the patent statute for utility:
And Congress has given the responsibility to the FDA, not to the Patent
Office, to determine in the first instance whether drugs are sufficiently
safe for use that they can be introduced into the commercial market under
the conditions prescribed, recommended or suggested in the proposed
labeling thereof. -- To put it in another way, the FDA need not
necessarily determine that a drug is commercially useful or usable before
it may be 'useful' in the patent law sense. 162 USPQ 594, 604
In its discussion concerning proof of operability for human therapeutic
inventions in the Notice, the argument relied upon appears to be
important ... yet others have identified important public policy
justification for the USPTO to review operability of inventions to be
used to treat human disorder. A patent provides the public with high
quality technical accurate disclosure of a new, useful and non-obvious
invention. However, with the imprimatur of the Federal Government, a
patent can also effect the commercial prospects of an invention in
question, and can raise and lower expectations of those effected with the
illness the invention is designed to treat.
This public policy justification for proof of operability is contrary
to U.S. law as enunciated by the highest patent court of the United
States, the Court of Appeals for the Federal Circuit (CAFC) and its
predecessor court, the Court of Customs and Patent Appeals (CCPA). To
justify this requirement, under the present law based upon the above
public policy argument, provides a waste of money and time since it
throws roadblocks in the path of patenting which roadblocks can later be
removed by costly appeals to the courts.
It is well settled that there is no requirement for proof of
operability even when human therapy is alleged unless this utility is
unbelievable on its face. Even a cancer utility has been held to be a
utility which is not unbelievable on its face requiring proof of
operation.
In Ex parte Rubin, 5 USPQ 2d 1461 (BPAI 1987) claims to a cancer
treatment method were rejected under Section 101 and Section 112 first
paragraph for lack of utility. The rejection was overturned on the basis
that since the utility asserted in the specification was credible and no
evidence had been offered that this utility was not believable. In so
holding the Board said,
"The Examiner's attention is directed to In re Langer, 503 F.2d
1380...especially at 297 (CCPA 1974). The Court there held: '...a
specification which contains a disclosure of utility which corresponds in
scope to the subject matter sought to be patented must be taken as
sufficient to satisfy the utility requirement of ¤101 unless there is
reason for one skilled in the art to question the objective truth of the
statement of utility or its cope'. No reason to doubt 'the objective
truth' of the asserted utility having been advanced by the Examiner, we
accept appellant's disclosure of utility corresponding in scope to the
claimed subject matter." at 1462.
Another example that there is no requirement for proof of utility,
unless said utility is unbelievable on its face, is the decision in In re
Isaacs and Lindenmann, 347 F.2d 887, 146 USPQ 193 [CCPA, 1965]. In this
case, a compound was disclosed as being useful as an anti-viral agent.
The application to comply with the utility requirements of the statute in
that there was no demonstration that the claimed compounds had anti-viral
properties in vivo. While in vitro data was submitted to the USPTO, the
CCPA specifically stated that it was even not necessary to present such
data. As stated by the Court in the In re Isaacs and Lindenmann case,
supra:
"Furthermore, even if there had been a call for in vitro test data, we
seriously question the Examiner's discretion to make it." 146 USPQ 193,
195.
Furthermore, in the In re Isaacs and Lindenmann case, supra, the Court
specifically spelled out the criteria for requiring data of animals
and/or human testing stating:
"It is our opinion that the instant disclosure would satisfy one of
ordinary skill in this particular art that the claimed invention
possesses the alleged utility. Even more to the point, however, it seems
manifestly clear form the record that the alleged utility is not
'incredible in the light of the knowledge of the art, or factually
misleading.' In such a case, it is clearly improper for the Examiner to
make a demand for further test data, which evidence would be essentially
redundant and would seem to serve for nothing except perhaps to unduly
burden the inventor." 146 USPQ 193, 196.
The Court of Appeals for the Second Circuit in Carter-Wallace v.
Riverton 433 F.2d 1034, 167 USPQ 656 (CA 2) aff'g 304 F. Supp. 357, 164
USPQ 73 (DC S NY), in upholding the validity of the meprobamate patent
against the arguments that its disclosure of utility did not conform with
requirements of U.S. law stated:
"We hold, therefore, that under the circumstances of this case, neither
the confidential relationship between the inventor and the Patent Office
nor the statutory requirements that the inventor disclosed the best mode
contemplated by him for use of the invention required a disclosure by him
of the results of the tests on humans.
The defendants in the Carter-Wallace v. Riverton case, supra, attacked
the validity of the meprobamate patent on the ground that the patentee
failed, during the prosecution of his application, to disclose to the
U.S. USPTO the results of human testing as well as the extensive animal
testing that he carried out with respect to the claimed compound. In
rejection this argument, the Court reiterated the doctrine of the CCPA in
the Isaacs case, supra, stating:
"Under present practice, submission of test information to the Patent
Office in support of the claims made in an application is not required,
unless the asserted utility of a compound is not believable on its face
to persons skilled in the art in view of the contemporary knowledge in
the art." 167 USPQ 656, 659.
D. Conclusion
The inventors seeking legitimate patent rights are being thwarted by
the USPTO's application of the law on utility and operability. This
practice has had severe consequences for an industry that did not exist
thirty years ago and which may not be able to continue into the next
century unless the USPTO applies the patent law in a consistent way from
one industry to another.
Practical Utility8
A. Executive Summary
While our specific concerns and points on the various patent issues
covered in the USPTO Notice are as diverse as our membership, an overall
concern has emerged: by not following established legal precedent as it
applies to proof of utility under 35 U.S.C. Section 101, the USPTO is
effectively preventing the issuance of patents to innovators and
entrepreneurs whose endeavors have created and have driven the
biotechnology industry. Without the guarantee of the legitimate right to
a patent for an invention which satisfies the statutory requirements for
patentability, the USPTO not only ignores the Constitutional mandate to
promote the arts and useful sciences, but unfortunately and unnecessarily
increases the hurdles of the biotechnology industry, an industry that
significantly impacts the economic and political landscape of our
country, and an industry which truly represents an opportunity for our
nation to compete in a 21st century global economy.
With respect to Section A of the Notice, Practical Utility for
Biotechnology Inventions, three questions have been presented by the
USPTO. As will be supported and discussed in detail below, we respond in
summary fashion to these questions as follows:
In response to Question 1, we believe that the standards governing the
requirements for "practical utility" under 35 U.S.C. Section 101
("Section 101") are sufficiently clear and appropriate for biotechnology
inventions. We believe that the issue of practical utility is one of
mis-application of the law by the USPTO and not the clarity of the law
established by legal precedent. Our position is based upon an analysis
of the relevant case law and a discussion of the types of practical
utility rejections which are routinely made by the USPTO and which do not
comport with established legal precedent. Suggested approaches to
remedying this situation include allowing the patent bar to participate
in the discussion and education of USPTO Examiners as to the nuances of
case law.
In response to Question 2, we do not believe that the USPTO is
correctly and uniformly applying the legal standards governing the
requirements for practical utility under Section 101 for biotechnology
inventions, particularly for inventions directed to combating human
diseases and disorders. This position is also supported by a review of
the applicable case law and the mis-application of this law by the USPTO.
In response to Question 3, we believe that the approach employed by
forcing patent offices to establish that the claimed subject matter be
"susceptible of industrial application" provides an advantage and a more
realistic framework than establishing "practical utility" as now done by
the USPTO. This position is supported by the recognition that identical
data which is routinely rejected by the USPTO as allegedly not
establishing "practical utility" is routinely accepted as providing proof
that an invention is "susceptible of industrial application" by foreign
patent offices.
We first present an analysis of the relevant legal decisions, from the
seminal, but mis-applied, Supreme Court decision of Brenner v. Manson, to
recent decisions of the USPTO's Board of Patent Appeals and Interferences
and the Court of Appeals for the Federal Circuit.
A. Case Law Review
The USPTO Notice for this hearing9 includes a summary of the case law
on utility as a preface to the questions which follow. We here respond
to this case law summary.
1. Introduction
Examiners in art unit groups handling biotechnological inventions
increasingly have rejected those inventions as lacking utility when the
application does not disclose human clinical data (or, at a minimum, in
vivo animal data) proving a human therapeutic use. As discussed below,
this USPTO examination practice brings severe economic hardship to the
biotechnological industry. Moreover, the rigorous USPTO utility standard
contravenes controlling case law, as the standard used by many Examiners
has been soundly rejected by the Court of Appeals for the Federal Circuit
(CAFC) and its predecessor court, the Court of Customs and Patent Appeals
(CCPA).
As the USPTO does not have the authority to deviate from controlling
case law, we urge that the USPTO educate the Examiners regarding the
utility cases discussed herein, and require that the Examiners
scrupulously apply that law.
2. The detrimental economic impact of the USPTO's overly stringent
utility standard
A patent application on a biotechnological invention today enters a
USPTO that, as a starting presumption, doubts the utility of most of the
field. Even such well-known, manifestly useful reagents as characterized
monoclonal antibodies, DNAs of defined sequence that encode proteins of
known function, membrane preparations that contain heterologous receptor
proteins of defined sequence and class, enzymes of defined activity,
enzyme inhibitors, bioassays for well-defined substances, and compounds
that have anti-viral activity, to mention just a few, are subject to this
doubt as a matter of course.
We must assume that those who wish to institute this approach to
patentability, despite the statutes and precedent, believe that doubting
the utility of any but the most dramatically effective and well proven
fruits of inventive efforts in biotechnology is the best way to carry out
the mission of the USPTO and to serve the public interest. Nothing could
be more wrong. This policy works against the benefits that the patent
system is designed to confer, impedes progress in the biotechnology
industry, and fails to further the public interest.
3. Fundamental Constitutional basis of the patent system
Our U.S. patent system is designed to reward an inventor with an
exploitable property right. This right provides a great economic
incentive to society to invest in the advancement of the useful arts.
Indeed, the purpose of the patent system as mandated by our Constitution
is to provide incentives to invest energy and resources in inventive
activity.
The patent serves as a guarantee that the fruits of invention will
accrue to those who engage in the inventive enterprise. It prevents
would-be free riders, who do not undertake the risk of failure, from
exploiting the hard won success of inventive effort. Thus, policies that
encourage inventive activity further the fundamental Constitutional
purpose of the patent system. Policies that decrease investment and
progress are directly contrary to that Constitutional mandate.
In addition, the patent system advances the useful arts by encouraging
early disclosure of hard won information, which otherwise might remain
secret. Early disclosure of information to the public, particularly to
those members of the public involved in invention activity, facilitates
further progress. Thus, the patent system fosters the dissemination of
information and hastens its exploitation to increase the public good. As
a secondary matter, therefore, policies that encourage early application
and early issuance will likewise encourage early disclosure and will
provide another fundamental benefit of the patent system.
4. The economic gauntlet which the biotechnology industry must run
Despite perceptions to the contrary, and despite the still great
promise of the industry, biotechnology since its inception has been
"losing" money at a stupendous rate. Venturesome investors in this
industry often invest on the strength of a small portfolio of patent
applications and faith in an idea and the inventors who will move it
forward. Such investments are far from a sure long-term bet. The
willingness of investors to "lend" $50 to $100 billion to the unproven
dreams of the inventors, though they may be brilliant scientists, is a
testament to the strength of investors' belief that if the claimed
invention works well enough, if it is sufficiently advantageous, and if
it achieves marketplace success, then the patent will assure a return on
investment. Thus, the patent system provides investors with an assurance
that they will be rewarded for undertaking the risk of developing an as
yet untried invention into a commodity.
The hardest times to raise capital are at the beginning of an
enterprise and later at the initiation of each stage of clinical trials
(because of the substantially greater sums required to carry out human
clinical studies). Thus, the potential for obtaining patent protection
early on is crucial to reassure investors at the earliest stage of
research and development and during the riskiest points on the investment
pathway. The USPTO's unduly stringent utility requirement for
biotechnological inventions makes it harder to obtain investment at these
critical times. It decreases investment in beginning enterprises because
it makes it difficult or impossible to obtain early patent protection, or
even a reasonable expectation of eventual patent protection, based on
preliminary results. Likewise, it decreases the incentive of investors
to foot the bill for expensive clinical trials. Both results are
counterproductive.
To the extent that early patent protection is unavailable, the risk of
investment in biotechnology will be increased, the reward necessary to
attract investment will be increased and investment in biotechnology will
decrease. This is not in keeping with the Constitutional mandate of
promoting arts and useful sciences.
5. The utility standard is clearly defined by controlling case law
35 U.S.C. Section 101 requires that a patentable invention be "useful,"
a term which was clarified by the Supreme Court in Brenner v. Manson, 148
USPQ 689 (1966). In applying this standard, the USPTO increasingly has
rejected applications with in vitro or even non-human mammalian in vivo
demonstrations of pharmacological effect. In short, the USPTO position
seems in many cases to be that nothing less than human clinical data will
suffice to establish utility when, in the opinion of the USPTO, the
ultimate intended commercial use of the claimed invention is the
treatment of humans, regardless of what is actually claimed. However, as
we establish below, the case law does not permit the USPTO to set such a
rigorous standard for biotechnological inventions.
6. The claimed invention dictates the utility inquiry
The USPTO is constrained to determine the utility of the claimed
invention, not the commercial embodiment that the USPTO believes to be
the inventor's ultimate goal. Rather, "[i]n determining utility . . .
the claims must first be interpreted to define the invention to be tested
for utility." Raytheon Co. v. Roper Corp.. 220 USPQ 592, 596 (Fed. Cir.
1983), cert. denied, 469 U.S. 835 (1984). Accordingly, The inventors are
not required to prove utility for every aspect of an invention discussed
in the application.
Biotechnology-related inventions, as reflected in many Office Actions
from Group 1800 (the designated group of Examiners at the USPTO who are
primarily responsible for biotechnology inventions), seem subject to a
very different principle of examination. A particularly striking example
in this regard is the current examination practice for applications that
relate, however distantly, to therapy of disease. Such applications
often present one or more of four broad types of claims: (a) claims that
recite products per se, such as a compound with pharmacological activity;
(b) claims that recite assays or other diagnostic or experimental tools;
(c) claims that recite compositions comprising such compounds, such as
"pharmaceutical" compositions, that may imply a use in treating disease;
and (d) claims that recite a method of treating disease.
How the utility requirement is applied depends upon the type of claim
at issue. In re Bundy, 209 USPQ 48, 51 (CCPA 1981). The CAFC has held
that claims which are not drawn to particular uses -- i.e., composition
of matter claims and method of making claims -- require a lesser showing
of utility. "[E]vidence of any utility is sufficient when the count [or
claim] does not recite any particular utility." Id. at 743. Accord
Nelson v. Bowler, 206 USPQ 881, 883 (CCPA 1980), Blicke v. Treves, 112
USPQ 472 (CCPA 1957).
Thus, what suffices for utility will vary from case to case, depending
upon how the claims and specification are drafted. Although these
different categories of claims present very different issues of utility,
current examining practice in Group 18000 often treats all claims,
regardless of format, as though any discussion of therapeutic potential
is a constructive recitation of a method of treating disease in all the
claims. Thus, claims that recite compounds, assays, and compositions
frequently are judged not to have met the utility requirement of Section
101 if the application does not demonstrate therapeutic efficacy.
Currently, if a claim recites that it is drawn to a therapeutic use in
humans (i.e., therapeutic methods or compositions having therapeutic
effect), then the USPTO position is that clinical data might be required
to prove utility. See MPEP Section 608.01(p) (citing only Ex parte
Timmis, 123 USPQ 581 (Bd.App. 1959)). However, it must be emphasized
that in vivo testing in animal models will suffice when those animal
models are accepted by those skilled in the art. In re Jolles, 206 USPQ
885, 890 (CCPA 1980). See also In re Gardner, 166 USPQ 138, 140 (CCPA
1970) (more specific disclosure regarding dosage required because claim
is drawn to the antidepressant activity of the compound rather than the
compound itself).
In contrast, methods for uses other than human treatment and
compositions of matter (and the related methods of making) should not
require proof of efficacy in humans simply because of a possibly utility
is human therapy. To reiterate, this distinction is frequently
overlooked by the biotechnology Examiners.
7. Brenner v. Manson and its progeny: "Utility" does not mean
"therapeutic use"
Brenner v. Manson, the Supreme Court's most recent pronouncement on the
utility issue, involved methods of making steroid compounds which were
similar to useful compounds for human therapy. However, the inventor in
Brenner had disclosed no utility in the patent application for the
compounds. Instead, in supporting affidavits, the inventor argued that
the compounds were presumptively useful based on article stating that a
homolog of the compounds was an effective tumor-inhibiting agent in mice.
The Court deferred USPTO opinion that such a showing was insufficient to
regardless of format, establish utility, given the article's statement
that minor structural changes "may produce profound changes" in activity.
Therefore, the steroid field at the time the application was filed was
unpredictable and utility could not be predicted. Id. at 694.
The Brenner Court rejected as a matter of law a variety of arguments
that would have excused the utter lack of utility description or tests:
that the utility standard was met by any process which "produce[d] the
intended result" or which produced a compound that was "not detrimental
to the public interest" or "the subject of serious scientific
investigation." Brenner, 148 USPQ at 694-695. Instead the Court held
that for the process to be useful, the end product had to be useful.
The Supreme Court summarized the policy rationale of the utility
requirement thus: "[A] patent is not a hunting license. It is not a
reward for the search, but compensation for its successful conclusion. A
patent system must be related to the world of commerce rather than to the
realm of philosophy." Brenner at 696. The patent is a "quid pro quo"
for the "benefit derived from the public from an invention with
substantial utility." Id. at 695. That benefit is a "specific benefit .
. . in currently available form." Id. However, these seemingly extreme
policy statements of Brenner must be understood in light of the facts of
that case -- that no utility whatsoever had been disclosed, in an art
field acknowledged to be unpredictable at the time the appellants'
application was filed.
The CAFC restatement of Brenner requires that a patentable invention
have a "substantial or practical utility . . . where such utility would
not be obvious." Cross v. Iizuka, 224 USPQ 739 (Fed. Cir. 1985).
Practical utility "is a shorthand way of attributing "real-world" value
to the claimed subject matter." Nelson v. Bowler, 206 USPQ 881, 883
(CCPA 1980).
The CCPA and CAFC cases since Brenner have progressively defined the
outer limits of the utility requirement. Immediately after Brenner, the
CCPA applied the holding to its composition of matter claims drawn to a
chemical intermediate which produces a final product for which no utility
testing had been completed, and for which no utility could be inferred.
In re Kirk, 153 USPQ 48, 56 (CCPA 1967); In re Joly, 153 USPQ 45, 47
(CCPA 1967). In both cases, the USPTO determination that the
intermediates lacked utility was upheld.
Applications which disclose some testing to support statements of
utility pose more difficult line-drawing questions. However, the CCPA
decisively drew that line far short of requiring human testing and
therapeutic effect in Nelson v. Bowler, 206 USPQ 881 (CCPA 1980). In
that case, the inventor's claims were composition of matter claims drawn
to prostaglandin derivatives. The stated utilities of smooth muscle
stimulation and blood pressure modulation were based upon an in vitro
muscle assay and an in vivo rat blood pressure assay. The results of
those tests correlated with the results of other useful prostaglandin
derivatives. The USPTO Board rejected the utility showing, stating that
the tests were "rough screens, uncorrelated with actual utility." 206
USPQ at 883.
The CCPA reversed the USPTO, holding that "the board erred in not
recognizing that tests evidencing pharmacological activity may manifest a
practical utility even though they may not establish a specific
therapeutic use." Id. at 883 (emphasis added). Further, the requisite
benefit was provided by "knowledge of the pharmacological activity." Id.
"Rigorous correlation [of the data] is not necessary where the test for
pharmacological activity is reasonably indicative of the desired
response." Id. at 883-884 (emphasis added). The Nelson court's
rejection of the USPTO focus on the ultimate therapeutic use is
consistent with earlier Supreme Court case law, which stated:
The word 'useful', therefore, is incorporated into the act in
contradistinction to mischievous or immoral . . . But if the invention
steers wide of these objections, whether it be more or less useful is a
circumstance very material to the interests of the patentee but of no
importance to the public. If it be not extensively useful, it will
silently sink into contempt and disregard.
Lowell v. Lewis, 15 F. Cas. 1018, 1019 (No. 8568) (C.C. Mass. 1817)
(Story, J.) (emphasis added). See also In re Langer, 183 USPQ 288, 298
(CCPA 1974) (full scale clinical trials in humans may be necessary to
establish commercial usefulness but are not required to establish utility
under Section 101). The Nelson court's approach is also consistent with
In re Krimmel, 130 USPQ 215 (CCPA 1961), in which the court instructed
the USPTO to leave determinations of safety and efficacy to the FDA. Id.
at 220. Thus, the FDA and the free market should determine the ultimate
commercial value of an invention -- not the USPTO.
In light of the above, it is very hard to see how the USPTO can use
Nelson v. Bowler to justify rejecting on utility grounds compounds whose
activity manifestly has been demonstrated. Yet the biotechnology
industry routinely sees such rejections issued in applications that
provide incontrovertible evidence that claimed compounds possess, e.g.,
enzymatic, ligand-binding, anti-viral, or immune-stimulating activities.
Such showings demonstrate the pharmacological activity required by Nelson
-- no more need be shown.
8. The utility requirement is a minimal threshold to patentability
In line with the rationale of Lowell v. Lewis, the CAFC has clearly
interpreted the utility requirement to be a minimal threshold. In Carl
Zeiss Siftung v. Renishaw plc, 20 USPQ2d 1094 (Fed. Cir. 1991), an
infringement litigation involving automated coordinate measuring
machines, the CAFC reversed the trial court's holding that a claim was
invalid for lack of utility, stating:
The utility requirement, although an essential requisite of
patentability, has other limits. An invention need not be the best or
the only way to accomplish a certain result, and need only be useful to
some extent and in certain applications . . .
Id. at 1100 (emphasis added). In Tol-o-Matic, Inc. v. Proma Product-and
Marketing Gesellschaft M.b.H., 20 USPQ2d 1332, 1338 (Fed. Cir. 1991), the
court reversed a jury verdict that the invention lacked utility because
the evidence at trial did not show "total incapacity." Accord E.I. du
Pont de Nemours & Co. v. Berkley & Co., 205 USPQ 1 (8th Cir. 1980) ("A
small degree of utility is sufficient.").
Likewise, the CAFC approach in a patent prosecution context underscores
the minimal nature of the utility requirement. For example, the
requirement that an inventor disclose a "stated utility," Cross, 224
USPQ at 742 n. 8, only mandates that the utility of the invention be
described with some specificity. See Cross, 224 USPQ at 745. The CAFC
explicitly states that the test is a "threshold requirement." Id.
The Cross court cited two cases as examples that failed to meet the
threshold "stated utility" requirement. In Kawai v. Metlesics, 178 USPQ
158 (CCPA 1973), the court held that a statement that the claimed
compounds "exhibited pharmacological effects on the nervous system" was
inadequate to meet the utility requirement. In In re Kirk, 153 USPQ 48
(CCPA 1967), the court rejected the inventors' bare allegations of
"biological activity" and "biological properties." Presumably then,
patent applications which provide more than such vague generalities will
meet the minimal stated utility requirement.
9. In vitro data clearly suffices to demonstrate practical utility
The CAFC requires that an invention have a "practical" utility. That
practical utility may be based upon a variety of showings. In Cross v.
Iizuka, 224 USPQ 739 (Fed. Cir. 1985), the claims at issue were
composition of matter claims drawn to imidazole derivatives which
inhibited thromboxane synthetase, an enzyme involved in platelet
aggregation. The only data supporting the inventors' utility claims were
derived from an in vitro assay. The appellant Cross lodged several
challenges to the utility finding. Specifically, Cross attempted to
shift the focus to the ultimate commercial use:
Cross' position is that the stated purpose or the sole contemplated
utility of the invention of Iizuka is to provide a novel class of
compounds which provide "practical use" as "therapeutic medicines for
diseases caused by Thromboxane A2."
id. at 743 (emphasis added). The CAFC rebuffed this position, noting
that a "fair reading" of the application disclosed utility in the in
vitro microsome test milieu. Id.
Cross also attacked the probative value of the in vitro data:
Cross has contended that . . . the inhibition of thromboxane synthetase
in human or bovine platelet microsomes is not sufficiently correlated to
a pharmacological activity to be a practical utility. In other words,
Cross may be arguing that the minimum acceptable utility disclosed in an
application claiming a compound having pharmacological activity must be
directed to an in vivo utility in order to comply with the practical
utility requirement of ¤ 101.
Id. at 744 (emphasis added). The CAFC dismissed this position
decisively, noting that in vitro testing "is the accepted practice in the
industry." Id. at 747. The court elaborated:
Moreover, in vitro results with respect to the particular
pharmacological activity are generally predictive of in vivo test
results, i.e., there is a reasonable correlation therebetween. Were this
not so, the testing procedures of the pharmaceutical industry would not
be as they are."
Id. (emphasis added).
Cross clearly endorses in vitro testing as probative of utility, when
those tests are accepted by those skilled in the art. This finding
accords with earlier CCPA cases, which indicated that the USPTO's inquiry
was to remain fixed upon what would be persuasive to one skilled in the
art. E.g., In re Jolles, 206 USPQ 885, 890 (CCPA 1980); In re Irons, 144
USPQ 351 (CCPA 1965), In re Krimmel, 130 USPQ 215, 219 (CCPA 1961). "In
the final analysis, every utility question . . . must be decided on its
own facts. Relevant evidence is judged as a whole for its persuasiveness
in linking observed properties to suggested uses." Nelson v. Bowler, 206
USPQ at 885. It appears clear, then, that any doubt that an Examiner may
express regarding the probative value of an in vitro assay should easily
be overcome by an appropriate sworn declaration of one skilled in the art
that the in vitro assay sufficed to establish the stated utility.
The position taken by appellant Cross -- and decisively rejected by the
CAFC -- is the position taken by many Examiners of biotechnological
inventions today. However, the CAFC in Cross has made clear that such
positions set too high a standard of utility. Instead, the lesser
showing of pharmaceutical activity -- by whatever experimental means
generally acceptable to those skilled in the art -- will suffice for
biotechnological inventions when that which is claimed is other than a
human treatment or a composition which has a utility other than for human
treatment, or a method of making such compositions. The Examiners'
persistence in reiterating positions rejected in Cross constitutes
reversible error, adding nothing but cost and delay to the inventors'
efforts to secure legitimate patent protection.
10. The USPTO's recent written decisions deviate from controlling case
law
Unfortunately, two recent decisions from the USPTO Board of Patent
Appeals and Interferences demonstrate the USPTO's deviation from the CAFC
consensus that utility is a minimal threshold and that only
pharmacological activity need be shown. Ex parte Maizel, 27 USPQ2d 1662
(BPAI 1993) and Ex parte Deuel, 27 USPQ2d 1360 (BPAI 1993), were decided
after the NIH engendered public debate regarding the utility requirement
by seeking patent protection for cDNA sequences identified by human
genome project researchers. In both cases, the Board spontaneously
raised the utility issue and stated that the inventors provided "no
statement of use or utility" in the specification.
Deuel involved composition of matter claims drawn to a "purified
prostate tissue-derived growth factor" having particular characteristics,
including mitogenic activity. The Board opinion noted that the inventors
disclosed data from assays demonstrating that the claimed compound
demonstrated "potent mitogenic activity against NRK cells." 27 USPQ2d at
1361. However, the Board noted that the cited references indicated that
"the role of the growth factor in controlling cell division and
interactions with other factors was not understood" at the time of filing
and further that the significance of the factors was "unclear." Id. at
1364-65. Another reference was quoted as suggesting that the mitogen has
"potential to mediate some of the activities related to prostatic growth,
development, and, perhaps hyperplasia and neoplasia." Id. (emphasis
added). These comments suggest that the USPTO is seeking information
relating to the physiological mechanism of action and/or the ultimate
therapeutic effect of the growth factor. The USPTO does not refer to
other potential uses for such proteins, including, e.g., making
antibodies for screening for the protein as evidence of prostatic growth,
or directly screening for cells which are responsive to the mitogen. If
such uses are supported in the specification, they should suffice to
establish utility.
In Maizel, the claims were drawn to recombinant DNA encoding a
recombinant human B-cell growth factor. The Board opinion notes that the
claimed growth factor "has the ability to maintain the growth of B cells
in a culture medium." Yet, the opinion questions whether the utility
requirement was met because, at the time of filing, "the actual function
of BCGF protein was unknown." 27 USPQ2d at 1668. This objection was
lodged despite the Board's simultaneous discussion of an obviousness
rejection based in part on prior art disclosing the non-recombinant
protein:
BCGF is described as a protein useful in bolstering the immune response
and the knowledge of the protein would have motivated one skilled in the
art to utilize recombinant DNA protocols to [produce recombinant
protein].
Id. (emphasis added). The Board's implicit conclusion -- that knowledge
of the properties of the nonrecombinant protein can simultaneously render
the recombinant protein obvious yet not be used by the inventors as
evidence of utility -- seems somewhat contrary, absent some showing of
significant sequence variation or of unexpected immune activity of the
recombinant protein.
Thus, Maizel and Deuel are published examples of the current USPTO
misinterpretation of the utility requirement. Unfortunately, any patent
attorney or agent working in the biotechnology area can augment these
examples with anecdotes of Examiners refusing to accept evidence of
pharmacological activity that is persuasive not only to those skilled in
the art, but to those in the venture capital community which,
commercialize such efforts.
Utility under 35 USC Section 101 is to be judged on a case-by-case
basis, with no higher standard than that applied to the field of organic
chemistry. In chemical cases pharmaceutical utility is assumed for a
number of molecules with a common core structure and an R group pendant
off the core structure (where R as a substituent can be any alkyl, aryl,
amino, etc. group), even though utility is only shown, if at all, for one
of this family of compounds. In fact, in many instances a mere statement
of utility, speculated based upon structural analogy with a known
compound which has the stated utility, is accepted as sufficient for
organic chemicals. In a similar way, given that sufficient utility is
shown (or analogized) for one protein or polypeptide, pharmaceutical
utility should be assumed for a family of proteins that share a common
biological function or structural characteristic, for example, they bind
to the same receptor or have a consensus sequence that is a receptor or
antigen binding site, but that vary somewhat in their amino acid
sequences.
Alternatively, if the utility for the family of polypeptides is stated
in the claims, the same favorable result is achieved, because if some
structural variants encompassed by the claims turn out in fact to be
inactive, they are not protected and neither the public nor the patent
applicant is harmed. The case law is clear that not all embodiments
encompassed within a claim must be operable for the claim to be valid.
See, e.g., Ex parte Mark, 12 USPQ2d 1904 (BPAI 1989).
The legal standard for utility is, and should be, the same in
biotechnology as it is in organic chemistry because these scientific
fields entail the same degree of predictability in extrapolating from one
compound or protein to another. For example, just as proteins have
secondary and tertiary conformations that may impart some particular
properties to the proteins, organic chemicals (e.g., small molecules)
have stearic requirements that may impart certain properties to those
molecules.
Instead of relying on Ex parte Deuel, 27 USPQ2d 1360 (BPAI 1993) for
the standard of utility (i.e., whether the utility shown is clear), the
Examiners are to rely on the case law relevant for utility in the organic
chemistry field. The law is settled that in the absence of any evidence
or apparent reason why the claimed compounds do not possess the disclosed
utility, the allegation of utility in the specification must be accepted
as correct. See, e.g., In re Kamak et al., 158 U.S.P.Q. 320 (CCPA 1968);
In re Riat et al., 140 U.S.P.Q. 471 (CCPA 1964); Ex parte Krenzer, 199
U.S.P.Q. 227 (POBA 1978).
The statements in the specification which can validly be challenged by
the Examiner are those which are speculative [In re Eltgroth, 164 USPQ
221 (CCPA 1970); In re Ruskin, 148 USPQ 221 (CCPA 1966)]; or abstruse,
esoteric, incredible, or factually misleading [In re Citron, 139 USPQ
516; 520 (CCPA 1963)]; which run counter to what would be believed to
happen by the ordinary person [In re Pottier, 153 USPQ 407 (CCPA 1967)]
or by those skilled in the art [In re Houghton, 167 USPQ 687 (CCPA
1970)]; which are in a field of endeavor where little of a successful
nature has developed or which has been the subject of much fraud [In re
Oberweger, 47 USPQ 455 (CCPA 1940); In re Irons, 144 USPQ 35 (CCPA
1965)]; or which are inconsistent with evidence presented by the Examiner
[In re Corneil et al., 145 USPQ 697, 702 (CCPA 1965); In re Wooddy et
al., 141 USPQ 518 (CCPA 1964)]. Thus, allegations in the specification
of utility which are or border on the incredible in light of contemporary
knowledge in the particular art must be substantiated by substantial
evidence. In re Ferens, 163 USPQ 609 (CCPA 1969). Cancers are an
example of where contemporary knowledge in the art has far advanced so
that it is not per se incredible. Ex parte Rubin, 5 USPQ2d 1461 (BPAI
1987).
The PTO has not been charged with the task of protecting the public
against possible misuse of chemical patents. The patent statutes do not
give the PTO the right or duty to require proof that claimed compounds or
other materials which are stated to be useful for pharmaceutical
applications are safe, effective, and reliable for use with humans. In
re Krimmel, 130 USPQ 215 (CCPA 1961); In re Hitchings et al., 144 USPQ
637 (CCPA 1965).
The requirement for clinical utility in biotechnology cases (including
antibody technology) should be the same as that in organic chemistry
cases, i.e., clinical utility should not be required if adequate animal
tests are set forth upon which the reasonably skilled clinician would
rely to decide if undertaking clinical trials would be fruitful. In re
Hartop et al., 135 U.S.P.Q. 419 (CCPA 1962). In Hartop the CCPA defined
"standard experimental animals" as "whatever animal is usually used by
those skilled in the art to establish the particular pharmaceutical
application in question." Id. at 426, footnote 14. Further, the species
of animal to be employed for testing depends on what animal is ordinarily
used by those skilled in the art to establish the particular utility in
question. In re Krimmel, 130 U.S.P.Q. 215 (CCPA 1961). The law merely
requires disclosure of an activity coupled with knowledge as to the use
of the compound for that activity to satisfy 35 U.S.C. Section 101. In
re Bundy, 209 U.S.P.Q. 48 (CCPA 1981).
Indeed, inhibition of growth of a transplanted cancer strain in rats by
an organic molecule has been held to be sufficient utility to meet the
requirements of 35 USC Section 101 [In re Ross et al., 134 USPQ 321 (CCPA
1962); In re Bergel et al., 130 USPQ 206 (CCPA 1961); Ex parte Westphal
et al., 139 USPQ 378 (POBA 1962)]. Furthermore, even in vitro tests can
raise a presumption of in vivo usefulness of the claimed compounds if
there is a showing of a reasonable correlation between such activities.
See, e.g., Cross et al. v. Iizuka et al., 224 U.S.P.Q. 739 (CAFC 1985);
Ex parte Hirsch, 34 P.T.C.J. 588 (BPAI 1987).
The same standards as set forth above should be applied equally for
biotechnology inventions.
Two other recent decisions by the PTO Board, Ex parte Balzarini (1991
Pat. App. LEXIS 37, March 1991) and Ex parte Brana (apparently
unpublished), demonstrate why it has proven increasingly difficult to
convince the PTO that a biotechnological invention satisfies the
usefulness criterion of the patent laws. In these cases, the Board of
Appeals affirmed the rejection of patent applications claiming inventions
useful in the treatment of AIDS and cancer, respectively, primarily
because the in vitro or in vivo data submitted to the PTO did not
establish that the claimed inventions were useful.
In Balzarini, where the applicants claimed pharmaceutical compositions
comprised of two dideoxynucleotides and their use to treat retroviral
diseases and to inhibit replication of HIV in human cells, the Board
agreed with the Examiner that the applicants had not presented any
persuasive evidence establishing that their in vitro data was predictive
of the in vivo activity of their claimed compositions as of 1987. In
fact, an article cited by the Examiner showed that one antiviral agent
active against HIV in vitro proved ineffective and harmful in clinical
trials, calling into question the value of in vitro data in selecting
prospective AIDS therapies. The Board stressed that the claims were not
rejected because the utility was incredible. In fact, the in vivo
activity of AZT left open the possibility that other antiviral agents
could be useful in the treatment of AIDS if shown to work in vivo. The
Board dismissed as irrelevant the fact that the PTO had previously
allowed patents claiming AIDS therapies on the basis of in vitro data
alone.
In Brana, the application as originally filed disclosed the in vitro
activity of the claimed chemical compounds (diones) against unspecified
human tumor cells. It also referred to a reference which describes a
computer analysis of the anti-tumor activity of structurally related
compounds in leukemia in vivo murine assays used by the National Cancer
Institute (NCI). During prosecution of their application, the inventors
in Brana submitted data to the PTO showing the in vivo activity of
certain of their compounds in a leukemia murine assay, as well as the in
vitro activity of other claimed compounds against human colon and
laryngeal cancer cells.
The Board in Brana affirmed the rejection of the Examiner on several
bases: the application did not disclose a specific tumor or disease
against which the claimed compounds were shown to be useful in vivo; the
in vivo murine screens only identified compounds potentially useful for
clinical study and did not establish that any of those compounds worked
clinically; the in vivo and in vitro data submitted by the applicants
subsequent to filing could not compensate for a failure initially to
describe a practical utility; and three prior art references called into
question the value of murine assays relied on by the applicants.
Brana is now on appeal to the Court of Appeals for the Federal Circuit,
in which the applicants claim that the in vitro data included in their
application as filed and the in vivo data for related compounds generated
in murine assays recognized by the NCI established utility. The PTO is
arguing that the evidence of record established that there was no
correlation between the murine screening test relied on by the applicants
and the real world pharmacological activity. The Federal Circuit heard
oral argument in January and should render a decision sometime this year.
Brana presents the Federal Circuit with an opportunity to stress that an
inventor need not establish the safety and efficacy required under law by
the FDA to market a drug. Further, Brana is directed to organic
chemicals, not to a biotechnology product, indicating that Group 1200 is
starting to take the stricter stance of Group 1800 as regards utility
rejections.
11. Conclusion
Both law and sound policy dictate that the USPTO re-evaluate its view
of the utility requirement and examine biotechnology patents in
accordance with controlling case law.
The underlying policies of the patent system require that USPTO
examining practice reward the inventors as soon as possible for
discovering and disclosing the pharmaceutical and pharmacological
activities of compounds, as opposed to requiring proof of ultimate
therapeutic utility which the USPTO tends to assert is the sole basis for
patentability of potential therapeutic agents. The decisions also
encourage early disclosure of such discoveries to stimulate research and
development of therapeutic agents. The USPTO's contrary requirement of
clinical efficacy to demonstrate utility forfeits these benefits and
instead favors secrecy, delayed filings, prolonged term of prosecution
and later disclosure of inventions.
We assert that the utility case law discussed above clearly establish a
low evidentiary threshold for meeting the utility requirement of Section
101. The decisions mark a clear distinction between pharmaceutical and
pharmacological activities and therapeutic uses, which the USPTO seeks to
ignore. Specifically, the USPTO should not interpret Brenner as carte
blanche authority for requiring clinical or in vivo data for every
biotechnological invention. Instead, the USPTO should determine the
stated utility of the claimed invention, and not require evidence of
ultimate therapeutic utility in humans unless the claims specifically are
drawn to such utility. To do otherwise is to repeat the arguments of
appellant Cross, which the CAFC rejected in Cross v. Iizuka.
As the USPTO must follow the case law set forth by the CAFC, the
Examiners should be directed to study Nelson and Cross and to conduct
their utility determinations accordingly.
The USPTO Notice for this hearing raises a number of specific questions
concerning utility and we respond to these questions here.
B. Question 1: Do you believe that the legal standards governing the
requirement for identification of practical or substantial utility under
35 U.S.C. ¤ 101, as developed by the Federal courts, are sufficiently
clear and appropriate for biotechnological inventions? If not please:
(a) identify aspects of the law that you believe lack clarity or are
inappropriate, citing relevant cases; and
(b) identify changes to legal standards you believe would be desirable.
As discussed in the previous Section, we believe that the legal
standards established by the Federal Courts governing the requirement for
identification of "practical utility" under 35 U.S.C. Section 101 are
sufficiently clear and appropriate for biotechnology inventions. We
submit that these legal standards are well defined and require a minimum
of proof to establish practical utility. The concern over the utility
requirement for patentability should not be directed to the clarity of
the legal standards, but rather the implementation of these standards by
the USPTO. Thus, we view the utility issue as one of mis-application of
the law rather than incorrect legal precedent.
To resolve the utility issue, we propose that the patent bar be offered
the opportunity to understand the content of the Examiners' education by
the USPTO on such legal standards and to positively contribute to the
content of this education. Accordingly, we offer a practical and
effective approach to working with the USPTO and achieving the principal
goal of our nation's patent system: promotion of science and innovation.
We commend the USPTO for its recent efforts to increase the number of
qualified Examiners in the biotechnology area. Consequently, the
Examiners have evidenced a very positive trend in the technical
understanding of inventions that less than two decades ago were beyond
dreams. The biotechnology industry is a clear bright spot for our nation
and its competitive endeavors. As we approach the next century, our
patent system must continue its role of protecting innovative solutions
to a variety of unique problems.
The single purpose of our patent system is to promote science and
innovation. Accordingly, the USPTO has expressed the laudable desire to
promote research, development and commercialization of technological
advances in biotechnology. On this point, the USPTO, and our nation's
inventors, actually share common ground. It is the choice of pathways to
reach this common ground that creates a problem which threatens to
undermine the recent positive trends of the USPTO and erode the faith
that those inventors (and their investors) have in rewarding advances in
biotechnology.
The mis-application of these legal standards governing practical
utility is exemplified by the Notice for this hearing authored by the
USPTO. The notice prominently states that the USPTO is interested in
ensuring that the practical utility requirement is governed by standards
that promote research, development and commercialization of technological
advances in biotechnology. It must be absolutely clear that this
laudable interest is of secondary importance. This desire does not grant
the USPTO the right to create policy. Of primary importance to the USPTO
is fulfilling its Constitutional obligation to promote science and the
useful arts by following and implementing the law decided by the Federal
Courts and legislature. Only when an issue is one of first impression,
and no direction is otherwise provided by the Courts, does the USPTO have
the right to extrapolate from the decisions otherwise rendered by the
Courts. By not adhering to the law as observed by the inventors and the
patent bar, the USPTO creates confusion in the process of securing a
patent which can lead to a variety of deleterious consequences: notably,
the trust and security inherent in the patent system is weakened and our
competitive opportunities as a nation are threatened.
The Notice also raises an example of practical utility in the
patentability of nucleotide sequences that are produced incident the
expression of a human gene. There is a "concern" as to whether the
sequence or the gene must be characterized as to its physical, biological
or physiological significance in order to establish practical utility.
This statement misplaces the focus of the problem. First, the USPTO must
implement the decisions of the Federal Courts and not respond to
perceived "concerns" by attempting to create policy. Second, the test of
utility promulgated by the Federal Courts is not "physical, biological or
physiological significance." Almost any utility satisfies the statutory
requirements. Third, the technical presumption in this statement that a
sequence has no characterization as to its biological significance is not
scientifically accurate. There is inherent biological activity, and
hence practical utility, in these inventions. In its own example, the
USPTO assumes that the only utility of a sequence or gene fragment may
lie in the use of the fragment for the production of a protein. This is
in error. Again, the legal threshold for practical utility is very low
such that the practical utility of a gene sequence can be met when the
inventor establishes that the discovered sequence can be used as probes
for genetic screening, markers for specific human chromosomes, targets
for regulation in the case of promoters or enhancing elements, or PCR
primers for genetic fingerprinting. Absent evidence to the contrary,
such uses should establish practical utility.
The Notice analogizes these policy-tainted concerns to the development
of the chemical arts practice before the USPTO. It is presumed that the
patentability of intermediate compounds can depend upon an unidentified,
yet commercially promising final product or compounds claiming
therapeutic utility based only on findings of in vitro biological
activity. The Federal Courts have made clear that commercial
significance is not the standard of utility. Neither is in vivo
therapeutic activity the standard of utility. There is no reason for
biotechnology, as exemplified by a DNA sequence, to have a different
standard of determining utility than traditional chemistry.
The mis-application of these legal standards is also exemplified during
the examination of the inventions themselves. By shifting the
requirements determining practical utility from the statutory minimum
threshold to a USPTO defined "real world" application (typically in the
form of a commercially viable invention), the USPTO has raised the
standards from one of utility to proving efficacy. The legal standards
for establishing practical utility are, and should be, a low threshold.
To equate practical utility with a complete understanding of commercial
utility improperly raises these standards.
In order to continue the successful momentum that the USPTO has
recently established, the common ground between the inventors and the
USPTO must be expanded. We must have some fundamental agreement as to
the choice of paths which will implement our common goal of ensuring that
patentable inventions receive the guarantees and benefits earmarked to an
issued patent. We must address not only the technical expertise of the
Examiners, but also their legal education and guidance necessary to apply
the legal standards established by the Federal Courts to their everyday
duties.
We highly recommend the attainable goal of having the USPTO focus
primarily on the implementation of the standards set forth by the Federal
Courts and we recommend at least one option to achieve this goal. We
suggest that the USPTO open the initial and continuing education program
of USPTO Examiners to the public, so that the basis of the Examiner's
legal education is known to the public. This should expand the common
ground between the USPTO and the inventors by providing a consensus
starting point for legal arguments to be applied to the facts of the
invention under examination.
By allowing the public to understand the legal education foundation
taught by the USPTO, the public, and in particular our nation's
inventors, will have a better appreciation of the USPTO's legal views.
Thus, if the inventors wish to deviate from the common ground, then they
will do so knowing the probable consequence of their action, namely, the
appeal of the Examiner's decision in order to have the Federal Courts
rule on the practitioner's interpretation of the law or an issue of first
impression.
Furthermore, there are clearly many advantages to establishing a legal
education for the Examiners which reflects a general consensus of both
the USPTO and the patent bar, as representatives of the inventors.
Should fewer appeals result as a consequence, the savings in economic and
inventive power alone justifies the effort. Accordingly, we recommend
allowing the patent bar to cooperate in the education of the USPTO corps
by providing comment on the Federal Court case law.
C. Question 2: Do you believe that the PTO is correctly and uniformly
applying the legal standards governing the requirement for identification
of practical or substantial utility under 35 U.S.C. ¤ 101 for
biotechnological inventions? If not, please:
(a) identify the basis for your belief that the PTO is not correctly or
uniformly applying the legal standards governing practical utility;
(b) identify the changes you would like to see the PTO make in its
application of this requirement during examination of patent
applications; and
(c) discuss the implications of such changes, not only with respect to
patent applicants seeking protection but also for scientific research
and development in general.
The standards for meeting the requirement for practical utility ,under
35 U.S.C. Section 101, for biological inventions directed to materials
for use in combatting human diseases and disorders are legal standards
which are interpreted by the courts. The USPTO is obligated to follow
these decisions and especially the decisions of its reviewing court, the
CAFC. The USPTO is not a legislative body but is empowered only to
administer the laws as enunciated by its reviewing court, the CAFC. In
their notice, the USPTO sets forth the following argument to support its
own review of inventions for use in human therapy.
...important public policy justifications for the USPTO to review
operability of inventions to be used to treat human disorders. A patent
provides the public with a high quality technically accurate disclosure
of a new, useful and nonobvious invention. However, with the imprimatur
of the Federal Government, a patent can also effect the commercial
prospects of the invention in question and can raise or lower
expectations of those afflicted with the illness the invention is
designed to treat.
While we recognize the importance of the USPTO's review of operability
of inventions, such review must be conducted in accordance with
established legal principles. The USPTO has neither the right nor the
authority to disregard the well-settled legal standards for reviewing
utility. Furthermore, the USPTO should heed its own advise and recognize
that the commercial prospects of an invention can be significantly
impaired by inappropriate USPTO action. Delays in prosecution caused as
a result of having to address rejections premised on mis-application of
the law can be tremendously burdensome to biotechnology companies, many
of which have their access to capital controlled by the value of their
patent portfolio.
Another basis for our belief that the USPTO is not correctly and
uniformly applying the utility standards is that many Examiners consider
that the practical utility standards of the U.S. statute are only
satisfied if the material in question can be useful in human therapy.
This is not the case. As seen from the CCPA decisions in In re Krimmel,
292 F.2d 948, 130 USPQ 215 [CCPA 1961], In re Bergel, 292 F.2d 955, 130
USPQ 206, and In re Dodson, 292 F.2d 943, the disclosure that a compound
exhibits some useful pharmacological property is sufficient to satisfy
the utility requirements for this compound under the statutes. As stated
by the CCPA In re Bergel, supra, in holding that the disclosure that a
compound inhibits transplanted tumors in rats or mice is sufficient
utility, the CCPA stated:
In our opinion that achievement is sufficient to satisfy the express
language of Section 101, and is in harmony with the basic constitutional
concept of promoting the progress of science and the useful arts. 130
USPQ 206, 209
The CAFC in Cross v. Iizuka, 224 USPQ 739 [CAFC 1985] and in Nelson v.
Bolar. 206 USPQ 881 (CCPA 1980) reiterated the doctrine that is not
necessary that a compound be therapeutically effective in man in order
for the compound to meet the utility requirements of U.S. patent law.
All that is required is that the compound be shown to exhibit biological
activity. In reiterating the doctrine in Bergel, supra, Dodson, supra,
the CAFC in the Cross case, supra, stated:
We perceive no insurmountable difficulty, under appropriate
circumstances, in finding that the first link in the screening chain, in
vitro testing, may establish a practical utility for the compound in
question. Successful in vitro testing will marshall resources and direct
the expenditure of effort to further in vivo testing of the most potent
compound, thereby providing an immediate benefit to the public analogous
to the benefit provided by the showing of an in vivo utility. (id. at
748) (Emphasis Added)
In Nelson v. Bolar, the CAFC specifically defined practical utility as
follows:
'Practical utility' is a shorthand way of attributing 'real-world'
value to the claimed subject matter. In other words, one skilled in the
art can use a claimed discovery in a manner which provides some immediate
benefit to the public.
Knowledge of the pharmacological activity of any compound is obviously
beneficial to the public. It is inherently faster and easier to combat
illnesses and alleviate symptoms when the medical profession is armed
with an arsenal of chemicals having known pharmacological activities.
Since it is crucial to provide researchers with an incentive to disclose
pharmacological activities in as many compounds as possible, we conclude
that adequate proof of any such activity constitutes a showing of
practical utility. 206 USPQ 883
This definition certainly does not require the USPTO to determine
whether the material being claimed is effective and safe for human
therapy. All that is required to satisfy the utility requirements of the
patent law is that material have a pharmacological activity. No more is
needed.
Question 2(b): Identify changes you would like to see the USPTO make in
its application of this requirement during examination of patent
applications.
We would like to see better education of the Examiners concerning the
law as regards to utility and what is required to satisfy the patent
standards.
Question 2(c): Discuss the implications of such changes, not only with
respect to patent applications seeking protection but also for
scientific research and development in general.
When the USPTO maintains standards of practical utility which differ
from that of the courts, unnecessary appeals result. This is very time
consuming and expensive process and is especially hard on companies with
little capitalization. Through an examining corporation better educated
in the principles governing practical utility, prosecution of
applications can proceed more expeditiously. Additionally, resources
that currently must be devoted to overcoming rejections based on
misapplication of the law can be used elsewhere.
In accordance with well settled court decisions, practical utility need
not be based upon the ultimate use of a compound as a therapeutic but can
be based on the finding that the compound has pharmacological activity.
The policy basis for this minimum standard for meeting the practical
utility requirements expressed in these court decisions is as follows:
1. patents promote the development of therapeutic agents. Through the
granting of patents investment is stimulated for developing patented
compounds with therapeutic activity;
2. investors are more likely to provide financing for development of
therapeutic agents which have patent protection;
3. patent protection increases dissemination of information concerning
therapeutic agents to public; and
4. patents accelerate the dissemination of information to clinicians
for clinical testing which aid in developing the patented compound as a
therapeutic agent.
D. Question 3: Do you believe legal standards and examining practices
in foreign systems to assess the patent eligibility of biotechnological
invention (e.g., those governing industrial applicability and exclusions
from patentability) provide a better framework than is available in the
United States? Please identify desirable and undesirable practices of
foreign offices, particularly in the EPO and Japan.
The utility requirement in the United States is the sole requirement
for patentability that addresses the contribution made by the patented
subject matter to the well-being and progress of the society as a whole,
i.e., the invention must have "real world" value. This standard is
addressed in Europe and Japan by requiring that the patented subject
matter be "susceptible of industrial application." In addition, the
European Patent Convention, in Article 53, excepts from patentability
"inventions the publication or exploitation of which would be contrary to
ordre publique or morality" and also excepts from patentability plant or
animal varieties or essentially biological processes for production of
plants or animals. Japanese patent law also requires that inventions be
useable in industry and excludes patentability for inventions liable to
be contrary to public order, health or morals. In neither Japan nor
Europe are methods for treating the human body considered an industrial
application. However, patents may be obtained for the use of
compositions (whether the compositions are old or new) in therapeutic
regimens.
It is generally considered that the standard of industrial
applicability is a much lower hurdle than the standard of utility.
Indeed, it is common experience that claims rejected in a case pending
before the USPTO as lacking utility (often, however, under the guise of
assertedly failing to provide an enabling disclosure) will be considered
to meet the standard of being susceptible to industrial applicability
when examined in the context of a PCT application by a U.S. Examiner
(often the very same Examiner who has authored the utility/enablement
rejection). Thus, data routinely rejected in the United States are
routinely accepted in Europe and Japan, a scenario that does not bode
well for American the inventors in a global economy.
The many problems in attempting to apply the standard of utility (as
opposed to a standard of susceptibility to industrial application) are
only exacerbated by the dictum in Brenner v. Manson, 383 U.S. 519; 148
USPQ 689 (S. Ct. 1966) that the invention must be developed to "where
specific benefit exists in currently available form" that benefit being
"derived by the public." Who is the public? Does the public include
that subset of the population actively engaged in research? And what is
"currently available form"? Eventually, every member of the public will
potentially benefit from the efforts of that subset engaged in research;
is that benefit sufficiently direct that an immediate benefit to the
research community can be considered a "currently available" benefit to
the public?
There is no need to answer any of these questions where a standard of
industrial application is applied.
This distinction can perhaps best be illustrated by an example. Claims
are directed to concededly new and unobvious compounds which tightly bind
a known receptor present on a subset of white blood cells. Since the
cells on which the receptor appears are often useful in conducting
research to investigate the nature of human disease, the compounds are
clearly susceptible of industrial applicability since they can be used to
purify these cells for a researcher to study. The inventor further
states that the compounds can be used to target these cells in
therapeutic protocols.
There is no question that if sufficient proof were offered to show that
this latter use had therapeutic value, the public would have a currently
available benefit. However, showing that this is the case is quite
difficult, and the inventor of the claimed compounds is a basic
researcher not able personally, or through the employing research
institution, to do the necessary animal and clinical studies that would
provide the therapeutic parameters and proofs that seem to be required.
On the other hand, of course, commercial entities which may have this
capability will not be interested in pursuing the matter unless they can
be assured that the compounds themselves are protected. If the standard
of industrial applicability were applied, the use of these compounds for
purifying the relevant cells for research purposes would be adequate to
support their patentability. In the face of a utility requirement, the
questions raised above now introduce a complication -- is the provision
of compounds that are, at this moment, of interest only to the research
community a currently available public benefit?
In short, the standard of industrial applicability removes the value
judgment dimension of the utility requirement. It is easy to apply. If
the material can be used for something that someone is being paid to do
it meets the standard. Substitution of this standard for that of utility
would have the benefit of providing clarity in the law as well as
removing an unnecessary barrier to the progress of research in
biotechnology.
On the other hand, the requirement that the claimed subject matter not
be contrary to public morals can introduce its own complications. The
presence of this provision in the European patent law has already caused
considerable mischief in the form of oppositions to patents granted on
transgenic animals. The multiple oppositions filed with respect to these
patents have come not from competing commercial interests but from animal
rights groups and others with particular political agendas. There is
considerable concern in Europe that this provides an inappropriate
platform for such agendas. The recent formation by the EPO of a special
panel whose approval will be required in addition to the decision of the
Examining Division for the grant of a patent on a transgenic animal may
be in response to such pressures. It would clearly be undesirable to add
such a provision to the statute in the United States.
The third clear difference between U.S. and Japanese/European law is
the exclusion from patentability of methods of treating the human body.
The effects of this prohibition are minimized by the ability to obtain
protection for medical use of compositions. It will come into play only
when the method of treatment involves manipulative steps only. This does
not appear to constitute a major issue at this time.
In summary, it would be helpful to substitute for the utility
requirement a standard of industrial applicability, but without the
accompanying provisions which exclude from patentability inventions
contrary to the public order.
Operability10
A. Executive Summary
We perceive the issues surrounding the requirements for establishing
proof of operability for human therapeutic inventions as indicative of
the USPTO's recent trend towards legislating and setting policy for the
biotechnology industry. Fortunately, an era in our nation's history,
prior to the formation of the Food and Drug Administration ("FDA") and
during which time unscrupulous charlatans used the patent system to pawn
patented "medicines" off onto an unsuspecting public, no longer exists.
With the formation of the FDA and the understanding that this agency, and
not the USPTO, is responsible for ensuring that all therapeutics must
satisfy specific and well-defined criteria for both safety and efficacy,
the USPTO must ignore the altruistic, yet absolutely mis-placed, desire
to "protect" the public. As will be delineated below, by not issuing
legitimate patents directed to therapeutic inventions based upon a
perceived lack of proof of operability, the USPTO participates in both
avoiding the Constitutional mandate to promote the arts and useful
sciences, as well as the weakening of an industry important to the
competitive efforts of our nation.
The USPTO notice sets forth three questions and we respond to these
questions as follows:
In response to Question 1, we believe that the legal standards
governing proof of operability for inventions relating to treatment of
human disorders under the utility requirements of 35 U.S.C. Section 101
and under the enablement requirement of 35 U.S.C. Section 112, first
paragraph, are sufficiently clear and appropriate. We believe that the
legal precedent in this area is both concise and crystalline: an
invention which has a utility is operable, and only one objective need be
shown in order to establish operability.
In response to Question 2, we do not believe that the USPTO is
correctly and uniformly applying the legal standards governing proof of
operability during examination of patent applications claiming inventions
for treatment of human disorders. We believe that the USPTO has
effectively co-opted the duties of the FDA in setting forth an unwritten
but de facto requirement for proof of "efficacy" of a claimed
therapeutic; anecdotal evidence describing the types of improper
rejections routinely issued by the USPTO in the area of "operability" is
presented.
In response to Question 3, we believe that the legal standards and
examining practices in foreign systems, particularly in Europe and Japan,
often provide a better framework than is available under the current
approach of the USPTO for assessing patentability questions related to
operability of inventions directed to the treatment of human disorders.
In particular, we believe that the standards in foreign systems, unlike
those of the USPTO, are clear in their recognition that clinical data is
not required for establishing proof of operability.
We first present an analysis of relevant legal decisions, including the
important Court of Customs and Patent Appeals' decision of In re Anthony
which set the tone for judicial recognition of the different roles of the
FDA and the USPTO.
B. Case Law Review
The USPTO Notice for this hearing11 includes a summary of the cases law
on operability as a preface to the questions which follow. BIO here
responds to this case law summary.
The requirement that an invention be "operable" or "useful" to be
patentable has been part of the patent law of the United States since the
Patent Act of 1790. Indeed, the Constitutional grant of authority to
Congress to legislate with respect to patents requires that the
legislation promote progress of the "useful" arts. The requirement is
now embodied in Section 101 of the Patent Statute, 35 U.S.C. Section 101,
which requires that an invention be "new and useful" to be patentable,
and Section 112, Paragraph 1, of the Statute, 35 U.S.C. Section 112,
paragraph 1, which requires that a patent application describe a claimed
invention so that a person of skill in the pertinent art on the effective
filing date of the application would know "how to use" the invention
without need for undue experimentation. If an invention is inoperable,
how to use it cannot be described.
In Mitchell v. Tilgham, 86 U.S. (19 Wall.) 287 (1873), the Supreme
Court defined the "operability requirement" in holding that a new product
or process, to be patentable, must be shown to be "capable of being used
to effect the object proposed" in a patent application.
Several courts have interpreted this "operability" standard, each court
concluding that only one proposed object need be shown to be effective to
satisfy the operability requirement.
In Raytheon Co. v. Roper Corp., 220 USPQ 592 (CAFC 1983), the claimed
invention was directed to a "common capacity" oven capable of
conventional thermal cooking, microwave cooking, and pyrolytic
self-cleaning. For determining whether a claimed invention had utility
(i.e., was operable), the Court set out a two-part test: (1) interpret
the clans to define the invention to be tested for utility; (2) determine
whether that claim requires a means for accomplishing an unattainable
result. The court stated "When a properly claimed invention meets at
least one stated objective, utility under section 101 is clearly shown."
Id. at 1598.
In Stiftung v. Renishaw plc, 20 USPQ2d (CAFC 1991), the claimed
invention was directed to "touch-trigger" probes used in
coordinate-measuring machines. The court further explained that an
invention "need not be the best or the only way to accomplish a certain
result, and it need only be useful to some extent and in certain
applications." Id. at 1100. In that case, the court reversed the trial
court's finding of lack of utility because the court was able to find a
utility for the claimed invention as presented.
A rejection based on "lack of proof of therapeutic utility" of chemical
process and composition claims was reversed by the court in In re Gazave,
154 USPQ 92 (CCPA 1967). The court in that case recognized that "the
amount of evidence required depends on the facts of each individual
case." Id. at 96. However, the court also made it clear that the burden
rests on the examiner to present "evidence inconsistent with the
assertions and evidence of operativeness presented by" the applicant. Id.
at 96. The court stated:
Appellants' discovery here does not appear to us to be of such a
speculative, abstruse or esoteric nature that it must inherently be
considered unbelievable, incredible, or
factually misleading. Nor does operativeness appear unlikely or an
assertion thereof appear to run counter to what would be believed would
happen by the ordinary person in the art. Id. at 96.
The decision in Gazave is consistent with the court's decision in In re
Chilowsky, 109 USPQ 321 (CCPA 1956). In Chilowsky, the court reversed
and remanded a rejection based on operability of claims directed to a
method and apparatus for extraction and utilization of thermal energy
resulting from atomic decomposition of uranium. The court stated "If the
alleged operation seems clearly to conflict with a recognized scientific
principle...the presumption of inoperativeness is so strong that very
clear evidence is required to overcome it." Id. at 325. However, the
initial burden of demonstrating the "recognized scientific principle" was
placed on the patent examiner and could not be sufficiently supported by
the examiner's "mere recitation of personal experience or anecdotal
observations."
The admonitions of the court in the Chilowsky case apply with equal
force to the biotechnological and human therapeutic arts:
Applicants for patents in this field, as in all others, are entitled to
specific information as to the grounds on which their applications are
rejected and should not be met with anything in the nature of a blanket
rejection based on the comparatively recent development of the art and
the difficulty which has been experienced in producing commercial
devices. Id. at 108.
The Patent Office notes in the Notice of Public Hearings, 59 Federal
Register 45267 (September 1, 1994) at 45268, that rejections of claimed
inventions for inoperability, and therefore lack of utility under 35
U.S.C. Section 101, often are accompanied by rejections under 35 U.S.C.
Section 112, paragraph 1, that assert that the specification is
non-enabling. "Operability" is considered to be an element of the
disclosure requirement under Section 112, Paragraph 1, because the
inventor is required to disclose, inter alia, how to use the claimed
invention.
In re Ziegler, 26 USPQ2d 1600 (CAFC 1993), concerned an application
with an alleged effective filing date more than forty years before the
court's decision. In the decision, a rejection of claims directed to
solid, plastic polypropylene "capable of being pressed into flexible
foils and sheets" at certain temperatures was upheld. In the case, the
applicant attempted to sustain a claim priority under 35 U.S.C. Section
119 from a German patent application in order to overcome a prior art
rejection under 35 U.S.C. Section 102(e). The court held that priority
could not be claimed from the German application because Section 119
requires, for such a claim, that the German application have satisfied
the requirements of Section 112, paragraph 1, with respect to the claims
at issue and the German application failed to do so because it failed to
satisfy the "how to use" prong of the enablement requirement of Section
112, paragraph 1. This was found to be the case because no "practical
utility" for the claimed invention was disclosed in the German
application. The case had a complex procedural ancestry, with important
facts established by collateral estoppel due to earlier proceedings, and
turns on the state of the art in the polypropylene field in the early
1950's. Basically, the court held that, under the facts at hand, the
examiner had reason to assert that the claimed invention lacked utility
and the applicant could not overcome the examiner's assertion.
In In re Marzocchi, 169 USPQ 367 (CCPA 1971), the court reversed a
rejection under 35 U.S.C. Section 112, paragraph 1, of claims directed to
a technique for improving adhesion characteristics between glass fibers
and vinyl polymer resins. Operability was not at issue in the case, but
a rejection based on Section 112, paragraph 1, was. As indicated above,
Section 112, paragraph 1, incorporates the operability requirement as a
matter of logic and may be cited as a basis for a rejection for
inoperability. The case is important for the direction it provides the
Patent Office in handling rejections under Section 112, paragraph 1. The
court said:
... it is incumbent upon the Patent Office, whenever a rejection on
this basis [35 U.S.C. Section 112, paragraph 1] is made, to explain why
it doubts the truth or accuracy of any statement in a supporting
disclosure and to back up assertions of its own with acceptable evidence
or reasoning which is inconsistent with the contested statement. Id. at
1073.
The truth and accuracy of statements in a patent application are
presumed unless the Patent Office can establish that the statements are
otherwise.
The decision in Marzocchi establishes that mere allegations of
insufficiency or statements of disbelief regarding an applicant's data
and issuing from the Patent Office are insufficient to render the
applicant's "presumptively accurate" disclosure statutorily deficient.
Further affirming the duty on the Patent Office to provide reasoned,
technically based support for its challenges to the utility and
disclosure requirements of a patent application, the court in In re
Bundy, 209 USPQ 48 (CCPA 1981), stated:
The PTO must have adequate support for its challenge to the credibility
of applicant's statements as to utility. Only then does the burden shift
to [applicant] to provide rebuttal evidence. Id. at 51.
The claims in the Bundy application were directed to a new series of
analogs of naturally-occurring prostaglandins. Despite the fact that
"[no] specific examples of dosages for human use or even animal tests are
given for the novel compounds per se," id. at 51, the court held that it
did not consider "that one of ordinary skill in the art would not know
how to use these novel analogs to determine the specific dosages for the
various biological purposes." Id. at 51. One factor mentioned by the
court in arriving at its decision was that the claims at issue were
directed to the compounds and not to their therapeutic use.
In addition, that court recognized that:
Early filing of an application with its disclosure of novel compounds
which possess significant therapeutic use is to be encouraged. Id. at 52.
Such disclosure will tend to be delayed if the Patent Office, as it has
been wont to do in recent years, routinely requires applicants for
patents on inventions involving treatment of human disorders to produce
late-stage clinical data to establish that the inventions are operable.
The claimed invention at issue in In re Fouche, 169 USPQ 429 (CCPA
1971), was a class of compounds having pharmaceutical utility due to
their antidepressant, neuroleptic, and tranquilizing properties. The
court affirmed a rejection of Claim 1 under Section 112, paragraph 1,
because the applicant failed to provide any evidence to overcome what the
court viewed as reasonable doubts of the Patent Office that some
compositions within a Markush group could be used for the alleged
therapeutic purposes.
It has become a common practice for the Patent Office to require
applicants to submit human clinical data to overcome rejections for
inoperability of claims to methods of using compositions to treat human
disorders. In In re Langer, 183 USPQ 288 (CCPA 1974), the court held
that clinical testing in humans would not be required to overcome a
rejection for lack of utility based on references describing tests in
vitro. In that case, the claims were directed to compositions and methods
of using a new source of stannous tin for incorporation in dentifrices.
The claims were rejected under, inter alia, Section 112, paragraph 1, for
failing to provide clinical data and Section 101 for lack of utility.
The examiner asserted that the compositions should be subjected to
clinical trials for two years to establish clinical effectiveness. The
court stated:
It is not proper for the Patent Office to require clinical testing in
humans to rebut a prima facie case for lack of utility when the pertinent
references which establish the prima facie case show in vitro tests and
when they do not show in vivo tests employing standard experimental
animals. Id. at 297.
Clearly, the courts do not recognize that in all cases human clinical
data are required to support the operability of claims to methods of
treating human disorders.
In In re Jolles, 206 USPQ 885 (CCPA 1980), the court reversed a
rejection for lack of utility of claims to certain compounds and methods
of using them to treat acute myeloblastic leukemia. In response to the
rejection, the applicants submitted data on testing of one of the
involved compounds in humans and eight of the involved compounds in mice.
The court found this evidence adequate to establish utility of the
claimed invention. The court noted:
... the character and amount of evidence needed may vary, depending on
whether the alleged utility appears to accord with or contravene
established scientific principles and beliefs. Id. at 890.
The court specifically rejected the position of the Patent Office that
testing in animals was not relevant to establishing utility of claims to
compounds or methods for treating humans.
The Court in In re Anthony, 162 USPQ 594 (CCPA 1969), addressed whether
it is proper for the Patent office to consider the safety of the claimed
compositions and process in human treatment. The subject invention in
that case was compositions and processes to treat mental depression in
humans. The Court clearly stated:
And Congress has given the responsibility to the FDA, not to the Patent
office, to determine in the first instance whether drugs are sufficiently
safe for use that they can be introduced in the commercial market... Id.
at 604.
The court further stated:
The presence of a certain degree of danger or risk attendant on the use
of a drug does not necessarily mean that the subject matter is not useful
within the meaning of the patent law because of that danger or risk. Id.
at 604.
Despite such precedent, which is further supported by the earlier cases
of in re Krimmel, 230 USPQ 215 (CCPA 1961), and In re Sichert, 196 USPQ
209 (CCPA 1977), the Patent Office is rejecting claims based on
applicants' failure to present safety and efficacy data from human
testing.
The claims at issue in In re Hartop, 135 USPQ 419 (CCPA 1962), were to
a stable solution of a thiobarbituric acid compounds, which were stated
in the involved application to be important as anesthetic and hypnotic
agents. Once again, the court rejected a requirement imposed by the
Patent Office for clinical tests to satisfy the utility requirement. The
applicant in that case had submitted animal data in support of the
utility and enablement requirement. Addressing the concern of proving
the safety of using the claimed compositions in humans, absent the
presentation of human clinical data, the court reasoned:
... inherent in the concept of the standard experimental animal is the
ability of one skilled in the art to make the appropriate correlations
between the results actually observed with the animal experiments and the
probable results in human therapy. Id. at 426.
The Court in Hartop, as in Krimmel, acknowledged the delegation of
public safety issues to the FDA, and not to the Patent office.
The claims at issue in In re Malachowski. 189 USPQ 432 (CCPA 1976) were
to compositions for treating arthritis "without limitation as to what
kind of animal is being treat." Although the applicant provided data on
the effect of administering the compositions only to certain non-human
animals, the court held that the data were sufficient to establish
utility also for humans. The Court stated:
Having found that the claimed composition has utility as contemplated
in the specification, Section 101 is satisfied and it becomes unnecessary
to decide whether it is in fact useful for the other purposes indicated
in the specification as possibilities. (citing In re Gottlieb, 140 USPQ
at 668.) Id. at 435.
In a claim to a composition, only a single utility is required to meet
the operability requirement.
In Ex parte Balzarini, 21 USPQ2d 1892 (BPAI 1991), the Patent Office
Board of Appeals affirmed a rejection under the utility requirement of
claims to pharmaceutical compositions and their methods of use in
treating retroviral diseases such as AIDS. The Board attributed
significant weight to evidence presented by the examiner that the state
of the art at the time the subject application was filed indicated that
in vitro tests were not predictive of in vivo efficacy. There is
significant question whether, as a matter of fact, the examiner and the
Board properly read this evidence as it pertained to the claims at issue.
Although the Board stated "[we] do not presume to tell appellants what
evidence would be acceptable in rebuttal of these rejections," the Board
did not find the declaration evidence submitted by the applicants, in
which the Board found a number of deficiencies including lack of in vivo
data, to be sufficient. The Board strongly suggested that presentation
of in vivo data of some type might be required but stressed that human
clinical data would not necessarily be required.
Finally, the Board in Ex parte Rubin, 5 USPQ2d 1461 (BPAI 1987)
squarely addressed the issue of adequate evidence presented by the
examiner in rejecting claims in the biotechnology art for lack of
utility. The claims were to methods of improving the effectiveness of
interferon in the treatment of certain cancers by administering a
tyrosinase inhibitor. The examiner contended that the asserted utility
was per se incredible, expressing disbelief at the applicants' statements
regarding utility but offering no factual support for her rejection. The
Board, at that time, reiterated the clear mandate, as expressed
throughout the cases outlined above, that the burden initially is on the
examiner to provide evidence to question an applicant's statements of
utility. Only then can an applicant be required to submit evidence,
beyond what is in the application, to support such utility.
C. Question 1: Do you believe that the legal standards governing proof
of operability for inventions relating to treatment of human disorders
under the utility requirement of 35 U.S.C. Section 101, and under the
enablement requirement of 35 U.S.C. Section 112, first paragraph, as
developed and interpreted by the Federal courts, are sufficiently clear
and appropriate? If not, please
(a) identify aspects of the law that you believe lack clarity or are
inappropriate, citing relevant cases; and
(b) identify any changes to these legal standards you believe would be
desirable.
The legal standards governing operability for inventions relating to
treatment of human disorders under the utility requirement of 35 U.S.C.
Section 101 and the enablement requirement of 35 U.S.C. Section 112.
paragraph 1, as interpreted and developed by the courts, are unambiguous
and appropriate.
"Utility" and "operability" are the same thing. If a claimed invention
satisfies the utility requirement, embodied in Section 101 of the
Statute, the invention necessarily also satisfies the operability
requirement. The operability requirement is part of the enablement
requirement embodied in
Section 112, Paragraph 1, of the Statute, merely as a matter of logic.12
In order to be enabled by a patent application, a claimed invention must
be operable, i.e., it must work to some extent in a use described for it
in the application.13 "Working
to some extent in a use described ...in the application" means "having
utility."14
The legal standards, which govern utility/operability for inventions
involving treatment of human disorders, which the courts have established
and which, therefore, the Patent Office must follow, are unambiguous and
appropriate. The problem is not these standards. The problem is the
Patent Office's imposition of additional standards that are unrelated to
the Patent Office's statutory purpose and mandate. For more than 30
years, the courts have consistently rejected the Patent Office's attempts
to impose of such additional standards.
The Commissioner's Notice15 (hereinafter "the Notice") suggests a
distinction, that does not exist, between "utility" and "operability" and
then suggests that the requirement for "operability" encompasses
requirements for patentability that the Federal courts have clearly
rejected.
Initially an applicant for a patent on an invention is under no
obligation to prove the invention's utility/operability. It is presumed
under the law that an invention claimed in a patent application is
operable as described in the application. Proof of operability of a
claimed invention may be required from an applicant only if an examiner
establishes, on the basis of technical information that the examiner must
specify, that the operability of the invention as described in the
application would have been regarded as "incredible" by the person of
skill in the pertinent art on the effective filing date of the
application.16
In the context of inventions relating to treatment of human disorders, a
claim to a method of curing a disorder known in the pertinent art on the
relevant date to be incurable, or a claim to a composition of matter for
which the only use disclosed in the associated application is cure of
such a disorder, might be properly rejected by an examiner for lack of
utility or inoperability. Then, before the Patent Office would be
required to issue a patent with the claim, the applicant could properly
be required to provide evidence to the Patent Office to establish, to the
satisfaction of the person of ordinary skill in the pertinent art on the
effective filing date of the associated application,that the method or
composition does cure the disorder.17
On the other hand, a claim to a method of treating a disorder known to
be incurable, or a claim to a composition of matter for which one of the
uses disclosed in the associated application is treatment of such a
disorder, would not generally be properly rejected for lack of utility or
inoperability. This is because it is possible to treat an incurable
disease. Consider Grave's disease, diabetes, rheumatoid arthritis,
multiple sclerosis, and AIDS, to name a few. Treatment of an incurable
disorder is not generally "incredible."
Proof of operability, if it need be provided, requires only
presentation of evidence that, as of the effective filing date of the
application at issue, would have lead a person of skill in the pertinent
art to conclude that the claimed invention would likely be effective to
some extent for a purpose described for the invention in the application,
as the application would have been understood by such a person on the
effective filing date. When the claimed invention is a composition of
matter said to have therapeutic utility, the test is "effectiveness to
some extent" for any therapeutic use described in the application or
reasonably inferable by the person of skill in the pertinent art from the
application on its effective filing date. When the claimed invention is
a method of treatment of a disease, the test is "effectiveness to some
extent" in alleviating any of the adverse effects of the disease in a
person suffering therefrom. Even a de minimis extent is sufficient.
The test is not "safety and efficacy" as required for marketing
approval from the Food and Drug Administration. The test is not
"clinical efficacy."18 It is de minimis effectiveness in the eyes of the
person of skill in the pertinent art on the effective filing date of the
application.
The standard for proof of operability is very low, even if an examiner
has reason to require such proof. The courts consistently have held that
the standard is low. The standard must be low, if the patent system is
to be effective in promoting progress in the arts of treating human
disorders.
Neither the Statute nor the courts authorize the Patent Office to deny
a patent on an invention involving treatment of a human disorder, whether
under the guise of "lack of utility" or "inoperability," for reasons
suggested at Page 45269, Column 1, of the Notice. The Patent Office may
not deny an applicant a patent on an invention involving treatment of a
human disorder, even one that may be "incurable," because the applicant
cannot provide clinical data supporting efficacy in the described
treatment19 or because the Patent Office has some concern that the public
might be misled by grant of the patent. The courts settled long ago that
clinical safety and efficacy of therapeutics, avoiding the possibility of
a misled public, and any of a number of other worthwhile goals that might
be appropriate to consider when new technologies arise, are not concerns
of the Patent Office.20 These concerns are within the jurisdictions of
other agencies, such as the Food and Drug Administration, the Department
of Agriculture, the Environmental Protection Agency, the Securities and
Exchange Commission and similar agencies of the several states.
The mandate of the Patent Office is a limited one: to grant a patent on
an invention unless the Patent Office can establish some basis in the
Patent Statute to not grant one. Now the Patent Office is thwarting the
development and commercialization of technology for treating human
disorders by imposing,21 under the guise of "operability," requirements
for patentability that have no basis in the Statute and have long been
rejected by the courts. As a matter of law, this is improper. As a
matter of policy, it is a travesty. It is delaying and preventing new
therapeutic technologies, including many made available by modern
biotechnology, from becoming available to the American people.
D. Question 2: Do you believe the PTO is correctly and uniformly
applying the legal standards governing proof of operability under 35
U.S.C. Section 101 and Section 112, first paragraph, during examination
of patent applications claiming inventions for treatment of human
disorders? If not, please
(a) identify specific practices that you believe are inappropriate,
particularly with respect to evidentiary requirements to establish
operability, effectiveness or safety of a claimed human therapeutic
product or process;
(b) provide or summarize examples where you believe the PTO has
incorrectly or inappropriately imposed or maintained an evidentiary
requirement to support operability, under either Section 101, Section
112, or both, of an invention for use in treatment of a human disorder;
(c) identify changes you would like to see tea PTO make in examination
of applications claiming inventions related to treatment of human
disorders under 35 U.S.C. Section 101 or Section 112, first paragraph;
and
(d) discuss the implications of such changes, not only for patent
applicants seeking protection, but also for scientific research and
development related to treatment of human disorders as well as the public
health and welfare.
We believe that the USPTO is improperly applying the legal standards
governing proof of operability for claims directed to the treatment of
human disorders. Our concerns over this issue are multi-faceted, but
generally are summarized as follows:
1. Concerns regarding the impact of an issued patent on the
expectations and hopes of patients should not be a factor in the
determination of compliance with Sections 101 and 112, first paragraph.
2. A clear demarcation between the USPTO's "operability" standard and
the FDA's "efficacy" standard must be recognized by the USPTO.
3. While the USPTO has acknowledged that human clinical data is not a
requirement for compliance with Sections 101 and 112, first paragraph,
the type of rejections which are routinely made in cases involving human
treatments, particularly in Group 1800, establish an unwritten but de
facto requirement for such evidence.
The USPTO must apply the proper legal standards governing proof of
operability of human treatment claims; our desire in assisting the USPTO
in the proper application of these standards is geared towards a single,
fundamental goal: maintaining our nation's competitive vitality by
protecting entrepreneurial efforts which are directed to state of the art
human therapeutics.
The USPTO has raised the concern that the Federal Government's
"imprimatur" in the form of issued patents directed to the treatment of
human diseases can raise or lower the expectations of patients suffering
from such diseases. We believe that such concerns are absolutely
misplaced in the context of patentable subject matter. The purpose of
the patent system is to promote science and innovation; the purpose of
the FDA is to protect our citizens from unsafe and ineffective
treatments. By assuming to any degree that the issuance of a patent
should in some fashion be tailored with the emotions of the citizenry of
our nation in mind telegraphs the USPTO's recent trend towards reviewing
this type of subject matter under a different standard than other
patentable inventions. We believe that such feelings have led to the
avoidance of issuing patents for inventions which are in complete
compliance with the provisions of Sections 101 and 112, first paragraph.
Such avoidance can set in motion a myriad of devastating consequences:
without a reasonable guarantee of the rights granted by a patent,
financial investments necessary to fund research and development for
state of the art treatments are jeopardized; the security in knowing that
a patent can provide a significant period of time to recoup the financial
outlays necessary for research, development and commercialization of such
treatments can be vitiated; and, fundamentally, without the ability to
protect inventions for which patents should, but do not, issue, our
ability to compete in a global arena is severely jeopardized.
We believe that because drug development must initially be driven by
the deliberative and safety-oriented requirements of the FDA, it is
essential that the USPTO understand and recognize that a clear and
distinct demarcation exists between the legal requirements for
establishing "operability" and the FDA's requirements for proving
"efficacy." We believe that in the arena of treatments for human
disorders, the USPTO, and in particular Group 1800, has unfortunately
blurred this distinction. Patent Examiners are not trained to make
determinations as to the safety or efficacy of a drug; these
determinations fall under the province of the FDA. The legal standards
necessary to establish "operability" of a claimed treatment for a human
disorder are necessarily different from the factual, statistical and
scientific evidence necessary to establish "efficacy" of the treatment;
to the degree that the standards for operability are unintentionally
changed in an effort to approach proof of efficacy, our patent system is
emasculated.
The issuance of a patent directed to a human therapeutic has absolutely
no bearing on the FDA's determinations of the safety and efficacy of the
claimed therapeutic. Clearly, there have been numerous inventions
directed to human therapeutics which have issued as patents but have not
been able to satisfy the efficacy requirements of the FDA. There is
nothing inappropriate, inconsistent or alarming about such a situation:
inventions which are "operable" under the standards of the USPTO may not
be "effective" under the different standards of the FDA. But even under
such circumstances, society benefits: public disclosure of an invention
in a patent may prompt others to use that invention as a starting point
for development of a more appropriate treatment, and preventing
commercialization of an ineffective therapeutic protects vulnerable
members of society, i.e., those afflicted with a disease that is not
mediated by the ineffective treatment. By not allowing claims for human
treatment inventions that have complied with the statutory provisions of
patentability and which are ultimately proven to be safe and effective,
the USPTO enables in the plundering of the bio-pharmaceutical industry by
both foreign and domestic pirates who are not required to expend the
capital necessary to prove the safety and efficacy of the non-patented
therapeutic.
While we recognize that the USPTO has properly acknowledged that human
clinical data is not required in order to establish "operability" of
inventions relating to the treatment of human disorders, we believe that
the USPTO, and in particularly Group 1800, has established a de facto
requirement for human clinical data to establish operability.
Specifically, we view the following examples as placing an
inappropriate burden on innovative entrepreneurs who have discovered
creative and unique approaches to the treatment of diseases which affect
the human condition:
1. There are, unfortunately, some disorders and diseases for which
there are no adequate animal models; Alzheimer's is a prime example.
Thus, the art is forced by circumstances to rely upon in vitro testing to
establish the causal connection between an invention and the operability
of that invention. Under such circumstances, comparisons between
innovative, state of the art technologies and "similar compounds" which
are being "marketed commercially" for the same indicated uses are by
definition impossible. This is particularly the case in the
bio-pharmaceutical industry which at present can boast of only a few
commercially marketed products. In such circumstances, where an animal
model for a disorder or disease does not exist, and where the art
recognizes the importance of in vitro analysis as an indication of what
is to be expected in humans, we submit that the invention has met the
statutory requirements of Sections 101 and 112, first paragraph. To not
accept in vitro data under such circumstances is to effectively force the
art to expend limited resources on the development of an "appropriate"
animal model, rather than on the development of a treatment for the
targeted disease.
2. There are a variety of situations where the USPTO appears to avoid
the appreciation that an animal "model" is by definition not identical to
human patients. In situations where in vivo animal data is provided to
the USPTO in support of the operability of the claimed treatment, we
believe that it is inappropriate for the USPTO to effectively raise the
ante by asserting that despite the positive results provided in such
data, the results are not indicative of operability in a human condition,
the targeted disease in humans is "incurable," or treatment of the
disease is "unbelievable on its face." The USPTO has routinely rejected
such inventions based upon differences in the anatomical, biological and
circulatory systems of animal models and humans. Egregious examples
include the following: the USPTO has based its rejection of claims whose
operability was supported by an animal model by referring to an article
which promoted a different animal model, even though the article did not
denigrate the animal model utilized by the inventor; the USPTO has
refused to accept data directed to the operability of a vaccine because
the animal model, which the art was also utilizing in its investigation
of the disease, did not manifest each and every symptom of the disease in
humans; the USPTO has refused to give weight to data evidencing the
operability of a compound in destroying a human tumor transplanted into
an animal model, the USPTO's rationale being that the normal course of
cancer does not involve the intentional introduction of foreign tumor
cells into a human. In such circumstances, it is clear that the term
"model" has become irrelevant to the USPTO.
3. Declarations by experts offered to establish the operability of the
claimed invention and/or the value of an animal model in assessing the
operability of the invention have in many circumstances been dismissed by
the USPTO with nothing more than an unsupported opinion by the Examiner
that the declaration is not deemed "persuasive." Because all such
declarations must be signed with an acknowledgment as to the penalties
directed to both the declarant and a patent which issues based upon false
statements made by the declarant, most declarants think twice before
signing a declaration which the declarant can not stand behind. An
Examiner's opinion that a declaration is not "persuasive" without the
benefit of factual, scientific or legal support does not allow the
inventor or the declarant to know what perceived deficiencies in the
declaration must be corrected.
4. In circumstances where a purified and isolated human protein which
targets a particular organ or cellular population evidences a positive
effect in an animal model having a structurally and functionally similar
organ or cellular population, proof of operability is manifest. Under
such circumstances, the benefits derived in a non-human model using a
human protein must be viewed as predictive of what will occur in humans.
The rejection of claims directed to such an invention under Sections 101
and 112, first paragraph, merely reinforces the notion that a de facto
requirement for human clinical data exists at the USPTO.
5. The utilization of inconsistent theories in rejecting human
therapeutic claims has become so common-place that many Examiners have
adopted a unique vernacular to describe these rejections. Exemplary is
the so-called "112/103 squeeze" by which the claimed therapeutic is
rejected under Section 112, first paragraph as being "incredible" and
under Section 103 as being "obvious." The irony that human clinical data
is typically the only evidence that will overcome this "squeeze," despite
assurances that human clinical data is not required, is not lost on the
patent bar. "Squeeze" indeed.
6. In situations where an inventor is fortunate enough to have secured
human clinical data (typically in a Phase I/II FDA study in a small
population of patients suffering from the targeted disease), questions
raised by the USPTO as to the statistical significance of data showing a
positive effect indicates a breach of the role of the USPTO; such
assumptions relate to "efficacy" rather than "operability" and thus have
no bearing on the patentability of the invention.
7. Some enterprising Examiners have obtained a biotech (and possibly
other art units) company's statements on file at the SEC and used those
statements to discount patent application and declaration statements.
These statements, which have evolved as a result of SEC statutes and
regulations and securities case law, are intended to protect the
"innocent investor" from the more knowing company experts and investment
professionals. Recent securities cases spur companies to disclose even
the remotest, least probable risks to avoid fault and not label those
risks as remote. Therefore, SEC statements are replete with legalese
descriptions of the risk to investors - however remote - which include
chances such as the products may not be successful in clinical trials,
etc.
In contrast, the patent laws of operability and enablement require
disclosure only sufficient for those skilled in the art who are
presumably cognizant of probability and likelihood of the various
statements being true. Patent specifications and declaration statements
are not inaccurate or dishonest when they are not accompanied with
disclosure of low-probability events. Therefore, the SEC statements are
inappropriate to use to "disprove" the disclosure of the inventor in the
specification or declarations later supplied by those skilled in the art.
Biotech (and any art unit) Examiners can increase their efficiency and
productivity by not seeking out and demanding explanations for such
irrelevant documents.
Invariably, the points raised above force a knee-jerk reaction that
such rejections, if they truly are improper, should be directed by the
patent bar to the Board of Patent Appeals and Interferences. However,
given the two-to-three year period involved in the appeal process, and
the state of limbo that the invention is placed into during this period,
it has become a matter of necessity to refile the application after a
Final Rejection because the refiled application will typically be
reviewed within one year. Refiling the case often provides another
opportunity to attack the rejections when the application is again
examined by the USPTO, the hope being that more data will have become
available during the refiling period. We view this approach as a
necessary but clearly inefficient manner in dealing with the de facto
requirement for human clinical data.
We recognize that the demands and burdens placed upon the USPTO in
examining cases directed to the treatment of human disorders is enormous,
and we commend the efforts of the USPTO to seek, train and maintain
qualified and experienced Examiners, particularly in Group 1800. The
bio-pharmaceutical industry, while less than two decades old, operates at
a break-neck speed which limits the amount of time in which the USPTO can
review, absorb, understand and fully appreciate technologies which were
mere dreams and ethereal hopes 25 years ago. Thus, we understand how the
USPTO can at times incorrectly apply the legal standards governing proof
of operability under Sections 101 and 112, first paragraph. However,
unless the USPTO properly applies these standards and allows the issuance
of patents directed to inventions which have met the statutory
requirements for patentability, we are gravely concerned that an industry
vital to our nation's competitive commercial interests will continue to
be jeopardized and eroded.
E. Question 3: Do you believe legal standards and examining practices
in foreign systems provide a better framework than is available in the
United States for assessing patentability questions related to
operability of inventions for treating human disorders? Please identify
desirable or undesirable practices of foreign offices, particularly the
Japanese Patent Office and the European Patent Office, in this regard.
We believe that legal standards and examining practices in foreign
systems, especially Europe and Japan, often provided a better framework
than is available in the United States for assessing patentability
questions related to operability of inventions for treating human
disorders. The following is a description of standards of operability in
Japan and Europe. Overall European law is more favorable and, in certain
circumstances, Japanese law is more favorable, than the standards to
which U.S. inventors are being held. As outlined in the introduction, we
believe the USPTO is using an inappropriate and unnecessarily strict
standard of operability by apparently requiring that human clinical data
be submitted for biotechnological inventions relating to human therapy.
European Operability
As in the United States, European Patent Practice excludes those
articles or processes alleged to operate in a manner clearly contrary to
well established physical laws (EPO Guidelines Part C IV, 4.1, also Art.
57). However, outside of this straightforward operability exception, it
appears European patent practice readily accepts any reasonable statement
regarding the operation of an invention. For example, in vitro data is
generally sufficient to demonstrate operability of inventions in human
therapy. Therefore, European patent practice presumes that any
therapeutic composition intended for a first or second medical use as may
be claimed under European Patent Law is likely to be proven sufficient
for its first or second medical use by way of in vitro data, animal in
vivo data, and in some cases a believable, enabling, but "prophetic"
description of experimental data, long before such compound is
administered to humans. We are aware of no European case where the
European Patent Office has requested the filing of human in vivo data in
order to grant a patent for a pharmaceutical compound.
Obviously, the level of proof of operability of biotechnical
inventions, particularly as it relates to human therapeutics, is less
rigorous in comparison to that required by the United States patent
system which appears to be requiring human clinical data as the only
experimental evidence which is supportive of claims to human
therapeutics. The distinct commercial advantage that European
"operability" practice provides as compared to the emerging U.S. practice
is self-evident.
1. Operability in Japan
The issues of operability in Japan are governed under Japanese Patent
law Article 29 (industrial applicability) and Article 36, Paragraph 4
(disclosure of claimed invention) which closely correspond to 35 USC
Section 101 and Section 112, first paragraph. There are two distinct
classes of human therapeutics.
The first class relates to new chemical compounds per se with no use
limitation although eventual use of the compounds is directed to human
therapy. In Japan, if the inventor is the first to discover a novel
compound, a mere statement of the possibility of usefulness is
sufficient. A working example which shows that the claimed compound was
actually prepared is necessary but experimental evidence of the use is
not required. If this standard were to be adopted in the US., claims
drawn to novel compounds now being rejected in the U.S. would be allowed.
The second class relates to pharmaceutical compositions with a use
limitation, such as "treatment for cancer" and may be claimed as, for
example, "A pharmaceutical composition, for treatment of cancer,
comprising a compound A. . ." In these cases, the claimed use must be
experimentally supported. However, in vivo data is not necessarily
required. In vitro data is effective if the data directly supports the
claimed use. For example, when a claim reads "a pharmaceutical
composition for treating cancer comprising compound A, in vitro data
which shows that compound A kills cancer cells in a test tube is often
enough to support the claims use. This standard is more favorable than
the current U.S. standard.
2. Conclusion
We urge a relaxation of the present stringent interpretation of the
standard of operability as applied to human therapeutic inventions. A
standard similar to Japan and, especially, Europe would enable U.S.
inventors to compete in the world-wide market on a more level playing
field. In foreign countries, competitors and regulatory agencies do not
rely on the Patent Office to determine if an invention is absolutely
operable. The standard of operability should be that the invention is
enabled and it appears believable that it will operate as stated. The
apparent requirement of presenting human data for purposes of receiving
patent protection should be jettisoned. Such a requirement prevents the
flow of human therapy inventions to the next level of research and
ultimately to the marketplace. Other U.S. regulatory agencies govern and
control efficacy issues. The benefits of encouraging research and
investment in the highly competitive human therapy industry far outweigh
any possible dangers associated with allowing a non-useful human therapy
to be patented. Without patents, open sharing of new scientific
developments with the public is impossible. Once a threshold of
operability has been demonstrated, as exemplified by the acceptable and
useful European and Japanese standards, the public should be allowed to
determine the ultimate usefulness of an invention. Article 1, Section 8,
Clause 8 of the U.S. Constitution empowering Congress to grant patents
states that the objective is to "promote the progress of science and
useful arts." The proposed relaxing of the stringent interpretation of
the operability standard is totally consistent with this objective.
Nonobviousness22
The USPTO has previously held a hearing on October 28, 1993, on
nonobviousness and a BIO representative, William Epstein, Assistant
Patent Counsel, Hoffmann-LaRoche, Inc., testified. BIO's comments appear
here in Appendix C. These comments in this report supplement BIO's
previous comments.
A. Introduction
Broadly speaking, the premise of the patent system is that innovation
is encouraged by granting inventors the right to exclude others from
practicing their invention in exchange for teaching the world something
that it did not know.
The biotechnology industry, perhaps more than any other industry in the
United States, critically depends upon the incentives provided by the
patent system. In the biotechnology field, high research costs, lengthy
and expensive development programs and lengthy regulatory review periods
result in massive capital expenditures that must be incurred before any
product can possibly get to market. Moreover, for every research and
development program that results in a product in clinical trials,
numerous other research and development programs have been funded as
well. Without adequate patent protection for the fruits of the research
and development process, the simple fact is that return on investment
cannot be realized.
Though, "adequate" patent protection has many facets, at least two
items are critical: 1. patents must issue in a timely and efficient
manner; and
2. the scope of claims allowed for meritorious inventions should bear a
rational relationship to commercial reality.
From a practical standpoint, if the patent laws are being applied in an
overly restrictive fashion (such that inventors cannot obtain claims of
sufficient breadth to have any commercial impact), intended incentives
are illusory.
In the United States, three key statutes define the requirements for a
patent: (a) the invention (as defined by the patent claims) must have
been neither available to the public already, nor readily discernable
from publicly available material (the "novelty" and "nonobviousness"
requirements of 35 U.S.C. Sections 102 and 103, respectively); and (b)
the patent application, as filed, must adequately teach the public about
the invention (the "description," "enablement," and "best mode"
requirements of 35 U.S.C. Section 112). The USPTO must support
rejections with evidence.
This Section concerns the issues of nonobviousness and enablement of
biotechnological inventions. Currently, the patent statute does not
impose different patentability requirements depending upon the technology
of the invention. Concerning nonobviousness, the Patent Act provides:
A patent may not be obtained ... if the differences between the
subject matter sought to be patented and the prior art are such that the
subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which
said subject matter pertains. Patentability shall not be negatived by
the manner in which the invention as made.
35 U.S.C. Section 103 (emphasis added)
As explained more fully in the review of the case law, numerous legal
tests have been formulated to assist application of the statute to the
particular invention. Nevertheless, it is nearly universally recognized
by the courts and patent practitioners that the nonobviousness
requirement is one of the most difficult legal standards to apply. It is
difficult to determine the knowledge level of a person having ordinary
skill in the art or even to determine what constitutes ordinary skill.
In addition, the nonobviousness inquiry is susceptible to hindsight
analysis; that is, instead of assessing what would have been obvious to
one of ordinary skill in the art at the time the invention was made, the
assessment improperly takes into account information provided by the
inventor or others after the relevant date. Hindsight vision being
20/20, ingenious inventions can often look routine or simple after the
fact.
Further, in assessing whether an invention would have been obvious, it
is easy to lose sight of the fact that it is the subject matter defined
in the claims, viewed as a whole, that is assessed, not the broad
inventive concept, not the gist of the invention, and not some different
invention (such as, for example, a method or process when the claim
recites a composition). Unfortunately, as highlighted, infra, this
latter issue is a particular problem in the context of biotechnological
patent applications.
The "enablement" issue arises out of the requirement of 35 U.S.C.
Section 112 that the specification of the patent application contain a
description of the invention in such terms "as to enable a person skilled
in the art to which it pertains, or with which it is most nearly
connected, to make and use the same...." (Emphasis added.) Although the
enablement requirement applies with equal force to any patent application
regardless of the technological field of the invention, enablement issues
are more frequently raised in biotechnology. This is so primarily
because in certain circumstances the USPTO has taken the position that
biotechnology is a field where results are generally unpredictable.
Though nonobviousness and enablement are distinct requirements of the
patent code, both inquiries are grounded in an assessment of what the
specification (or prior art) would teach or suggest to a person of
ordinary skill in the art. In many instances, the critical question to
be answered in an obviousness inquiry is whether a person of ordinary
skill in the art would have had a "reasonable expectation of success" in
performing an experiment suggested by the prior art. By the same token,
often the critical question to be addressed in an enablement inquiry is
whether, in light of the teaching provided in the patent's specification,
a person of skill in the art could make and use the claimed invention
without "undue experimentation." Thus common to both of these inquiries
is a determination of the knowledge of one of ordinary skill in the art.
Though these two inquiries may not always be diametrically opposed, an
issue of concern to many biotechnology companies is that the USPTO often
applies these doctrines in an inconsistent manner, often even in the same
case. Such an inconsistent application is illogical, however, since the
level of skill in the art presumably does not change depending upon
whether the mythical person of ordinary skill is reading a patent
application or some form of publication. If the field of the invention
is so unpredictable that an inventor is precluded from obtaining claims
to embodiments described in detail but not specifically proven to work
(because making and using such embodiments would require undue
experimentation on the part of the person of ordinary skill in the art),
then how can an invention simultaneously be obvious because the same
skilled person would have had a reasonable expectation of success in
making and/or using the claimed invention based upon a collection of
elements coupled together from several publications?
In summary, as discussed throughout our response, we believe that the
USPTO is not properly construing and applying the statutory requirements
for patentability. In the area of nonobviousness, the USPTO has
misinterpreted the law concerning the tests for patentability of
biotechnology inventions. In the case of both the nonobviousness and
enablement requirements, the law is often misapplied and inconsistent
positions are taken. Furthermore, all too frequently biotech Patent
Examiners fail to cite any prior art or other evidence in support of
their conclusions, relying instead on supposition or unsupported
assertion.
The practical effect of the USPTO's position cannot be understated.
The USPTO's own statistics readily demonstrate that biotechnology patent
applications take longer on average to prosecute than applications
directed to any other technology. The cases that issue are often
extremely narrow and limited to embodiments that have been actually
tested; as a result, the claims are often of little commercial use. This
decreases competitiveness of research-oriented companies. Time is money,
and, unfortunately, far too many precious resources are being needlessly
spent by biotechnology companies to secure protection for the results of
their research. At the same time, misapplication of the requirements for
patentability effectively deprive these same companies of the full return
due on their research investment.
B. Case Law Review
The USPTO Notice for this hearing23 includes a summary of the case law
on nonobviousness as a preface to the questions which follow. We here
respond to this case law summary.
Neither the nonobviousness nor the enablement requirements of the patent
law distinguish between the type of technology to which the invention is
directed.24 Nevertheless, given the recent emergence of biotechnology,
little guidance has been available with respect to how the law on
obviousness and enablement would be applied to biotechnological
inventions. At the same time, despite a number of cases by the USPTO's
Board of Appeals and Patent Interferences (the "Board"), few cases had
been decided by the CAFC.
Recently, however, a number of cases involving biotechnological
inventions and issues of obviousness and enablement have been decided by
the CAFC. These cases, discussed infra, are helping to refine the
application of law to biotechnological inventions. While this growing
body of decisions provides patent practitioners and the USPTO with
helpful initial guidance, major uncertainties still exist. Adding to the
uncertainty are two cases decided in the past year by the Board (Ex parte
Movva, 31 USPQ2d 1027 and Ex parte Deuel, __ USPQ2d ____, 1993 Pat. App.
LEXIS 22 (1993)) that take a very narrow view of the CAFCs' important
decision in In re Bell, relating to the nonobviousness of claims to
compositions directed to isolated DNA.25 At the same time, none of the
cases contains much discussion specifically directed to the issue of the
level of skill in the art that is driving the obviousness (and
enablement) inquiries (much less why that level of skill is appropriate
in the circumstances presented).
From the standpoint of doctrinal consistency in the area of
biotechnological inventions, perhaps the most important statement to date
is found in the CAFC's decision in Amgen v. Chugai, 927 F.2d 1200 (Fed.
Cir. 1991): "A gene is a chemical compound, albeit a complex one ..."
Though this statement may be a slight oversimplification, see, e.g.,
Storella, Amgen, Fiers and Bell: The Federal Circuit and the
Patentability of Genes, 13 Biotechnology Law Reporter 459 (July-August
1994), the statement provides a framework of legal precedent from the
chemical art that can be applied to biotechnological inventions. This
precedent finds application primarily in the areas of obviousness and
enablement.
1. Obviousness
35 U.S.C. Section 103 provides that a patent may not be obtained if the
differences between the subject matter sought to be patented and the
prior art are such that the claimed subject matter as a whole would have
been obvious to one of ordinary skill in the art at the time the
invention was made. Though obviousness is a question of law, Panduit
Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568 (Fed. Cir.), cert.
denied, 481 U.S. 1052 (1987). However, as explained by the Supreme
Court, the obviousness conclusion is based upon several factual
inquiries: (a) the scope and content of the prior art; (b) the
differences between the prior art and the claims at issue; (c) the level
of ordinary skill in the art at the time the invention was made; and (d)
objective evidence of nonobviousness (such as the commercial success of
the invention or a long-felt, but unmet need for the invention), if any.
Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966).
The law provides that an inventor is entitled to a patent unless the
USPTO establishes sufficient grounds for rejection. See 35 U.S.C.
Section 102. As applied to obviousness, the USPTO bears the burden of
establishing a prima facie case that the claimed invention would have
been obvious to one of ordinary skill at the time it was made. In re
Fine, 837 F.2d 1071, 1074 (Fed. Cir. 1988). "A prima facie case is
established when the teachings from the prior art itself would appear to
have suggested the claimed subject matter to a person of ordinary skill
in the art." In re Rinehart, 531 F.2d 1048, 1051 (CCPA 1976). An
inventor may be entitled to a patent even if the USPTO has satisfied its
burden of establishing a prima facie case of obviousness, however.
Inventors may introduce evidence, such as objective evidence of
nonobviousness or evidence that their claimed compounds showed certain
unexpected properties, to "rebut" the prima facie case. When the claimed
invention is viewed as a whole in light of all the evidence, it may be
that the claimed invention would not have been obvious to the ordinary
practitioner at the time the invention was made despite the suggestion in
the prior art.
Importantly, any rejection by the USPTO must be based on objective, as
opposed to subjective, reasons. The USPTO's Examiner has a duty to
present evidence and reasons in support of his rejection of the claims.
See Ryko Mfg. Co. v. Nu-Star, Inc., 950 F.2d 714 (Fed. Cir. 1991). As
has been held by the Courts, "to establish a prima facie case, the USPTO
may not rely on unsupported assertions about the level of ordinary skill
in the art or bare conclusions that one of ordinary skill could apply
such skill to obtain the claimed invention." In re Sun, 31 USPQ2d 1451,
1456 (Fed. Cir. 1994)(Mayer, J. concurring). Nonetheless, as explained
by the CAFC in In re Sun, an inventor may need to request an Examiner's
affidavit requesting such citations, as provided in 37 CFR Section
1.107(b). In the absence of such a request, an inventor may be held to
have waived its right to such citations by the USPTO. Id. at 1455.
The case law squarely holds that a proper obviousness inquiry requires,
inter alia, consideration of two factors: (1) whether the prior art
would have suggested to those of ordinary skill in the art that they
should make the claimed invention (or carry out the invention in the case
of a claimed process); and (2) whether the prior art would have revealed
that in making the claimed invention (or carrying out the claimed
process), those of ordinary skill would have had a reasonable expectation
of success. See In re Vaeck, 947 F.2d 488, 493 (Fed. Cir. 1991); In re
Dow, 837 F.2d 469, 473 (Fed. Cir. 1988). Both the suggestion and the
reasonable expectation of success must be found in the prior art. Id.
Despite the fact that the basic law to guide the obviousness inquiry can
be easily recited, in practice the obviousness question is one of the
most difficult legal standards to apply. Two important decisions by the
CAFC provide substantial guidance with respect to the requirements that
the person of ordinary skill have a reasonable expectation of success and
that the prior art suggest the claimed invention.
In In re O'Farrell, 853 F.2d 894 (Fed. Cir. 1988), the CAFC addressed
the reasonable expectation of success test. In O'Farrell, the University
of California had appealed from the rejection of claims directed to the
method of producing proteins by readthrough translation in transformed
bacterial hosts. The rejection was based on an article relating to the
transcription of heterologous genes and providing some data relating to
the higher molecular weight of certain subsequently translated protein.
The obviousness inquiry focused on a paragraph of the article stating,
inter alia, that it would be "interesting" to examine the expression of a
"normally-translated eukaryotic sequence in the plasmid" and that the
extent of read-through translation would depend upon certain factors.
In rejecting appellants' argument that the USPTO had relied
impermissibly on the "obvious to try" standard (and that one of ordinary
skill in the art would not have a reasonable expectation of success based
upon the reference), the CAFC stated:
The admonition that "obvious to try" is not the standard under ¤ 103
has been directed mainly at two kinds of error. In some cases, what
would have been "obvious to try" would have been to vary all parameters
or try each of numerous possible choices until one possibly arrived at a
successful result, where the prior art gave either no indication of which
parameters were critical or no direction as to which of many possible
choices is likely to be successful. In others, what was "obvious to try"
was to explore a new technology or general approach that seemed to be a
promising field of experimentation, where the prior art gave only general
guidance as to the particular form of the claimed invention or how to
achieve it.
853 F.2d at 903 (citations omitted).
According to the Court, neither of these situations applied to the
instant case. Though success was not predictable with absolute
certainty, the Court affirmed the USPTO's determination that the cited
references provided a reasonable expectation of success.
Unfortunately, as further detailed infra, in many cases USPTO Examiners
are rejecting claims to DNA sequences on obviousness grounds based upon
information concerning the amino acid sequence of a protein and a
reference describing at most a general cloning method (such as the use of
probes). Based on the Court's decision in O'Farrell, it seems that
rather than providing a reasonable expectation of success, such general
references only invite experimentation.
In In re Bell, 991 F.2d 781 (Fed. Cir. 1993), the Court considered an
obviousness rejection commonly encountered by inventors seeking
composition claims protecting genes that they isolate. In Bell, the
inventors had isolated the human IGF-I and IGF-II genes and sought, inter
alia, claims to those compositions having the DNA sequences of the
isolated genes and certain DNA sequences that would hybridize to the
genes. The USPTO Board had affirmed the Examiner's rejection, holding
that the Examiner had established a prima facie case of obviousness for
compositions having the claimed DNA sequences in light of the known amino
acid sequence of IGF-I, the "correspondent-link" between an amino acid
sequence and DNA sequences (based on the redundancy of the genetic code),
and a prior art patent describing "a general method of isolating a gene
for which at least a short amino acid sequence of the encoded protein is
known," based on constructing nucleic acid probes.26
In reversing the USPTO's decision holding that a prima facie case of
obviousness had been established, the CAFC acknowledged that the USPTO's
decision rested on the assumption that "just as closely related homologs,
analogs and isomers in chemistry may create a prima facie case, the
relationship between a nucleic acid sequence and the protein it encodes
also makes a gene prima facie obvious over its correspondent protein."
991 F.2d at 784. The Court then held that the USPTO had not met its
burden of showing that the prior art would have suggested the claimed
sequences because the known amino acid sequence, in light of the
degeneracy of the code, might have yielded 10(36) sequences, but would
not have taught one of skill in the art which of those sequences
"corresponds to the IGF gene [the claimed invention]."27
At the same time, the Court rejected the notion that the prior art
patent "fill[ed] the gap," i.e., when combined with the known amino acid
sequence of IGF-I rendered the claimed sequences obvious. The Court
noted that, when read carefully, the reference actually taught away from
the claimed invention because it suggested the desirability of designing
probes based upon unique codons and IGF had no unique codons. Id. at
784-85.
Finally, the Court rejected the USPTO's argument that the prior art
reference supplied the necessary teaching because the inventor himself
had used the method suggested by the prior art in designing the probes
that were used to isolate the claimed gene. Labelling the USPTO's focus
on Bell's method "misplaced," the Court pointed out that Bell claimed
compositions, not the method by which they are made, and cited case law
supporting the proposition that "patentability of a product does not
depend on its method of production." Id. at 785 (quoting In re Thorpe,
777 F.2d 695, 697 (Fed. Cir. 1985)).
This latter statement by the Court is quite important in that it is the
differences between the "subject matter sought to be patented" and the
prior art to which it is to be compared in the obviousness determination,
not the method by which the invention is made that is relevant. 35
U.S.C. Section 103. As recognized by the Court and as supported by a
long line of cases, whether a composition is patentable depends on
whether the composition is known in the art or is obvious, and not
whether the process by which the composition is made is patentable. See
In re Klug, 333 F.2d 905, 907 (CCPA 1964); In re Thorpe, 777 F.2d at 697;
In re Kratz, 659 F.2d 1169 (CCPA 1979) (Claimed compound patentable
despite the fact that the method of isolating and discovering flavor
components of food were "unquestionably obvious"; prior art did not
evidence some predictability that the claimed compound was a flavor
agent).28
Unfortunately, the decision in In re Bell appears to have done little to
dissuade the patent office from continuing to reject claims directed to
DNA compositions based on some partial amino acid sequence data and the
generalized assertion that a particular prior art cloning method would
have resulted in a reasonable expectation of isolating the claimed
compound. In Ex parte Movva, (31 USPQ2d 1027 (BPAI 1993) and Ex parte
Deuel, ____ USPQ2d ____, 1993 Pat.App. LEXIS 22 (BPAI 1993), the USPTO
again rejected claims as obvious based almost entirely on a prior art
method to isolate the claimed compound. In both these cases, the USPTO
gave little latitude to the legal position taken by the CAFC in Bell,
relying instead on the misplaced truism that obviousness inquiries are
inherently fact intensive or, especially in Deuel, on the argument that
the Court's holding in Bell was narrow (in that the reference cited by
the Board had actually taught away from the claimed invention and that
the Court did not "disparage the USPTO's theory that the amino acid
sequence and a general method can render a gene prima facie obvious.")
In so doing, the USPTO is failing to properly consider the statement by
the Court that it is the claims that define the invention, not the method
of making the claimed compositions. Despite giving lip-service to the
requirement for structural similarity, a careful reading of the facts in
Deuel necessitates a conclusion that the focus of the USPTO's inquiry is
almost solely on the cloning method.29 That focus runs directly counter
to the CAFC's statement in Bell.
Perhaps even more importantly, in Deuel the USPTO seemed to lose sight
of the fact that the prior art supplied only a partial amino acid
sequence and only the most general information about cloning. Apparently
absent from the "general method" was any information about the various
parameters that one in the art may have needed to vary if attempting to
apply the prior art method to a particular desired gene sequence. See In
re O'Farrell, supra. In fact, this case highlights one of the
biotechnology industry's main concerns with the USPTO's position that
such bare-bones information fully satisfies its obligation to make a
prima facie case of obviousness. Placing the burden on the inventors to
prove the negative -- i.e. that the alleged method would not be expected
to yield the claimed composition -- is nearly impossible, especially in
light of the USPTO's consistent refusal to cite relevant experimental
parameters.
As regards the level of skill to be attributed to "a person of ordinary
skill in the art" during an obviousness inquiry, very few biotechnology
cases have focused directly on this issue. For example, in Bell, Amgen
and Vaeck, as well as the published cases from the USPTO Board, the
obviousness issue has turned on what the prior art would have suggested
to a person of ordinary skill in the art or whether that person would
have had a reasonable expectation of success in carrying out an
experiment, but the scientific attributes of the person of ordinary skill
have not been elucidated. Even in In re O'Farrell, 853 F.2d 894 (Fed.
Cir. 1988), the case that contains the most discussion of the obviousness
issue in the context of a biotechnology invention, specifics concerning
the level of skill in the art are addressed solely by reference to the
fact that "Appellants say that in 1976 those of ordinary skill in the
arts of molecular biology and recombinant DNA technology were research
scientists who had 'extraordinary skill in the relevant arts' and 'were
among the brightest biologists in the world.'"
Nonetheless, there is no apparent basis in the case law to suggest that
the standards for determining the applicable level of skill possessed by
the person of ordinary skill in the art of biotechnology should be any
different than used for making that determination in other arts. Thus,
it is clear that the person of ordinary skill in the biotechnology field
should be considered to be the "designer or problem solver" in the art,
not the user of the invention. Orthopedic Equip. Co. v. United States,
702 F.2d 1005 (Fed. Cir. 1983); In re Grant, 377 F.2d 1019 (CCPA 1967).
While the person of ordinary skill is presumed to be aware of all the
pertinent prior art, she is one who thinks along the lines of
conventional wisdom in the art and is not innovation oriented. Standard
Oil Co. v. American Cyanamid Co., 774 F.2d 448 (Fed. Cir. 1985).
Consequently, the obviousness of an invention to the actual inventor is
acknowledged to be irrelevant because inventors are acknowledged as a
class to possess skills that set them apart from the ordinary person of
skill. Id.
Though, as explained above, the cases contain very little discussion of
the attributes possessed by the person of ordinary skill, the positions
taken by the USPTO in In re Bell, Deuel and Movva (that a person of skill
in the art armed with a general cloning procedure and with the knowledge
of an amino acid sequence would have a reasonable expectation of success
in isolating the human DNA encoding the amino acid) suggest that the
USPTO may be applying a far higher level of skill than that actually
possessed by the ordinary person of skill in the art.
2. Enablement
35 U.S.C. Section 112 requires that the specification of a patent
contain a written description of the claimed invention and the manner of
making and using that invention in such full and clear terms as to
"enable" any person skilled in the art to make and use the invention.
Though not expressly stated in the statute, the case law holds that to be
enabling, the specification of a patent, as filed, must teach those
skilled in the art how to make and use the full scope of the invention,
as defined by the claims, without "undue experimentation." In re Wright,
999 F.2d 1557, 1561 (Fed. Cir. 1993); In re Vaeck, 947 F.2d 488, 495
(Fed. Cir. 1991). As noted above, the level of skill in the art should
not change depending upon whether the mythical person of ordinary skill
is reading a patent application or some form of publication.
Further, the requirement that the patent teach those skilled in the art
how to make and use the claimed invention can be satisfied in various
ways. The key is that the patent put the public in possession of the
invention. Thus, the enablement issue is judged in light of the skill in
the art as of the date the patent application was filed, and turns on
what the person of skill would have known and been able to make and use
at that time, in light of the patent's specification. A patent need not
disclose what is well known in the art; but can provide necessary
teachings through illustrative examples or broad terminology. In re
Wright, 999 F.2d 1557, 1561 (Fed. Cir. 1993); In re Marzocchi, 439 F.2d
220, 223 (CCPA) 1971).
Furthermore, where a written disclosure alone would not enable one
skilled in the art to make and use the claimed invention, patent
inventors may submit ("deposit") necessary materials in depositories
which will distribute samples to members of the public who wish to
practice the invention after the patent issues. In fact, deposits have
been held to be necessary for enablement in situations where (1) starting
materials (for example, living cells from which the claimed cells could
be produced) are not readily available to the public or (2) it would
require undue experimentation to make the claimed invention from the
publicly available starting materials.
Like the burden on the USPTO in rejecting claims based on obviousness
grounds, when rejecting a claim under the enablement requirement of
Section 112, the USPTO bears the prima facie burden of setting forth a
reasonable explanation as to why it believes that the claim is not
adequately supported by the specification. "This includes, of course,
providing sufficient reasons for doubting any assertions in the
specification." In re Wright, 999 F.2d at 1561-62. Moreover, if
requested by the Inventor, the USPTO's Examiner has a duty to support his
assertions with citations of relevant prior art. In re Sun, 31 USPQ2d at
1451. If the USPTO satisfies this burden, the inventor must "provide
suitable proofs indicating that the specification is indeed enabling."
Id.; In re Marzocchi, 439 F.2d at 223-24.
Two of the most difficult aspects of the test for enablement, in
practice, relate to (1) the requirement that the specification teach the
skilled artisan how to make and use the "full scope" of the invention and
(2) the amount of experimentation that may be undertaken before
experimentation becomes "undue." As with the obviousness requirement,
recent decisions by the Court of Appeals for the CAFC address these
issues.
In In re Wright, 999 F.2d 1557 (Fed. Cir. 1993), In re Goodman, 11 F.3d
1046 (Fed. Cir. 1993), and In re Vaeck, 947 F.2d 488 (Fed. Cir. 1991),
the Court addressed the enablement issue in the context of three
biotechnological inventions. In Vaeck, the invention was directed to the
use of genetic engineering techniques for producing proteins toxic to
mosquito larvae through the use of a chimeric gene capable of being
expressed in Cyanobacteria cells. The claim recited a chimeric gene
comprising a DNA fragment encoding a promoter effective in Cyanobacteria
and DNA fragment(s) encoding an insecticidally-active protein produced by
a Bacillus strain.
Seizing on the fact that the appellant's application specifically
disclosed only two particular species of Bacillus and nine genera of
Cyanobacteria (and a single strain of cyanobacteria as a working example
(despite also describing the invention in generic terms)), the USPTO took
the position that "the limited guidance in the specification, considered
in light of the relatively high degree of unpredictability in this
particular art, would not have enabled one of ordinary skill." Id. at
493 (citing In re Fischer, 427 F.2d 833 (CCPA 1970)).
In affirming the USPTO's rejection, the Court first reviewed precedent
holding that while the need for some experimentation by one of skill in
the art is not fatal to the enablement inquiry, "the issue is whether the
amount of experimentation required is undue." Then, citing (1) the
relatively incomplete understanding of Cyanobacteria as of the
appellants' filing date (and appellants' failure to effectively dispute
this assertion by the USPTO); and (2) the limited disclosure of
particular Cyanobacteria operative in the claimed invention, the Court
agreed that the enablement rejection was proper because no reasonable
correlation existed between the disclosure in the application and the
broad scope of protection sought in the claims.
However, the Court made a point of specifically stating that it did not
mean to "imply that patent applications in art areas currently
denominated as 'unpredictable' must never be allowed generic claims
encompassing more than the particular species disclosed in their
specification." There must be sufficient disclosure to teach one of
ordinary skill how to make and use the invention. According to the
Court: "This means that the disclosure must adequately guide the art
worker to determine, without undue experimentation, which species among
all those encompassed by the chemical genus possess the disclosed
utility."30 As the Court held in In re Wands, 858 F.2d 731 (Fed.Cir.
1988), factors to be considered in deciding whether a disclosure would
require undue experimentation include: (1) the quantity of
experimentation necessary; (2) the amount of direction or guidance
presented; (3) the presence or absence of working examples; (4) the
nature of the invention; (5) the state of the prior art; (6) the relative
skill of those in the art; (7) the predictability or unpredictability of
the art; and (8) the breadth of the claims.31
In practice, one of the most common problems being encountered by patent
inventors is that an application is rejected on enablement grounds based
on the blanket assertion by Examiners that the field is unpredictable and
thus cannot support claims broader than those specifically exemplified in
the application. That approach is contrary to the Court's holding in
Wright, Vaeck and Goodman. Moreover, in many instances the rejection is
not directed to that which is claimed, but rather is based upon the
alleged failure of the inventor to make an actual showing of efficacy in
humans. This seems to be true especially in cases where the claim is to
a composition (or method of making a composition) and one of the ultimate
commercial uses of the composition may be human therapy. Such a
requirement is contrary to current law, however. See, e.g., Cross v.
Iizuka, 753 F.2d 1040 (Fed. Cir. 1985).
Furthermore, in many instances, enablement rejections appear to be
based upon the subjective belief of the Examiner (contrary to the
teaching of the specification). At the same time, the rejections supply
little or no reasoning for doubting the specification and contain no
citation of prior art supporting the Examiner's statements. This
practice is contrary to existing law, as well. See In re Wright, 999
F.2d at 1561; In re Sun, 31 USPQ2d at 1451.
Finally, another problem commonly encountered by practitioners is that
an Examiner may take a position concerning the level of skill in the art
concerning the combining of references and the reasonable expectation of
success in connection with an obviousness inquiry that conflicts with the
level of skill applied by the Examiner in the enablement inquiry.
However, the case law specifically holds that a claimed composition would
have been obvious under 35 U.S.C. Section 103 if the prior art would have
placed the composition in the possession of the public. In re Payne, 606
F.2d 303, 314 (CCPA 1979); In re Braun, 329 F.2d 1006, 1011 (CCPA 1964).
As recognized by the USPTO in their brief to the CAFC in the Deuel case:
"To that end the prior art must describe the compound in such full,
clear, concise and exact terms as to enable any person skilled in the art
to make and use the compound." In re Hoeksma, 399 F.2d 269, 274 (CCPA
1968). In fact, in Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802
F.2d 1367, 1384 (Fed. Cir. 1986), the Court reversed a district court
holding and labelled "internally inconsistent" findings by the court that
"the method for producing monoclonal antibodies was well known" in the
art (in a Section 103 inquiry), while at the same time holding the patent
deficient (for lack of an enabling disclosure) because it failed "to
teach how to make monoclonal antibodies.
As a result, there is precious little room to argue that a claim to a
genus is not enabled due to the lack of disclosure of sufficient species,
while simultaneously arguing that in light of some prior art reference
one of skill in the art would have had a reasonable expectation of
success in making one of the claimed species.
C. Question 1: Do you believe the legal standards governing assessment
of the ordinary level of skill in the art for purposes of nonobviousness
under U.S.C. ¤103, as developed and interpreted by the Federal courts,
are sufficiently clear and appropriate for biotechnology inventions? If
not,
(a) identify aspects of the las that you believe lack clarity or are
inappropriate, citing relevant cases; and
(b) identify any changes to these legal standards you believe would be
desirable.
We believe that the legal standards established by the Federal Courts
governing assessment of the ordinary level of skill in the art for
purposes of nonobviousness under 35 U.S.C. Section 103 are sufficiently
clear and appropriate for biotechnology inventions. We submit that these
legal standards are well defined and are the same for all technologies.
There is no reason to use a different standard in deciding whether
biotechnology inventions are obvious. The concern over the
nonobviousness requirement for patentability should not be directed to
the clarity of the legal standards, but rather the uniform implementation
of these standards by the USPTO. Thus, we view the nonobviousness issue
as one of mis-application of the law rather than incorrect legal
precedent.
As a practical recommendation to address what we see as the
mis-application of legal standards to the nonobviousness issue, we
propose two-way, direct communication between the USPTO and the patent
bar, as representatives of the inventors. The communication is needed to
exchange information and opinions with the goal of formulating a common
interpretation of the legal standards established by the Federal Courts.
The resultant common interpretation will be used as the basis for the
legal training of Examiners. Since the common interpretation will be
known to both the Examiners and the patent bar, it will serve as a
reference point for applying the nonobviousness standard to individual
inventions under examination. Thus, the legal standards of the Federal
Courts will be more accurately and uniformly implemented within the
USPTO.
The recent efforts of the USPTO to keep pace with the rapidly advancing
fields of biotechnology are very commendable. The academic
qualifications of Examiners, especially in biotechnology, have undergone
a welcomed, dramatic improvement which bodes well for our nation and its
competitive endeavors. The tremendous, multi-faceted obstacles the USPTO
has overcome to achieve these successes are well-recognized and
appreciated by inventors and the patent bar. The USPTO is encouraged to
continue its efforts to develop a world-class competence in helping all
inventors protect innovative solutions to global problems and needs. By
coupling examiner legal education as well as practical industrial
information with keeping pace with rapid technological advances that the
USPTO can truly achieve its desire to promote research, development and
commercialization of technological advances in biotechnology.
The communication between the biotech examiners and the patent bar is a
way to re-discover their common ground. Namely, that the purpose of our
patent system is to promote science and innovation. It is important to
do so because the consequences of failing are costly in both capital and
human resources. The pool of capital for investment into biotechnology
inventions is limited. One of the variables which determines the size of
that capital pool is risk. The trust placed in the patent system by the
inventors and their investors is one way of minimizing that risk. If
this trust is eroded by shrinking patent protection or by uncertainty in
the availability or value of patent protection, risk increases and
shrinks the capital pool. The result is less innovation and fewer
improved patient treatments, neither of which is good for humanity or our
markets.
As it appears now, the USPTO relies on the appeal process to police the
legal standards of the Federal Courts. This is very costly for both the
USPTO and the inventors. In the Notice for comments, the USPTO
recognizes that the body of case law is growing and is helpful in giving
direction for implementing the requirement of nonobviousness.
Unfortunately this is a harmful, self-fulfilling prophecy. This growing
body of case law is being generated by the mis-application of legal
standards which are already well-defined, albeit in different
technological areas or factual situations. This is similar to a drug
company doing away with quality control and gauging the quality of its
products on survivors (or family members) who sue.
There are numerous cases prior to the 1966 Supreme Court decision in
United States v. Adams et al., as well as more recent decisions, which
define obviousness and provide guidance for applying the legal standards
to individual inventions. These cases are being ignored, however, in
determining the obviousness of genetic material. The standard of
obviousness does not differ with technology as well-recognized three
decades ago in In re Papesch, 137 USPQ 43, 47 (CCPA 1963):
The problem of "obviousness" under Section 103 in determining the
patentability of new and useful chemical compounds, or, as it is
sometimes called, the problem of "chemical obviousness," is not really a
problem in chemistry or pharmacology or in any other related field of
science such as biology, biochemistry, pharmacodynamics, ecology, or
others yet to be conceived. It is a problem of patent law.
Furthermore, the growing number of recent decisions by the Federal
Courts on biotechnology patent issues is only the tip of the iceberg. It
represents a small fraction of Examiners' decisions that could have,
probably should have, been appealed. Very few inventors have the capital
and human resources to challenge a mis-applied legal standard; first
through the USPTO's examination, second through the Board of Appeals, and
then into the Federal Courts. The current implementation of legal
standards through successive appeals saps the resources of both the USPTO
and the inventors. Opening communication between the USPTO and its users
should decrease the number of appeals while more accurately applying the
requirement of nonobviousness.
Examples of mis-applying the legal standards governing nonobviousness
are in the Notice for comments authored by the USPTO. The Notice refers
to the suggestion that the USPTO is imposing a per se rule of obviousness
for inventions involving sequencing and expression of genes once any
sequence information has been publicly disclosed, whether the sequence
information takes the form of a partial amino acid sequence of a protein
or DNA sequence information derived from the expression of the gene. The
USPTO asserts that it does not apply per se rules.
To the contrary, specific examples exist in the public record where
Examiners have expressly stated ."..the relationship between a gene and
the protein it encodes requires a different type of obviousness
determination..." The USPTO clearly changes the non-obviousness
requirement when genetic material is involved. The legal standards have
been improperly simplified by focusing exclusively on the function of the
DNA sequence as a information transfer vehicle while disregarding its
chemical structure and the properties and characteristics resulting from
its structures. The patentability of a DNA sequence must include the
properties and characteristics of its structure as it is inserted in a
vector, the vector in a host, and the host grown to produce the desired
protein. It must be made absolutely clear that genetic material, and the
other inventions of biotechnology, are to be judged by the same legal
standards as other technologies on the issue of obviousness.
The DNA sequence, like any other graphic chemical formula, are symbols
which form a chemical nomenclature. There is no scientific difference
between "living" and "non-living" molecules. The atoms of carbon which
partially comprise the DNA polymer are no different than any other
element in the periodic table. There is no legal basis for treating DNA
polymers differently from the polymers that comprise household plastics.
The obviousness of a novel chemical compound in view of prior art
compounds arises only when there is close structural similarity and
motivation to make the novel compound. The law is well-defined that the
questions of chemical obviousness are decided on the basis of structure
with all of its properties and characteristics taken into account. A
compound and all of its properties are inseparable; they are one and the
same thing.
No one would argue that certain procedures are needed as a practical
matter in dealing with genetic material. For example, filing the genetic
sequence with the USPTO in a particular format. These rules are
procedural formalities, however, not substantive standards. There is no
reason for biotechnology, as exemplified by a DNA sequence, to have a
different standard of determining obviousness than traditional chemistry.
The Notice also refers to the USPTO practice of rejecting inventions
drawn to monoclonal antibodies as being obvious over disclosure of the
antigen that serves as a basis for making the antibody in view of
conventional hybridomal technology. The USPTO seems to require a new and
higher legal standard which requires "unexpected difficulties" in making
the antibody before it will find nonobviousness. 35 U.S.C., however,
clearly allows using known process technology to make a novel compound,
even if that compound is an antigen. Mechanical inventions are not made
obvious by the tool and die industry methods, nor should biotechnology be
discriminated against.
Of primary importance to the USPTO is fulfilling its Constitutional
obligation to promote science and the useful arts by following and
implementing the law decided by the Federal Courts and legislature. By
not adhering to the law, the USPTO weakens the trust and security placed
in the patent system and robs our nation of competitive opportunities,
particularly in emerging sciences like biotechnology.
In order to continue the successful momentum that the USPTO has
recently established, we must assure that the legal acumen of the
Examiners rises to the same high standards. We must address not only the
academic expertise of the Examiners, but also their legal education and
guidance necessary to apply the legal standards established by the
Federal Courts to their everyday duties.
We recommend that the USPTO focus primarily on the implementation of
the standards set forth by the Federal Courts. We suggest that the USPTO
open the initial and continuing education program of USPTO Examiners to
the public, so that the basis of the Examiner's legal education is known
to the public. This should provide a consensus starting point for legal
arguments to be applied to the facts of the invention under examination.
There are clearly many advantages to establishing a legal education for
the Examiners which reflects a general consensus of both the USPTO and
the patent bar, as representatives of the inventors. Should fewer
appeals result as a consequence, the savings in economic and inventive
power alone justifies the effort. Accordingly, we recommend allowing the
patent bar to cooperate in the education of the USPTO corps by providing
comment on the Federal Court case law.
D. Question 2: Do you believe the legal standards governing assessment
of the level of skill attributable to a person "skilled in the art" in
determinations made under 35 U.S.C. ¤ 112, first paragraph, as developed
and interpreted by the Federal courts, are sufficiently clear and
appropriate? If not,
a) identify aspects of the law that you believe lack clarity or are
inappropriate, citing relevant cases; and
b) identify any changes to these legal standards you believe would be
desirable.
The legal standards governing assessment of the level of skill in
determinations made under 35 U.S.C. Section 112, first paragraph (for
simplicity "enablement") are sufficient as developed by the Federal
courts. The law does not need clarification and no changes to this legal
standard need be made.
The enablement statute, 35 U.S.C. Section 112, first paragraph, relates
to the disclosure in a U.S. patent application of an invention. This
statute requires that the application discloses the manner of making and
using the invention "so as to enable any person skilled in the art to
which it pertains... to make and use the [the invention]...."It has been
held that the burden of establishing that a U.S. application is not so
enabling is on the party asserting such non-enablement.
Many times this statute is misread as requiring a patent inventor to
demonstrate to one skilled in the art the validity of the assertions in
the application. However, nothing in 35 USC 112, first paragraph,
requires an inventor to demonstrate to one skilled in the art that the
disclosure is enabling to make and use the invention in accordance with
the claimed scope. In certain cases 35 USC Section 112, first paragraph,
has been utilized incorrectly by the USPTO to require an inventor to
provide convincing evidence that the invention can be made and used in
accordance with the claimed scope. However, any such requirements are
not in conformance with the court's interpretation of 35 USC Section 112.
As stated by the CCPA in In re Armbruster, 185 USPQ 152 (CCPA 1975):
Section 112 does not require that a specification convenience persons
skilled in the art that the assertions therein are correct. 185 USPQ at
153
Furthermore, nothing in 35 USC Section 112 requires an inventor to
justify the scope of an invention to one skilled in the art by the
presentation of specific examples. In holding that no specific
exemplification is needed to support a generic claim, the CCPA in In re
Robins, 166 USPQ 552 (CCPA 1970) stated:
Both the Examiner and the board seem to have taken the position that in
order to 'justify,' as the Examiner said, or to 'support," as the board
said, broad generic language in a claim, the specification must be
equally broad in its naming, and use in examples, of representative
compounds encompassed by claim language. This position, however,
misapprehends the proper function of such disclosure. Mention of
representative compounds encompassed by generic claim language clearly is
not required by Section 112 or any other provision of the statute. 166
USPQ at 555
Therefore, it is clear from decided case law that the statute does not
require the inventors to establish to one skilled in the art that their
inventions can be made or used in accordance with the claimed scope.
Rather, the burden of proof for demonstrating non-enablement is placed
upon the party, which includes the USPTO, challenging the patentability
of a given invention and not upon the inventor. Therefore, to meet this
burden of proof, the USPTO must provide acceptable evidence that the
specification does not enable the invention to be made or used in
accordance with the claimed scope. See In re Marzocchi, 169 USPQ 367
(CCPA 1971). This shifting of the burden, not the standard itself,
appears to pose the greatest problem for the USPTO since it requires the
USPTO to produce credible evidence to support non-enablement rejections.
Obviously the USPTO cannot test disclosures in a laboratory. However,
that is no excuse for a general allegation of unpredictability when tea
specification is to be taken to be true.
To determine enablement based upon the individual judgments or feelings
of an Examiner or group of Examiners, no matter how academically skilled,
promotes disparity and creates a subjective determination. Subjective
determinations do not breed consistency whereas law and the requirements
of law do.
The inability to produce evidence to support a holding of
non-enablement may frustrate some Examiners. However, the question
should not be whether Examiners believe or do not believe the evidence
presented by the inventor but whether they have credible evidence to
rebut the inventor's evidence and are following the standards of the
courts. The Examiners cannot merely interpose their own judgment as to
the correctness of the data or assertions made by the inventor.
We believe that the current standard should be uniformly administered
throughout the USPTO to ensure consistency. The USPTO should follow the
law on enablement as interpreted by the reviewing courts. In short, the
Examiners' standards for determining enablement should conform to the
standards imposed by these courts. In this respect, the Examiners should
be instructed as to the law and the standards imposed by the law. As in
previous Sections, we therefore recommend that the USPTO open its
education process to the public and allow the patent bar to assist in the
education, both initial and continuing, of examiners as to the nuances of
legal precedent.
E. Question 3: Do you believe the USPTO is correctly assessing the level
of skill possessed by persons working in the field of biotechnology in
determinations it makes regarding nonobviousness under 35 U.S.C. 103 and
enablement under Section 112, first paragraph?
In the biotechnology arts, the USPTO consistently applies an
unrealistically high standard of skill in the evaluation of patent claims
under the requirements of Section 103 and applies and equally
unrealistically low standard of skill in the evaluation of patent claims
under the requirements of Section 112. Moreover, the level of skill in
the art, which is represented by a hypothetical skilled artisan working
at the time the claimed invention was filed, is very often changed in the
course of the prosecution of the same application depending upon whether
the USPTO is making an argument with respect to nonobviousness or
enablement.
Guidance as to the appropriate standards both for Section 103 and 112
purposes are found in the case law.
Question 3: (a) Do you believe that the USPTO is properly assessing
the level of "ordinary skill" in the art of biotechnology under 35 U.S.C.
103? If not, please provide examples and identify specific situations
where determinations have not been made that reflect the appropriate
standard.
Proper identification of a person of ordinary skill is critical to
the proper determination of the patentability of a given invention. The
higher the level of skill which is applied, the more sophisticated and
complex the combinations of prior art that are appropriate.
There is no doubt that the identification of a person of ordinary skill
in the art is difficult. A class of persons must be identified who
represent the ordinary worker in this area and the level of skill of that
person needs to be evaluated. In biotechnology the situation is
particularly difficult because the biotechnology industry relies upon a
large proportion of very highly skilled researchers as well as employing
significant numbers of less skilled laboratory technicians. The
technology is developing rapidly and the level of ordinary skill
continues to also change at a fast pace. Since the base technology itself
is new, it can be difficult to determine that which is the next step as
compared with the next inventive step. The secondary considerations of
nonobviousness, which can greatly help to give clear perspective to the
identity and motivation of that person of ordinary skill, are just not
available yet.
There are some common factors which contribute to the improper
assessment of the person of ordinary skill in the biotechnological arts:
1. Failure to remember that an invention under Section 103 may not be
obvious even to those of greater than ordinary skill.
2. Failure to apply the proper legal standard to the Section 103
analysis apart from the determination of what level of skill represents
the skilled artisan.
3. Failure to appreciate that the hypothetical person of ordinary skill
envisioned by the USPTO would require a level of interdisciplinary
skills which may be found in the literature, but not representative of a
currently recognized expertise.
4. Failure to appreciate that the published literature only represents
successes. The actual person of ordinary skill will be more cautious
than a hypothetical person because of the realities of the laboratory,
as well as the time and energy investment that each new experiment
represents.
5. Failure to give significant weight to the review articles of those
who are working in the area. When an inventor is able to provide review
articles contemporaneous to an invention which lists several
possibilities as explanation for a particular problem, these facts
should not be ignored.
For example, in one case, claims asserted to a purified preparation of
a newly discovered protein having a particular activity were rejected
over a publication which described a crude extract in which the physical
characteristic for which the claimed protein is responsible could be
observed. The cited reference failed to specifically identify the protein
activity responsible for the characteristic, much less teach purification
of the protein. Review articles published later than the cited
publication were provided to the USPTO. The reviewers described several
possible protein activities which could be responsible for the noted
physical characteristic, and referred specifically to the cited reference
as providing a mere suggestion of one of the possible mechanisms. The
USPTO did not even comment on the review articles and maintained the
obviousness rejection on the basis that "Applicants have not overcome the
rejection by showing evidence of why one of ordinary skill in this art
would not have purified the extracts."
A few specific examples of inappropriate assessment of the level of
skill in the art are provided below:
*Partial nucleic acid sequence rendering gene obvious.
In one case the Examiner rejected a claim to a specific viral
promoter region on the basis of a primary reference which disclosed the
encoding sequence to the virus as a whole, but which did not identify any
portion as likely to contain a promoter, let alone inventors specific
promoter region, and a secondary reference disclosing a promoter from a
different virus. There was no teaching in any reference which disclosed
or suggested a relationship between the genomes of the two viruses which
would direct the skilled artisan to any particular region.
To render an invention obvious, the prior art must not only suggest
the invention and suggest that it is reasonably likely to succeed, but
further "both the suggestion and the expectation of success must be
founded in the prior art, not in the inventors disclosure." In re Dow
Chemical, 837 F.2d 469, 472 (Fed. Cir. 1988). The USPTO erred in this
case in presuming that the skilled artisan would have found the specific
promoter region described in the specification obvious, when in truth the
prior art did not provide anything like the level of information that
could make such a prediction obvious. The level of skill in the art is
not yet so great that the artisan can tease out a promoter region from
viewing an encoding sequence. Promoter elements remain a somewhat
mysterious component of the art, and the skilled artisan does not pretend
to know precisely what it is that makes a promoter a promoter, even
within relatively well known promoter sequences. It is only when a
particular region is expressed in a cell and shown to work that it is
certain that the critical elements that make up a promoter have been
properly pulled together.
* Partial purification or assay for a protein in the literature
combined with sequencing techniques render purified protein obvious.
In one rejection a primary reference was cited disclosing an assay for
an enzyme and preliminary work which identified a lipid-rich preparation
enriched for that enzyme. The USPTO stated that this would have rendered
the purified protein obvious in light of "established methods" for
purifying membrane-associated enzymes, as reviewed in a secondary
reference. What was missing was any explanation for why the skilled
artisan would have made the particular combination. The Examiner
attempted to transfer the burden to the Inventor, rather, to identify
"unusual or specialized techniques beyond" the basic methods contained in
the secondary reference.
While obviousness does not require absolute predictability of
success, at least some is required. In re Whiton (CCPA 1970) 402 F.2d
1082; In re Rinehart (CCPA 1976) 531 F.2d 1048. The general knowledge of
techniques for protein purification fails to suggest a specific method
for purification, and fails to characterize any aspect of the protein
which could be used to devise a purification method which would be
expected to purify the protein.
The skilled artisan in the protein purification art requires much more
from a disclosure, at the very least a critical purification step or a
key characteristic of the protein before even a preliminary purification
approach could be devised. By the CAFCs holding in In re Eli Lilly & Co.,
(Fed. Cir. 1990), a general disclosure must contain a sufficient teaching
of how to obtain the claimed results, or assurance that particular
results would be obtained if certain directions were pursued. The
purification of any protein involves many steps which often must be
practiced in a precise order and under specific conditions of time,
temperature, volume, concentration, etc.. These steps are not
self-evident, and will vary a great deal from protein to protein. There
are literally infinite combinations of possible columns, gradients, gels,
precipitants, centrifugations, all with buffers of varying pH, salt,
concentrations of same, etc., to choose from. Until a purification has
been accomplished, and the protein described with some certainty, there
is little guidance as to where one would even begin.
Nonetheless, in many cases we have observed that the USPTO readily
asserts that the mere knowledge of an assay for a protein is enough to
render a purified preparation of such a protein obvious, and, in most
cases, methods do exist for every step necessary to go from protein to
DNA. A reference such as In re le Grice is typically cited for the
proposition that prior art is enabling if the combination of the
description and the knowledge of the art would put the invention into the
possession of the skilled artisan. It would be random luck, however, for
one to choose a purification procedure from the infinite possible
combinations of steps, times, reagents, columns, buffers and detergents
(and countless possible concentrations and permutations thereof)
disclosed in a general reference to purify a particular protein.
In any case, this approach would seem to be a direct contradiction of
the objection made by the Board of Appeals to the approach adopted by the
Examiner in Ex parte Maizel. The biotech patent examiners apparently view
this holding, though, as applying only to those cases where all six of
the steps enumerated in Maizel are required to go from the cited
reference to the claimed nucleic acid sequence. The real issue of a
situation like Ex parte Maizel is not, however, the number of steps the
Examiner must presume obvious from the prior art, nor the estimated time
to DNA from protein, but the issue of certainty and uncertainty. The fact
is that while the tools are available to attempt cloning given a
description of a protein, and the prior art may provide a motivation to
try, there is no certainty in any of these operations. The person
ordinarily skilled in the art experiences many failures in protein
purification. Even given an assay, and some purifications simply prove
to be unattainable. This is a fact of life to the person of ordinary
skill in the art.
Perhaps the problem is that published descriptions of protein
purification and cloning exclusively recite successful approaches. There
are no reviews of failed methods and unsuccessful attempts. In reading
published methods of cloning and protein purification it may appear that
the person of ordinary skill finds protein purification routine once
given a published description of an assay for a protein.
The skilled artisan can not extract from a description of an assay for
a protein any particular characteristic of the protein which would assist
the skilled artisan in its purification, such as its pI value, size,
shape, membrane association, etc.. General methods described in a review
contain no hint or suggestion about the necessary approach for the actual
purification of a specific protein. The requirements of purification vary
so much from protein to protein, that the knowledge gained from purifying
one protein can be useless in devising a protocol to purify another. In
fact, a detergent or other element used successfully in one protocol can
inactivate or destroy a different target protein.
In yet several other instances, claims to a nucleic acid sequence
encoding a particular protein were rejected over a combination which
included references describing characterization or partial purification
of the protein. When presented with evidence countering the supposed
purification in the cited references, the USPTO has responded with
statements such as the references would be "reasonably expected to permit
isolation of the requisite peptide sequences," "Inventors have failed to
show that the preparations are not pure enough to obtain useful peptide
sequences" and "Inventors ability to reproduce the protocol is not
probative." When faced with evidence that additional purification steps
beyond the cited disclosures were required, the USPTO has characterized
such additional steps as "a matter of routine in the art" even though the
cited reference gave no indication that additional purification steps
were in fact required.
Obviously, a report in the prior art of a purified protein does not
teach, nor does it suggest, any portion of the amino acid or nucleic acid
sequences for any synthase protein, and it is often not even clear from
such a reference what constitutes purification, beyond the visualization
of one or a few bands of protein on a polyacrylimide gel from a sample
having assayable protein activity.
While techniques are clearly known to the skilled artisan by which a
protein can be sequenced to yield an amino acid sequence, and by which an
amino acid sequence can be used to obtain a clone, there are a number of
practical reasons why such activity should not be viewed as expected to
successfully result in a protein encoding sequence and thereby render the
encoding sequence obvious.
A suspect protein on a gel is not reliable for the purpose of obtaining
nucleic acid sequence, first of all in the uncertainty of whether the
particular visible protein is, in fact the suspected protein. The skilled
artisan recognizes that the active protein in a sample may not be the
predominant protein of the sample, and may not even be visible on such a
gel. It may be present as a slight band easily missed or discounted,
while a contaminant protein may be the only protein present in sufficient
amounts as to be visible as a band. The skilled artisan is also cognizant
of the fact that two or more similarly sized proteins may run to the same
location on a gel, thus appearing as a single protein.
Also, as noted by the Board in Ex parte Maizel, purification of a
protein from other proteins does not mean that the protein of interest is
in a quantity, or in physical condition, which would permit amino acid
sequencing as a matter of routine.
Additionally, it can be very difficult to obtain an amino acid sequence
even give a quantity of purified protein. The person skilled in the art
recognizes that proteins are highly variable in their response to peptide
mapping or amino acid digestion sequencing techniques, even ignoring the
fact that hidden or seemingly minor contamination can provide sequences
which will lead to the cloning of the wrong sequence.
Finally, by the reasoning of the CAFC in In re Bell, an amino acid
sequence should be considered a suggestion, only, of the nucleic acid
sequence to a protein. It does not render a particular sequence obvious.
For these and other reasons regarding the unpredictability of the
sequencing art, it is only when the nucleic acid sequence has been shown
to encode the activity by expression in a host cell, or when an amino
acid or nucleic acid sequence has been obtained showing a high degree of
homology to a known protein having that activity, that it can be said
with some certainty that a suspected purification as suggested by a band
on a gel in truth corresponds to the desired protein.
The USPTO frequently dismisses such arguments, and months of research
in the laboratory by a group of researchers is deemed "routine" absent
"special considerations." Ask the skilled artisan, however, and the work
required to obtain nucleic acid sequences from an apparently purified
protein will be characterized as arduous and unpredictable, and such an
artisan would be (and often are) justifiably insulted to hear such work
dismissed as "routine."
The purification of any protein involves many steps which often must be
practiced in a precise order and under specific conditions of time,
temperature, volume, concentration, etc.. These steps are not
self-evident, and vary radically from protein to protein. There are a
literally infinite combinations of possible columns, gradients, gels,
precipitants, centrifugations, all with buffers of varying pH, salt,
buffers, concentrations of same, etc., to choose from. Until it has been
done, and the protein described, there is little guidance as to which way
to go.
Nonetheless, in many cases we have seen it argued by the USPTO that the
mere knowledge of an assay for a protein is enough to render a purified
preparation of such a protein obvious, and, naturally, methods do exist
for every step necessary to go from protein to DNA. A reference such as
In re le Grice is typically cited for the proposition that prior art is
enabling if the combination of the description and the knowledge of the
art would put the invention into the possession of the skilled
This would seem to be a direct contradiction of the objection made by
the Board to the approach adopted by the Patent and Trademark Office in
Ex parte Maizel. The USPTO apparently views this, though, as applying
only to those cases where the six enumerated steps are present in the
invention to go from description of protein to DNA. The real issue of a
situation like Ex parte Maizel is not, however, the number of steps the
Examiner must presume obvious from the prior art, nor the estimated time
to DNA from protein, but the issue of certainty and uncertainty. The fact
is that while the tools are available to attempt cloning given a
description of a protein, and the prior art may provide a motivation to
try, there is no certainty in any of these operations. The person
ordinarily skilled in the art experiences many failures in protein
purification even given an assay, and some purifications simply prove to
be unattainable. This is a fact of life to the person of ordinary skill
in the art.
One should not read published descriptions of successful purification
and cloning attempts, or reviews of methods useful in the attempts, and
presume that cloning and protein purification is a routine approach which
the person of ordinary skill practices like falling off a log once given
a published description of an assay for a protein. A description of an
assay for a protein does not teach or suggest any particular
characteristic of the protein which would assist the skilled artisan in
its purification, such as its pI value, size, shape, membrane
association, etc. General methods described in a review contain no hint
or suggestion about the necessary approach for the actual purification of
a specific protein. The requirements of purification vary so much from
protein to protein, that the knowledge gained from purifying one protein
can be useless in devising a protocol to purify another, and in fact a
detergent or other element used successfully in one protocol can
inactivate or destroy another protein. An assay for a protein doesn't
tell the person skilled in the art where to begin, or what steps to take.
The knowledge of one ordinarily skilled in the prior art available from
general techniques for purifying proteins is simply not so great as to
put the subject matter of a purified protein into the possession of the
public from the report of an assay for the protein. A skilled artisan
requires much more from a disclosure, at the very least a critical
purification step or a key characteristic of the protein before even a
preliminary purification approach could be devised, let alone the concept
of an expectation of success for its ultimate purification. By the
Federal Circuits holding in In re Eli Lilly & Co., (Fed. Cir. 1990) a
general disclosure must contain a sufficient teaching of how to obtain
the claimed results, or assurance that particular results would be
obtained if certain directions were pursued.
Another example involves the combination of general methods for
solubilizing membrane-associated proteins with a published assay for a
particular protein. Among many other things, the general method taught
techniques for isolating a protein from a protein-containing fraction,
such as through the use of high salt concentrations and/or zwitterionic
detergents. This reference also suggested the use of different types of
column chromatography to further purify the solubilized protein.
As it turns out, high salt and a specific detergent, in particular
concentrations and under specific circumstances as developed through
trial and error experimentation by the inventor, to solubilize the
protein, and then purified the protein through a combination of columns.
The USPTO alleged that at the time the invention was made it would have
been obvious to one of ordinary skill in the art to solubilize and purify
the protein by the methods taught by the general reference, even though
nothing in the general reference taught or suggested the suitability of
any particular method for any particular protein.
The USPTO approach is mistaken in alleging that it would be obvious to
utilize established methods for purifying membrane-associated enzymes
once the assay exists and it reported, in presuming that at the time of
the invention one ordinarily skilled in the art aware of general methods
or approaches which could be attempted would know which combinations
would work.
It truly comes down to the issue of the reasonable expectation of
success in carrying out the claimed invention; which must be present for
combined teachings of prior art to render the invention obvious. While
obviousness does not require absolute predictability of success, at least
some is required. In re Whiton (CCPA 1970) 402 F.2d 1082; In re Rinehart
(CCPA 1976) 531 F.2d 1048. The general knowledge of techniques for
protein purification fails to suggest a specific method for purification,
and fails to characterize any aspect of the protein which could be used
to devise a purification method which would be expected to purify the
protein. Isolation and purification of membrane proteins is a difficult
task. It would be random luck for one to choose a purification procedure
from the infinite possible combinations of steps, times, reagents,
columns, buffers and detergents (and countless possible concentrations
and permutations thereof) disclosed in a general reference to purify a
particular protein.
To use an analogy to another art unit, let's assume the software
examiners refuse to grant patents on any software programs using existing
languages -- because any consideration of known commands would be
obvious, based on general references -- i.e. any earlier patent
application utilizing that language.
Question 3: (b) Do you believe that the USPTO is properly assessing the
level of skill possessed by biotechnology applicants in determining
compliance of an application with 35 U.S.C. 112 first paragraph? If not,
please provide examples and identify specific situations where
determinations have not been made that reflect the appropriate standard.
35 U.S.C. Section 112, first paragraph states only that the
specification must include a written description of the invention which
enables any person skilled in the art to make and use the invention, and
to set forth the best mode. With regard to the enablement aspect of
Section 112, first paragraph, as long as a person skilled in the art can
make and use an invention without undue experimentation, combining the
knowledge of the prior art with the disclosure of the specification, then
the enablement requirement of Section 112 is satisfied. Northern Telecom,
Inc. v. Datapoint Corp., 908 F.2d 931, 943 (Fed. Cir. 1990). Furthermore,
it is not fatal if some experimentation is needed (i.e., if the skilled
artisan must practice only routine experimentation based on the
disclosure, the invention is still enabled).
As with the determination of the skilled artisan of ordinary skill for
Section 103 purposes, the proper identification of the person skilled in
the art is critical to the proper determination of patentability. The
higher the level of skill which is applied, the greater the "enabling
power" of a given patent specification. Based upon caselaw in this area,
the test for enablement requires that the claimed invention be practiced
by the person skilled in the art without undue experimentation. In re
O'Farrell, 853 F.2d 894 (Fed. Cir. 1988).
The identification the skilled worker for Section 112 purposes, as it
is for Section 103 purposes described above, is also difficult. Many of
the same considerations apply.
As an overall comment, there is a clear failure on the part of the
USPTO to give the benefit of the disclosure in the specification to this
"worker skilled in the art" when making an analysis of undue
experimentation. For example, when an inventor has provided a previously
unknown nucleic acid sequence in the specification, these sequences are
put into the possession of the skilled artisan who should be presumed
able to do with these sequences all that is possible from the knowledge
of such a one of recombinant DNA technology and techniques that exist in
the prior art. This is discussed in more detail below with a specific
example.
Some specific examples where determinations which related to the level
of skill in the art have not been made under the appropriate standard:
* USPTO requires limitation to particular nucleic acid construct
parameters such as size of component fragments.
A requirement to limit one's invention to the exact DNA construct
tested is also commonplace. Apparently, it is the belief of Group 1800
that once a DNA sequence encoding a protein is disclosed, that one
skilled in the art is incapable of making any modifications to that
sequence without undue experimentation. Likewise, in order for an
inventor to obtain claims that would cover reasonable modifications to a
sequence, that all such functional permutations must be actually
described within the patent specification.
For example, in one case which is now on appeal, the Examiner states:
"only one [deleted] construct comprised of [deleted] kb fragment of the
[deleted] gene was described...there is no guidance as to what portions
of the [deleted] gene would be effective or how long those portions
should be in order to be effective. One of skill in the art could not
determine which portion to use and thus could not make and use this
invention on the basis of this disclosure without undue experimentation."
However, it should be readily apparent that the level of skill in the art
has included the ability to make and test modifications of gene size
without undue experimentation.
*USPTO requires limitation to particular host organism even when
property tested is not host specific
Limitation to the tested host organism, even when there is no
scientific reason to believe that there is a difference in a particular
pathway between different organisms is commonplace. The purported "undue
experimentation" typically results from the "unpredictability" in
biotechnology, but without any real scientific rational for support.
In one situation, claims directed to an essential enzyme involved in a
highly conserved biochemical pathway were rejected under argument that
the claims would only enable the exemplified host and only for that
particular host tissue of using the particular construct tested. However,
given the fact that the enzyme itself was from a species different than
the host tissue and had inherently worked there, it is readily clear that
an important principle was being described to those skilled in the art.
The USPTO has no basis to assume that the exemplified host was unique
but, as noted above, relies upon a generalized recognition of those of
skill in the art of the variability and unpredictability of genes in
different species.
Question 3: (c) Do you believe the USPTO should equate the knowledge
and experience of a person "skilled in the art to which the invention
pertains" under Section 112 to that possessed by a "person of ordinary
skill in the art" under Section 103? Please explain the basis for your
conclusions.
Section 103 refers to a person having ordinary skill in the art to
which said subject matter pertains, while Section 112 speaks to the
sufficiency of the written description of the invention to enable those
skilled in the art. An important reason to equate these concepts is it
would be impossible to distinguish among the Section 112 and 103 artisans
in any meaningful way. Thus, the skilled artisan under Section 112 and
the artisan ordinarily skilled in the art to which the invention pertains
under Section 103 should be equated.
However, aside from "skilled" issues, there is one very important
distinction written into the statute which can not be ignored. This
distinction is, of course, that the Section 112 skilled artisan has the
benefit of all that the inventor teaches in the specification, while the
person having ordinary skill in the art to which said subject matter
pertains under Section 103 is ignorant of inventor's disclosure.
Keeping this difference in mind between these imaginary persons is
critically important to the proper prosecution of patentability and
enablement issues. As noted above, in alleging obviousness for
biotechnology patents, the USPTO takes an expansive view as to what the
general teachings and knowledge of the prior art reveals to the person
ordinarily skilled in the art under Section 103 regarding the specifics
of an invention. In many cases, Examiners seem to use the specification
as a blueprint to select information from references.
Then for enablement, the examiners discount to disclosure as and
refuses to acknowledge that those skilled in tea art can now make great
progress. Frequently even when the nucleic acid sequence for a protein is
disclosed, the USPTO will object to claims encompassing very similar
proteins from similar species. It is the skilled artisan under Section
112, however, that has the greater knowledge, including the specifics of
an inventor's invention and all that can be gleaned from the
specification.
This imbalance in the USPTO as to what the prior art teaches the
Section 103 and Section 112 artisan goes to the heart of the patent
practitioners difficulty in prosecuting patent applications to
biotechnology inventions.
By the Federal Circuits holding in In re Eli Lilly & Co., (Fed. Cir.
1990) a disclosure must contain a sufficient teaching of how to obtain
the claimed results, or assurance that particular results would be
obtained if certain directions were pursued. How, then, could a claimed
subject matter be simultaneously obvious and not enabled, particularly
given the fact that the Section 112 person has the benefit of the
specification while the Section 103 person ostensibly does not! Yet, we
see this combination of rejections all the time.
The confusion as to the level of skill seems to work against the
inventor in each case, never in his favor of innovation. As an example,
we frequently find that the USPTO is of the view that the Section 112
person of ordinary skill in the art knows less than the Section 103
person of ordinary skill, which results in some strange positions. For
instance, claims rejected under Section 103 as obvious in view of a
general reference are often the same claims rejected under Section 112 as
not enabled. This suggests an anomalous and illogical view that the
person having ordinary skill in the art under Section 103 would have had
an expectation of success to practice the technology from the prior art
teachings, but once the patent specification has provided additional
information the formerly confident person of ordinary skill under Section
103 is converted to a skilled artisan under Section 112 who lacks the
certainty of what to do in order to practice the invention.
In biotechnology practice these conflicts between the "confident"
Section 103 person with ordinary skill and the "lost and confused"
Section 112 skilled artisan are fairly commonplace. In one case the USPTO
asserted that a protein having an activity for a particular substrate
rendered a protein with specificity for a similar but different substrate
obvious under Section 103, for the reason that once given an encoding
sequence to the first protein the second would have been obtainable as a
matter of routine. However, based on the additional encoding sequence
provided in the specification and the original sequence, which taken
together provided previously unknown conserved regions of homology,
certain claims which embraced proteins with specificity to third related
substrate were not enabled. According to the USPTO, the specification did
not enable the Section 112 skilled artisan with sequences to proteins
other than those disclosed by the specification. In other words, under
the Section 103 rejection the second protein was asserted to be well
within the purview of the Section 103 person of ordinary skill in the art
based upon the first encoding sequence. However, given homologous
sequences from the first and second encoding sequences, the cloning of a
third related protein was viewed as beyond the skill of the Section 112
artisan. In another case, the USPTO simultaneously held (1) that it
would have been obvious under Section 103 to express a certain protein in
any host cell to effectuate a change in a common metabolic pathway, and
(2) that the specification only enabled the change which was exemplified,
i.e., the claims must be limited to the expression in cells of a
particular tissue type from a particular construct. The skilled artisan
under Section 112 was not viewed as having sufficient information to do
more than the specific examples of what that application taught.
As argued before, in the biotechnology field, the USPTO believes that
the difference between the skilled artisan of Section 103 and the skilled
artisan of Section 112 is that the latter knows everything that the
former knows, and significantly more. The skilled artisan of Section 112
has the benefit, denied the person ordinarily skilled under Section 103,
of knowing everything about the particular invention which is disclosed
in the specification. Thus, there should be a gap in what the two
artisans can be expected to practice with a reasonable expectation of
success, or with only routine experimentation, but the gap should favor
the skilled artisan under Section 112, i.e., the skilled artisan under
Section 112 can do more.
A final example is a case involving the encoding sequence to a protein
involved in a basic metabolic pathway and constructs for its use, where
detailed analysis of what the metabolic effects observed upon use are not
provided. The USPTO's rejections included a Section 112 rejection which
claimed that absent the results it was "uncertain" whether the encoding
sequence could effectuate a change in the metabolic pathway, as well as a
Section 103 rejection which stated that the use of such a gene to alter
the metabolic pathway was obvious given a report in the prior art of the
protein. How is an inventor to respond to such a rejection?
F. Question 4: Are there specific practices of the USPTO with regard to
determinations under 35 U.S.C. 103 or 112 for biotechnological inventions
that you believe are inappropriate or inconsistent with legal precedent?
1. Overview
The question requests parties to identify with specificity the
practices in question, examples of the practices, reasons why the
practices are inconsistent with legal precedent, suggestions for specific
changes that would address these concerns, and an explanation of the
implication of these changes. Following these requirements, this Section
presents specific examples of recurring rejections which based upon
positions that are inconsistent with case law. The majority of the cases
include illustrative quotations by an Examiner since the USPTO has stated
that it is difficult to respond to concerns about USPTO practice
"particularly when expressed anecdotally." Id. at page 45270.
2. Specific Examples and Case Law
(a) Obviousness Rejections That Confuse Tests of Novelty and
Nonobviousness
(1) An analysis of the elements of a claim lacking consideration of
whether the claim as a whole would have been obvious
This case is illustrated by a Section 103 rejection of a two-step
method in view of a single reference. The following quote shows the
USPTO's approach to analyzing the obviousness of the method claim.
The preamble of claim 1 . . . is taught by [the reference]. Claim
1(a), the determining step, is clearly met by figure 1 of [the
reference]. Claim 1(b), the step of comparing [is taught by the
reference].
Thus, the USPTO dissected a claim into various elements and attempted
to show that each element was taught or suggested by the cited reference.
This test for obviousness is erroneous as a matter of law. For
example, the Board of Patent Appeals and Interferences has explained
that:
[C]iting references which merely indicate that isolated elements
and/or features recited in the claims are known is not a sufficient basis
for concluding that the combination of claimed elements would have been
obvious. That is to say, there should be something in the prior art or a
convincing line of reasoning . . . suggesting the desirability of
combining the reference[s] in such a manner as to arrive at the claimed
invention.
Ex parte Hiyamizu, 10 USPQ2d 1393, 1394 (BPAI 1988).
Criticizing a similar obviousness analysis of a nine-step method claim,
the CAFC stated that:
Of course, there is no such thing as "claim 1(a)" . . . . There is
claim 1 and the first step of its 9 recited steps is designated "(a)." .
. . [W]hat is claimed is what is defined by the claim taken as a whole,
every claim limitation (here each step) being material.
General Foods Corp. v. Studiengesellschaft Kohle mbH, 23 USPQ2d 1839,
1845 (Fed. Cir. 1992) (original emphasis), rehearing in banc denied, 1992
U.S. App. LEXIS 25713 (Fed. Cir.; Oct. 5, 1992).
(2) Claims directed to DNA molecules are treated as if they are
presumptively anticipated
Group 1800 has formulated a policy that a novel nucleotide sequence
does not render a claimed DNA molecule nonobvious, regardless of whether
the prior art would have suggested the claimed nucleotide sequence.
Following this policy, for example, the USPTO has rejected claims that
recite a novel DNA sequence which functions as a promoter capable of
stimulating gene expression in a particular tissue. In one case, the
USPTO stated that "the fact that the claimed [tissue A specific] promoter
has a unique nucleotide sequence does not render it non-obvious." It was
not relevant to the USPTO's decision that the promoter was characterized
by a novel nucleotide sequence and that the prior art did not suggest how
one could modify the nucleotide sequence of a known tissue A specific
promoter to obtain the novel sequence of the claimed promoter. In other
words, it was irrelevant that the claimed promoter was structurally
nonobvious.
The USPTO has maintained the position that the recitation of a
nucleotide sequence should have little, if any, impact on the issue of
obviousness. For example, one Examiner stated that "[t]he nucleotide
sequence of any given promoter is an inherent property easily ascertained
using standard techniques." Moreover, the "[n]ucleotide sequence is
irrelevant in this case" because "one [tissue A] specific promoter
renders another obvious regardless of sequence." This dismissal of the
structure of the claimed promoter absolutely disregards the
well-developed body of law regarding the obviousness of chemical
compounds. Apparently, Group 1800 does not believe that:
While the cited decisions refer to chemical compounds, rather than
sequenced DNA, we stress that a gene is a chemical compound, albeit a
complex one. See Amgen Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200,
18 USPQ2d 1016 (Fed. Cir. 1991), at 18 USPQ2d 1021. Thus, it is manifest
that the prior decisions involving chemical compounds are equally
applicable to claims directed to [a DNA sequence coding for human tissue
plasminogen activator].
Ex parte D, 27 USPQ2d 1067, 1069 (BPAI 1993).
(b) Rejections Based Upon the "Obvious to Try" Standard Coupled with
Implicit Hindsight
(1) A claimed gene is considered to be rendered obvious by the
disclosure of the isolated protein encoded by the gene
In one case, the Examiner rejected claims directed to DNA molecules
encoding "enzyme A" as obvious in view of primary, secondary, and a
tertiary reference. The Examiner's position was (1) that the primary
references describe purified enzyme A, (2) that the secondary references
describe methods for determining amino acid sequences, and (3) that the
tertiary reference describes a method for isolating a gene encoding a
protein "for which a short amino acid sequence is known." The Examiner
concluded that it would have been obvious to one of ordinary skill in the
art to have purified enzyme A, to have learned at least part of the amino
acid sequence, and to have isolated the enzyme A gene using the method of
the tertiary publication.
The Examiner's analysis was flawed as a matter of fact since the
primary reference did not teach methods for obtaining sufficiently pure
enzyme A. Moreover, the inventors in this case had found it necessary to
devise a new purification step.
In addition, the Examiner's analysis was erroneous as a matter of law
in view of Ex parte Maizel, 27 USPQ2d 1662 (BPAI 1992), in which the
Board reversed a Section 103 rejection of claims directed to DNA
molecules and recombinant host cells comprising a DNA fragment encoding
B-cell growth factor (BCGF) protein. Here, the Examiner's position was
that one of skill in the art could have purified BCGF protein, sequenced
the purified BCGF protein, constructed oligonucleotide probes encoding
portions of BCGF protein, and isolated DNA molecules encoding BCGF using
the oligonucleotide probes.
According to the Board, the "Examiner's position reflects the
'obviousness [sic] to try' approach of the 'armchair' chemist." Id. at
page 1668. The Board found that the BCGF protein had not been isolated
to "sufficient purity and sufficient quantity" for amino acid analysis at
the time that Maizel's application had been filed. Consequently, the
Board concluded that
In the absence of being able to isolate substantial quantities of the
protein to purify, it would be virtually impossible to produce probes
insofar as sequencing the proteins would be disrupted by the presence of
significant portions of other proteins.
Id. (emphasis added).
(2) A human gene, the existence of which is unacknowledged by the
prior art, is rendered obvious by the disclosure of a homologous rat
gene.
As an illustration of this type of rejection, an Examiner rejected
claims directed to DNA molecules encoding human "receptor A." The
Examiner's position was that the primary reference taught the rat
receptor A gene, while secondary references taught methods to clone human
homologues of various rat receptor genes. Here, the Examiner's premise
was that the secondary references would have suggested the existence of
the human receptor A gene since "[t]here is no suggestion in the prior
art or any evidence of record which would suggest that the [receptor A]
gene, first identified in rats, would not also be present in humans."
In other words, the Examiner argued that the disclosure of a class of
rat genes would have rendered obvious an unknown human gene which was
claimed by its novel nucleotide sequence. Clearly, the Examiner applied
the "obvious to try" standard, since the cited references, at best, gave
"only general guidance and is not at all specific as to the particular
form of the claimed invention and how to achieve it." Ex parte
Obukowicz, 27 USPQ2d 1063, 1065 (BPAI 1992).
(c) Rejections Based Upon an Overt Use of Hindsight
To support an obviousness rejection, an Examiner stated that the
primary reference "teaches a gene encoding a rat [receptor B] which
shares 91% nucleic acid sequence homology with the [human receptor B]
gene of the instant invention, as demonstrated by a database sequence
comparison." Here, the Examiner took the inventors' teaching from the
specification and combined this information with the teaching of the
primary reference. This was an improper combination, based upon
impermissible hindsight. Panduit Corp. v. Dennison Manufacturing Co., 1
USPQ2d 1593, 1595 (Fed. Cir. 1987), cert. denied, 481 U.S. 1052 (1987)
("To reach a proper conclusion under Section 103, the decision maker must
step backward in time and into the shoes worn by that [person having
ordinary skill in the art] when the invention was unknown and just before
it was made").
In another case, an Examiner decided that claims to an antiviral
composition comprising components A and B would have been obvious. The
Examiner explained that:
One of ordinary skill seeking to inhibit virus replication would be
motivated to combine [a variant of component A described in a cited
reference] with other known antiviral agents, such as [component B], for
their additive effects. Applicant has indicated [in the application]
that a synergistic composition results when [component A is combined with
component B]. Thus, according to applicant, the mere combination of the
two substituents is sufficient to achieve a state of synergy.
Again, the Examiner supported the rejection by improperly referring to a
statement in the inventors' specification.
In passing, it should be noted that the Examiner compounded the error
by disregarding the significance of the synergistic effect which is
evidence for the nonobviousness of the claimed invention. In re Corkill,
226 USPQ 1005, 1009 (Fed. Cir. 1985) ("A greater than expected result is
an evidentiary factor pertinent to the legal conclusion of obviousness")
(citing United States v. Adams, 383 U.S. 39, 51-52 (1966)).
(d) Rejections of Composition Claims Based Upon Prior Art Methods
The Examiners assigned biotechnology inventions uniformly ignore
Section 103: "Patentability shall not be negatived by the manner in which
the invention was made." In a typical case, an Examiner rejected
composition claims directed to DNA molecules that stimulate gene
expression in tissue A. The Examiner's position was that the claimed
invention would have been obvious in view of prior art methods. For
example, the Examiner stated:
(1) that "[i]t would have been obvious to one of ordinary skill in the
art at the time the invention was made to use the method of [reference
1] to isolate a [tissue A]- specific promoter sequence,"
(2) that reference 2 "shows that the method of [reference 1] can be
successfully applied to other species," and
(3) that "[o]ne needed only to isolate a [tissue A]-specific cDNA and
then proceed with standard techniques to identify the [tissue
A]-specific promoter . . . . [which] is precisely what Appellants did."
The Examiner's reliance on prior art methods to support an obviousness
rejection was directly contrary to case law because "the issue is the
obviousness of the claimed compositions, not of the method by which they
are made." In re Bell, 26 USPQ2d 1529, 1532 (Fed. Cir. 1993).
Techniques for purifying proteins and isolating DNA do not make those
chemicals obvious.
(e) Rejections Based Upon a Misunderstanding of Patentability
Standards Under the First Paragraph of Section 112
One recurring problem is an overzealous demand for the deposit of DNA
molecules in satisfaction of the enablement requirement. For example, in
application related to a method for producing transgenic animals, the
specification described numerous examples of well known DNA molecules
that could be used with the claimed method. The Examiner decided that
the specification did not enable the claims because the inventors had not
deposited the various illustrative well known DNA molecules.
Examiners are rejecting claims to hybrid plant seeds based on a
misapplication of the written description requirement. In one case, an
Examiner rejected claims directed to hybrid seed under Section 112
because "the absence of a written description of the inbred parents of
the instant hybrid precludes the Examiner from evaluating the teaching of
the specification."
This position is directly contrary to case law. Ex parte C, 27 USPQ2d
1492 (BPAI 1993), concerns a similar case in which an Examiner had
rejected claims under Section 112 to a novel soybean plant, seeds
produced from the claimed soybean plant and a method for producing the
seeds. Here, the Examiner's position was that the specification did not
adequately describe the characteristics of the parent lines of the
claimed hybrid soybean plant. The Board reversed the Section 112
rejection, explaining that:
[T]here is nothing in 35 U.S.C. ¤ 112 which supports a rejection on
the ground that the specification does not provide enough information for
the Examiner to formulate a search and examine the application.
Id. at page 1495 (original emphasis).
In another misapplication of the written description requirement,
Examiners are demanding a disclosure of amino acid and nucleic acid
sequences for claims directed to proteins and DNA molecules,
respectively. In one case, for example, claims directed to a particular
enzyme stated that the enzyme was isolated from a specific group of
microorganisms, was capable of degrading an identified substrate, and had
recited physicochemical properties including pH optimum and resistance to
degradation when incubated at a certain temperature. Yet, the Examiner
improperly cited Fiers v. Sugano, 25 USPQ2d 1601 (Fed. Cir. 1993), for
the proposition that "[t]he breadth of the claims amount to a functional
definition and absent a recitation of further details therein, do not
provide sufficient written description of the invention."
3. Suggestions for Changes to Address the Above-Described Concerns and
Implications of Such Changes
At first blush, a mechanism for change is obvious: provide training for
Examiners so that they (a)can appreciate the policy behind legal
precedent, (b)are educated in case law concerning biotechnology
inventions, and (c) are informed of current case law on a continuing
basis. If Examiners followed case law, the shape of patent prosecution
for any particular case would be more predictable. A degree of
predictability is important for business decisions on the economics of
filing a patent application and pursuing patent prosecution. Effective
training also would enhance the survivability of small start-up
biotechnology companies. This is so because the cost of prolonging
prosecution due to unreasonable rejections selects for large, established
biotechnology companies with greater monetary resources than the small
business ventures.
There is reason to believe, however, that a complete cure cannot be
effected solely at the Examiner level. After all, biotechnology
Examiners receive guidance from their superiors in Group 18000. One
example of such guidance is the above-described policy regarding DNA
molecules having a nonobvious nucleic acid sequence.
Assuming that Group 18000 has the authority to generate its own
internal policies, often called "the flavor-of-the-month" by Examiners
and practitioners, these interpretations of the patent statute should be
aired in a public forum. In fact, the Administrative Procedure Act
requires that even interpretive rules must be published.
Last Spring, Commissioner Lehman published a note in the Official
Gazette instructing Examiners to ignore a decision by the U.S. Court of
Appeals for the CAFC in In re Baird, 29 USPQ 1550 (Fed. Cir. 1994).
Apparently, the USPTO simply decided that the Court had used an improper
standard for patentability under Section 103 in assessing the question of
obviousness. We believe that this incident demonstrates the need to
clearly define the role of the USPTO in U.S. patent practice, and to
delineate the relationship between the USPTO and its reviewing court.
Otherwise, it may be unrealistic to expect Examiners to give the proper
deference to case law while the Commissioner refuses to do so. The USPTO
has been getting sequence data for some time and Examiners need to be
taught its proper place in patentability determinations.
G. Question 5: Do you believe legal standards and examining practices
in foreign systems provide a better framework for making patentability
determinations that depend upon the level of skill in the relevant field
of biotechnology than is utilized in the United States? Please identify
desirable and undesirable practices of foreign offices, particularly the
Japanese and the European Patent Office, in this regard.
With one notable exception, as concerns the legal standards for making
patentability determinations that depend upon the level of skill in the
art, it does not appear that foreign systems provide a better legal
framework. The U.S. system of case law provides a comprehensive
analytical framework for addressing issues, such as obviousness,
enablement and the breadth of claims relative to disclosure. Unlike the
U.S. system, however, the foreign systems explicitly recognize that the
level of skill in the art does not change depending upon whether the
inquiry is one based upon an assessment of the prior art or the
sufficiency of the disclosure in a patent application. As explained in
earlier Sections of this paper, such a nonvarying application of the
skill in the art is desirable and appropriate.
As concerns examining practices, however, foreign systems have much
more detailed Examination guidelines, and generally more
legally-experienced Examiners. These factors appear to make examination
and prosecution of biotechnology patent applications in foreign systems
more uniform and straight-forward.
As was explained in earlier Sections of this paper, at the heart of the
patentability determination of obviousness and enablement is an
assessment of the skills possessed by the person having ordinary skill in
the art ("PHOSITA"). See J.O. Tresansky, "PHOSITA -- The Ubiquitous and
Enigmatic Person in Patent Law," 73 J.P.O.S. 37 (1991). This fictitious
person is the standard by which decisions are made. For example, an
obvious contribution involves the performance of acts involving routine
experimentation which a PHOSITA would have expected to succeed in light
of contemporary knowledge. In the case of enablement, sufficiency of
disclosure is judged sufficient if this person can practice the
technology falling within the description of the claims by engaging in
routine experimentation. In the biotechnology field, routine
experimentation can often be labor intensive and time consuming. These
determinations involving PHOSITA, though objective, are information
content dependent.
The Japanese Patent Office and the European Patent Offices essentially
address the same issues involving inventiveness and enablement using
functionally similar analytical frameworks. In regard to the European
Patent Office's and the British Patent Office's handling of
inventiveness, see R.S. Crespi, "Inventiveness in Biological Chemistry:
An International Prospective," 73 J.P.O.S. 351 (1991). These systems,
while they do not employ PHOSITA of U.S. law, do employ a similar fiction
to set threshold standards by which decisions are made. The standards of
all the mentioned systems change with advancing technology. The European
and Japanese Offices do employ detailed "Examination Guidelines," which
are updated, to facilitate examination. These guidelines promote
consistent decision making amongst their "Examiner" corps and educate the
inexperienced. The Guidelines employed by these Offices are much more
detailed at an individual technology level than is the Manual of Patent
Examining Procedure employed by the U.S. Office and therefore appear more
useful. Considering the relative inexperience of U.S. Examiners in the
biotechnology field on matters of patent law and the application of the
law to varying factual situations, a more detailed set of Examination
Guidelines should be given serious consideration. The assistance of
industry representatives should be encouraged by the USPTO in the
formulation process.
Implications of Legislation32
The USPTO Notice requests comments on several patent reform initiatives
pending before the Congress. These include the legislation to implement
the intellectual property provisions of the GATT agreement, the
Biotechnology Patent Protection Act and other measures. It also raises a
series of questions regarding a provisional application filing system,
data bases of DNA or amino acid sequences, restriction practices, and
examining practices. This Section of the report outlines BIO's views on
two pending bills, the GATT implementing legislation and Biotechnology
Patent Protection Act and then addresses the specific questions raised by
the USPTO Notice.
A. Pending Patent Reform Legislation (GATT)
1. BIO's Position on GATT Implementing Legislation
The United States is a signatory to the new GATT agreement, including
its intellectual property provisions. President Clinton has submitted
legislation to implement the agreement and these provisions under a "fast
track" procedure and votes on the legislation are set in November or
December.
Prior to the introduction of this legislation all interested parties
were invited to submit their views on draft legislation. This process is
routine for such legislation because under the procedures set for
consideration of the legislation it cannot be amended once it is
submitted. Congress would not accept these procedures if there were not a
full opportunity to review the draft legislation prior to its
introduction.
On June 27, 1994, BIO communicated its views on the draft legislation
in letters to
Ambassador Mickey Kantor, United States Trade Representative, and Patent
Commissioner Bruce A. Lehman. A copy of BIO's letter to Commissioner
Lehman is printed in Appendix D of this report. The letter stated that,
"As an industry with a positive balance of trade we support full and fair
international trade. Therefore, we welcome many features of the GATT
Agreement, including elimination of tariffs and the stronger intellectual
property protection provided under the Agreement on Trade Related Aspects
of Intellectual Property Rights (TRIPS) which forms part of the GATT
Agreement."
BIO then expressed "serious concerns relating to draft legislation to
implement the agreement." It stated its belief that "limiting the patent
term to 20 years from filing, without adopting either a package of
safeguards or other reforms, will seriously disadvantage our industry,
which is particularly prone to lengthy delays between the filing of a
patent application and subsequent issuance of the patent."
BIO said that, "This threat to our industry can be avoided, while at
the same time complying with GATT, by leaving the present patent terms of
17 years from issue unchanged other than to insert language stating that
the term will not be less than 20 years from filing." (emphasis in
original) It emphasized that, "This proposal would not only be in full
compliance with GATT but would greatly simplify the implementing
legislation by completely avoiding all additional provisions currently
proposed in connection with patent term extension for interference
delays, provisional protection and the like."
At that time BIO understood that the Administration was reluctant to
amend the draft legislation and we, therefore, stated that "[i]n the
event that despite our suggestions above, change to a patent term of 20
years from filing remains in the proposed legislation, we urge[d]" that a
series to steps be taken. BIO proposed that the "extension provisions
should also apply to cases involved in protracted appeals," that the
legislation "not apply to inventions which were filed on or prior to the
effective date even if refiled thereafter," and that the Administration
commit in its Statement of Administrative Policy "to shorten the
processing time of Patent Applications through the following: (i)
increased staffing at the Patent and Trademark Office; (ii) support for
ameliorative legislation such as the Biotechnology Patent Protection Act;
and (iii) strict guidance to Patent Examiners on questions of utility
particularly in the biotechnology area." The letter included a lengthy
analysis of BIO's views on the utility issues, views which are reflected
in the presentations at this hearing.
On August 12, 1994, the House and Senate patent subcommittees held a
hearing on the GATT implementing legislation and BIO communicated these
views to the subcommittees, Ambassador Kantor, and Commissioner Bruce A.
Lehman. A copy of this letter is printed in Appendix D of this report.
Finally, on September 27, 1994, with the submission of the final
legislation by President Clinton to the Congress, BIO wrote to Ambassador
Kantor and Commissioner Lehman to support the legislation. A copy of
this letter is included in Appendix D of this report. This letter
reiterated BIO's support for "many features of the GATT Agreement,
including elimination of tariffs and the stronger intellectual property
protection provided under the Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS) which forms part of the GATT
Agreement." It referred to BIO's effort over the previous three months
to raise "concerns relating to draft legislation to implement the
intellectual property provisions of the agreement." It specifically
mentioned BIO's concern that limiting the patent term to 20 years from
filing, without adopting a package of safeguards, could seriously
disadvantage our industry because of lengthy delays with regard to patent
applications for biotechnology inventions between the filing of a patent
application and subsequent issuance of the patent.
BIO expressed its appreciation for the fact that the Administration had
adopted a package of safeguards, including the following:
(a). The patent term will be extended to compensate the inventors for
delays due to successful interferences, appeals to the Board of Patent
Appeals and Interferences and appeals to the Federal Courts.
(b). Special protections have been added to minimize the impact of the
legislation on pending cases.
(c). The Administration has committed in a Statement of Administration
Action (SAA) to give patent examiners explicit instructions with regard
to utility issues in applications regarding biotechnology inventions.
(d). The USPTO will hold a hearing, at an appropriate time, if it
appears that the inventors for patents for biotechnology inventions are
receiving patent terms of less than 17 years from the grant of the
patent.
It concluded its analysis of the intellectual property provisions of
the legislation by stating that, "These safeguards address each of the
issues we raised with" the Administration. BIO is acutely aware that the
legislation, having now been submitted, cannot now be amended. The final
vote in the Congress will be on the whole bill as introduced, up or down,
without any separate vote on the pharmaceutical tariff provisions or the
intellectual property provisions. It is this procedural setting which
leads BIO to support the bill as a whole on the one vote which will occur
with respect to it. These votes are scheduled for November 30, 1994, in
the House and December 2, 1994, in the Senate, and BIO urges the Congress
to pass the implementing bill.
While BIO supports the GATT implementing legislation as a whole, we
have not endorsed these intellectual property provisions. We remain
concerned that the intellectual property provisions of the legislation
may serve to erode the patent term for biotechnology inventions. Action
by the USPTO on the range of recommendations outlined in this report
would substantially reduce this concern. BIO will be closely monitoring
the actions of the USPTO regarding applications for biotechnology patents
and will, in fact, request that a hearing be held, and that USPTO
practices be changed or amendments to the implementing legislation be
adopted, if it sees that our patent terms are being eroded. Any such
amendments would be completely consistent with the GATT agreement, which
provides that the patent term must be at least 20 years, not that it must
be a maximum of 20 years.
In the remainder of this Section we will outline the context for this
debate and some of our concerns about the 20 year patent term, especially
retroactivity and third party harassment.
2. GATT/TRIPS Agreement and BIO's Concerns
Our U.S. patent system undeniably provides the most effective means of
protecting intellectual property rights in the world; but, the
recognition that we live in a global economy has made the formal,
world-wide harmonization of patent laws a primary goal of intellectual
property and trade negotiations. In support of patent harmonization, BIO
has argued that uniform procedures and standards would permit patent
inventors to obtain foreign patent protection more quickly, more
reliably, and more economically. BIO's position on patent harmonization
issues is reflected in BIO's submission to the USPTO on October 28,
1993.33
For many, "harmonization" has been equated with converting the U.S.
patent system from one in which the right to claim priority to an
invention is determined by who is the "first-to-invent," to the system
used world-wide by the other industrialized nations, which is based upon
who is "first-to-file" an application claiming a particular subject
matter. However, last January the Commerce Department unexpectedly
issued a press release which, perhaps in response to strong opposition by
grass-roots inventors and the academic community, stated that the U. S.
would maintain the "first-to-invent" patent system, and would not pursue
negotiations of a WIPO treaty harmonizing the world's patent laws at this
time.
The U.S. has, instead, turned to multi-national trade negotiations,
specifically the General Agreement on Tariffs and Trade ("GATT"), to
improve international intellectual property protection. Originally
designed to reduce tariffs and other trade barriers, and to toughen the
rules against international trade violations, BIO applauds the present
revisions to the GATT treaty which were finally concluded after years of
negotiations and signed by Vice President Gore on April 15, 1994. The
U.S.-led efforts in the GATT negotiations have lead to a detailed
proposed agreement on intellectual property entitled the "Trade-Related
Aspects of Intellectual Property (TRIPS) which will provide minimum
standards of intellectual property protection and equal national
treatment. With the support of an enforcement clause, TRIPS will
significantly enhance the protection of U.S. inventors because each
member nation will be required to implement both internal and border
measures to stop the importation of infringing goods, and specific
provisions on injunctions, damages and obtaining evidence.
As explained above, BIO's concerns lie in the language used to
implement the intellectual property provisions of the GATT treaty into
U.S. law, not with the Agreement itself. Its concern is that in the rush
to have the GATT fast-track legislation approved could weaken patent
protection in biotechnology, pharmaceuticals and other rapidly-advancing
key U.S. industries. Implementation of GATT requires only minimal
changes to the U.S. patent term -- presently measured as 17 years from
the date on which a patent is granted. Yet, the bill as submitted limits
patent term of 20-years from the filing date of the application for
inventions in almost all fields of technology - a change that goes beyond
the actual demands of the GATT related TRIPS provision. We are proving
to be very poor negotiators and trading partners if we forego what we
negotiated.
Article 33 of the TRIPS Agreement reads:
The term of protection available shall not end before the expiration of
a period of twenty years counted from the filing date.
Perhaps the additional limitations presently suggested by the
Administration in the GATT implementation measures is a reflection of the
Administration's commitment to facilitate the objectives proposed in
March 1992 by the PTO's Advisory Commission on Patent Law Reform. The
Commission's proposed changes to the U.S. patent system include:
(a). conversion of the U.S. patent system from a "first-to-invent"
system to "first-to -file" (as part of a comprehensive harmonization
package);
(b). a 20-year patent term measured from the filing date of the
earliest-filed application;
(c). automatic publication of patent applications within 24 months of
filing; and
(d). provision for limited prior-user's rights to a later filed
invention.
The recent discussions by the Secretary of Commerce and by Commissioner
Lehman with the Japanese Patent Office appear to further manifest the
Administration's commitment to harmonization, even though such measures
carry no legal weight. On January 20, 1994, Commissioner Lehman signed
an agreement with Commissioner Asou of the JPO, providing that the United
States will introduce legislation to change the length of a patent term
to 20 years from the date of filing of the first completed application.
In return, Japan agreed to accept English-language patent applications
when followed by a Japanese translation within two months, and agreed to
allow translation corrections until the time for replying to the first
substantive communication from the JPO. Then, on August 16, 1994,
Secretary Brown and Japanese Ambassador Takakazu Kuriyama signed Letters
of Agreement in which the JPO significantly agreed to institute an
accelerated examination process and eliminate pre-issuance third-party
opposition proceedings. In response, the United States PTO agreed to
begin publishing patent applications 18 months after the filing date of
the earliest-filed application, and to expand reexamination proceedings
to more easily accommodate third-parties.
The Administration and the USPTO have maintained that, under the
present statute, the inventors have no incentive to prosecute their
applications expeditiously. The argument is that by changing the
measurement of the 20-year patent term to begin on the filing date, as
opposed to the present 17-year patent term measured from the date of
grant, inventors will no longer be able to benefit from the extended
period of secrecy which now attaches to each application. Further, the
USPTO and the Administration have said that the proposed 20-year term
from date of filing will reduce the incentives to "tie-up" technology
with so-called "submarine" patent applications - meaning those
applications that remain secret for many years before the patents are
finally issued. Similarly, the USPTO and the Administration have
maintained that automatic publication of applications at 18-months will
facilitate the use of technology by American innovators and permit
identification of potential patent conflicts earlier than is now
possible.
The proposed changes to the law have been met with broad and deep
concern among many BIO members, especially those representing small
companies and universities conducting research in rapidly advancing
fields, such as biotechnology. BIO's concern is that neither the
"20-year from filing" term, nor the 18-month publication will adequately
resolve the problems; and worse yet, that the changes will, in and of
themselves, create additional conflicts and rob the inventor of his
rights.
As outlined above BIO has taken every opportunity to voice its concerns
to the Administration regarding the fixed 20-year patent term. BIO has
argued that the 20-year term will, in reality, have the practical effect
of significantly decreasing the effective term of many U.S. patents,
diminishing the value of the issued patents, and providing incentive to
competitors to instigate abusive patent procurement practices and
harassment tactics. Moreover, BIO has expressed concern that the
Administration has failed to realize that in many instances an inventor
is forced to extend the prosecution of an application for significant
periods of time for reasons under the singular control of the USPTO. BIO
has suggested that in lieu of radically changing patent laws, the matter
of "submarine" patents can be eliminated simply by eliminating delays
within the USPTO. We must reiterate that BIO appreciates the responses
of the Administration to these concerns and the amendments to the draft
legislation which have been offered which will ameliorate the impact of
the 20 year term.
The GATT implementation bill is now a reality. The bill defines the
patent term as a fixed 20-years from the date of the earliest filed
application, with extensions for up to 5 years permitted under certain
circumstances. Yet, it remains to be seen whether the additional
measures, agreed to by the Administration at BIO's request, assuming that
the GATT implementation bill is passed into law, will succeed in
minimizing the impact of the legislation on pending patent applications
or in preserving the patent rights for an inventor whose application
becomes involved in PTO-mandated delays (e.g., an appeal or interference
proceeding); or whether, even with extension provisions, the fixed
20-year patent term in a "first-to-invent" patent system will promote
bad-faith competitive tactics and diminished rights.
3.What Effect will Implementation of the GATT Provisions Have on
Pending Applications?
Upon enactment of the GATT implementation bill, the amendments set
forth in Title V, Subsection C - Patent Provisions, will effect major
changes in the existing patent laws. Of particular significance for the
present discussion are the amendments to 35 U.S.C. ¤ 154, including the
revised patent term, which is defined as a fixed period of 20 years
measured from the filing date of an application (as opposed to the
present 17-year patent term measured from the date of grant). The
amended law will "take effect on the date that is one year after the WTO
Agreement enters into force with respect to the United States."
Subsection C, ¤ 534. The new law also provides that an application filed
after the effective date that contains a specific reference to an earlier
application filed under Sections 120, 121, or 365(c) of title 35 would be
entitled to the filing date of the earliest filed application. However,
the bill provides neither that patent applications will be examined under
an accelerated schedule, nor that the PTO will provide a first office
action within a fixed, expedient period from the filing date of the
application.
The question which must be answered, however, is: Will the fixed
"20-year from filing" patent term, if enacted, have the desired effect of
placing the U.S. on a par with other industrialized nations, establishing
certainty in the length of the patent term, and reducing the incentives
to "tie-up" technology with "submarine" patent applications that remain
secret for many years before the patents are issued; or, will it also
introduce unintended changes in U.S. patent practice that would open the
door to blatant abuse of the patent procurement system?
BIO seriously doubts that a fixed "20-year from filing" patent term can
be implemented without having the net effect of significantly decreasing
the effective term of many U.S. patents, and diminishing the value of the
subsequently issued patents. BIO's concern is that rather than merely
preventing the unfair extension of the life of a patent, the new fixed
term will effectively eliminate grandfathering the present 17-year term
(from date of issue) for any application claiming priority to an
application which has been pending more than one year from the enactment
of the law. This will be true because under the new fixed term, even if
a case was filed before the enactment of the "20-year from filing"
statute, a continuing application (even a simple file-wrapper
continuation) will fall under the new term of, at most, 20 years from the
priority filing date. It will no longer be entitled to claim the 17-year
term from date of issue. Similarly, all divisional applications of the
original case would be limited to a patent term of 20 years from the
filing date of the priority application, even if the original term of the
application was 17-years from issuance.
It is probably a conservative estimate to state that 50% of all
biochemical and pharmaceutical applications currently pending before the
Patent Office are some kind of continuation or divisional application,
each of which may be affected by a revision of the patent term.
Consequently, BIO foresees that applicants responsible for at least half
of all presently pending biochemical and pharmaceutical applications will
be deprived of some part of the 20-year patent term by the simple act of
filing a continuing application.
In all likelihood the resulting term for such applications will be
significantly less than the present 17 years from issuance of the patent.
If correct, such an action would, at best, result in a mad dash to the
Patent Office to file all continuation applications within the six (6)
month grace period under the old law as disclosed in ¤ 154(c)(1); or, at
worst, the law would affect a serious and unconstitutional "taking" of
each inventor's rights.
The situation is clearly unfair, particularly when the need for the
continuing application is mandated by the PTO. Often an applicant's only
alternative to a file-wrapper continuation (which under the new Act will
jeopardize the grandfathered term of the parent applications) is an
appeal. However, often an appeal is counter-productive since the claimed
application may not be entirely in condition for allowance, and since the
Appeal Board typically upholds the Examiner's rejection. Therefore,
appeals intended only to avoid the new Act would merely overload the
Board's already overcrowded docket for the review of cases that should
have been resolved at the Examiner's level.
BIO contends that it would be both unfair and unjust to cause an
inventor who is required by an action by the PTO to file a continuation
application, to be penalized a portion of the term of his granted patent
simply because a new law is enacted during the pendency of his
earlier-filed application. Therefore, BIO proposes that provisions must
be added to the present Act, or by subsequent amendment to the law, which
will permit an inventor filing continuing applications (regardless of
actual filing date) to be accorded not only benefit of the filing date of
his or her priority application, but also the right to be considered
under the same laws as are applied to that priority application. In
other words, if the priority application was filed prior to enactment of
a "20-year from filing" law, then all subsequent applications claiming
priority to that application should also be examined under the same
standard, regardless of the state of the law at the time the subsequent
application is filed. It is BIO's recommendation that if the new law is
to be prospective, rather than retrospective, the Commissioner of Patents
must be permitted the ability to "grandfather" all continuing
applications claiming priority to applications filed under the old
"17-year from date of issue" law, regardless of the date of enactment of
new legislation, until the invention has been fully disclosed and all
related applications have been prosecuted. To do less would mock equity.
4.What Effect Will Implementation of the GATT Provisions Have on Delays
to Issuance Which Are Controlled by the PTO, e.g., Interference or
Appeal
proceedings?
The GATT implementation bill, if enacted, contains several provisions
which will extend the term of the patent beyond the designated 20 years
from the filing date of the earliest filed application. However, the
extension-of-term provisions are limited to two very specialized
circumstances: ¤154(b)(1) relates to interference delay or secrecy
orders; while ¤154(b)(2) relates to extensions for delays due to
appellate review. In both cases the proposed statute very clearly states
that the term of the patent may "in no case [be extended] more than 5
years."
At first glance, five years seems to be a generous extension of the
patent term. That is, at least, until one actually analyzes the real
time lost to an applicant purely as a result of the Patent
Office-controlled delays. Therefore, the members of BIO are concerned
that the extension-of-term provisions in the GATT implementation bill are
simply neither broad enough nor long enough to provide an adequate
safeguard to an applicant involved in delays controlled by the Patent
Office. BIO does not believe that an applicant involved in such a
PTO-controlled delay will be adequately compensated for the lost value of
his or her intellectual property rights; and as a result, the value of
the subsequently granted patent will be substantially diminished.
a. Delays Related to Interference Practice
In highly competitive fields, such as the biotechnology, biochemistry
and pharmaceutical industries, two or more applicants often file a patent
application claiming essentially the same subject matter. However, since
only one patent can issue on a given invention, the dispute as to which
applicant deserves the patent must be resolved. The United States
settles this dispute by determining who was the first to invent the
claimed invention. Thus, patent practice in the United States (which has
elected to remain a first-to-invent" nation) is clearly distinguished
from that of countries which determine priority solely on who was
"first-to-file" the application.
To begin with, first-to-file countries publish or "lay open" their
patent applications, but have implemented procedural safeguards to
prevent abuse of the early publication. For example, countries with
automatic early publication also have laws protecting the applicant's
rights against copying and derivative applications filed by a competitor.
Since the patent rights are determined by the filing date in those
countries, it would be useless for a third party to file an application
directed to the already published material because the second filing date
would be after that of the original invention. Moreover, first-to-file
countries typically provide a fixed "opposition" period in which third
parties may argue against the granting of a patent.
The United States has no similar procedural safeguards to prevent third
party harassment during patent examination. As a result, early
publication34 of a patent in a "first-to-invent" country that utilizes
interference or protest proceedings, lends itself to aggressive tactical
use by entities whose only interest may be to deny the rightful party its
patent. The abusive harassment of patent applicants will only increase
if the U. S., after deciding to continue to determine priority based on
who is "first-to-invent," enacts a law in which patent applications are
published prior to issuance.
In addition, the number of inter partes contests within the Patent
Office will increase dramatically increase - creating perhaps two to four
times as many interference proceedings as in the current practice. Since
half of all of the patent applications filed at the U.S. PTO are
submitted on behalf of foreign inventors, it would appear that under the
revised nationalistic policies of 35 U.S.C. ¤ 104 in the new law, more
than 75% of all interferences will have at least one foreign party
relying on priority actions conducted outside of the United States.
Demographic studies have shown that the majority of U.S. inventors file
as small entities, many of which are poorly funded small businesses,
universities or independent inventors. The majority of foreign
inventors, on the other hand, are large entities, representing
well-financed corporations and large manufacturing organizations.
Therefore, under the new laws interferences will not only occur more
often, but they will be more complex, frequently involving foreign
proofs.
Logically then, interference proceedings will also become more time
consuming and expensive, requiring more time to resolve - and hence
resulting in longer delays. Accordingly, recognizing that the new law
provides no measures for reducing the time lost in the inter partes
proceeding, or even in the time required to declare an interference, BIO
wonders how the term extension provided in the new law will compensate
for the increased complexity of the process.
Before an interference can be declared, the existence of the
interfering subject matter must be recognized by the patent examiner,
both (or all) interfering applications must be prosecuted until the
claims are held to be allowable, and the formalities of declaring the
interference (count formulation, initial correspondence with the involved
parties, etc.) must all be completed. As it is, inventors are already
waiting almost 5 years for the formalities of declaring the interference
to be completed. In at least one verified recent case, a biotech
inventor's application was held in suspended prosecution for over 4_
years before the interference was finally declared. In that same case,
an additional 1_ years were lost after the filing of the final
preliminary motion before the administrative patent judge took up the
matter for consideration. In other words, we can document a typical
situation involving only three parties in which at least six (6) years of
uncompensated time was lost to an inventor, completely under the control
of the Patent Office. At least under the existing laws, the patent term
does not begin until the patent is finally granted, but under the
"20-year from filing" term, the clock is always ticking. Under the new
law, the inventor in our exemplary case would have already lost one year
more than the extension of term provides before the interference had even
passed the preliminary motion stage.
BIO is concerned that the decreased life of a U.S. patent may encourage
abusive patent procurement practices by third parties. Under a patent
system in which the patent term is a fixed 20 years from the filing date
of an application, a competitor may be tempted to apply abusive tactics
to significantly lengthen the time it takes the rightful inventor to
procure a patent, or such a competitor may instigate an adversarial
proceeding simply to make obtaining a patent prohibitively expensive for
the rightful owner. To economically or strategically "win," competitors
acting in bad faith need not actually be found by the Board to be the
winner of the right to claim priority in the interference. Rather, a
bad-faith competitor may "win" simply by blocking or delaying issuance of
a significant patent in the industry.
Many small entities and/or non-profit organizations such as hospitals
or universities do not, or cannot, bear the cost of routinely fighting an
interference, wherein the filing of the preliminary motions alone may
cost $50,000- $100,000. As a result, small companies or non-profit
entities often simply concede without fighting, thus giving up the patent
rights to which they are truly entitled. Similarly, a competitor may be
able to negotiate more favorable licensing terms as a result of a forced
settlement of the interference when the true inventor lacks the funds to
fight a protracted inter partes proceeding.
BIO recognizes that in the end, theoretically, justice will prevail and
the copyist will not be permitted the right to claim a derivative
invention. However, in our competitive economy, even losing an
interference is effectively a "win" if it significantly diminishes the
term of the patent eventually granted to the rightfully inventor. By
comparison, such unscrupulous competitors would be less liable to use
unfair tactics if they could not shorten the proper applicant's term of
patent grant.
Clearly then, if the GATT implementation provisions are enacted,
interference proceedings will have to be revolutionized. Of course, the
demise of interference practice has been a long-term goal of foreign
inventors and those who advocate converting the U.S. to a "first-to-file"
system. Commentators have suggested relying on some type of
reexamination practice or adopting European-type formal opposition
proceedings in the U.S. to determine priority in the absence of a
workable interference process. Others have proposed applying such
determinations only after the patent has been granted, and then tagging
the interfering claims, as is done in Europe, until such time as the
issue is resolved. But in reality, BIO does not believe that any of the
stop-gap proposals will work effectively in a "first-to-invent" country.
Thus, it would appear that if Congress chooses to adopt the fixed term
set forth in the GATT implementation bill, particularly if the PTO also
begins the proposed automatic publication of applications at 18 months
after filing, the U.S. will have begun its march down an inevitable road
to first-to-file.
b. Delays Related to Appellate Review
The inventor who must defend his or her application before the
appellate branch of the Board of Patent Appeals and Interferences will
suffer almost as great a loss as one involved in an interference
proceeding. As previously shown, the implementation of a fixed 20-year
patent term measured from the filing date of the application will
effectively destroy continuation practice. As a result, absent a
file-wrapper continuation to permit further communication with the
Examiner on the merits, an applicant's only alternative will be to appeal
the Examiner's decision to the Board. Theoretically, unless the
application is actually in condition for allowance, the Appeal Board will
take on the role of the Examiner, sending the case back into prosecution
until each issue has been resolved.
However, it is BIO's view that the Appeal Board is not designed to
serve such a purpose. The members of the Appeal Board, although
individually qualified in a variety of technologies, will in all
likelihood not collectively approach the level of understanding that the
Examiner would have of the technology. Moreover, with less input from
the Examiner, the cases brought before the Board will be far more complex
and time-consuming. Finally, the number of appeals will increase
dramatically, overburdening the Board and further delaying the time
before a case can be heard.
However, under the new law, the clock will always be ticking. Each
delay by the PTO will take away a fragment of the inventor's patent
rights.
Will the 5-year extension of term provided in the implementation Act
compensate the applicant for the time lost by the PTO-controlled delays?
BIO is concerned that it will not.
The Patent Office publishes the date of the oldest ex parte appeal
awaiting assignment to a panel and the oldest one awaiting the setting of
a hearing. As published in the October 4, 1994 issue of the Official
Gazette, the oldest ex parte appeal in the chemical discipline has been
awaiting assignment to a panel for a decision without a hearing since
October 20, 1992, while one awaiting the setting of a hearing has been on
hold since January 22, 1993. Presumably, these cases are not atypical,
or the PTO would not be publishing the information as representative.
Even so, the more than two (2) years lost while awaiting assignment for
consideration is not the total time lost. By the time the hearing or
panel decision occurs and post-hearing events have been concluded, the
applicant will have lost a considerable portion of his or her patent
term. Furthermore, the time involved in the appeal proceeding may, under
the new system, at best, only place the application back in ex parte
prosecution.
It remains to be seen whether an applicant's rights would be preserved
by the extension of term provision in the GATT implementation bill.
However, in BIO's view it would be doubtful if applicants are no longer
able to continue their applications to resolve issues in dispute.
Unfortunately, the GATT implementation bill cannot be revised, but if
passed into law it could later be amended. Therefore, before the bill
becomes law, BIO proposes carefully examining the devastating effect that
the fixed term will have on continuation practice if the term of every
continuing application is measured from the filing date of the earliest
filed application, and the consequent effect such a proposal will have on
appellate practice within the PTO, ultimately costing the inventor
valuable lost time as his or her application drifts into competitive
obsolescence. On the other hand, if the GATT implementation bill becomes
the new law, BIO will diligently monitor the effect of the fixed patent
term on biotech applications delayed within the Patent Office by appeal
procedures. If we find that an inventor has received less than the
presently mandated 17 years from the date on which the patent finally
issues, BIO will seek a hearing to rectify the law and to restore the
right of every inventor to the justifiable term of his or her invention.
Despite these concerns about the 20 year term, BIO urges the Congress
to adopt the implementing legislation and send it to the President for
his signature.
B. The Biotechnology Patent Protection Act
1. The Problem
Present U.S. laws do not protect the creative and scientific genius of
inventors who use biotechnology to produce important new health care,
agriculture, and waste clean-up inventions. There are two problems:
(a)The U.S. Patent and Trademark Office (PTO) often refuses to issue
biotechnology process patents, citing In re Durden, 763 F.2d 1406 (CAFC
1985). The Durden decision has been highly criticized by legal experts
and in subsequent decisions by the same appellate court that issued it.
In addition, the PTO has conceded in House and Senate testimony that it
is unable to reconcile Durden with conflicting decisions by the same
court.
(b)Under U.S. law, the holder of a U.S. patent on an intermediate
product, such as genetically engineered host cell, is powerless to
prevent a foreign company from using the patented invention overseas and
then exporting the product to the U.S. to compete with the patentee's
product. This loophole in our patent law permits unfair competition by
foreign competitors of U.S. patentees.
To a substantial extent, these problems represent two sides of the same
coin. If Durden were legislatively overruled, then the inventor of a
genetically engineered host cell could obtain a corresponding process
patent that could be enforced at the border against foreign-based
infringement under the Process Patent Amendments Act of 1988.
Alternatively, if products made abroad using U.S.-patented intermediate
products, such as host cells, could be stopped at the border in the same
way as are products made from U.S.-patented processes, then overruling
Durden would be less critical because effective and equivalent patent
protection would be available for intermediate products.
2. Possible Solutions
The Senate and the House have taken somewhat different approaches to
addressing this issue.
The House approach has been to overrule Durden with respect to any
process that uses a novel and nonobvious "composition of matter." This
approach recognizes that while Durden may affect the biotechnology
industry most severely, it is in fact a generic problem for other
industries as well, such as the traditional pharmaceutical industry. The
House approach therefore avoids industry-specific patent legislation,
although the limitation to compositions of matter is intended to exclude
application to the computer and software industries. It has passed the
House once, in 1994.
The Senate approach has been to overrule Durden only with respect to
biotechnology processes, and to also create border enforcement for
U.S.-patented host cells. This approach has the advantage of directing
the benefits of the legislation to the biotechnology industry, thereby
mooting objections by the chemical industry. It has passed the Senate in
various forms three times, in 1992, 1993, and 1994.
However, the definition of "biotechnological processes" contained in
the Senate bill appears to be too narrow to apply to all biotechnologies
in use either today or in the future. For example, the most recent
definition does not appear to include genetically engineering an organism
either to promote overexpression of an endogenous nucleotide sequence or
to inhibit expression of such a sequence.
3. Biotechnology Industry Position
Either the House or Senate approaches would be acceptable to most
biotechnology companies. However, many in the biotechnology industry
prefer the House approach because it ensures that all biotechnologies,
present and future, will benefit from the overrule of Durden. The House
approach is also more consist with the law in Europe and Japan and would
further the goals of international patent harmonization. Vague and, in
our opinion, unjustifiable objections by the chemical industry have
impeded enactment of this approach.
4. PTO Position
The biotechnology industry is grateful for the PTO's support for
legislation to overrule Durden. We also appreciate its flexibility on
how to achieve this result. We appreciate and generally agree with PTO's
preference for a generic solution and commend its willingness to help
develop an appropriate industry-specific approach if the generic approach
encounters unalterable opposition from other industries.
The biotechnology industry urges the PTO to maintain its support for
legislation to prevent unfair foreign competition in the 104th Congress.
C. Question 1: Do you believe there are procedural steps that the USPTO
could do to facilitate use of a provisional application filing system by
biotechnology applicants, particularly with respect to filing of DNA or
amino acid sequence information?"
As an introduction, a brief comment on the philosophy of the
provisional patent application may be appropriate.
Traditionally, countries other than the U.S. (all of which are
first-to-file systems), the disclosure requirements for a provisional
application are slightly less stringent than those for filing a later
"complete" application with claims. The aim of the provisional
application is to give the inventor an early filing date but, at the same
time, also allow for further development of the invention. The result
being that when the complete application is filed and later published, it
provides the public with a complete teaching of the invention.
1. Benefits for Applicants
An advantage is that the provisional application can be filed without
claims. In many instances, the preparation of claims can delay the
filing of the application by as much as a few months. This would not be
the case if a provisional patent is filed.
Although the U.S. is a first-to-invent system, the rest of the world is
a first-to-file system. The provisional application system may encourage
U.S. inventors to get applications on file as soon as possible, thereby
obtaining an earlier filing date which is effective in the first-to-file
patent systems of the rest of the world.
U.S. inventors are already familiar with some aspects of the
provisional system. In many respects, the provisional system parallels
the U.S. C-I-P procedure. Claims which are based on matter in the
earlier (provisional) application get the filing date of the earlier
application and claims based on matter which is new in the later (C-I-P
or Complete) application get the later filing date. The transition to
the provisional patent system should, therefore, not be too disruptive.
Furthermore, companies which have foreign R & D operations (and file
foreign applications before filing in the U.S.) and practitioners who
have non-U.S. based clients have already had to deal with questions which
may arise from a patent system and its application as a basis for
claiming priority under Section 112. If a foreign application is filed
with such less disclosure and a subsequent Convention application is
filed in the U.S., such U.S. filing may present disclosure issues when
viewed in the light of Section 112.
Accordingly, the provisional filing system is, at least in part,
already familiar to the biotech industry.
2. Potential Conflicts
A potential conflict arises in connection with disclosure requirements.
In some countries where the provisional patent system operates, the
disclosure requirements are not as stringent for the provisional as for
the complete application. This facilitates the filing of applications
with less disclosure, in order to obtain a filing date. The proposed
legislation, however, requires that the provisional application should
have disclosure which meets the requirements of 35 U.S.C. Section 112, as
it should so as to satisfy U.S. statutory requirements.
There is, therefor, a tension between the basic philosophy of the
provisional application as applied in some countries, (i.e., obtaining an
early filing date by describing the concept of the invention and then
following up with a complete application which provides the more detailed
description) and the current requirements of Section 112 as currently
official to U.S. patent applications.
3. Procedural Steps for Facilitating Provisional Filings
The USPTO should, therefore, provide clear guidelines as to how an
Examiner (of a subsequent complete application) is to evaluate the
provisional application in terms of whether or not it will meet the
requirements of Section 112 and, accordingly, provide fair basis for a
subsequent complete application. It is suggested a provisional
application be treated in exactly the same way as a "convention"
application in how it is evaluated, except for the absence of claims.
Clearly, provisional applications will serve for a basis to claim
rights under 35 U.S.C. Section 119. If the provisional application is
to have the same function as a basic foreign application on which a
Convention Priority is based under Section 119, then the law which
applies to these cases should be applicable to provisional applications.
This is because it would be unfair for a provisional application
providing a basis for a claim of priority under 35 U.S.C. Section 119 to
be required to meet a higher or lower standard than a foreign patent
application on which a claim for priority under the same Section is
based.
As has been proposed by others, the provisional patent application
should have a lower fee structure than a conventional application to
encourage its early use by many innovators. The proposed split between
large and small entity should also be maintained.
As to whether or not the inventor should be required to file a DNA or
amino acid sequence listing, it is recommended that this not be a
requirement, provided the provisional specifications otherwise meet the
section 112 requirements. This should, however only be so if full
compliance with Section 112, as applied by the USPTO for current U.S.
filings, is not required.
D. Question 2: The USPTO is spending in excess of $2 million to obtain
the special computer capability for storing and searching DNA sequence
information. Do you believe this cost should be recovered from all
patent applicants, or only applicants who file applications which require
use of these special facilities?
The cost for establishing a computerized storage and retrieval system
for nucleotide and amino acid sequence data should be borne by the USPTO
through all patent inventors. It would be unfair for this cost to be
recovered only through inventors ("biotech inventors") who file
applications which incorporate the sequence information.
First, the benefits of a uniform DNA sequence storing and searching
facility extend beyond biotech inventors to the public. As noted in the
final USPTO rules regarding patent sequencing:
... the diversity and complexity of nucleotide and amino acid sequence
result in searching and analysis difficulties both within the USPTO and
outside the USPTO, decreased accuracy of search and reproduction, and
increased cost. (55 F.R. 18230 May 1, 1990)
Biotech researchers benefit by improved dissemination of sequence data
in electronic form. The USPTO saves money by establishing a consistency
in symbols and formatting so that it can more efficiently make a proper
evaluation of the patentability of an invention claimed in the
application. USPTO funds are saved by using the stored sequence
information when printing the patent and thus avoiding the need to re-key
information upon patent printing. The computer capability assists the
USPTO in fulfilling its USPTO's international obligations to exchange
published sequence data in electronic form with the Japanese Patent
Office and the European Patent Office under the Trilateral Sequence
Exchange Project. Since the benefits of the facility extend far beyond
biotech patent inventors, it would be unfair to saddle the additional
cost only on such inventors.
Second, we believe that it would be contrary to USPTO precedent to
focus on one industry such as biotechnology for payment of what amounts
to a surcharge on a USPTO computer storing and searching system. In
certain aspects, the development of a computer readable sequencing
information system is similar to development of a computer readable
mechanical drawings system. In the late 1980's as part of the Automated
Patent System (APS), the USPTO developed a computer searching system
which included storage of mechanical drawings in electronic form. As
part of the system, special graphic monitors were installed to access the
drawings. Establishing the APS system involved considerabe expense. The
costs, however, were not recharged to the inventors who filed cases
containing drawings. We believe it would have been inappropriate to have
singled out the mechanical inventors to pay for the much needed system.
Similarly, biotech inventors should not have to pay for establishing the
sequence facility.
Finally, instead of requesting a surcharge on biotech inventors, we
believe that the interest of the USPTO would be better served by Congress
providing full appropriation to the USPTO of all fees the USPTO collects.
At present, a percentage of the fees collected by the USPTO are not
appropriated to the USPTO for its use. We note with concern the increase
in the amount of funding being withheld each fiscal year from the USPTO
during Congressional appropriations. For research oriented companies
represented by BIO, the acquisition of enforceable patent protection is
essential to protecting their innovations. Diversion of USPTO user fees
retard the USPTO enhancing its efforts to issue enforceable U.S. patents
by negatively affecting the patent Examiners' ability to timely and
effectively examine the patent applications. Funding reductions also
make it difficult for the USPTO to sponsor new automated systems such as
the computer searching of sequences. Return to the USPTO of all the
monies collected would more than offset any cost incurred on account of
the sequencing facilities.
E. Question 3: Please identify changes, if any, to current restriction
practices that you believe would be appropriate in a patent system that
provides for automatic publication of applications and a 20-year patent
term measured from filing...
a. Please indicate requirements or measures that would be appropriate
for the USPTO to impose on patent applicants to enable it to examine
multiple patentably distinct inventions in a single application.
Restriction "may" be required if two or more "independent and distinct"
inventions are claimed in one application.35 If required, the inventor
must now refile at least one additional application with claims directed
to the inventions that were "restricted" from prosecution of the first
application.
1. The Problem
Restriction practice is an aspect of patent prosecution in which the
Examiner has vast discretion in deciding whether or not to restrict the
claims, and in how to restrict them. While the inventor has the
opportunity to traverse and rebut the restriction requirement, in the
vast majority of cases, this is simply pro forma. Therefore, while at
these hearings the USPTO specifically asks for suggestions regarding
"requirements or measure that would be appropriate for the USPTO to
impose on patent applicants ...," is it appropriate to also provide
suggestions for the USPTO to impose on itself in this regard.
2. 35 U.S.C. Section 121 Allows the Examination of Separate and
Distinct Inventions in the Same Application
35 U.S.C. Section 121 does not mandate issuance of a restriction
requirement even if the inventions are separate and distinct. 35 U.S.C.
Section 121 states that restriction may be required, not that restriction
must be required.
From the plain language of 35 U.S.C. Section 121 quoted above, it is
clear that neither independence alone nor distinctness alone is
sufficient to ground a proper restriction requirement. Indeed, use of
the conjunctive "and" rather than the disjunctive "or" renders any other
conclusion illogical and contrary to accepted principles of statutory
construction.
The term "independent" means "not dependent."36 There must be no
disclosed relationship between the subjects, that is, they must be
unconnected in design, operation or effect. For example, species under a
genus that are not usable together as disclosed, or, a process and
apparatus incapable of being used in practicing the process, are
independent inventions.
The term "distinct" means that two or more subjects as disclosed are
related, but they are capable of separate manufacture, use or sale as
claimed, and they are patentable over each other.37 For example, a
process and the product made by the process are distinct inventions.
3. Current Examination Guidelines Allow for the Examination of Separate
and Distinct Inventions in the Same Application
Even if the claims include two independent and distinct inventions,
USPTO practice as set forth in the Manual of Patent Examining Procedure
(MPEP) requires that search and examination of the entire application
must impose a serious burden on the Examiner before a proper requirement
for restriction may be made.38 Thus, current USPTO practice encourages
examination of the entire application even though it may include claims
to two distinct or independent inventions, when such search and
examination can be made without serious burden to the Examiner.
4. Recommendations Concerning Changes that the USPTO Can Make
In a patent system that provides for a 20-year patent term measured
from filing, it will be vital that the USPTO not unnecessarily delay
prosecution due to improper restriction requirements that force an
inventor to refile the same specification and start administrative
proceeding anew, in queue and behind all applications that came in prior
to the filing of the divisional application.
Assuming that the patent term is changed to one that is only 20 years
from the filing date of the earliest priority document, we recommend that
the USPTO implement the following action plan:
(a) Divisional applications that are filed as a result of a restriction
requirement should be made "special," all throughout prosecution and
appeal, without need of a petition on the part of the inventor. The
expedited handling and review that the application receives by being made
special is necessary to recover time lost due to the refiling of the
application as a result of the restriction requirement, and the
administrative processing of the divisional application at the USPTO.
(b) The criteria currently used by Examiners to issue restriction
requirements must be reevaluated. By following the wording of the statute
and the USPTO guidelines that are currently in place, restriction
requirements would be minimized to only those that were necessary. That
is, a restriction requirement would only be issued when claims were
directed to two or more inventions that were separate and distinct, and
the search of all groups involved an undue burden on the part of the
Examiner.
(c) The decision as to whether or not to issue a restriction
requirement should be made extremely early in the processing stages,
preferably within three months after filing. Most preferably, the
restriction requirement should accompany the Notice to File Missing
Parts.
(d) The decision as to whether or not to issue a restriction
requirement should be made be an Examiner who is a "special program"
Examiner, and not the Examiner who will receive the "points" for
examining the application. Only then can an impartial review be
guaranteed.
Alternatively to option (d):
(e) Assuming the Examiner who issues the restriction requirement is the
same Examiner who provides the substantive review of the merits of the
application, the Examiner should be awarded extra points for examining
separate and distinct inventions in the same application.
(f) Upon receiving a restriction requirement, the inventor should be
given the option of maintaining all claims together upon payment of a fee
as discussed below, or restricting them out. This would encourage
examination of the entire application on the merits.
5. Requirements or Measures That Would be Appropriate for the USPTO to
Impose on Patent Applicants
In international patent practice, a restriction requirement is called a
"lack of unity" objection. Patent Cooperation Treaty (PCT) inventors that
receive a lack of unity of invention have the option of paying a small
extra fee in order to have additional groups searched and examined by the
Examiner in the instant application. The USPTO should implement a similar
procedure. This would not only be consistent with harmonization but would
also encourage economy of time, prosecution, and paper handling at the
USPTO.
Currently, the corresponding provisions for originally filed U.S.,
non-PCT-filed applications are different from those applied to PCT-filed
applications. The PTO is to require restriction of non-PCT filed
applications if two or more independent and distinct inventions are
claimed in one application. Common PTO practice, however, is to consider
restriction appropriate where two joined inventions are either
independent or distinct, despite the presence of the word "and" in 35 USC
Section 121 and 37 C.F.R. Section 1.141. In contrast, the provision on
restriction practice for PCT-filed applications is contained in PCT Rule
13, which permits the inclusion in a single application of one or more
inventions, provided that the inventions are so linked as to form a
single general inventive concept. This single general inventive concept
requirement is met if there is a technical relationship among those
inventions involving one or more of the same or corresponding special
technical features.
For biotechnology inventions not filed through the PCT, the current
restriction practice may entail the filing of five or more divisional
applications when a new gene encoding a new protein is discovered. For
example, the PTO would typically make at least a six-way restriction
requirement as follows: (1) the new protein, (2) the new gene encoding
the protein, along with vectors and host cells containing the new gene,
(3) an antibody binding to the protein, (4) a method of making the
protein, (5) a method of using the protein, and (6) a method of using the
antibody. This application could even have more groups of inventions if
there were more than one use of the protein claimed.
The optimal situation for the patent applicant would be to have the PTO
curtail restriction. Thus, examination of all originally submitted
claims would be conducted in one application, rather than requiring that
multiple divisional applications be filed quickly enough after a
restriction requirement for them to issue with a "full" patent term left.
Another advantage is to negative the current PTO practice which
discriminates against applicants who do not file their U.S. applications
through the more expensive PCT procedure (this affects mostly U.S.
inventors and inventors who are not in a reciprocal PCT country). A
further benefit resulting from allowing the prosecution of an entire
application to proceed simultaneously is that the disclosures of
multiple, patentable inventions would issue simultaneously, and therefore
become available to the public simultaneously, rather than becoming
submarine patents. Further, it eliminates the dilemma of applicants
having to choose between abandoning certain aspects of their invention or
incurring the costs of multiple applications, which is a real hardship
for a fledgling biotechnology company.
The most prevalent anticipated concern against such revision is
perceived detriments to the PTO if Examiners were required to examine
multiple inventions in a single application for the cost of the original
filing fee--the PTO would lose additional filing fees from the divisional
applications and Examiners would face additional burdens. However,
currently the applicant can now choose the PCT route and not have to file
divisional applications, so the Examiners are burdened already in many
instances. Perhaps the PTO could develop a fee schedule to obtain more
fees for applications with multiple inventions.
After weighing all of the above factors, the AIPLA Chemical Practice
Committee has proposed and recommended that the first paragraph of 35 USC
Section 121 be amended and a new second paragraph be added to permit the
inclusion in a single application of more than one invention, provided
that the inventions are linked by a general technical feature. The
proposed amendments are (added material is underlined and deleted
materials are in brackets):
If two or more inventions that are both independent and distinct
[inventions] are claimed in one application, the Commissioner may require
the application to be restricted to one of the inventions. If [the other
invention] any of those inventions is made the subject of a divisional
application which complies with the requirements of section 120 of this
title it shall be entitled to the benefit of the filing date of the
original application.
Inventions shall not be considered independent and distinct for
purposes of the first paragraph of this section where the inventions are
so linked as to form a single inventive concept, due to the presence of a
technical relationship among the inventions involving one or more of the
same or related technical features that distinguish each of the claimed
inventions, considered as a whole, from the prior art.
6. Summary
Restriction practice is one area in which efficiency of operation is
under the control of the USPTO more than it is under the control of the
inventor. Current guidelines already encourage the complete examination
of applications. We encourage the USPTO to reevaluate internal
restriction practice by the Examiners. We also encourage the USPTO to
consider implementing a search and examination fee structure for the
examination of all claims in a single application, similar to that used
by the Patent Cooperation Treaty.
E. Question 4: Please identify changes to other aspects of USPTO
examining practices or operations that could be made in implementing a
20-year patent term, provisional application filing, or 18-month
publication that you believe would be desirable or beneficial for the
biotechnology industry. If possible, please comment on procedures in
foreign systems that you believe would be desirable for the U.S. to adopt
in implementing these changes.
We are concerned about the impact of the twenty year patent term on
biotechnology applications. Biotechnology is a relatively new industry.
However, the biotechnology industry is our nation's only hope for
urgently needed critical solutions to problems of a biological nature -
from agriculture to health care. Thus, the biotechnology industry plays a
critical role in all of our lives, and it is in our nation's best
interest to foster growth of this industry within the limits of our laws.
Growth of an industry is often closely tied to patent protection for
the underlying technology. The critical biotechnological solutions
discussed above are often the basis of a patent application in the USPTO.
The efforts and resources that the USPTO has expended in providing
biotechnology inventions with highly skilled Examiners, who have a depth
of scientific training and expertise, is a credit to our government.
However, when patent protection for a worthy invention is delayed, or
worse, the invention abandoned, not only does the potential patentee
lose, but also the consumer and the country loses. As the United States
moves closer to a patent term that is grounded solely in the
application's filing date, discussion about unnecessary delay in the
prosecution and issuance of deserving biotechnology patents thus commands
a heightened concern.
Therefore, we believe that prosecution of many biotechnology
applications in front of the USPTO is often needlessly prolonged for
reasons that are not under the control of the inventor. This delay in
prosecution and issuance results in a cloud on the property rights that
prevents owners of many worthy biotechnology inventions from obtaining
the funding they need to develop the invention for the market. In many
cases, many inventions are simply abandoned.
As an example of such unnecessary delay, we note the recent standard
that the USPTO has seemed to set for the inventor in order to satisfy
proof of utility of inventions that might be used in human treatments. In
the opinion of many member of the biotechnology industry, the USPTO
Examiners have not only been unnecessarily requiring human data per se,
but also, in addition, have been requiring data similar to that needed to
pass an FDA review. The cost of obtaining such data is simply out of the
reach of many small concerns in this industry, and funding is generally
not forthcoming absent patent protection.
We believe the utility standards set by the USPTO biotechnology team
are appropriate or simply too high for a decision on patentability per se
- a decision that should only look to (1) whether there is an invention
and (2) whether the inventor deserves legal rights in this invention, and
not to whether the invention is ready to market. We applaud the USPTO's
efforts to address these concerns as reflected in the recent Statement of
Administrative Action (SAA). However, as detailed above, we believe this
statement must be revised.
However, as another example, in the experience of the biotechnology
industry, the USPTO still attempts to distinguish CAFC decisions that are
"on point," without giving such decisions the interpretation they
deserve. We point to USPTO interpretation of Federal Circuit decisions on
obviousness, such as those having to do with the obviousness of a DNA
invention,39 or the obviousness of a method of using a patentable DNA to
express the encoded protein.40 Accordingly, claims are rejected for
reasons inconsistent with the case law, and prosecution is needlessly
delayed. With a patent term that runs only from the application's filing
date, appealing settled issues for each case would result in lost years
from the patent term for these inventions, and an unfair hardship to the
patentee.
In another example, we point to unnecessary piecemeal prosecution as
unnecessarily delaying issuance. Often an Examiner's supervisor will not
closely review an application until the Examiner presents it as a
possible allowance. However, very often, the Examiner's supervisor finds
a "new" rejection, and prosecution is reopened on that issue, sometimes
after the same issue has already been argued. Such piecemeal prosecution
violates PTO rules (37 C.F.R. Section 1.105). With a patent term that
runs only from the application's filing date, piecemeal prosecution must
be eliminated. Supervisory Examiners must be given the time and credit
to work closely with each application, with the emphasis being on the
completeness of the first Office Action on the merits.
Therefore, while we applaud the USPTO's interest in desiring to play an
active role in focussing patent law in the biotechnology arena,
nevertheless, we are certain that the USPTO is sympathetic to the fact
that the proposed change in the patent term will significantly increase
the burden on the USPTO to conduct its review of biotechnology
applications in an expeditious way. Under 35 U.S.C. Section 6, the
statutory rights of the inventor are paramount in drawing priorities
between the Commissioner as administrator and the inventor as beneficiary
of his statutory rights.
Therefore, to minimize the impact of such a change in the patent term,
we recommend that the USPTO adopt an action plan that would ensure that
biotechnology patent applications would be properly reviewed in a manner
similar to that for other industries, a manner that would not effectively
reduce the 20 year patent term of patents in the biotechnology industry
to one significantly less than that provided by the current standard of
17 years from issue, due to factors outside the inventor's control. Our
recommendations for such an action plan follow.
1. We encourage USPTO efforts to commit itself to the highest standards
in training Examiners to know and apply patent law. Respect for the
authority of the different branches of government is the heart of our
government. When the patent term runs only from the date of filing, it is
crucial that the inventor's term not be compromised by the inventor
having to reargue settled case law.
2. We encourage USPTO efforts to commit itself to the highest standards
in the quality of the examination of biotechnology applications. When the
patent term runs only from the date of filing, it is crucial that the
inventor's term not be compromised by the inventor having to train the
Examiner.
3. We encourage the USPTO to take measures to ensure that supervisory
Examiners have sufficient time to work closely with everyone they
supervise in every application, and especially early in the review
process. Such close supervision by our experienced supervisory
professionals is critical if the USPTO is to eliminate piecemeal
prosecution and unnecessary rejections and if the USPTO is to expedite
allowance in a timely manner.
4. We encourage the USPTO to take measures to ensure that all Examiners
are given sufficient time to review an application. Biotechnology
applications are among the most complex. Their review should not be
compromised because of a time limit at the examining level. However, if
the advise given earlier is followed all biotech Examiners will handle
their case load as efficiently as other art units.
5. We encourage the USPTO to take measures to ensure caseloads are
evenly distributed among the examining groups, and that Examiners get
proper time and credit for "coming up to speed" on any case that is
transferred to them. Currently, Examiners receive no time credit for
reviewing the file history of a case that has been transferred to them.
This only encourages the Examiner to maintain the previous rejections, no
matter what the merits of the inventor's arguments are. Transfer to
several Examiners is not infrequent. As having a case transferred to a
new Examiner is not something under the inventor's control, the inventor
should not be penalized by unnecessary rounds of prosecution and the new
Examiner should receive credit for the time spent in review.
6. We encourage the USPTO's effort to further reevaluate the "point"
system used to grade Examiners. Currently, Examiners receive points for,
inter alia, a first Office Action on the merits, an allowance and an
abandonment. We recommend that the point system be eliminated
altogether. At a minimum, Examiners should not receive points for the
abandonment of a case that they were handling, or for a first Office
Action in a file wrapper continuation as to do so only encourages the
Examiner to prolong prosecution.
7. We recommend that in any case that is refiled as a file-wrapper
continuation after a final rejection, or in which prosecution is reopened
after allowance by the USPTO, the inventors be allowed to petition that
this case be assigned to a special examining group where it will be
reviewed and handled by a group of the USPTO's most experienced, primary
Examiners, none of whom are under the point system, in a manner that will
expedite review.
The twenty year patent term will place a great burden on the USPTO to
enforce strict guidelines concerning examination and high standards
concerning the quality of the examination. We are pleased to provide
recommendations for the USPTO's consideration in this regard.
F. Section 104 Interference
1. Background
U.S. Patent law currently only provides for proof of U.S. (or NAFTA
country) based inventorship. In interference procedures (35 U.S.C.
Section 104) provision is made for proof of inventorship only from a
NAFTA country. Similarly, in swearing behind a reference (37 C.F.R.
1.131) only proof of U.S. based inventorship is admitted from the U.S.
These provisions are directly in conflict with TRIPS Article 27 which
provides that a country's patent laws must not discriminate as to place
of inventorship. Accordingly, proposals are currently afoot to amend at
least 35 U.S.C. Section 104. Senate bills 1854 and 2368 are good
examples of this.
2. Implementation Issues
Firstly, it appears that 37 C.F.R. 1.131 should be amended to make
allowance for inventorship beyond the borders of the U.S.
Secondly, once 37 C.F.R. 1.131 is amended, USPTO procedures must be set
up to procedures under which non-domestic inventors can "swear behind" in
terms of Rule 131. For example, must the required affidavit/declaration
(Rule 131(a)) be made before a notary (or equivalent) or before U.S.
consulate? Also, if an inventor attaches documentary proof of
inventorship (in terms of Rule 131(b)) in a non-English form, what if
any, translation will be required?
Thirdly, once 35 U.S.C. Section 104 is amended as proposed, how is
interference going to be dealt with? As it is, interference is a very
lengthy process - with proof of inventorship only U.S. based. How is the
USPTO proposing to deal with this, particularly in the light of a
20-year patent term? If interferences are going to become lengthier (as
they could easily become) the patent inventor's rights will be severely
limited.
Fourthly and finally, the amendment proposed to 35 U.S.C. Section 104
by S2368 provides:
To the extent that any information in a NAFTA country or a WTO Member
country concerning knowledge, use, or other activity relevant to proving
or disproving a date of invention has not been made available for use in
a proceeding in the Office, a court, or any other competent authority to
the same extent as such information could be made available in the United
States, the Commissioner, court, or such other authority shall draw
appropriate inferences, or take other action permitted by statute, rule,
or regulation, in favor of the party that requested the information in
the proceeding.
37 C.F.R. and the MPEP should contain concise guidelines regarding how
accusations of the "not-making available" information should be brought
to the attention of the Commissioner, how this can be remedied and what
guidelines the Commissioner will use in drawing inferences.
Experimental Use41
BIO draws its membership from a diverse range of companies in the field
of biotechnology and from allied industries. Our organization includes
research-based agricultural and human-health-care-related companies, as
well as manufacturers of biotechnical research tools. All three of these
sectors have an interest in promoting strong, enforceable patent
protection for their proprietary technologies. We support the present
judicially established experimental use defense but cannot come to a
consensus on expanding the defense by legislative efforts. Since it is
not always easy to separate permitted research "experiments" from actual
commercial use, We recommend that the matter be left to the courts to be
decided on a case-by-case basis. A short discussion of the case law in
this area will provide a background for the concerns of each of the
Biotechnology sectors.
A. Case Law Review
The USPTO Notice for this hearing42 includes a summary of the case law
on utility as a preface to the questions which follow. We here respond
to this case law summary.
A primary objective of the U.S. patent system is to promote innovation
by rewarding inventors with a limited exclusive property right in
exchange for a full, public disclosure of the details of their
inventions. Under this system, Congress has provided to the patent
holder the right to exclude others from "use" of a patented invention.
Since Congress never defined the term "use," its meaning has become a
matter of judicial interpretation. Faced with adjudicating subsequent
disputes between patent holders and alleged infringers, the courts
established the "experimental use" defense, originating with the case of
Whittemore v. Cutter, 29 F. Cas. 1120 (C.C.D. Mass. 1813)(No. 17,600), in
which Justice Story stated ."..it could never have been the intention of
the legislature to punish a man who constructed ...a machine merely for
philosophical experiments." See also Robinson, "The Law of Patents for
Useful Inventions," Section 898 (1890) (Experimental use defense as
applicable to "gratification of scientific tastes," "curiosity," and
"amusement.")
In the more recent case, Roche Products, Inc. v. Bolar Pharmaceutical
Co. , 221 USPQ 937 (Fed. Cir. 1984), the CAFC considered the experimental
use defense (Jordan P. Karp, Experimental Use as Patent Infringement:
The Impropriety of a Broad Exemption, 100 Yale L. J. 2169,2174 (1991)).
Bolar, a generic drug manufacturer, tested and formulated a drug patented
by Roche for the purpose of submitting an application to the U.S. Food
and Drug Administration for approval to market the drug as soon as the
patent expired. Bolar conceded that its intended use of the drug did not
fall within the "traditional limits" of the experimental use defense as
established by the courts. The CAFC concluded that ."..unlicensed
experiments conducted with a view to the adaption of the patented
invention to the experimenter's business is a violation of the right of
the patentee to exclude others from using his patented invention." 221
USPQ at 863. In the Bolar case, the CAFC declined to apply the
experimental use defense under the facts of the case.
Partly in response to the Roche v. Bolar decision, Congress passed the
Drug Price Competition and Patent Term Restoration Act of 1984
("Waxman/Hatch Act"). The Waxman/Hatch Act overruled the Bolar decision
in part by establishing a new and separate exemption from infringement of
patent rights. An infringement suit could no longer be filed on the
basis that the alleged infringer was making, using or selling a patented
invention:
...solely for uses reasonably related to the development and submission
of information under a Federal law which regulates the manufacture, use
or sale of drugs. 35 USC Section 271(e)(1).
The stated purpose of Section 271(e)(1) was to permit generic
pharmaceutical manufacturers to conduct bioequivalence studies with a
patented drug during the term of the patent for purposes of filing an
Abbreviated New Drug Application. The language of the Act, including the
Section 271(e)(1) exemption, represents a careful balancing of the
interests of the generic-based and research-based pharmaceutical
industries.
Nowhere in the Waxman/Hatch Act or in the language of Section 271(e)(1)
did Congress attempt to narrow the scope of the judiciary in reviewing
the applicability of the experimental use defense. This fact is
acknowledged in the Department of Commerce's and its Patent and Trademark
Office's joint December 27, 1993, solicitation of public comment (58 Fed.
Reg. 68395), on the experimental use defense:
other than limited provisions allowing for testing of patented
pharmaceutical products for purposes of regulatory approval (e.g.,
Section 271(e)(1) of Title 35, USC), existing law does not provide a
general, statutory defense against a charge of infringement for
experimental use of patented technology.
B. Our Concerns
1. Biopharmaceutical Company Sector.
The first published legal decision interpreting 35 USC Section
271(e)(1) arose from a lawsuit involving a biopharmaceutical product (Ned
A. Israelsen, An Examination of 35 USC Section 271(e) and the
Experimental Use Exception to Patent Infringement, 16 AIPLA Q. J. 457,
465 (1988-1989)). In Scripps Clinic and Research Foundation v.
Genentech, Inc., 231 USPQ 978 (N.D. Cal. 1986) and 666 F. Supp. 1379, 3
USPQ2d 1481 (N.D. Cal. 1987), modified, 678 F. Supp. 1429, 6 USPQ2d 1429
(1988), aff'd. on other grounds 18 USPQ2d 1001 (Fed. Cir. 1991),
Genentech contended that its testing of Factor VIII:C, used in treating
hemophiliacs, was excusable because such use was "reasonably related" to
an FDA application and thus exempted from infringement under Section
271(e)(1). The District Court for the Northern District of California
interpreted the legislative history for the Section and statutory
language to mean that the only permitted exempted use was limited testing
to establish bioequivalency. Id.
The 35 USC Section 271(e)(1) defense failed in a second case involving
Factor VII:C, Scripps Clinic and Research Foundation v. Baxter Travenol
Laboratories, Inc. 7 USPQ2d 1562 (D. Del. 1988). According to the
Scripps v. Baxter court, the Scripps v. Genentech judge interpreted
Section 271(e)(1) to cover activities that were "solely related" to FDA
marketing approval, but did not consider activities that were "reasonably
related" to FDA marketing approval.
Either via the traditional experimental use defense of the Whittemore
case or under Section 271(e)(1), organizations will attempt to conduct
activities that may be perceived differently as falling within or outside
of these exemptions. This situation will without question lead to
increased infringement disputes. However, among BIO's membership are
companies who easily could appear on either side of such cases, making it
difficult for our organization to come to a consensus on the issue of
expanding the experimental use defense through legislative efforts.
2. Research Tools Manufacturer Sector
During the last 20 years, there has been an explosion in the
availability of patented technology for the research market. These
include reagents, instruments and methods. Active licensing programs
have emerged where many universities and federally funded laboratories,
as well as for-profit corporations, have become active in granting rights
to commercial entities for the development, use or sale of their
proprietary research tools. These tools include genetic probes,
monoclonal antibodies and specific reagents such as those involved in PCR
(polymerase chain reaction) technology.
The research literature is now filled with papers based on the use of
these patented technologies. As with many newly available, highly
specialized commodities, the cost of these new reagents, instruments and
methods has raised concerns among some end-users, particularly
researchers at academic institutions and in small businesses.
Pre-biotechnology-revolution academic tradition frowned upon the
patenting of research tools. However, under the American system of free
enterprise, the high cost of developing and manufacturing many of these
proprietary tools logically suggests that patent holders are entitled to
recoup their expenses and receive a profit from their special
technologies. If the making and using of research tools be exempt from
infringement under a legislatively broadened statutory experimental use
defense, these companies are concerned that they might be deprived of
sales or licenses of their patented technologies. As a result, they
believe there would be less financial incentive to invest in further
innovations in this important area of research. lt should be noted,
however, that in the view of many potential users of this technology,
appropriate compensation to the patent holder under a license should be
limited to a lump sum payment of moderate amount and not a royalty on
sales of a product which results from the use of such technology.
Some also believe that a "due process" issue would arise if Congress
were to legislate away the enforcement of patented technology beyond that
presently permitted by the courts. They conclude that the issue of
taking property from the research technology patent holders without just
compensation surely needs to be carefully considered before legislation
is proposed.
Within BIO's diverse membership, all economic points of view are
represented, and it thus remains difficult to come to a consensus with
regard to a legislative expansion of the experimental use defense.
3. Agricultural Biotechnology Sector
In Ex parte Hibberd, the PTO Board of Appeals and Interferences held
that plants are eligible for utility patent protection under 35 USC
Section 101 in addition to the protection afforded under the Plant Patent
Act or the Plant Variety Protection Act if the utility patent is
appropriately enabled by a publicly available deposit of seeds. 227 USPQ
443 (POBAI 1985). Since that ruling, numerous genetically engineered
plants have been protected by utility patents, which can provide broader
and stronger protection of the intellectual property rights of the
inventors than can plant or design patents.
Various entities ranging from agricultural research stations,
not-for-profit institutes and for-profit organizations may wish to
"experiment" with patented genes through traditional breeding techniques.
In the view of many members, the decision as to whether such
"experiments" should be considered an infringing act should be made based
upon case law. To that end, they believe the decision in the Roche v.
Bolar case, supra, to be instructive. Accordingly, whether the activity
is excused or not should be dependent upon whether the "unlicensed
experiments [were] conducted with a view to the adaption of the patented
invention to the experimenter's business." Clearly, such a decision must
be made on a case-by-case basis. Thus, many BIO companies in this
sector, are not in favor of expanding the experimental use defense
through legislative efforts, but suggest leaving the issue to the courts.
C. Recommendations
The experimental use defense presents different potential concerns for
the three sectors of BIO's membership. Further, within each sector,
significant numbers of BIO's member companies do not agree on the
desirability of additional legislation in this area. However, common
across the three sectors is the fact that the issues presented above all
relate to matters that become actionable only after a patent is issued.
While we commend the USPTO for taking an active role in legislative
endeavors involving the Office's procedures, we note that infringement is
a post-patent issuance enforcement matter. Enforcement matters are the
purview of the courts, where offended parties may bring suits to be
decided on their individual facts. By statute, the USPTO's
responsibilities involve pre-patent issuance matters, as well as certain
very limited special items such a reexamination and reissuance.
We therefore recommend that the USPTO concentrate its efforts in the
area of biotechnology toward the other pre-issuance procedural questions
raised in the rest of this submission and leave the courts to resolve
experimental use
issues on a case by case basis.
Plant Patent Issues43
A. Question 1: Do you believe that the Plant Patent Act should be
amended to permit a holder of United States plant patent to exercise
exclusive rights with respect to parts of a protected plant, such as
material harvested from the plant?
1. Executive Summary
Plant patent infringement has an adverse impact on research and
development and the general economic health of the United States plant
biotechnology industry. Particularly serious is the unauthorized import
into United States of plant parts, produced by asexually propagating
outside of this country plant varieties protected by a United States
plant patent. Even though a court would likely find that the
unauthorized import of plant parts constitutes infringement under current
law, the PPA should be amended to explicitly provide that the plant
patent grant includes the right to exclude others from unauthorized sale
or use of any part of the asexually reproduced plant variety.44 The
proposed amendment to the PPA would reduce the need for unnecessary and
costly litigation. In addition, the proposed amendment to the PPA would
provide clear uniformity in the laws related to the scope of protection
available under the PPA for asexually propagated plant varieties, under
the Plant Variety Protection Act (PVPA) for sexually propagated plant
varieties and under the utility patent statute for both asexually and
sexually propagated plants.
2. Introduction
(a) The Purpose of the Plant Patent Act
Since 1930, American plant breeders, American agriculture and the
American public have benefitted from the stimulus to innovation in the
plant sciences provided by the PPA. Reports of the House and Senate
Committees that accompanied legislation enacting the PPA state that the
purpose of the PPA was to stimulate invention in the agricultural sector
by providing plant breeders with patent protection equivalent to that
available to inventors in industry.45 The Report of the House Committee
contains the statement by Thomas A. Edison that "[n]othing that Congress
could do to help farming would be of greater value and permanence than to
give to the plant breeder the same status as the mechanical and chemical
inventors now have through the patent law."46
Mr. Edison's prediction that patent protection for the inventions of the
plant breeder would stimulate and foster innovation and investment in
agriculture was accurate. For example, the Economic Research Service
(ERS) of the United States Department of Agriculture estimated that cash
receipts in this country in 1993 for nursery and greenhouse crops alone
equaled $9 billion, nearly eleven percent of all farm crop cash receipts
in this country.47 As a result, this agricultural sector is the sixth
largest among all commodity groups. It is even larger than such crops as
wheat, cotton and tobacco in terms of farm crop cash receipts.48
The plant patent system is not only utilized by plant breeders for the
protection of new varieties created for the ornamental plant industry,
but is also used to protect new varieties of trees and plants producing
fruits, nuts, berries and other important crops. The vitality of the
plant patent system is evidenced by the large number of applications
issued by the USPTO each year. For example, more than 400 plant patents
issued in 1993.49
The drafters of the PPA recognized the difficulties related to
compliance with the patent statutes with respect to written description
and enablement of claims for plant varieties, and provided that a plant
patent shall not be declared invalid "if the description is as complete
as is reasonably possible."50 However, the plant patent is limited "in
formal terms" to a single claim drawn to "the plant shown and
described."51
(b) The Plant Patent Grant
The plant patent grant is "the right to exclude others from asexually
reproducing the plant or selling or using the plant so reproduced."52
The plant may be invented or discovered (so long as it is found in a
cultivated state), and must be asexually reproduced by the inventor, in
order to secure plant patent protection.53 In addition, the plant must
be distinct from other plants of the same species. New varieties include
"cultivated spores, mutants, hybrids and newly found seedlings . . . ."54
The meaning of "plant" in the PPA can be gleaned from its legislative
history and court decisions. In reviewing the legislative history of the
PPA, a court stated that the word "plant" should be interpreted in the
"common language of the people" and went on to cite with approval the
definition of a plant in Webster's New International Dictionary as "1. A
young tree, shrub, or herb, planted or ready to plant; slip, cutting, or
sapling . . .."55 The court also cited the House of Representatives
Committee on Patents' statement that the PPA was intended to cover "a
valuable new variety of fruit or other plant . . . ." (emphasis in
original).56 The legislative history of the PPA evidences that Congress
intended to encourage agricultural development and in doing so, include
plant parts within the purview of the PPA.
The court held that sale of cuttings would be considered an
infringement.57 The court stated in Yoder Bros. that
it was not necessary to prove that the cuttings actually matured into
flowered plants to show infringement. . . we think Section 163 is plain
in its statement that a patentee may exclude others from asexually
reproducing, selling or using the plant. The negative inference to be
drawn from this is that commission of one of those acts would constitute
infringement.58
Accordingly, the court in Yoder Bros. found that asexual reproduction, or
selling, or using, the plant or plant part, irrespective of whether the
plant part had matured into a plant, constitutes infringement.
3. Plant patent infringement has an adverse impact on research and
development and the economic health of plant biotechnology
The USPTO has noted that "growers reproduce and use, outside the United
States, plants subject to a U.S. plant patent, and subsequently import
products harvested from such plants, to the detriment of the U.S. plant
patent owner."59 When competing in the market against lawfully produced
plants, these imported products have a decided competitive advantage
because the importer has not invested in the research necessary to
develop the plant variety. In contrast, the breeder must sell the
product at a price that recoups those research costs. Furthermore, the
importer benefits from the breeder's promotional and advertising efforts.
The income lost by American plant breeders due to patent infringement
inhibits investment in plant research and development programs which are
the foundation of a strong horticultural industry.
The adverse consequences of patent infringement are particularly
apparent in the cut flower industry. Attached is Appendix I showing the
dramatic decrease since 1971 in the number of United States growers
engaged in the production of carnations, mums (standard), pompons and
roses (hybrid tea), and the corresponding increase in the percentage of
the United States market for these same plant products controlled by
importers.60 A significant percentage of market share loss is due to the
adverse impact of patent infringement on the domestic industry. For
example, a single domestic rose breeder estimated lost royalty receipts
in 1993 in excess of $1.5 million dollars as a result of unauthorized
import of patented products produced in five Latin American countries.61
4. Unauthorized import into the United States of plant parts produced
outside this country by asexually propagating plants protected by Untied
States plant patent likely constitutes infringement under current law
The PPA enables a plant breeder to obtain a patent allowing the breeder
to prohibit asexual reproduction of plant varieties, and the sale or use
of those plant varieties so reproduced. Without the patent owner's
authorization, no one may asexually reproduce patented plant varieties in
the United States. The unauthorized multiplication of a patented plant
variety, even when the plant is lawfully acquired, is an infringement.
Moreover, the sale of the plant variety obtained by such multiplication
also is an infringement. To enforce patent rights, the patent owner may
sue an unauthorized propagator. If the seller of the plants multiplied
without authority of the patent owner is someone other than the
propagator, the seller may also be sued for infringement.
Although a court has never decided the issue, it is likely to hold that
unauthorized importation of plant parts, derived from a plant variety
protected by United States plant patent, directly infringes the patent.
The legislative history of the PPA indicates that Congress intended to
include plant parts within the purview of the PPA. The court has held
that "patentee may exclude others from asexually reproducing, selling or
using the plant" and that it is "not necessary to prove that the cuttings
actually matured into flowered plants to show infringement."62
Accordingly, a court is likely to find that use of plant parts in this
country that are derived from a plant variety protected by United States
plant patent, but asexually propagated outside the United States,
infringes the plant patent.
This result is particularly reasonable in light of advances in plant
biotechnology that make it frequently possible to regenerate a plant by
means of tissue culture from very small amounts of tissue taken from
different parts of the whole plant. For example, stem tissue of certain
cut flowers can be placed in tissue culture and used as a source of
germplasm from which the whole plant can be regenerated. In this case,
the cut flower is equivalent to the cutting found to be infringing in
Yoder Bros.63
There is no actionable infringement of a patent for a machine based
simply on the use or sale of the product made by the machine.64 For
infringement to occur under these circumstances, the product must be
separately patentable. Plant parts, however, are not equivalent to the
products of machines. Frequently, the patentability and economic value
of the plant variety depends on the distinctive characteristics of the
plant part. The plant part should not be viewed as a product of the
plant because the vegetative cells of the plant part contain genetic
material that is identical to the vegetative cells of the whole plant.
In addition, the plant part can frequently be either rooted or tissue
cultured to obtain a whole plant that is identical to the original plant
from which the plant part was derived. Sale or use of the plant part
taken from a plant protected by plant patent is therefore infringing.
The plant patent claim is fundamentally a process claim because, absent
asexual propagation of the protected variety, there can be no
infringement. A court has noted that:
asexual reproduction is the heart of the present plant patent system:
the whole key to the "invention" of a new plant is the discovery of new
traits plus the foresight and appreciation to take the step of asexual
reproduction.65
In 1988 Congress passed the Process Patent Amendments Act (PPAA) that
impose liability for infringement upon anyone who imports into the United
States, or sells or uses within the United States "a product which is
made by a process patented in the United States."66 Products that are
"materially changed by subsequent processes" or products that become "a
trivial and nonessential component of another product" are exempted by
the statute.67 As summarized by Senator Grassley of the Senate Judiciary
Subcommittee on Patents, Copyrights and Trademarks, the new infringement
provisions were intended to remedy the following:
There, of course, is something very inherently unfair about U.S.
research-based industries pouring resources into a product or a process
patent and then having that product or process pirated abroad and shipped
back into this country for sale. The applicant, of course, is required
to disclose his or her process patent, and it is available in the Patent
Office just like some recipe in a cookbook for all to see.68
The PPAA was intended to remedy the type of unfair trade practices
currently encountered under the PPA. Foreign competitors rely upon the
research investment and ingenuity of United States companies and plant
breeders for creation of new varieties. These foreign competitors then
practice the patented process, asexually propagating the protected
variety outside of this country, and then import plant parts produced by
this process into the United States. It is therefore likely that a court
would find this activity to infringe a plant patent under the PPAA.
5. The Plant Patent Act should be amended to explicitly provide that
the plant patent grant includes the right to exclude others from selling
and using any part of the asexually reproduced plant
Although a court would likely find that unauthorized import into the
United States of plant parts, produced outside this country by asexually
propagating plant varieties protected by a United States plant patent,
constitutes infringement under current law, the PPA should be amended to
explicitly provide that the plant patent grant includes the right to
exclude others from unauthorized sale or use of any part of the asexually
reproduced plant variety. The amendment could be achieved by revising 35
U.S.C. Section 163 of the PPA to read:
"In the case of a plant patent, the grant shall be of the right to
exclude others from reproducing the plant or selling or using the plant
so reproduced, or any part thereof."
This amendment would make explicit the Congressional intent in enacting
the PPA as well as reduce the need for companies in the United States to
engage in costly litigation to combat patent infringement by foreign
competitors.
The proposed amendment to the PPA would also provide clear uniformity
in the laws related to the scope of protection available under the PPA
for asexually propagated plant varieties, under the Plant Variety
Protection Act (PVPA) for sexually propagated plant varieties and under
the utility patent statute for both asexually and sexually propagated
plants.69 The International Convention for the Protection of New
Varieties of Plants (UPOV), as revised March 19, 1991 and signed by the
United States in October 1991, requires member countries to accord rights
to breeders of new varieties and member countries are required to protect
the products of protected varieties. Specifically, the UPOV Convention
provides the plant breeder with the right to prohibit others from
selling, importing, or exporting harvested material, including cut
flowers and ornamental plant parts, obtained from protected plant
varieties without the breeder's authorization.
The United States has signed, but not yet ratified, the revised
Convention. The President signed into law on October 6, 1994, amendments
to the PVPA. These amendments to the PVPA provide, in part, that
unauthorized use of harvested material obtained from propagating material
of a variety protected by PVPA certificate constitutes infringement. The
PPA need not be amended for the United States to ratify and be bound by
the 1991 Convention. Accordingly, a separate legislative initiative is
necessary to provide domestic plant breeders of asexually reproduced
varieties with the same explicit protections under the PPA as will be
afforded plant breeders of sexually reproduced varieties under the PVPA.
B. Coverage of Plants under Utility
The "AgBiotech" Industry depends heavily on the utility patent system
for intellectual property protection. It is conservatively estimated
that AgBiotech research and development costs in the US exceed of $100
million per year. The exclusivity afforded by utility patent protection
is a reward that will stimulate AgBiotech research and development in the
future. Utility patent protection peacefully coexists with the Plant
Patent Act (35 USC 161 et seq) and the Plant Variety Protection Act (7
USC 2321 et seq).
The private sector is uniquely postured to comment upon the critical
role of utility patents in the AgBiotech field. New biotechnology
products for agriculture, as with therapeutics, usually require
staggering research and development investments in both time and money.
Additionally, stringent regulatory review currently presents unique
challenges to the AgBiotech industry resulting once again in expenditures
of significant amounts of time and money. Without utility patent
protection and its resulting exclusivity, there is little hope for
recovery to the AgBiotech investor of the substantial costs of discovery
and development. The AgBiotech industry desperately depends on utility
patent protection to maintain its 'critical mass' from both investor and
science perspectives. If there is no money to fund projects, products
will never be developed. The Agbiotech Industry is distinctively
different from the Human Health Biotech industry that flourished in the
lab, the marketplace and on Wall Street in the 1980's. The AgBiotech
industry as a general rule cannot command the profit margins seen in the
Human Health industry and because of this utility patent protection is
all the more important. A strong utility patent portfolio is the
lifeblood of a successful AgBiotech company.
Some practitioners are concerned that the new amendments to the PVPA
will result in the USPTO relinquishing their jurisdiction of 'plant
inventions' to the USDA under the PVPA. This will not occur for several
reasons. First, the PVPA and the Plant Patent Act (PPA) do not expressly
or impliedly exclude utility patent protection. Nothing in the
legislative histories of either of these plant related laws indicate that
utility patent protection under 35 USC 101 would be restricted in any
manner whatsoever. Ex parte Hibberd, 227 USPQ 443-447. Second,
protection under the PVPA and PPA is limited to narrow compositions,
i.e., varieties. To take the position that AgBiotech inventions fall
exclusively under the PPA or the PVPA would preclude protection of
generic inventions, process inventions and intermediate compositions, all
of which could otherwise be claimed in a utility patent. Additionally,
just because there is overlap between utility patent protection and other
federal laws does not mean that there are irreconcilable conflicts
between them. For example, overlap occurs between the copyright statute
and the design patent statute, although both types of protection are
available under certain circumstances. See In re Yardley, 181 USPQ 331,
(CCPA 1974).
Patents, therefore, are the stimulus and the incentive for AgBiotech
research. We have already witnessed the remarkable impact of
biotechnology on human health care. What it can offer to agriculture is
equally exciting! However, to have the greatest impact it is imperative
that a strong utility patent law be available.
CONCLUSION AND BIO INVITATION
BIO again states its appreciation to Commissioner Lehman and his staff
for scheduling this hearing on biotechnology intellectual property
issues. The hearing could not be more important or timely. We are
encouraged by the interest this demonstrates in the intellectual property
protection the biotechnolgy industry needs to remain competitive in
international markets.
Our Intellectual Property Committee has presented the analysis and
recommendations in this report in the belief that they are consistent
with the applicable law and do no more than urge the USPTO to bring its
practices into line with this law.
BIO urges the Commissioner and his staff to review this analysis and
recommendations over the next six months and we invite Commissioner
Lehman and his staff to meet with representatives of BIO next April to
outline the actions he and his staff have taken, and will take, in
response to them.
We recommend that the Examiners in Group 180 be given copies of this
report to review as part of their legal education and that these issues
be explored in depth through the Biotechnology Institute.
We are optimistic that this hearing will lead to reforms at the USPTO
which will enhance the intellectual property protection afforced to
biotechnology inventions.
BIO welcomes comments on the analysis and recommendations in this
report from all interested parties. Such comments should be directed to
Chuck Ludlam, Vice President for Government Relations, Biotechnology
Industry Organization, 1625 K Street, N.W., Washington, D.C. 20006.
1 See membership list in Appendix E.
1 Peter Coy et al, "What's the Word in the Lab? Collaborate," Business
Week, (June 27,1994), 78-103.
2 Ernst & Young, Biotech 95 Reform, Restructure, Renewal, The Ernst &
Young Ninth Annual Report on the Biotechnology Industry IX (1994).
3 U.S. Congress, Office of Technology Assessment, Pharmaceutical R&D:
Costs, Risks and Rewards, OTA-H-522 (Washington, DC: U.S. Government
Printing Office, February 1993).
4 Ernst & Young, Biotech 94 Long Term Value Short Term Hurdles, Eighth
Annual Report on the Biotech Industry 28-31 (1993).
6 BIO acknowledges the special contributions of Melvin Blecher, Barbara
Luther and Thomas Wiseman in drafting this Section of the report.
7 See Appendix A.
8 BIO acknowledges the special contribution of Jon Case, Laura Handley,
Janet Hasak, Rick Shear, Thomas Wiseman, Timothy Gens, Rick Burgoon, Paul
Ginsburg, Dan Chamber , Melvin Blecher, Barbara Luther, Larry Millstein,
Norm Dulak, Edmund Fish, Kate Murashige, John Sanders, Howard Stanley,
Bill Epstein, Carl Bozicevic, John Isacson, Bob Blackburn, and Jim
Bradburne in drafting this Section of the report.
9 See Appendix A.
10 BIO acknowledges the special contribution of Cheryl Agris, Bill
Epstein, Jon Case, Thomas Wiseman, Timothy Gens, Rick Burgoon, Paul
Ginsberg, Geoff Karny, William Scanlon, Melvin Blecher, Barbara Luther,
Larry Millstein, Pat Granadas, Stacey Channing, Darlene Vanstone, Anne
Craig, Edmund Fish, Carl Eibl, John Sanders, Howard Stanley, George
Johnston, and Elizabeth Enayati in drafting this Section of the report.
11 See Appendix A.
12 The enablement requirement is that a patent applicant, in order to
obtain a patent claim on an invention, must provide in the associated
application a description of the claimed invention that would allow, on
the effective filing date of the application, a person of skill in the
art pertaining to the invention to make and use the invention without
need for undue experimentation. As a matter of logic, it is impossible
to provide a description of how to use an invention which has no utility.
13 A claimed invention can be operable and not enabled by the associated
application. The Commissioner's Notice, 59 Federal Register 45267
(September 1, 1994) (hereinafter "Notice") does not raise the issue of
enablement, other than as a premise for the operability requirement,
Notice at 45268 - 45269, and with respect to "level of skill in the art,"
Notice at 45269 - 45270.
14 For an invention to be patentable, at least one of the uses
described for it in an application must be a "practical" use. Brenner v.
Manson, 383 U.S. 519 (1966). A use to treat a human disorder is a
practical use.
15 59 Federal Register 45267 (September 1, 1994) at 45268 - 45269.
16 In re Marzocchi, 439 F.2d 220, 169 USPQ 367 (CCPA 1971); In re
Gazave, 379 F.2d 973, 154 USPQ 92 (CCPA 1967); In re Isaacs, 347 F.2d
887, 146 USPQ 193 (CCPA 1965); Ex parte Rubin, 5 USPQ2d 1461 (BPAI 1987).
See also In re Bundy, 209 USPQ 48 (CCPA 1981) and In re Chilkowsky, 229
F.2d 457, 108 USPQ 321 (CCPA 1956). With regard to the pertinent date
being the effective filing date of the application at issue, see In re
Hogan, 559 F.2d 595, 194 USPQ 527 (CCPA 1977).
17 There is no authority to suggest that the "person of skill in the
pertinent art on the effective filing date of the associated application"
in this context is the Commissioner of the Food and Drug Administration
acting in his official capacity relating to approval of drugs for
marketing. The nature of the evidence required to establish operability
in such a case depends on the facts of the case, including what is
understood by the person of skill in the pertinent art on the relevant
date. There is no per se rule that clinical evidence of operability in
effecting a cure is required. In some cases, in vitro data might be
sufficient.
18 In re Malachowski, 530 F.2d 1402, 189 USPQ 432 (CCPA 1976); In
re Langer, 503 F.2d 1380; 183 USPQ 288 (CCPA 1974); In re Anthony, 414
F.2d 1383, 162 USPQ 594 (CCPA 1969); In re Hartop, 311 F.2d 249, 135 USPQ
419 (CCPA 1962); In re Krimmel, 130 USPQ 215 (CCPA 1961).
19 Except in a rare instance where the examiner can establish that
the person of skill in the pertinent art, as of the effective filing date
of the application at issue, would require evidence of clinical efficacy
before believing that the described treatment would likely have de
minimis effectiveness.
20 Note 7, supra.
21 And apparently also contemplating continuing to impose. See
Notice at Page 45269, Column 1.
22 BIO acknowledges the special contribution of Thomas Wiseman,
Richard Peet, Bill Epstein, Timothy Gens, Paul Ginsberg, Phillip Jones,
Michele Cimbala, Edmund Fish, Carl Eibl, John Sanders, George Johnston,
Howard Stanley, Barbara Rae-Venter, Dan Chambers, Herb Jervis, Darlene
Vanstone, Anne Craig, Bill Dickheiser and Rick Shear in drafting this
Section of the report.
23 See Appendix A.
24 Legislation has been pending in Congress, however, that would add
to 35 U.S.C. Section 103 a specific provision relating to the
patentability of biotechnology inventions involving "method of making"
claims, where the process used would have been obvious to one of ordinary
skill in the art. This would effectively overrule In re Durden, 763 F.2d
1406 (Fed.Cir. 1985), a case that has been broadly applied by the USPTO.
This legislation was not adopted prior to the recent adjournment of the
Congress.
25 Furthermore, with respect to In re Baird, 29 USPQ2d 1550
(Fed.Cir. 1994), a more recent CAFC case citing In re Bell, the USPTO
recently announced that they would refuse to apply the case allegedly
because it conflicted with other applicable precedent. See 1161 Official
Gazette of the U.S. Patent and Trademark Office 314 (April 19, 1994). Is
this a situation where the tail "wags" the dog? the USPTO is supposed to
follow. We know of no authority that allows the USPTO to determine if
judicial decisions are in "conflict" with each other.
26 Ironically, though it asserted that the prior art patent
described a general method that could be used by one of skill in the art
to isolate a gene when a portion of the amino acid sequence of the
encoded protein is known, the USPTO had rejected claims by the inventor
of the prior art patent to broad claims to genes isolated using the
method when that patent was being prosecuted.
27 The Court did not completely preclude the possibility that the
gene could be rendered obvious by amino acid sequence data, however.
"This is not to say that a gene is never rendered obvious when the amino
acid sequence of its coded protein is known. Bell concedes that in a
case in which a known amino acid sequence is specified exclusively by
unique codons, the gene might have been obvious." Id.
28 In its brief to the CAFC on the issue (and as it raised in
conjunction with the appeal of Ex parte Deuel recently), the USPTO has
cited cases where the court refers to the method that was used to make
claimed compositions and argued that based on a partial or complete amino
acid sequence and an allegedly known method of cloning that a claimed
sequence would have been obvious despite the lack of structurally similar
compounds. In every case cited by the USPTO, however, there has been at
least one structurally similar compound. In no case has a rejection been
upheld in the absence of a comparable prior art compound.
29 For example, in Deuel there was only a partial amino acid
sequence in the prior art (as opposed to the full sequence found in
Bell), and like Bell, in Deuel there were dependent claims that included
only a subset of the possible sequences.
30 The Court made a similar point in In re Wright, 999 F.2d 1557
(Fed. Cir. 1993). In Wright, the claims read on vaccines against all
pathogenic RNA viruses (including AIDS viruses, leukemia viruses and
sarcoma viruses, based upon general descriptions and a single working
example to the production of vaccines based on the isolation and cloning
of the envelope A gene region from Prague Avian Sarcoma Virus. In
affirming the rejection on enablement grounds, the Court pointed out
that: (1) the claims required the composition to be a vaccine (which,
based on the specification, required an immunoprotective (as opposed to a
mere antigenic) response in the host; and (2) as of the filing date of
the application one of skill in the art would not have reasonably
believed that all living organisms could be immunized against infections
by pathogenic RNA viruses based on the disclosure in the patent
application.
31 These same principles were applied by the CAFC in In re Goodman,
11 F.3d 1046 (Fed. Cir. 1993). In Goodman, the Court affirmed the
USPTO's rejection of claims directed to methods of producing mammalian
peptides in plant cells, where the specification of the patent
application contained "a single example of producing gamma-interferon in
the dicotyledonous species, tobacco," Id. at 1050. According to the
Court, the specification did not contain sufficient information to enable
the broad scope of the claim (which covered, [f]or instance, production
of peptides in monocotyledonous plants." Id. The Court noted that
production of peptides in such plants involved "extensive problems," and
pointed to an article by the inventor as evidence of such problems. Id.
at 1051.
32 BIO acknowledges the special contribution of Chuck Ludlam, Allen
Norris, Andy Culbert, George Johnston, Bill Epstein, Timothy Gens, Paul
Ginsberg, Bernard D. Saxe, Dan Chambers, Michele Cimbala, Evelyn
McConathy, Edmund Fish, Kate Murashige, Craig Opperman, and Rich Shear in
drafting this Section of the report.
33 See Appendix B of this report.
34 The proposed amendments to the statute defining patent term do
not address the automatic early publication of a patent application prior
to issuance. However, the PTO will clearly continue to press for this
provision to implement the U.S./Japanese agreement of August 1994. If
implemented, the measure provides for the automatic publication at 18
months from the earliest priority date of all patent applications,
including later-filed continuation applications, filed after January 1,
1996.
35 35 U.S.C. Section 121; 37 C.F.R. Section 1.141.
36 MPEP 802.01.
37 MPEP 802.01.
38 MPEP 803
39 In re Bell, 991 F.2d 781, 26 U.S.P.Q.2d 1529 (Fed. Cir. 1993)
40 In re Durden, 763 F.2d 1406, 226 U.S.P.Q. 359 (Fed. Cir. 1985)
41 BIO acknowledges the special contribution of George Johnston,
Timothy Gens, Paul Ginsberg, Geoff Karny, Edmund Fish, Kate Murashige,
Estelle Tsevdos, and Ken Woolcott in drafting this Section of the report.
42 See Appendix A.
43 BIO acknowledges the special contribution of Allen Norris,
Timothy Gens, Richard Peet, William Scanlon, Stanley Schlosser, Edmund
Fish, Carl Eibl, John Sanders, Barb Luther, Rick Burgoon, and Jim
Bradburne in drafting this Section of the report.
44 59 Fed. Reg. 45267. The USPTO stated in its Notice (for this
hearing see Appendix A) that "a plant patent affords its holder only the
right to exclude others from sexually reproducing the plant or using the
plant so reproduced. As such, protection afforded by a plant patent does
not extend to parts of the protected plant, such as harvested material
(e.g. table fruit, cut flowers, etc.)" Id. at 45271. This statement
contains a factual error and the legal conclusion is unsupported. The
PPA grant is "the right to exclude others from asexually reproducing the
plant or selling or using the plant so reproduced." 35 U.S.C. Section
163. In addition, it is for a court of competent jurisdiction, not the
USPTO, to determine what constitutes infringement under the PPA. For
example, no court has rendered a decision as to whether unauthorized
import of plant parts is infringing but, for the reasons outlined herein,
it is likely that a court would find such unauthorized imports infringing
under current United States law.
45 "The purpose of the bill is to afford agriculture, so far as
practicable, the same opportunity to participate in the benefits of the
patent system as has been given industry, and thus assist in placing
agriculture on a basis of economic equality with industry. The bill will
remove the existing discrimination between plant developers and
industrial applicants. To these ends the bill provides that any person
who invents or discovers a new and distinct variety of plant shall be
given by patent an exclusive right to propagate the plant by asexual
reproduction; that is by grafting, budding, cuttings, layering, division,
and the like, but not by seeds." (emphasis in original) S. Rep. No.
315, 71st Cong., 2d Sess. (1930).
46 H.R. Rep. No. 1129, 71st Cong., 2d Sess. (1930).
47 Mr. Craig J. Regelbrugge, Director of Regulatory Affairs and
Grower Services, American Association of Nurserymen, kindly provided this
data.
48 Id.
49 Id.
50 35 U.S.C. Section 162.
51 Id.
52 35 U.S.C. Section 163.
53 35 U.S.C. Section 161.
54 Id.
55 In re Arzberger, 112 F.2d 834, 837 (Ct. Cust. and Pat. App.
1940). In this case, the court addressed the question of whether
bacteria were plants within the meaning of the PPA and concluded that
they were not.
56 Id. at 837.
57 Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d
1347 (5th Cir. 1970).
58 Id. at 295.
59 59 Fed. Reg. 45271.
60 Mr. William Carlson of the Floral Trade Council kindly provided
this data.
61 Mr. Craig J. Regelbrugge, Director of Regulatory Affairs and
Grower Services, American Association of Nurserymen, kindly provided this
data.
62 Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d
1347 (5th Cir. 1970).
63 Id.
64 Amgen Inc. v. U.S. Int'l Trade Comm'n, 902 F.2d 1532, 14 USPQ2d
1734 (Fed. Cir. 1990).
65 Yoder Bros., Inc. v. California-Florida Plant Corp., 537 F.2d
1347 (5th Cir. 1970).
66 35 U.S.C. Section 271(g).
67 Id.
68 Process Patent Legislation: Hearing on S. 568, S. 573, and S.
635 Before Subcomm. on Patents, Copyrights and Trademarks of the Senate
Comm. on the Judiciary, 100th Cong., 1st Sess. 4 (1987).
69 The USPTO Board of Patent Appeals and Interferences made the
administrative decision that plants produced by either sexual or asexual
reproduction and plant parts (including seeds and tissue cultures) are
protectable under 35 U.S.C. Section 101. Ex parte Hibberd 227 USPQ 443
(USPTO Bd. Pat. & Int'f. 1985). Even in view of the Hibberd decision,
however, the PPA continues to be critically important for the protection
of new asexually reproduced plant varieties for which satisfaction of the
more stringent written description and enablement requirements under 35
U.S.C. Section 101 would be impossible.
??
APPENDICES
Appendix A:
Notice of Public Hearing and Request for Comments on Patent Protection
Issues for Biotechnology Inventions, Patent and Trademark Office, 59
Fed. Reg. 45267 (September 1, 1994)
Appendix B:
Comments Submitted on Behalf of BIO Concerning Patent Harmonization
Issues in response to Patent and Trademark Office notice, October 28,
1993
BIO Position on Changing to a First-to-File Patent System
Appendix C:
Comments Submitted on Behalf of BIO Concerning the Standard of
Non-obviousness for Public Hearing of Patent and Trademark Office, July
20, 1994
Appendix D:
1. June 27, 1994, Letter to Commissioner Lehman from Carl Feldbaum and
Charles Ludlam Regarding Draft GATT Implementing Legislation
Attachments: BIO Proposed Amendments to 35 USC 154 to Implement GATT
Length of Appeals For Biotechnology Patents -- CAFC
Examples of Biotechnology Interferences
BIO Position on S. 1854, the Patent Simplification Act of 1994
BIO Comments on "Utility" Standard
2. August 12, 1994, Letter to Commissioner Lehman from Carl Feldbaum
and Charles Ludlam Regarding Draft GATT Implementing Legislation
3. September 27, 1994, Letter to Ambassador Mickey Kantor and
Commissioner Lehman from Carl Feldbaum and Charles Ludlam Regarding
Final GATT Implementing Legislation
Appendix E:
Membership of Biotechnology Industry Organization
October 28, 1993
The Honorable Bruce A. Lehman
Commissioner of Patents and Trademarks
Box 4
Patent and Trademark Office
Washington, DC 20231
Dear Commissioner Lehman:
The Biotechnology Industry Organization (BIO) hereby submits the
attached comment in support of changing to a first-to-file system
provided that the listed reforms are made in the patent systems of all
parties to a corresponding harmonization treaty.
The gist of the comment is that the U.S. should not give up
first-to-invent unless at least these listed reforms are adopted. We
would require that measures offering adequate and effective means of
protecting intellectual property rights are secured in the same
international agreement.
Additionally, in developing the balanced package, our member companies
have identified the following issues as important to consider:
a. a requirement that to receive a filing date under the first-to-file
system, a priority application must provide a "written description of the
invention, and the manner and process of making and using it...", as
identified under 35 USC 112.
b. sensitivity to the extreme controversy over the "prior user rights"
issue. Eventhough prior user rights were proposed to accommodate some of
the concerns expressed regarding abandonment of the first-to-invent
system, at their worst, they would be tantamount to a compulsory license
which would not be in the best interest of U.S. industry.
We very much appreciate this opportunity to comment on the issues. We
look forward to assisting the Administration in negotiating a
harmonization treaty that is consistent with the interest of America's
biotechnology companies.
The Honorable Bruce A. Lehman
Page Two
October 28, 1993
BIO represents over 500 large and small biotech companies who together
conduct nearly 85% of the biotech research done in this country. The
organization is the result of a recently completed merger between the
Industrial Biotechnology Association and the Association of Biotechnology
Companies. Attached is a list of our member companies.
Sincerely,
Chuck Ludlam Carl B. Feldbaum
Vice President, President
Government Relations
BIO Position on Changing to a First-to-File Patent System
International efforts to harmonize patent laws among member states of
the Paris Convention have led to the development of a draft patent
harmonization treaty that would require the U.S. to change from a
first-to-invent to a first-to-file patent system.
BIO would only support adoption of a first-to-file system as part of a
balanced package that would require changes in the patent laws of other
countries. Among these changes are:
¥ elimination of patentable subject matter exclusions (i.e., making
patent protection equally available for all fields of technology
including genetically engineered plants and animals);
¥ prompt examination and issuance procedures for patent applications;
¥ elimination of procedures, such as pre-grant opposition actions, that
delay patent grant once examination is complete;
¥ an adequate minimum patent term from filing (e.g., 20 years), with
provisions for patent term restoration;
¥ a scope of protection that extends sufficiently beyond the literal
scope of claims so as to assure equitable protection (i.e., one similar
to the U.S. doctrine of equivalents);
¥ the strictest of limits on the granting of compulsory licenses to
private parties;
¥ inclusion of a one-year "grace period" for publications; and
¥ elimination of other provisions in foreign laws that are
discriminatory and incompatible with strong and effective protection of
intellectual property rights in all countries.
The proposed change of U.S. law to a first-to-file system is significant
and is not
without controversy in the United States. Nevertheless, BIO believes
that a harmonization package along the lines above would remove some of
the costs, uncertainties and complexities in current U.S. practice, as
well as make foreign patent systems more accessible and equitable to U.S.
inventors.
COMMENTS SUBMITTED ON BEHALF OF THE
BIOTECHNOLOGY INDUSTRY ORGANIZATION
CONCERNING THE STANDARD OF NON-OBVIOUSNESS
July 20, 1994 Public Hearing
These comments are submitted on behalf of the Biotechnology Industry
Organization (also known as "BIO"), the largest biotechnology industry
organization in the United States with over 500 members. This is BIO's
official response to the PTO Notice which appeared in the April 29, 1994
issue of the Federal Register (59 FR 22152).
BIO applauds the PTO for reviewing the question of the standard of
obviousness and how it is applied by the courts and by the PTO. Such a
hearing as set up by the PTO and the comments which may be elicited
thereby can only aid the PTO in reviewing this issue and in relating it
to their function in serving the public.
SUMMARY
BIO does not support any change to the present standard of obviousness.
We believe that the present U.S. standard of patentability, which
includes obviousness, is one of the highest in the world and is a legal
standard set by U.S. statutes and the courts in interpreting these
statutes. Under the present statutes, it is the court, not the PTO, that
sets the level of non-obviousness for patentability determinations.
Under these statutes, the burden of proof for demonstrating
non-obviousness is, upon the party which includes the PTO, challenging
the patentability of a given invention and not upon the inventor.
Therefore, to meet this burden of proof, the PTO must provide acceptable
evidence. It appears that this, not the level of the standard of
obviousness, poses the greatest problem for the PTO since it requires the
PTO to produce credible evidence to support obviousness rejections based
upon a combination of references and to rebut the presentation by
applicants of evidence of secondary considerations. The presentation of
such positive evidence to maintain and support an obviousness rejection,
many times is beyond the resources of the PTO since the PTO does not
have the power, manpower or capacity to provide such evidence.
We agree that in order for the PTO to determine whether an invention is
unobviousness is through the presentation of acceptable evidence. To
determine obviousness upon the individual judgments or feelings of an
examiner, group of examiners or even a judge, no matter how highly
skilled, promotes disparity and makes this a subjective determination.
Subjective determinations do not breed consistency whereas law and the
requirements of law do.
Placing the burden of proof for demonstrating obviousness on the party,
including the PTO, challenging patentability has a positive impact on the
biotechnology industry. The biotechnology industry is an industry in its
infancy and is made up of and includes many small companies trying to
obtain investment capital to develop their technology and inventions.
The issuance of patents is an important aspect in obtaining investment
capital for the small companies so that they can develop the drugs
discovered during the early stages of their creation to produce important
commercial therapeutic products. Competition is not well served if these
biotechnology companies do not get sufficient funding to survive and
provide effective competition. The issuance of patents provides great
incentive for obtaining investment capital and for the survival of this
industry.
RESPONSES TO QUESTIONS RAISED BY PTO
The following is BIO's response to each of the questions raised by
the PTO in the Notice:
1. Is a more rigorous standard of non-obviousness needed?
No, the present U.S. standard of patentability, including
non-obviousness, is one of the highest in the world. No other court
reviews issues related to the patent application itself, the quality of
the disclosure and prosecution and raises such issues as
misrepresentation, failure to cite references, conduct of the prosecution
before the PTO, fraud in its procurement as well as whether the
application discloses the best mode known to the inventor. It is these
factors which raise the standards for enforceability and patentability of
the U.S. patent. While many of these issues cannot be determined in the
PTO, these are the standards set by the courts for determining not only
non-obviousness but also determining whether a U.S. patent has been
validly issued. That these issues are determined through inter partes
litigation does not lower the U.S. standards for patentability, which
includes non-obviousness.
The obviousness standard has been held by the U.S. Supreme Court to be
a legal determination. As such, these standards are set by U.S. statutes
and courts in interpreting these statutes. Other than recommending
legislation, the PTO has no function with regard to setting the standard
of obviousness but is only obligated to apply these standards. In
applying these standards, the PTO has the obligation to following the
decisions of its reviewing court which is the Federal Circuit.
2. How should the standard be defined?
The obviousness standard of patentability is defined by the statute as
applied by the courts. Under the U.S. patent law 35 USC 102:
A person shall be entitled to a patent unless ---
Under the statute, the burden of proof for demonstrating obviousness and
unpatentability is upon the person challenging the patentability of a
given invention and not upon the inventor. Under this statute, the
burden is placed upon the PTO to set forth by acceptable evidence that
the claimed invention is obvious. As seen from the present statute, the
PTO has the burden of establishing and maintaining any case of prima
facie obviousness to support a prior art rejection under 35 USC 103. To
meet this burden of proof, the Patent Office must produce credible
evidence to support its holding of obviousness.
In constructing and maintaining a 35 USC 103 obviousness rejection, PTO
has practical difficulty meeting this burden. It appears that this
notice is directed to this difficulty. The nature of a proceeding in the
PTO is an ex parte proceeding between an applicant and the examiner. In
many cases, the PTO may not have the capability necessary to rebut an
applicant's case. In this respect, the PTO is not a testing laboratory
nor does it have many of the usual means such as independent testing,
discovery and depositions, etc. necessary to rebut statements made by the
applicants. In addition, the PTO is not equipped to take on this burden
with its associated expenses.
The burden of proving obviousness, as imposed by the statutes, is more
effectively addressed by the courts. The PTO proceedings set the stage
for many of the issues to be resolved during subsequent litigation. One
of the key issues for defining the standard of non-obviousness, as set
forth by the Supreme Court in Graham v. John Deere & Co., is the level of
ordinary skill in the pertinent art. This issue must be addressed by a
person challenging the patent who presents evidence as to the particular
level of ordinary skill in the given case. This is an issue that is
relatively difficult for the PTO to establish in a case by case basis.
Whether or not the standard of non-obviousness set by the courts is too
low or too high may not be the main issue. Perhaps it is the inability
of the PTO to determine non-obviousness based upon their present
capability to perform this function which is best carried out by the
Federal Courts through litigation.
3. Should the current standard of non-obviousness be administered
differently?
We believe that the current standard should be uniformly administered
throughout the PTO to ensure consistency. In this respect, we feel that
the examiners should be instructed as to the law and what are the
limitations of their functions. The inability to produce evidence to
support a holding of obviousness may frustrate some examiners. However,
the question should not be whether examiners believe or don't believe the
evidence presented by the applicant but whether they have credible
evidence to rebut such evidence. The examiners cannot merely interpose
their own judgment as to the correctness of the data or assertions made
by the applicant.
4. Is the standard of non-obviousness applied differently among
different examining groups within the PTO question?
We believe yes, especially since in the PTO many times obviousness is
determined by the examiner's judgment as to their scientific belief and
upon whether applicants have proven unobviousness to their satisfaction.
As set forth in many decisions, applicant does not have to prove that any
of the assertions made in this patent application are correct. The
question of obviousness is determined by evidence and by meeting various
burdens of proof concerning this evidence. The determination of
obviousness cannot be made upon the individual judgment or feelings of an
examiner, group of examiners, even a judge. It must be based upon the
evidence as presented by the parties and their respective burdens of
proof. To allow this determination to be based upon individual judgment,
opinions and feelings does not result in standardization but rather
promotes disparity based upon a given examiner or group of examiners.
5. Should the standard of non-obviousness vary according to the field of
technology involved?
We believe no. Non-obviousness should be a legal determination based
upon law and the evidence presented. This determination should not be
based upon belief or judgment of an examiner or group of examiners.
6. What role should secondary considerations such as commercial success,
unexpected results, etc. play when determining the non-obviousness of an
invention
When a declaration presenting evidence of secondary consideration is
presented, this should, under the usual set of circumstances be given
great weight, unless the examiner rebuts the evidence presented in this
declaration by presenting positive, rebuttal evidence. Generally, it is
difficult for the PTO to present such rebuttal evidence since the PTO is
not equipped to do so.
Affidavits and declarations presenting evidence of secondary
consideration can best be challenged not by the PTO but by a third party
in a litigation. Interested parties have the facilities, data and
experts necessary to rebut the statements made or evidence presented in
these declarations. The use of declarations in obtaining an allowance in
the PTO presents a target for such third parties in later challenging the
validity of this patent. Therefore, it is in the courts, not in the PTO,
where the most effective rebuttal takes place.
7. Whether motivation should be used for a combination of references in
order to constitute a prima facie case of obviousness?
Yes. The test of a motivation as applied by the courts should be used
to determine whether a prima facie case of obviousness exists. Most
inventions are made from elements existing in the prior art. Without the
test of motivation, nothing would be patentable. Motivation, as stated
by the CAFC in In re Vaeck, 20 USPQ 2d 1438, requires that the prior art
suggest,
1) to one skilled in the art the combination; and
2) whether the prior art would suggest to one skilled in the art a
reasonable expectation of success; with
3) "both the suggestion and the reasonable expectation of success ...
found in the prior art, not in the applicant's disclosure".
This makes the issue of motivation for proper combination of references
an objective test depending upon the disclosure of the prior art. To
make motivation or the ability to combine references based upon the
judgment of the examiner without the disclosure in the prior art as to a
basis for such combination and the suggestion of success achieved by such
a combination would delegate the determination of this issue to
subjective judgment. Subjective judgment does not breed consistency.
8. Is the ordinary skilled in the art being interpreted and applied
correctly and if not, what changes are needed?
We feel that this issue has been addressed before and in order to apply
consistency, the law as set down in the statutes and interpreted by the
courts should be the correct standard for determining ordinary level of
skill. Subjective judgment of an examiner or group of examiners does not
bring consistency.
9. Should obviousness determinations be subject to re Novo review on
appeal with the CAFC?
We believe that under the statutes, the question of obviousness is a
legal determination which should be reviewed by the courts. It is the
courts which set the standard to be applied by the PTO in examining
patents. It is this standard which provides predictability. In
determining patentability and what constitutes patentable subject matter,
predictability is extremely important.
We also wish to deal with certain of the issues which were presented in
the Notice concerning the impact of standards of non-obviousness on
promoting industrial and technological progress in the United States.
10. Whether a stricter standard of non-obviousness would help or hinder
industrial and technological progress?
We believe that the present standard of non-obviousness as defined by
the statutes and the courts, if administered will help U.S. industrial
and technological progress. By setting standards of patentability
independent of the courts will at best benefit only the strongest and
largest technological companies. Well financed companies are in the best
position to appeal decisions which do not adhere to the standards set by
the courts. In the long run, a well financed large organization who is
willing to fight such a decision, will prevail since they are best able
to persist and bear the expenses of appeals to the court. However, small
technology companies which have capitalization problems or they are
looking for investors, will have a difficult time to obtain investment
and financing of expensive appeals for overturning decisions not in
accordance with the decision of the reviewing court. Such a policy, at
best, promotes non-competitiveness and emphasizes the inability of small
technical research organizations to compete effectively with larger
organizations who are able to easily afford the expenses of appeals.
In addition, the standard which allows a patent to be granted "unless"
and places the burden of proof of unobviousness on the party challenging
the patentability which includes the PTO, has a positive impact on this
industrial and technological progress. The existence of issued patents
is often a necessary precedent for small technology companies obtaining
investments and the substantial resources needed to finance further
research, development and testing of the patented subject matter prior to
commercialization. Therefore, the issuance of patents is an important in
obtaining investment capital for small companies to provide increased
competition and the development of new and important technology.
The problems with regard to non-uniform standards and delay of patents
has been effected in the area of biotechnology which is an emerging
industry in the United States. The issuance of patents to small
biotechnology companies has been a key component in raising the necessary
capital to finance the biotechnology start-up companies and to enable
them to develop earlier discoveries. Without this financing which can be
achieved through the early issuances of U.S. patents, biotechnology
companies cannot survive and the drugs discovered during early stages of
their creation cannot be brought to commercial market. Without this
financing, jobs are not created and life saving drugs are not developed.
The public interest is not well served if these potential new drugs do
not become available. Furthermore, competition is not well served if
these biotechnology companies cannot get sufficient funding to survive
and provide effective competition.
We believe the PTO has a corps of examiners who have a level of
technological competence higher than it has ever been. By training these
examiners as to the legal aspects of patent prosecution and their
function in examining patent applications as prescribed by law, the U.S.
would have a patent examining corps and procedures second to none.
June 27, 1994
The Honorable Bruce Lehman
Assistant Commerce Secretary and
Commissioner of Patents
Washington, D.C. 20231
RE: GATT-TRIPS/S. 1854/HR 4505
Dear Commissioner Lehman:
We are writing on behalf of the Biotechnology Industry Organization
(BIO), the trade association which represents the interests of 525
members active in biotechnology, concerning the General Agreement on
Tariff and Trade (GATT) Agreement and legislation to implement the
agreement.
As an industry with a positive balance of trade we support full and
fair international trade. Therefore, we welcome many features of the
GATT Agreement, including elimination of tariffs and the stronger
intellectual property protection provided under the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS) which forms part
of the GATT Agreement.
We do, however, have serious concerns relating to draft legislation to
implement the agreement. Specifically, we believe that limiting the
patent term to 20 years from filing, without adopting either a package of
safeguards or other reforms, will seriously disadvantage our industry,
which is particularly prone to lengthy delays between the filing of a
patent application and subsequent issuance of the patent.
This threat to our industry can be avoided, while at the same time
complying with GATT, by leaving the present patent terms of 17 years from
issue unchanged other than to insert language stating that the term will
not be less than 20 years from filing, extending 35 USC 104 to all GATT
(WTO) countries and, incidental to this, but apparently overlooked when
implementing NAFTA, amending 35 USC 102(g) in a similar manner. We
attach two proposals for such
amendment to 35 USC 154. This proposal would not only be in full
compliance with GATT but would greatly simplify the implementing
legislation by completely avoiding all additional provisions currently
proposed in connection with patent term extension for interference
delays, provisional protection and the like.
In the event that despite our suggestions above, change to a patent
term of 20 years from filing remains in the proposed legislation, we urge
the following three steps be taken:
¥ The extension provisions should also apply to cases involved in
protracted appeals. The Administration's attempt to deal with the
potential inequities of moving to a patent term of 20 years from filing
by permitting patent term extension for patents involved in
interferences, while welcome, does not go far enough and should apply to
protracted appeals. Without this change the effect in many cases of a 20
year term would be to cut back on the current effective length of the
patent terms available to biotechnology inventors.
¥ The amendments should not apply to inventions which were filed on or
prior to the effective date even if refiled thereafter.
¥ The Administration should commit in a Statement of Administrative
Policy to shorten the processing time of Patent Applications through the
following: (i) increased staffing at the Patent and Trademark Office;
(ii) support for ameliorative legislation such as the Biotechnology
Patent Protection Act; and (iii) strict guidance to Patent Examiners on
questions of utility particularly in the biotechnology area. This latter
issue is discussed in the attached outline of our concerns regarding the
utility issue.
Finally, we are concerned with the fact that the TRIPS Agreement
contains provisions which are subject to abuse, namely exclusion of
certain inventions in the biotech area from protection and lengthy delays
in implementation because of which we need to maintain options for
bilateral action. We, therefore, support efforts to preserve the
vitality and viability of special section 301 to address these two
deficiencies.
We have analyzed the two bills which have been introduced to implement
the Agreement. This letter is accompanied by a detailed commentary
regarding S. 1854, which sets out the problems with this particular bill.
Similar concerns arise with regard to H.R. 4505, which we understand to
be virtually identical to the Administration's draft GATT implementing
proposal on this issue.
Our concern about these bills is based on our experience with the
patent law as it applies to the biotechnology industry, which is outlined
here.
(A) Delays in the prosecution to allowance and issuance of applications
(a) Prosecution
(i) Utility Current patent office practice places demands upon
Applicants to provide clinical data in support of inventions claiming
therapeutic activity which form the major part of inventions in the
biotechnology area. Whether or not this requirement is correct, and we
believe it is not as outlined in the attached paper, generation of these
data is inordinately time consuming because of regulatory and safety
requirements and requires a major commitment of resources.
(ii) Scope In a new field such as biotechnology where there is scant
binding legal precedent both the Patent Office and Applicants require
much to and fro communications as well as guidance from higher
authorities to determine patentable claim breadth.
(iii) Appeals Because of the requirements of (i) and (ii) Appeals to
the Board of Patent Appeals and Interferences (BOPAI) and higher yet to
the Court of Appeals of the Federal Circuit (CAFC) are frequently
inevitable and all the more likely for more significant or important
inventions. In such cases delays of 10 years from filing are not
uncommon (see attached examples).
(iv) Interferences The relative incidence of interferences in the area
of biotechnology inventions is exceptionally high, and the interferences
themselves are frequently unusually complicated and/or adversarial
(=little willingness to settle), requiring 8 to 10 years to final
resolution (see attached examples). Additionally, these protracted
interferences typically involve pioneer inventions and it would be
demonstrably unfair to penalize an inventor with a shorter effective
patent term because of the dilatory tactics of a competitor.
Each of these four factors, especially if combined, would lead to
excessively lengthy patent prosecution and shortened effective patent
life if a 20 year from filing term is introduced.
(B) Continuing Applications and retroactivity.
The proportion of applications refiled as continuing applications is
disproportionately high in the biotechnology area. This is usually the
result of either a need to generate clinical data and/or the
oft-encountered practice of patent examiners finally rejecting
applications but indicating they will allow cases if they are refiled
with restricted scope. This latter is a temptation which is economically
hard to resist for many of our members who rely on patent portfolios to
attract investments.
As currently worded these bills could rob inventions made and
prosecuted under law and practice prevailing prior to its enactment of a
significant period of patent life even if Applicants were forced to file
a continuation application after the effective date of the legislation to
preserve their rights. We have attached data on the length of appeals
for biotechnology patents and examples of interferences.
In proposing a de minimis approach to the implementing legislation BIO
is not reversing its position on harmonization issues where we favor a
patent term of 20 years from filing and early publication as part of a
balanced package. BIO is also sympathetic to the problem of submarine
patents apparently encountered by some other industries. We have doubts,
however, whether a patent term of 20 years from filing effectively
eliminates submarine patents other than those issuing on applications
having pendencies of 20 years or more. Finally, our proposal would not
in anyway compromise the recent understanding between the USPTO and the
JPO.
We urge that these measures be considered, of all their ramifications
and careful fine tuning to avoid dealing an unnecessary blow to at least
one sector of US industry which relies heavily on effective patent
protection for its competitiveness and ultimately, survival.
We will be happy to meet, discuss and work with you and your staff to
implement GATT/TRIPS in a way which minimizes the risk of unintended
effect and at the same time to work expeditiously towards other desirable
reforms. We also would be interested in proposing an agenda of
administrative actions which could be taken by the Administration.
We very much appreciate this opportunity to offer BIO's view on this
legislation and look forward to working with you on this critical issue.
Sincerely,
Charles E. Ludlam Carl B. Feldbaum
Vice President for President
Government Relations
Enclosures:
BIO Proposed amendments to 35 USC 154 to Implement Gatt
Length of Appeals for Biotechnology Patents and Examples of
Interferences
BIO Position on S. 1854, The Patent Simplification Act of 1994
BIO Comments on Patent and Trademark Office "Utility" Standard
BIO PROPOSED AMENDMENTS TO 35 USC 154 TO IMPLEMENT GATT
(Based on text of H.R. 4505)
* 35 USC 154 (based on H.R. 4505)
"Every patent shall contain a short title of the invention and a grant
to the patentee, his heirs or assigns, of the right to exclude others
from making, using or selling the invention throughout the United States
and, if the invention is a process, of the right to exclude others from
using or selling throughout the United States, or importing into the
United States, products made by that process, referring to the
specification for the particulars thereof. Subject to the payment of
fees as provided for in this title, such grant shall be for a term
beginning on the date on which the patent issues and ending seventeen
years therefrom except that said term shall not be less than twenty years
from the date on which the application for the patent was filed in the
United States or, if the application contains a specific reference to an
earlier filed application or applications under sections 120, 121 or
365(c) of this title, from the date on which the earliest such
application that supports the claims was filed. Priority under sections
119, 365(a) or 365(b) of this title shall not be taken into account in
determining the term of a patent. A copy of the specification and
drawings shall be annexed to the patent and be a part thereof."
* 35 USC 154 (based on existing law)
"Every patent shall contain a short title of the invention and a grant
to the patentee, his heirs or assigns, for the term of seventeen years,
subject to a minimum term of twenty years from the date on which the
application was filed in the United States or the earliest effective
filing date under sections 120, 121 or 365(c), and subject to the payment
of fees as provided for in this title, of the right to exclude others
from making, using, or selling the invention throughout the United States
and ,if the invention is a process, of the right to exclude others from
using or selling throughout the United States, or importing into the
United States, products made by that process, referring to the
specification for the particulars thereof. A copy of the specification
and drawings shall be annexed to the patent and be a part thereof.
Note: Each of these amendments would require minimal conforming changes
and would make unnecessary the proposed changes to and additions of (i)
Section 154(b), and (ii) Sections 41(a) (i) (c) and 111 (b)(1), (2) and
(3).
LENGTH OF APPEALS FOR BIOTECHNOLOGY PATENTS - CAFC
Average Pendency ca. 10 years
4_ years In re Vaeck 20 USPQ 2d 1438 (CAFC)
8 years In re Goodman 29 USPQ 2d 2010 (CAFC)
10 years In re Wright 27 USPQ 2d 1510 (CAFC)
13 years Fiers v. Sugano 25 USPQ 2d 1601 (CAFC)
14 years In re Bell 26 USPQ 2d 1529 (CAFC)
EXAMPLES OF BIOTECH INTERFERENCES
(a) Interference originally declared between multiple parties. The
Administrative Patent Judge (APJ, formerly Examiner-in-Chief-EIC)
indicated when rendering an interlocutory decision that without
settlement the interference could last at least 11 years. At that time
the application was some eight years old. The junior and thus likely
losing party was already on the market and had every incentive to delay
the interference and not to settle. Under the new law this invention
would be lucky to enjoy one year of effective life with a possible 5 year
extension. Although interferences are relatively rare those involving
important inventions usually last a long time. The situation will become
even worse if GATT is implemented like NAFTA by making 35 USC 104
international or possibly repealing it altogether. The prospect of
"tactical" interferences is alarming.
(b) Another biotechnology based company has 20 declared interferences
with the furthest progressed of those contested (=not settled) Ä which
comprise more than half of the total Ä pending now for 10 years and not
expected to be decided within the PTO for another two years. This
decision is then subject to the loser's right of appeal to the district
court (2-3 years for final decision) and then the CAFC! As with the
first example effective life could be reduced to little or none.
(c) Chief Counsel of yet another of our member companies has had more
interferences declared in the first few years with that company than in
twenty years with a major pharmaceutical company.
BIO POSITION ON S. 1854, THE PATENT SIMPLIFICATION ACT OF 1994
S. 1854, The Patent Simplification Act of 1994,
(1) requires publication of patent applications 18 months after the
filing date of the earliest priority document;
(2) changes the patent term to 20 years from the earliest priority
date;
(3) restricts the length of time during which an applicant can claim
priority; and
(4) does not grandfather continuing applications under the old patent
law.
This proposal, if enacted, would create a stream of unintended effects
on U.S. patent law that would open the door to blatant abuse of the
patent system. BIO strongly opposes each of the above as currently
provided for in S. 1854.
I. PUBLICATION AND "FIRST TO INVENT" ARE NOT COMPATIBLE PRACTICES
A. The United States is a first to invent country.
In highly competitive biotechnology research, it is common that two or
more applicants will file a patent application on the same invention.
However, only one patent can issue on that invention. Therefore, the
dispute as to which applicant deserves the patent must be resolved.
The United States settles this dispute by determining who was the first
to invent the claimed invention. The United States is thus termed a
"first to invent" country. Most other countries are "first to file"
countries. In a "first to file" country, the earliest filing date wins
the patent.
B. Procedural Safeguards are Present in Countries that Publish
Applications that are not Present in the United States
First to file countries publish or "lay open" their patent
applications. First to file countries have procedural safeguards in
place to prevent abuse of the knowledge learned from such publication.
The most obvious safeguard in a first to file country is that an
applicant's patent rights cannot be compromised if a competitor copies
and files a second application on that subject matter. Since the patent
rights are determined by the filing date, it would be useless for a third
party to file an application directed to published matter because the
filing date of the application of that third party would be after that of
the deserving applicant.
Another safeguard that some first to file countries have is a
post-grant opposition practice such as that under the European Patent
Convention. Third parties are given a certain time period in which to
oppose the granting of a patent or lose the right to oppose.
The United States has no similar procedural safeguards to prevent third
party harassment during patent examination. If the United States were to
publish patent applications, the United States would stand alone in
intellectual property law in being a first to invent country that
publishes. As shown below, the two practices, first to invent and
publication, are not compatible.
C. Bad Faith Attempts to Provoke Interference Proceedings will Increase
due to Publication and will Harm Many Rightful Applicants
An "interference" is the proceeding by which the U.S. Patent and
Trademark Office determines which applicant was first to invent the
claimed invention. In a first to invent country like the United States,
once an application publishes, a competitor would be able to copy the
applicant's invention, file the competitor's own application and attempt
to force the rightful applicant into an interference proceeding so that
the USPTO can decide who invented first. This problem is not solved by
making published patent applications absolute novelty destroying art (the
proposed amendments to 35 U.S.C. ¤102(e), as discussed below). Further,
as discussed below, this problem is not solved by delaying publication
until 18 months after the priority date; in fact, it is made worse as it
relates to CIP practice.
D. Applicants will Lose Their One Year Grace Period for Filing an
Application in the United States if the Relevant Publication is that of a
Patent Application
The Act proposes to amend 35 U.S.C. ¤ 102(e) to add a new section, 35
U.S.C. ¤ 102(e)(1); this provision would recite that the applicant is
entitled to a patent unless:
the invention was described in ... a published patent application....
The proposed amendment to 35 U.S.C. ¤ 102(e) would eliminate the one
year grace period provided for by 35 U.S.C. ¤ 102(b) for an applicant who
was facing a patent application that published before the applicant's
filing date.
Currently, Applicants have one year from a disclosure to file their own
application. This is provided by 35 U.S.C. ¤ 102(b) which states, in
part:
A person shall be entitled to a patent unless the invention was ...
described in a printed publication in this or a foreign country ..., more
than one year prior to the date of the application for patent in the
United States.
The effect of 102(e)(1) is to eliminate the one year grace period
provided by 102(b) when the art is a published patent application
anywhere in the world. Thus, an applicant would be effectively placed
under a first-to-file standard, because publication of a third party
application prior to the applicant's filing date would be an absolute
bar to novelty. The proposed amendment to 35 U.S.C. ¤102(e) does not
allow the applicant to show that the applicant invented the invention
prior to the filing date of a different party who published prior to an
applicant's filing.
E. A Competitor Can Use the Disclosure of the Applicant so as to Deny
the True Inventor a Patent
The new Act raises published patent applications to a level that is an
absolute bar to novelty. Because of this, under this Act, a highly
aggressive competitor can use a disclosure of the application as a tool
to deny the true inventor a patent. For example, a scientist who presents
a public disclosure at a meeting risks the real possibility that a
competitor may file an application on the scientist's invention that
would publish before the filing of the scientist's application.
In fact, this could be easily achieved by the competitor asserting a
priority date of 18 months or earlier. The application would publish
immediately. It is important to note that there is no substantive
determination of whether an applicant deserves a priority date prior to
the application publishing. The simple fact that the competitor's
application published prior to the scientist's filing date would destroy
patentability of the scientist's invention. The competitor can then
abandon the application. The immediate effect of such abuse possibilities
would be a stifling of the free flow of scientific exchange.
F. Continuation-in-part Applications Would be Especially Compromised as
All New Material Would Publish Less Than 18 Months After Filing
S. 1854 proposes to add a new section, 35 U.S.C. ¤100(e), that would
define the term "filing date" to mean:
the earliest of the actual filing date or any priority date claimed by
the applicant under section 119, 120 or 365.
S. 1854 also proposes to publish applications 18 months after their
priority date.
The United States is now unique in that the applicant is able to file
applications that are continuation-in-part (CIP) applications, wherein
some claims may deserve the priority date and some claims may be directed
to the new matter that was introduced for the first time in the CIP
application. Especially in biotechnology, CIP practice is common, as the
research progresses upon which the invention is based.
However, under S. 1854, the CIP application would be published
immediately if the claim to priority was greater than 18 months. If the
CIP application was filed at less than 18 months after the claim to
priority, the time to publication would be proportionately less. All new
matter in the CIP application would be published at the same time as the
old matter, even though the new matter had not been on file for 18
months. Such immediate disclosure in rapidly breaking fields would only
exacerbate unnecessary patent prosecution harassment.
In addition, under current interference rules, new matter that is
published soon after filing (such as in a CIP application) will be that
matter which is most likely to be drawn into such an interference
proceeding. Under S. 1854, such new matter will publish soon after, or
immediately upon filing and be the most susceptible to attack.
II. THE PATENT TERM FOR U.S. PATENTS WILL EFFECTIVELY DECREASE, NOT
INCREASE, DUE TO THE LONG PROSECUTION TIME IN THE UNITED STATES
The Act would change the patent term to one that runs from a filing
date rather than from the date that the patent actually issues. The
language of the Act could provide two or more terms for an issued patent
if that patent was a continuation in part application. In a
continuation-in-part application, different claims may have different
priorities, as the actual filing dates of the claimed subject matter can
differ. The language of the Act should be amended to clarify that the
term runs from the earliest priority date of any of the claimed
inventions in that patent.
No patent will ever have a term of twenty years. Note that it may take
two years before a patent application is even examined in an art unit. A
very small handful of patents may actually have a term of eighteen years.
The majority of patents would have a term of seventeen years or shorter.
In biotechnology, even without an interference or appeal, it is not
unusual that a patent will not issue until 5-10 years after filing.
Continuation of the USPTO's policy on utility and enablement would
further add to prosecution delays.
The practical result of enactment of the Patent Simplification Act will
be a significant decrease in the term of the effective life of many U.S.
patents.
A. Establishing a Patent Term Based on a Filing Date Provides
Incentives to Competitors to Interfere with and Delay Issuance
If third parties are allowed to read patent applications in a first to
invent country, attempts to provoke interferences, rightfully or wrongly,
will soar. A competitor who acts in bad faith to copy an application and
provoke an interference does not have to win the interference to "win."
Rather, such bad-faith competitor "wins" if it simply delays issuance of
the patent or if it is able to negotiate more favorable licensing terms
as a result of a forced settlement of the interference when the other
party lacks the funds to fight. These problems will only be exacerbated
in the most highly competitive biotechnology areas.
It should also be emphasized that merely trying to provoke an
interference will delay issuance of a patent - often for six months or
longer. In at least one recent instance, attempts to provoke an
interference suspended prosecution of an application for 4 1/2 years
after the claims were found to be allowable - and that was not even
counting the time spent in the interference proceeding itself.
B. Even Attempts to Provoke Interferences, or the Filing of Formal
Protests, Deserving or Not, Achieve the Goal of a Competitor Who Desires
to Delay Issuance of a Patent
Interference proceedings are very expensive. Many small companies
and/or non-profit entities such as hospitals or universities do not or
cannot bear the cost of routinely fighting an interference. The filing of
the preliminary motions alone, with all of the arguments for attacking
why the opposing party does not deserve a patent on its application, may
cost $50,000- $100,000 in a typical application. Discovery and
depositions would add even more to the cost of the interference.
As a result, such small companies and/or non-profit entities often
simply concede without fighting. By conceding, the applicant gives up all
patent rights to the interfering subject matter, even if they properly
deserved such rights.
In the alternative to provoking an interference, a competitor could
file an official protest at any time that the application is pending. By
delaying the filing such official protest until the application is near
allowance, the competitor again achieves his goal of delaying issuance of
the applicant's patent.
This decreased life of US patents will be the most obvious result of a
system that encourages abusive patent procurement practices by third
parties. The harassment tactics discussed above would all significantly
lengthen the amount of time and the cost required to procure a patent.
For example, in one instance, the Administrative Patent Judge (APJ)
indicated when rendering an interlocutory decision that, without
settlement, the interference could last at least 11 years. At that time,
the application was some eight years old. The junior party and thus
likely losing party was already on the market and had every incentive to
delay the interference and not to settle. Under the new law, this
invention would be lucky to enjoy even one year of effective life with a
possible five year extension.
Although interferences are relatively rare, those involving important
inventions usually last a long time. The situation will become even worse
if GATT is implemented like NAFTA by making 35 U.S.C. ¤ 104 international
or possibly repealing it altogether. The prospect of "tactical"
interferences is alarming.
Third parties would be less liable to use such tactics if they did not
shorten the proper applicant's term of patent grant. For example, a
compromise such as a patent term of 20 years from the earliest priority
document or 17 years from the date of issue, whichever is longer, would
dissuade abusive third party tactics that had a sole purpose of eating
into the length of a patent term. This compromise proposal would be
adequate to satisfy GATT/TRIPS on patent term which must "not end" before
20 years from filing (see Senator DeConcini's introductory comments on
this point).
III. PROVISIONAL PROTECTION AFTER PUBLICATION IS NOT STRONG ENOUGH
The provisional protection offered to patent applicants by this Act is
not strong enough. Compensation is calculated on a "reasonable royalty"
basis only; this is essentially a compulsory license. However, only
strong economical deterrents will prevent abuse of the knowledge gained
by publication.
If an infringement is found under the claims both as published and as
issued, regardless of actual knowledge of the published application, then
at a minimum, actual or even enhanced damages, including lost profits and
attorney fees should be awarded if there is to be an effective deterrent.
IV. CONTINUING APPLICATIONS FILED FROM CURRENTLY PENDING APPLICATIONS
ARE NOT GRANDFATHERED
S. 1854 would require that all new filings be placed under the terms of
the Act. This creates a retroactive definition of patent law for
continuing applications of currently pending subject matter, thus
significantly disrupting the U.S. patent system.
The Act proposes to add a new section, 35 U.S.C. ¤ 100(e), that would
define term "filing date" to mean:
the earliest of the actual filing date or any priority date claimed by
the applicant under section 119, 120 or 365.
This definition of filing date defeats the purpose of proposed SEC. 3
which recites:
The provisions of this Act and the amendments made by this Act shall
take effect 90 days after the date of the enactment of this
Act and shall apply only to applications filed on and after such
effective date.
The proposed definition of "filing date" defeats the purpose of
grandfathering presently-filed applications because, in many instances,
an applicant is forced to refile an application as a continuing
application for reasons that are only under the control of the USPTO.
Upon refiling, the subject matter that should have been grandfathered
under the old patent statutes would now come under this Act, defeating
the purpose of proposed SEC. 3, above.
Patent Office statistics reveal that as high as 53% of all applications
in the Group 1800 (the group that examines biotechnology applications)
represent some kind of continuing application (Report of Committee 103
(Relations With PTO) By Gabriel P. Katoma, IPL Newsletter 12:9 (1994)). A
"continuing" application is just that - it is an application directed to
subject matter that is being "continued" under a new application number
(for any of a variety of reasons), while claiming priority to at least
one parent application.
Accordingly it can be expected that at the time that this Act takes
effect, 50% of the applications in Group 1800 that are already filed will
be refiled as a file wrapper continuation or other form of continuation
or divisional application.
For example, one very common type of continuing application is a "file
wrapper continuation" (FWC) application in which, for a new filing fee,
the application is given a new filing date; prosecution continues where
it left off prior to the filing of the FWC application request. This
effectively extends the applicant's ability to prosecute the originally
filed application.
Under the new Act, although a pending application would be
grandfathered under the new rules, upon the filing of an FWC application,
the same subject matter that was grandfathered would lose its
grandfathered status and now be under this Act. Since the applicant often
does not have a choice but to file a continuing application, this is
highly unfair. To avoid the provisions of the new Act, the applicant's
only choice would be to appeal the final rejections to the Board. This
would greatly swamp the appellate level reviews with cases that could
have been resolved at the patent examining level.
The definition of "filing date" thus contradicts the intent of having
this Act apply only to the subject matter of applications filed on and
after the effective date of this Act because continuing applications of
currently pending applications would not be grandfathered, and continuing
applications contain subject matter that was on file prior to the Act's
effective date.
V. APPLICANT'S OWN PATENT PUBLICATION, EVEN IF PUBLISHED LESS THAN A
YEAR FROM APPLICANT'S FILING DATE ON A RELATED APPLICATION, WOULD BE ART
AGAINST THE RELATED APPLICATION
It is not clear whether 35 U.S.C. ¤ 102(e) as amended refers to
published patent applications in the US or anywhere in the world. The
other sections of this statute refer to "this country" or "a foreign
country" for clarity.
As currently written, the publication of the applicant's own
application would be art against the applicant immediately upon its
publication, without any grace period such as that currently allowed an
inventor with respect to his own publications. Current 35 U.S.C. ¤
102(a) states, in part:
A person shall be entitled to a patent unless the invention was ...
described in a printed publication in this ... country, before the
invention thereof by the applicant for patent.
The proposed amendment to 35 U.S.C. ¤ 102(e) would make the publication
of the applicant's own patent application novelty destroying art, as
against all subsequently filed related applications. Such publication
would also be available for any other purpose, including 35 U.S.C. ¤ 103.
This is contrary to the intent of 35 U.S.C. ¤ 102(a).
Even current 35 U.S.C. ¤ 102(e) has language that excluded the
applicant as it recites that patentability is lost only if "...the
invention was described in a patent granted on an application for patent
by another filed in the United States before the invention thereof by the
applicant for patent." However, under the proposed amendment, the
applicant would be provided no opportunity to remove the applicant's own
work as art against the same applicant.
VI. THE LOSS OF THE ABILITY TO CLAIM PRIORITY AFTER FIFTEEN MONTHS FROM
THE EARLIEST PRIORITY DATE IS UNDULY HARSH, ESPECIALLY FOR CONTINUING
APPLICATIONS WHEN THE PATENT APPLICANT HAS ALREADY PUBLISHED
Currently in the United States, the application can be amended at any
time to correct or to claim priority. Under the Patent Simplification
Act, this option would not be available greater than fifteen months after
the earliest priority date. In continuing and CIP applications filed
greater than 15 months from the priority date, the applicant would be
under an undue burden to correctly specify priority or else lose it; even
simple administrative errors could not be corrected. It is not clear if
the reason for this is simply to set a publication date, or if the
reasons for this proposal is to prevent people from delaying publication
until 18 months from the filing date of the latest filed specification.
A proposal that would be more fair would be to simply publish all
specifications a certain time after their filing date (no matter what the
priority date) and to continue to allow amendments to priority at any
time throughout prosecution or in reissue. Especially if the provisions
concerning publication are not present in the final version of the Act,
there is no reason to set a 15 month deadline for claiming priority.
In addition, even if publication provisions are retained, once a
specification of a parent application has published, it is moot whether
it is republished as a result of filing a continuation application (such
as a divisional application or a file wrapper continuation, each of which
use the identical specification as that of the published parent). Indeed,
it would be better not to clog up the literature with several
publications of the same document. It would be appropriate to provide
that once the application has published, the applicant may amend priority
at any time on continuing applications that have the same specification.
VII. IT IS UNCLEAR WHAT EFFECT THE PATENT TERM RESTORATION ACT WOULD
PLAY IN THE PATENT SIMPLIFICATION ACT
The very purpose of the Patent Term Extension Act, protection against
erosion of patent terms due to long clinical trials and testing, is
directly contrary to the Patent Simplification Act. Most seriously, S.
1854 fails to harmonize with 35 U.S.C. ¤ 156, which provides for
extension to compensate for delays after issuance. At a minimum, the bill
should make it clear that it does not put a cap on the term extensions
available under ¤ 156.
VIII. PUBLICATION WOULD COMPROMISE THE TIME OF REVIEW OF APPLICATIONS
FOR SECURITY CONCERNS
Patent applications that are filed in the U.S. Patent and Trademark
Office must be reviewed and those that are directed to inventions that
are related to national security properly identified. If necessary, the
application is placed under a Secrecy Order. The Secrecy Order applies to
the subject matter of the invention and restricts the disclosure or
publication of the invention in any form.
It necessarily takes some period of time to evaluate applications in
this regard. Review is generally complete within six months after filing.
Note that CIP applications whose priority application(s) were not placed
under a secrecy order must still be reviewed for new matter and a
decision made as to whether the new matter requires a Secrecy Order.
However, as explained above, any application having a priority date
earlier than 18 months from its filing date would require immediate
publication. S. 1854 would thus require expedited security interest and
foreign filing license review of all applications requiring immediate or
imminent publication, thus potentially compromising the normal review
period for an adequate review of these most sensitive matters.
IX. SUMMARY
In summary, patent publication in a country that utilizes interference
and protest proceedings lends itself to aggressive tactical use by
entities whose only interest is to deny a rightful party its patent. The
abusive harassment of patent applicants will only increase if the United
States publishes patent applications prior to issuance. Amendments to 35
U.S.C. ¤ 102(e) and restrictions on the time for claiming priority will
not prevent such abuse, and will add a new category of absolute novelty
destroying art which cannot be reconciled with the U.S. "first to invent"
policy.
BIO COMMENTS ON "UTILITY" STANDARD
35 USC ¤ 101 requires that an invention must have "utility" to be
patentable. A series of federal court decisions over the last 30 years
have established a rather liberal view of utility for chemicals which
find utility as pharmaceuticals. These decisions give the PTO rather
broad discretion in how they go about applying the utility standard.
Where the PTO draws the line for utility for the products of the U.S.
biotechnology industry can have a significant effect on that industry's
global competitiveness. Of equal or greater concern is that if the level
of utility is set too high, potentially life-saving products targeted at
intractable diseases may never be developed.
The biotechnology revolution is in its second decade. While large,
multinational pharmaceutical companies have invested heavily in this
technology, the breakthroughs, as well has the high risk research which
leads to such breakthroughs, continue to flow from the small U.S.
biotechnology companies (and, to a lesser extent, U.S. universities).
The majority of this research is funded by high risk capital investment,
which can only be generated if there is patent protection available for
the resulting products of that research. Basic inventions which are made
at universities can usually only be developed in the private sector.
Because such development requires substantial development, the private
sector will usually only invest in those university inventions that are
protectable by patents.
American is at the forefront of biotechnology research. However,
biotechnology patent practitioners have noted a trend in the PTO's
position on utility for biotechnology products which, if not reversed,
will have a devastating impact on the ability of U.S. biotechnology
companies and universities to achieve any effective protection for the
fruits of their research. If the utility standard is raised too high
with the consequence of no or limited patent protection for the high risk
biotechnology research, not only will future funding of such research dry
up, currently identified promising biotechnology products may be dropped.
The cost today of taking a new drug or vaccine through clinical trials
to FDA approval is enormous, typically running into several hundred
million dollars. Such expenses are typically beyond the initial or
"seed" funding resources of biotech companies. Usually, such companies
must fund the clinical trials of a new product by partnering with large
pharmaceutical companies or raising additional equity investments (e.g.,
specific limited partnerships). Those type of funding arrangements will
not be possible if the biotechnology companies do not have a proprietary
position on the product to undergo development.
Ironically, the absence of patent protection will not just prevent the
innovative biotech company or university from receiving just
compensation. The lack of effective patent protection will kill the
development of the drug or vaccine by anyone. The first company to seek
approval of a new drug can be expected to spend more than ten times what
subsequent "generic" companies will spend in obtaining FDA approval. No
company will be inclined to take the enormous financial risk of clinical
trials for initial approval in the absence of effective patent
protection.
The decisions of the CCPA (e.g., Nelson v. Bowley, 206 USPQ 881 (CCPA
1980)) and the Federal Circuit (e.g., Cross v. Iizuka, 224 USPQ 739 (Fed.
Cir. 1985)) have interpreted the utility requirement for pharmaceuticals
as necessitating only the establishment of a pharmaceutical activity for
a compound to meet the utility requirement of 35 USC ¤ 101. Both courts
have rejected the need to establish a specific therapeutic use.
Contrary to the application of the utility requirement in the context
of pharmaceutical inventions by the CCPA and Federal Circuit, the PTO
Board of Patent Appeals and Interferences has issued a series of decision
affirming the rejections of examiners for lack of utility or
utility/enablement even though the record clearly shows that the claimed
compounds have pharmaceutical activity. (See, e.g., Ex parte Aggarwal,
23 USPQ2nd 1334 (Bd. Pat. App. & Int'f 1992), Ex parte Sudilovsky, 21
USPQ2nd 1702 (Bd. Pat. App. & Int'f 1992), Ex parte Kranz, 19 USPQ2nd
1216 (Bd. Pat. App. & Int'f 1991), Ex parte Balzarini 21 USPQ2nd 1892
(Bd. Pat. App. & Int'f 1991)).
The effect of these decisions as applied by the examining corps is to
raise the level of utility far beyond that contemplated by the federal
courts. In many instances, examiners are now requiring a demonstration
of clinical efficacy/commercial utility in order to overcome utility
rejections. The cost and time of generating such data in humans in the
United States in incompatible with the expeditious prosecution of patent
applications as well as the financial resources of small biotechnology
companies and universities. Nor can these types of applicants afford to
maintain applications pending through the filing of a series of
continuations while seeking funding to carry out the clinical research
often demand by examiners.
Fortunately, the U.S Food and Drug Administration does not allow hasty
experimental trials in humans. Gone are the days when one would contact
the local prison for "volunteers". That is not the case in other
countries. For example, there are a number of Asian countries where
there is a economic policy to develop a local biotechnology industry.
These government subsidized biotech concerns are filing patent
applications on "me too" biotechnology products. When these applicants
are faced with a utility rejection demanding human data, such applicants
can often readily generate such data. U.S. applicants are thereby
significantly disadvantaged.
The utility standard as set by the PTO disproportionately impacts the
biotechnology products relative to the more traditional pharmaceutical
products. This is because the typical target of the U.S. biotechnology
industry is a serious disease for which there is no effective treatment.
As just one example, Chiron, one BIO member company, is pursuing
treatments or vaccines for such diseases as ALS, cancer, HIV, hepatitis,
herpes and insulin-resistant diabetes, rather than medical problems for
which treatments already exist.
For these difficult medical problems targeted by the U.S. biotechnology
industry, the PTO has raised the de facto burden of proving utility even
higher. The PTO has taken the position that in order to rely on anything
less than human clinical data, one must demonstrate that the in vivo or
in vitro model correlates to the ultimate therapeutic application of the
product. Such diseases usually have relatively poor or no animal models.
Since no effective treatment of any kind exists, no correlation has been
established between ultimate clinical efficacy and any of the in vitro or
in vivo models which do exist. Even though applicants are usually able
to demonstrate pharmacological/immunological activity for their claimed
product, often in a model they have had to invent themselves, they are
being denied patents based on a failure to show utility.
The problem of utility is not confined strictly to rejections under 35
USC ¤ 101. In some areas, applicants are able to demonstrate that at
least one species within a claimed genus has utility. In such instances,
it is common to see 35 USC ¤ 112, first paragraph, rejections for lack of
enablement where the rational is actually a failure to establish utility
for the remainder of the scope of the claim. The same, often impossible,
burden of demonstrating utility is applied to all of the embodiments of a
claim in such rejection. Claims are rejected even though (1) the claims
are functionally limited to embodiments possessing utility, and (2) the
applicant presents evidence demonstrating that the identification of
species possessing the desired pharmacological or immunological activity
can be accomplished by a routine screening protocol. The result of such
industry is a serejections is the granting of claims which can be readily
avoided by third parties who are employing the technology disclosed by
the applicant. Patents of such narrow scope are of equal disincentive to
the funding and development of biotechnology inventions.
There are utility rejections which are at best wasteful of the PTO's
and our resources, and at worse frustrating our attempts to bring new
products to market. Examiners continue to approach the question of
utility as if they were part of an FDA advisory panel. We have been
engaged in endless debates regarding the design of animal model studies
and the predictive value of in vitro tests. In the diagnostics area, we
have seen utility/enablement rejections which require us to demonstrate
that every embodiment of a claimed diagnostic method performs at a level
100% accuracy, a standard not even attained by commercial tests.
In the vaccine area, the experiences of Chiron are illustrative of the
failure of current PTO policy on utility to take into account the reality
of the development of a biotechnology vaccine. Chiron first identified
and made its lead candidate HIV vaccine and filed patent applications in
the 1984-85 time frame. It took approximately six to eight years for
Chiron to generate the preclinical data it felt necessary to justify to
the FDA the first human clinical experiments. Even animal model data was
very late in coming due to the fact that the only model which exists is
the chimpanzee, an endangered species. The availability of such animals
is limited not only because of expense, but also politics. Very early
on, however, Chiron demonstrated the pharmacological activity of its
vaccine candidates by showing that they generated antibodies which slowed
or stopped infection of cells in vitro. The decision of the board in Ex
parte Balzarini would suggest that this data of Chiron's is not
sufficient to establish utility. It may be many years before Chiron
could possibly meet the standards set in Balzarini. Yet Chiron, in
reliance on the patent system to protect its research investment, has
freely published its candidate vaccines and the results of its
preclinical and clinical investigations. We believe that the sharing of
this information has benefitted others generally in the pursuit of a
prevention or treatment of this terrible disease.
More recently, Chiron made an extremely important invention relative to
the safety of the U.S. blood supply; the discovery of the hepatitis C
virus. This virus accounted for significantly more disease via blood
transfusion than HIV. Chiron's discovery and development of an effective
diagnostic test has virtually eliminated threat of this disease to
patients receiving transfusions. (Before Chiron's invention, there was a
5-10% risk to surgical patients who were transfused.) These diagnostic
tests, however, have also shown that hepatitis C is prevalent in patients
who have never had a transfusion or other blood products. It appears
that the only way that these other routes of infection can be stopped is
through effective vaccination.
Chiron has taken a lead in the development of such a vaccine, having
already demonstrated protection in a chimpanzee (again, the only animal
model). We estimate that pursing this vaccine through clinical trials
will require the investment of several hundred million dollars. If
effective patent protection is denied because of utility, I will be
forced to advise Chiron to seriously reassess the wisdom of that
investment. If they felt that the investment was still justified,
however, I would caution them to publish nothing of consequence with
respect to the development of that vaccine. The tragedy of such advice
is that it would mean that contrary to its constitutional purposes, the
US patent law was being applied in a manner which was retarding the
progress of useful medical science.
August 12, 1994
The Honorable Bruce A. Lehman
Assistant Secretary of Commerce
and Commissioner of Patents
and Trademarks
Washington, D.C. 20231
Dear Bruce:
BIO, a trade association representing over 540 firms in biotechnology,
strongly supports the GATT Agreement. We welcome the improved trade
regime and lower tariffs. We also support the improved intellectual
property protection offered by the TRIPS Agreement. We are writing to
express our views on the legislation and administrative action to
implement this Agreement.
As an industry we have benefitted from strong and stable patent
protection in the United States. Thus, we have expressed trepidation
about changes in the length and calculation of patent term contained in
the GATT implementing bill. Specifically, we have been concerned that by
moving from a 17 year patent term from issuance to a 20 year term from
filing, rather than simply guaranteeing a minimum of 20 years from
filing, we could see an erosion of patent term for biotechnology
inventions. This concern arises from perceived delays in the prosecution
of ex parte claims in the Patent and Trademark Office, delays from
interferences and appeals, and unduly harsh transition provisions. For
this reason we have supported a patent term which starts from the first
filing date of a patent application but is no less than seventeen years
from the date the patent issues.
We applaud and welcome the commitment of the Administration to address
some of these concerns. We understand that the Administration is
committed to ensuring the speedy and fair processing of biotechnology
derived applications and ensuring that this legislation will not, in
fact, erode the patent terms of these industries. This commitment has
been or will be made concrete in the following ways: (1) support for
legislation (H.R. 4307) to clarify the law in the area of process patent
protection; (2) provision of adequate resources in the examining corps
for biotechnology; (3) transmittal of clear instructions to the examiners
on
the legal question of utility in the area of requiring clinical trials
for certain categories of diseases; and (4) review of delays in
prosecution, appeals, or interferences to assist in avoiding problems and
delays.
In addition, we understand that the Administration is committed to
including in the GATT implementing legislation provisions that provide
patent applicants with extensions of patent term when they have
experienced delays due to interferences and for appeals to the CAFC. We
appreciate the inclusion of these provision. We have sought as desirable
and support further ameliorative changes in this area offered by Congress
or the Administration relating to extensions for appeals to the Board of
Patent Appeals and Interferences, to transition provisions which permit
current patent term rules to apply to all continuation and divisional
applications regardless of when they are filed which make specific
reference to an application filed prior to the effective date of the
legislation, and to expansion of the maximum permissible term of any
extension. With regard to extensions we note that patent term extensions
for regulatory delay in the European Community are measured from the
commencement of the 20 year term, not the date of grant.
We look forward to working with you to review the implementation of the
legislation to ensure that it does not cause any unintended erosion of
our industry's patent terms. We want to work with you on additional
measures, including legislation, if they are necessary to address any
problems which may arise with respect to the patent term issue in the
future. We will also work with you and the Administration to achieve the
goals of comprehensive, balanced international patent harmonization, to
support the Biotechnology Patent Institute, and to participate in other
cooperative efforts to enhance the value of intellectual property.
We are impressed with the leadership you are providing and your
understanding of the importance of the biotechnology industry to the
competitiveness of the United States and to patients, farmers, and
consumers who want and need our inventions. We look forward to
facilitating and participating in a long-term, constructive dialogue with
you on a wide range of issues and programs.
Thank you again for your support of the American biotechnology industry
and your actions with respect to our concerns.
Sincerely,
Charles E. Ludlam Carl B. Feldbaum
Vice President for President
Government Relations
September 27, 1994
Ambassador Mickey Kantor
United States Trade Representative
600 17th Street, N.W. - 209 Winder Building
Washington, D.C. 20500
The Honorable Bruce Lehman
Commissioner of Patents and Trademarks
902 Crystal Park 2
Arlington, VA 22202
RE: GATT-TRIPS IMPLEMENTING LEGISLATION
Dear Ambassador Kantor and Commissioner Lehman:
We are writing on behalf of the Biotechnology Industry Organization
(BIO), the trade association which represents the interests of 540
members active in biotechnology, to support the legislation to implement
the General Agreement on Tariff and Trade (GATT) agreement. We are
writing today to all Members of the Congress to urge them to vote in
favor of the legislation. We understand that our members are doing the
same.
As an industry with a positive balance of trade we support full and
fair international trade. Therefore, we welcome many features of the
GATT Agreement, including elimination of tariffs and the stronger
intellectual property protection provided under the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS) which forms part
of the GATT Agreement.
During the past several months we have raised concerns relating to
draft legislation to implement the intellectual property provisions of
the agreement. Specifically, we have been concerned that limiting the
patent term to 20 years from filing, without adopting a package of
safeguards, could seriously disadvantage our industry because of lengthy
delays with regard to patent
applications for biotechnology inventions between the filing of a patent
application and subsequent issuance of the patent.
We are pleased that the Administration has, in fact, adopted a package
of safeguards, including the following:
* The patent term will be extended to compensate applicants for delays
due to successful interferences, appeals to the Board of Patent Appeals
and Interferences and appeals to the Federal Courts.
* Special protections have been added to minimize the impact of the
legislation on pending cases..
* The Administration has committed in a Statement of Administration
Action (SAA) to give patent examiners explicit instructions with regard
to utility issues in applications regarding biotechnology inventions.
* A hearing will be held by the Patent and Trademark Office, at an
appropriate time, if it appears that applicants for patents for
biotechnology inventions are receiving patent terms of less than 17 years
from the grant of the patent.
These safeguards address each of the issues we raised with your
offices. We very much appreciate the Administration's consideration of
these concerns and your advocacy for these amendments to the draft
legislation.
At every point during the discussion of this legislation we have made
it clear to the Administration, Members of Congress and their staff, and
other groups with whom we have worked that we strongly support the GATT
agreement and its implementation. We are reiterating that support with
this letter today.
We look forward to working with you to enhancing the markets for
biotechnology products and the intellectual property protection afforded
to patent applications for biotech inventions. Again, thank you for your
assistance on these critical issues.
Sincerely,
Charles E. Ludlam Carl B. Feldbaum
Vice President for President
Government Relations
CC. 535 Members of Congress