Top Stories of 2012: #8 to #11

Reflecting upon the events of the past twelve months, Patent Docs presents its sixth annual list of top biotech/pharma patent stories. For 2012, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) the greatest impact on biotech/pharma patent practitioners and applicants. Yesterday, we counted down stories #15 to #12, and today we count down stories #11 to #8 as we work our way towards the top three stories of 2012. As with our other lists (2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.

11. Patent Law Changes Abroad

In December, the European Parliament adopted two draft regulations on the creation of the unitary patent, and an agreement establishing the Unified Patent Court (UPC), a specialized court having exclusive jurisdiction over infringement and validity questions related to unitary patents, is expected to be signed next month. The European Union, however, was not the only governing body making patent news abroad. In Australia, significant amendments were made to that country's patent laws through enactment of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, with the new provisions scheduled to take effect on April 15, 2013. Those provisions will raise Australia's patentability threshold and specification requirements, and are intended to raise the quality of granted patents in Australia to a level that is more consistent with the standards set in the U.S., Japan, and Europe. In Israel, the adoption of a set of amendments to the Israel patent statute establish 18-month publication, submission of prior art by third parties, and third party requests for expedited examination of patent applications.

For information regarding this and other related topics, please see:

• "Parliament Approves EU Unitary Patent Package," December 17, 2012
• "European Parliament Adopts Draft Regulations on Unitary Patent," December 12, 2012
• "Unitary Patent & Unified Patent Court," December 12, 2012
• "Progress for Single European Patent and Litigation System," November 12, 2012
• "Australia Reforms Its Patents Act 1990," August 29, 2012
• "Recent Amendments to the Israel Patent Statute: Pulling the Pace of Prosecution from the Purview of the Applicant," August 7, 2012
• "EU Patent Is Finally Born," July 2, 2012

10. Federal Circuit Issues Fractured En Banc Decision on Divided Infringement Cases

On August 31, the Federal Circuit issued its en banc decision in Akamai Technologies, Inc. v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corp., reversing the District Court in both cases and remanding for reconsideration. A majority consisting of Chief Judge Rader and Circuit Judges Lourie, Bryson, Moore, Reyna, and Wallach (with Circuit Judges Newman, Linn, Dyk, Prost, and O'Malley dissenting) expressly overruled BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), which held that there must be a single actor (or a second actor acting under the control of another) for infringement to lie. According to the majority, all the steps of the claimed method still need to be performed, but it is not necessary to prove a "single entity" performed them. The majority opinion, if upheld, would be a boon for biotechnology, if only because it would provide another way for claim drafters to protect diagnostic method claims. However, it is unlikely that the Supreme Court will deny certiorari in a case of statutory construction where the Federal Circuit is so plainly fractured. (According to the Supreme Court's website, the deadline for filing a petition for a writ of certiorari was December 28, 2012.)

For information regarding this and other related topics, please see:

• "Akamai Technologies, Inc. v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corp. (Fed. Cir. 2012) (en banc)," September 4, 2012

9. More USPTO PTA Interpretations Questioned

In 2012, the District Courts for the District of Columbia and the Eastern District of Virginia sided with a number of patentees in determining that certain practices used by the U.S. Patent and Trademark Office in determining Patent Term Adjustment (PTA) were improper. In ArQule, Inc. v. Kappos, the District Court for the District of Columbia found that the Office's practice of counting weekends and holidays as applicant delay under 37 C.F.R. § 1.704(b) (while permitting responses filed by the next business day to be considered timely under 35 U.S.C. § 21(b)) was improper. In Exelixis, Inc. v. Kappos, the Eastern District of Virginia disagreed with the Office's practice of negating B delay in circumstances where an applicant had responded to a final rejection by filing a request for continued examination (RCE). According to the District Court, the statute "makes [it] clear that once the three year clock has run, PTA is to be awarded on a day for day basis regardless of subsequent events" in the Court's view. As a result, RCEs filed after the three-year date should not toll the amount of B-Delay to be awarded to the patentee. The District Court for the District of Columbia adopted the rationale of the Eastern District of Virginia in Novartis AG v. Kappos, finding that PTA should not be reduced by time attributable to an RCE where the RCE is filed after the expiration of the three year guarantee period specified in the statute. The Court in Novartis, however, refused to toll the 180-day after issuance deadline for filing suit against the USPTO Director to challenge a PTA determination (for one of 23 patents at issue in the case, where the Office had failed to issue a determination on reconsideration within the 180-day period of 35 U.S.C. § 154(b)(4)(A), but Novartis had filed suit within 180 days of the Office's determination on reconsideration, the Court did toll the start of the 180-day period). The Court issued a warning to patentees that may be dissatisfied with PTA determinations by the Office that are based on different theories than those presented in Wyeth, ArQule, or Exelixis, stating that "Novartis was free to raise the same issues that Wyeth and Abbott Laboratories raised in their lawsuits within the 180 days after their patents were granted."

For information regarding this and other related topics, please see:

• "Novartis AG v. Kappos (D.D.C. 2012)," November 27, 2012
• "Exelixis, Inc. v. Kappos (E.D. Va. 2012)," November 8, 2012
• "ArQule v. Kappos: Enjoy Your Weekend, or What a Difference a Day (or Two or Three) of PTA Can Make," October 1, 2012
• "USPTO Proposes Change to PTA Provisions Regarding Appellate Review," January 9, 2012

8. Supreme Court to Resolve Circuit Split on Reverse Payment Settlement (Pay-for-Delay) Agreements

Last month, the Supreme Court granted certiorari in Federal Trade Commission v. Watson Pharmaceuticals, Inc., one of two cases with certiorari petitions before the Court relating to reverse payment settlement (or pay-for-delay) agreements in ANDA litigation under the Hatch Waxman Act. The Court's decision to grant certiorari marks the culmination of almost a decade of effort by the Federal Trade Commission to get a reverse payment case before the Court. What clinched the effort this time was the decision in the K-Dur case by the Third Circuit in favor of the FTC's position, finding such settlements to be presumptively anticompetitive and subject to a "rule of reason" antitrust analysis. This result was contrary to decisions in the 11th Circuit (Valley Drug Co. v. Geneva Pharmaceuticals, Inc., 344 F.3d 1294 (11th Cir. 2003) and Schering-Plough Corp. v. Federal Trade Commission, 402 F.3d 1056 (11th Cir. 2005)); 2nd Circuit (In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187 (2d Cir. 2006) and Arkansas Carpenters Health & Welfare Fund v. Bayer AG, 604 F.3d 98, 105 (2d Cir. 2010)); and the Federal Circuit (In re Ciprofloxacin Hydrochloride Antitrust Litigation, 544 F.3d 1323 (Fed. Cir. 2008)) that such agreements are legal provided that they stay within the legitimate bounds of the patent grant (applying the "scope of the patent" test). (It should be noted that the lone appellate exception (before K-Dur), In re Cardizem CD Antitrust Litigation, 332 F.3d 896 (6th Cir. 2003), involved different facts leading to the conclusion that there was anticompetitive behavior.)