Top Stories of 2018: #11 to #15

by McDonnell Boehnen Hulbert & Berghoff LLP

After reflecting upon the events of the past twelve months, Patent Docs presents its 12th annual list of top patent stories.  For 2018, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  Today, we count down stories #15 to #11, and in the coming week, we will work our way towards the top stories of 2018.  As with our other lists (2017, 2016, 2015, 2014, 2013, 2012, 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.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2018" on January 16, 2019 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

15.  USPTO Implements New Authentication System

In October, the U.S. Patent and Trademark Office announced the implementation of a new authentication method for signing into the EFS-Web and Private PAIR, which will replace the use of PKI certificates, and which constitutes a major change in the way stakeholders interact with the USPTO's Patent Electronic Business Center (EBC).  The Office has indicated that the new method will provide users with access to the EFS-Web and Private PAIR until the full release of Patent Center, which is scheduled to replace the EFS-Web and Private PAIR, in 2020.  When announcing the new authentication system, the Office cautioned practitioners that migration to link accounts to PKI certificates should be completed by the end of October (using the Office's migration tool), sponsorship of support staff should be completed by the end of November (using the Office's sponsorship tool), and that PKI certificates would be phased out on December 31, 2018.  While implementation of the new authentication system has been a fairly straightforward process for many stakeholders, many others were happy to receive an early holiday gift from the USPTO on December 21, when the Office announced that it was delaying the date on which PKI certificates would be retired.  The Office's latest word on PKI certificate retirement is that "EFS-Web and Private PAIR users will no longer be able to authenticate using PKI certificates as of February 15."

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

• "USPTO Delays PKI Certificate Termination Date," December 23, 2018
• "USPTO Director Issues Notice on New Authentication System for EFS-Web and Private PAIR," December 3, 2018
• "USPTO News Briefs," October 25, 2018
• "USPTO Moving to New Authentication System for EFS-Web and Private PAIR," October 4, 2018

14.  Federal Circuit Affirms PTAB Decision Finding No Interference in CRISPR Dispute

CRISPR (an acronym for Clustered Regularly lnterspaced Short Palindromic Repeats), which is part of a system for altering chromosomal sequences in situ in a cell in combination with a bacterially derived protein called Cas9, was hailed as a "Breakthrough of the Year" for 2015.  CRISPR provides a mechanism for inserting or deleting specific DNA sequences using CRISPR-associate targeting RNAs and the Cas9 RNA-guided DNA endonuclease enzyme.  Given the commercial potential of this method, patenting was an obvious concern and, as it turned out, more than one group of inventors filed patent applications on the reagents, methods, and cells produced or used to produce CRISPR modifications.  Because these applications were filed prior to March 16, 2013, the dispute regarding who was the first to invent had to be resolved via an interference.  In 2016, the USPTO declared Interference No. 106,048, naming Feng Zhang and his colleagues, the named inventor of the Broad Institute/MIT's patents, as the Junior Party, and Jennifer Doudna and her colleagues at UC/Berkeley as Senior Party.  In February of 2017, the Patent Trial and Appeal Board handed down its decision, finding no interference-in-fact between several patents and patent applications owned by The Broad Institute and applications owned by the Regents of the University of California, Berkeley.  The decision ended the interference and allowed both parties to license (and assert) their patents to (or against) any third party.  The basis for the decision was that UC's claims would not anticipate Broad's claims-in-interference because all of Broad's claims contained the affirmative limitation that the CRISPR technology be operative in eukaryotic cells, and the UC's claims were devoid of any limitation regarding the context in which CRISPR was applied.  In September, the Federal Circuit affirmed the PTAB's decision that there is no interference-in-fact between the Broad's twelve patents and one application-in-interference and the University of California/Berkeley's pending application, thereby concluding the interference between the parties.  This marks the third consecutive appearance – and perhaps the last -- on our Top Stories list for the CRISPR dispute (the dispute was #19 in 2017 and #18 in 2016).

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

• "Whither CRISPR? University of California/Berkeley Granted Another CRISPR Patent," October 30, 2018
• "Regents of the University of California v. Broad Institute, Inc. (Fed. Cir. 2018)," September 10, 2018
• "The CRISPR Chronicles -- Broad Institute Wins One and Loses One," January 24, 2018

13.  Federal Circuit Defines Contours of Obviousness-type Double Patenting Doctrine

Four years after issuing decisions in AbbVie Inc. v. Mathilda & Terence Kennedy Institute of Rheumatology Trust and Gilead Sciences, Inc. v. Natco Pharma Ltd., the Federal Circuit again handed down opinions concerning the proper application of the judicially created doctrine of obviousness-type double patenting (OTDP).  In January, in In re Janssen Biotech, Inc., the Federal Circuit affirmed a rejection by the Patent Trial and Appeal Board of certain claims of U.S. Patent No. 6,284,471 for OTDP.  The co-assignees of the '471 patent argued on appeal that OTDP was not applicable because the safe-harbor provision of 35 U.S.C. § 121 protected the '471 patent claims.  The Federal Circuit determined, however, that the '471 patent was not entitled to safe-harbor protections because the '471 patent had issued from a CIP application (even though the co-assignees sought to re-designate the application as a divisional during a reexamination twelve years after the '471 patent issued).  In December, the Federal Circuit issued two more decisions that help define the contours of the OTDP doctrine.  In Novartis AG v. Ezra Ventures LLC, the Court addressed a narrow but important question regarding its OTDP jurisprudence:  whether a first patent filed earlier than a second patent, but that issued later, could be used to invalidate the second patent on OTDP grounds if the reason the later-expiring patent was later expiring was due to Patent Term Extension (PTE) awarded under 35 U.S.C. § 156.  The Federal Circuit affirmed the District Court's determination that OTDP does not invalidate an otherwise validly obtained PTE under § 156.  In Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., the Federal Circuit was provided with an opportunity to decide whether the operation of the OTDP doctrine was the same for (a) two patents granted after the Uruguay Round Agreements Act of 1994 (URAA) changed the term of U.S. patents from 17 years from the grant date to 20 years from the earliest claimed priority date, and (b) circumstances in which one patent is subject to the pre-URAA term and the other to the post-URAA term.  In reversing the District Court, the Federal Circuit determined that its decision in Gilead Sciences, Inc. v. Natco Pharma Ltd. did not control in this instance, because the difference between how the patents were related to one another with respect to their expiration dates made a difference in how the doctrine of OTDP should be applied.  The Court noted that "because a change in patent term law should not truncate the term statutorily assigned to the pre-URAA '772 patent," the '990 patent "cannot properly be used as an OTDP reference."

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

• "Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc. (Fed. Cir. 2018)," December 11, 2018
• "Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018)," December 9, 2018
• "In re Janssen Biotech, Inc. (Fed. Cir. 2018)," January 29, 2018

12.  Federal Circuit Finds Method of Treatment Claims Patent Eligible

Although there were several interesting decisions issued in 2018 that addressed the issue of subject matter eligibility in the context of life sciences inventions (see list below), the most interesting of these decisions to most life sciences practitioners and applicants is likely one issued by the Federal Circuit in April.  In Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals, the Federal Circuit affirmed a District Court decision finding, inter alia, that the claims of U.S. Patent No. 8,586,610, which are directed to methods of treating a patient suffering from schizophrenia with iloperidone, were not invalid under 35 U.S.C. § 101.  Two months after that decision, the U.S. Patent and Trademark Office distributed a memorandum to the patent examining corps that addressed the impact of the Vanda decision.  The memorandum explains that in Vanda, the Federal Circuit determined that the claims at issue are "patent eligible under 35 U.S.C. § 101 because they are not 'directed to' a judicial exception" (emphasis in memorandum).  The memorandum also states that (with emphasis in memorandum):

The USPTO's current subject matter eligibility guidance and training examples are consistent with the Federal Circuit's decision in Vanda, with the understanding that: (1) "method of treatment" claims that practically apply natural relationships should be considered patent eligible under Step 2A of the USPTO's subject matter eligibility guidance; and (2) it is not necessary for "method of treatment" claims that practically apply natural relationships to include nonroutine or unconventional steps to be considered patent eligible under 35 U.S .C. § 101.  For example, claims 5 and 6 of USPTO Example 29 (Diagnosing and Treating Julitis) should be considered patent eligible under Step 2A of the USPTO's subject matter eligibility guidance in light of the Federal Circuit decision in Vanda.

Last week, Hikma Pharmaceuticals and West-Ward Pharmaceuticals filed a Petition for a Writ of Certiorari for Supreme Court review of the Federal Circuit's decision.

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

• "Illumina, Inc. v. Ariosa Diagnostics, Inc. (N.D. Cal. 2018)," December 27, 2018
• "A Glimmer of an Idea on an Experimental Use Exemption," November 7, 2018
• "Roche Molecular Systems, Inc. v. Cepheid (Fed. Cir. 2018)," October 10, 2018
• "Ex parte Galloway (PTAB 2018)," July 26, 2018
• "Illumina, Inc. v. Natera, Inc. (N.D. Cal. 2018)," July 11, 2018
• "USPTO Issues Memorandum on Vanda Pharmaceuticals v. West-Ward Pharmaceuticals," July 9, 2018
• "Supreme Court Denies Certiorari Again in Patent Eligibility and Safe Harbor Cases," June 20, 2018
• "Pernix Ireland Pain DAC v. Alvogen Malta Operations Ltd. (D. Del. 2018)," June 12, 2018
• "Genetic Veterinary Sciences, Inc. v. LABOklin GmbH (E.D. Va. 2018)," May 22, 2018
• "Exergen Corp. v. Kaz USA, Inc. (Fed. Cir. 2018)," March 11, 2018
• "Ex parte Kotanko (PTAB 2018)," February 12, 2018

11.  Supreme Court: Patentees Can Recover Lost Foreign Profits

In June, in WesternGeco LLC v. ION Geophysical Corp., the Supreme Court determined that, based on the "focus" of 35 U.S.C. § 284 of the Patent Act (the general damages provision) when read in light of domestic infringement under 35 U.S.C. § 271(f)(2) (barring exportation of components specifically adapted for a patented invention), a patent owner could recover lost foreign profits.  The decision overruled the Federal Circuit's general practice of interpreting damages under § 271(f)(2) in the same fashion as § 271(a) (the general infringement provision, which does not allow patent owners to recover lost foreign profits).  Justice Thomas, joined by Chief Justice Roberts and Justices Kennedy, Ginsburg, Alito, Sotomayor, and Kagan, determined that despite the "presumption against extraterritoriality" in the enforcement of federal statutes, foreign lost profits due to domestic acts of infringement under § 271(f)(2) should not be categorically barred.  The majority reiterated the facts presented and that "the focus of § 284, in a case involving infringement under § 271(f)(2), is on the act of exporting components from the United States."  In this context, because the infringing act happens domestically, any lost profits (foreign or otherwise) based on that domestic infringement were merely a domestic application of § 284.  The dissent (Justices Gorsuch and Breyer) takes issue with the majority's decision permitting a patentee to be sued for damages for the use abroad of a patented article infringed under the provisions of 35 U.S.C. § 271(f)(2), arguing that "[p]ermitting damages of this sort would effectively allow U. S. patent owners to use American courts to extend their monopolies to foreign markets," and that this "would invite other countries to use their own patent laws and courts to assert control over our economy."

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

• "WesternGeco LLC v. ION Geophysical Corp. (2018)," June 24, 2018

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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