Diagnostic Kits/IP in Kits

• (Pressman, L. et al., 2006)

Patents

General Discussion

(ADDED TO PAPER)

• • Wrangling Genes: As the law changes and new medical frontiers open, the dispute over genetic patents intensifies
    • "Many business methods, including numerous genetic-based diagnostic tools, are processes that don’t rely on particular machines. Those patents are now on shaky legal ground because Bilski requires that a pro­cess involve a machine or a transformation of something into a different state."
    • "Klein says many gene patents aren’t inventions or even true discoveries. 'They are simply biological relationships,'"
    • Dissent in Laboratory Corp. of America Holdings v. Metabolite Laboratories Inc.
      • “The reason for the exclusion is that sometimes too much patent protection can impede rather than ‘promote the progress of science and useful arts,’ the constitutional objective of patent and copyright protection,” Breyer wrote.
      • “The problem arises from the fact that patents do not only encourage research by providing monetary incentives for invention,” Breyer
      • "The ACLU’s arguments in the Myriad Genetics suit mirror Breyer’s dissent in many respects."
      • "That machine-or-transformation test seeks to work with the Supreme Court’s patent exclusions for laws of nature, natural phenomena and abstract ideas. The Fed­eral Circuit pulled the test largely from the 1972 Supreme Court decision in Gottschalk v. Benson."
      • Biomarkers Consortium: National Institutes of Health, the Food and Drug Admin­is­tration and the Pharmaceutical Research and Manufac­turers of America.
        • "Companies that share their intellectual property won’t lose it, but new research developed by the consortium will be open to scientists and subject to shared licensing agreements among consortium members."
  • Bilski Briefs: Supporting the Government (In Name) - short digests of 23 Amicus briefs filed in the Bilski case
  • Applying In re Bilski to Diagnostic Method Claims
  • Applying Bilski to Biotechnology and the Life Sciences
  • The Impact of Human Gene Patents on Innovation and Access: A Survey of Human Gene Patent Litigation
    • "While clearly many US patents have issued that reference human genetic sequences, the actual scope of exclusivity varies dramatically from claim-to-claim as dictated by the actual claim language. Many patents restrict only some very narrow use of the genetic sequence, others are much broader - none cover actual human genes as they exist in their native state. And it should go without saying that none confer actual ownership of human beings, or allow a patent owner to do "whatever it wants" with another person's genes." (Quoting the abstract)
  • Learning from Litigation: What Can Lawsuits Teach Us About the Role of Human Gene Patents in Research and Innovation?
    • "Although universities are the source of a disproportionate number of the human gene patents have been asserted in lawsuits, particularly in the context of genetic diagnostic testing, they have generally not been the target of lawsuits, particularly with respect to basic noncommercial research" (Quoting the abstract)
  • An Analysis of the Approach of the European, Japanese and United States Patent Offices to Patenting Partial DNA Sequences (ESTs)
    • Patentability of expressed sequence tags (ESTs)
    • "According to HUGO, the technology involved in generating ESTs is relatively straightforward, whereas the process required to isolate the full-length gene and determine its biological function from an EST is considerably more difficult,7 produces more social benefit and thus warrants the most protection and incentive." (page 4)
    • "The concerns centre around the utility of such tools, the breadth of the claims, and the potential adverse impact on future research and development caused by the reduction of incentives for scientists to identify the corresponding full length gene and the protein for which the gene encodes." (page 5)
  • Public Access Versus Proprietary Rights in Genomic Information: What is the Proper Role of Intellectual Property Rights?
    • Intellectual property rights (IPRs) in bioinformatics

Case Law

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Caselaw that specifically comments on the patentability of diagnostic processes:

• "the machine or transformation of nature test
• not patentable subject matter: law of natures, natural phenomenon, or abstract ideas

• Prometheus Laboratories, Inc. v. Mayo Collaborative Services 2009 WL 2950232 C.A.Fed. (Cal.,2009)
  • decided September 16, 2009
  • Issue: Whether the claims are patentable?
  • Facts: patents claiming methods for calibrating proper dosage of drugs
    • Prometheus sued Mayo for infringement of the patents
  • Reasoning:
    • "A process is not patent-eligible if it claims 'laws of nature, natural phenomena, and abstract ideas.'"
    • "An application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.’“ Bilski, 545 F.3d at 953
    • The step must not be insignificant
  • Holding: the "methods of treatment claimed in the patents in suit squarely fall within the realm of patentable subject matter"
  • News Reaction:
    • Patent Docs: Biotech and Pharma Patent Law and News Blog:Medical Diagnostics Claims Are Patentable Subject Matter

      "Over the past few years, Federal Circuit decisions in In re Bilski and Classen Immunotherapeutics, Inc. v. Biogen Idec, combined with Justice Breyer's dissent in Laboratory Corp. v. Metabolite Labs., Inc. ("LabCorp"), have created more than a frisson of anxiety in the biotechnology and medical diagnostics community, due the apprehension that medical diagnostics claims might generally be deemed not to be patent-eligible subject matter under 35 U.S.C. § 101. These fears may be alleviated to some degree by the decision today in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, where the Court held that a diagnostics claim satisfies the machine-or-transformation test enunciated in Bilski."

    • Harvard Journal of Law & Technology:The Federal Circuit Provides Protection to Medical Diagnostics

      "The Federal Circuit’s successful application of the Bilski “machine-or-transformation” test to the treatment method in Prometheus secures patent protection for the medical diagnostics industry. This security may be temporary however as the diagnostics industry anxiously awaits the Supreme Court’s review of Bilski later this year."

    • Genetic Engineering & Biotechnology News Court Ruling May Impact Life Science Patents

      "Further, the Federal Circuit’s footnote 26 suggests indirectly that the patentability of certain medical diagnostic process claims could be challenged under Bilski... In Classen Immunotherapies, Inc. v. Biogen IDEC, Fed. Cir. No. 2006-1634 (December 19, 2008) process claims related to risk-assessment of protocols for vaccination followed by immunization were found to be invalid for not meeting either of requirements (1) or (2) under Bilski. The Classen decision is nonprecedential however, and the single paragraph opinion leaves many speculating how to interpret it."

• Prometheus Labs., Inc. v. Mayo Collaborative Servs. (pdf), 2008 WL 878910 (S.D. Cal. Mar. 28, 2008)

• Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co. (pdf) 560 F.3d 1366 C.A.Fed. (Mass.),2009
  • ARIAD PHARMACEUTICALS, INC., Massachusetts Institute of Technology, The Whitehead Institute for Biomedical Research, and The President and Fellows of Harvard College, Plaintiffs-Appellees, v. ELI LILLY AND COMPANY, Defendant-Appellant.
  • Facts:
    • Infringement action
    • Patent claims a methods with a single step for reducing Nuclear Factor Kappa B (NF-kB) activity in eukaryotic cells.
  • Holding:
    • patent is invalid, failed to provide adequate written description
  • News Reaction:
    • Patent Docs: Biotech and Pharma Patent Law and News Blog:Pharmaceuticals, Inc. v. Eli Lilly and Co. (Fed. Cir. 2009)

• Classen Immunotherapies, Inc. v. Biogen IDEC, 304 Fed. Appx. 866 (Fed. Cir. 2008)
  • "In light of our decision in In re Bilski, 545 F.3d 943 (Fed.Cir.2008) (en banc), we affirm the district court's grant of summary judgment that these claims are invalid under 35 U.S.C. § 101. Dr. Classen's claims are neither “tied to a particular machine or apparatus” nor do they “transform[ ] a particular article into a different state or thing.” Bilski, 545 F.3d at 954."

• In re Bilski, 545 F.3d 943 (C.A.Fed., 2008.)
  • a trading method, not a diagnostic test method was analyzed
  • the test that governs whether a process qualifies patentable subject matter under 35 USC 101.

• In re Fisher, 421 F.3d 1365, 1371 (Fed.Cir. 2005)
  • involved “expressed sequence tags” ESTs
  • EST claims were held invalid for lack of enablement and utility
  • Patent non-gene sequences has been made more difficult by this case.

• Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 370 F.3d 1354 (2004)
  • Facts: processes for testing a patient and correlating the test data with the patient's health. This correlation required mental reasoning by the physician.
  • Issue:the patentability of a diagnostic process but the case was decided on other grounds the Supreme Court dismissed after initially granting certiorari and hearing oral arguments, in the dissent to the Supreme court dismissal, the process was characterized as unpatentable natural phenomenon
  • Prometheus used its own “machine or transformation” test and found Labcorp to be nonbinding.

• Diamond v. Chakrabarty, 447 U.S. 303 (1980)
  • recognized the patentability of a genetically engineered bacteria
  • patentable subject matter under § 101 embraces “anything under the sun made by man.” Chakrabarty, 447 U.S. at 309
  • Courts "should not read into the patent laws limitations and conditions which the legislature has not expressed.” Chakrabarty, 447 U.S. at 308.

• Gottschalk v. Benson, 409 U.S. 63 (1972) ... 9
  • Holds unpatentability due to preemption of every possible implementation that could come from recognizing a fundamental principle.
  • Test: whether the machine or transformation is central to the purpose of the claims.
  • “Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” Bilski, 545 F.3d at 952, citing Benson, 409 U.S. at 67

• Funk Brothers v. Kalo, 333 U.S. 127 (1948) ... 10-11, 15
  • “If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.” Funk Brothers v. Kalo, 333 U.S. 127, 130 (1948).
  • A transformation of matter that is part of a natural process remains “the handiwork of nature” and is not patentable. Id. at 131.
  • Basic scientific facts “are part of the storehouse of knowledge of all men.” Funk Bros., 333 U.S. at 130.

• O'Reilly v. Morse, 56 U.S. 62 (1853)
  • Facts:
  • Morse was the first and original inventor of the electro-magnetic telegraph, for which a patent was issued to him in 1840, and reissued in 1848. His invention was prior to that of Steinhiel of Munich, or Wheatstone or Davy of England. O'Reilly, 56 U.S. at 62
    • Claim 8 that was foudn to be invalid: ‘I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specification and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed, for making or printing intelligible characters, signs or letters at any distances, being a new application of that power, of which I claim to be the first inventor or discoverer.’ O'Reilly, 56 U.S. at 62
  • Holding:
    • "he claims an exclusive right to use a manner and process which he has not described and indeed had not invented, and therefore could not describe when he obtained his patent. The court is of opinion that the claim is too broad, and not warranted by law." O'Reilly, 56 U.S. at 113

Bayh-Dole Act Specific Cases

(ADDED TO PAPER)

• In Re Petition of CellPro, Inc.
  • CellPro petitioned claiming "Hopkins and Baxter have failed to take reasonable steps to commercialize the technology" Determination In the Case of Petition of CellPro, Inc.
  • "CellPro is the only company that has an FDA-approved device commercially available." Determination In the Case of Petition of CellPro, Inc.
  • "The NIH has examined whether, (1) Baxter has failed to take, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject inventions; and, (2) there exists a health or safety need which is not reasonably satisfied by Hopkins or Baxter. Based on these criteria and the available information, march-in is not warranted at this time." Determination In the Case of Petition of CellPro, Inc.
  • "CellPro first argued that The Johns Hopkins University and Baxter Healthcare failed to take reasonable steps to commercialize certain patented stem cell technologies and that Johns Hopkins should be forced to license Cellpro the patent necessary to keep its machine on the market." Wikipedia PDF of Case
  • Discussion
    • Patent policy flaws complicate commercialization of federally funded university discoveries
• In the Case of NORVIR
  • " The NIH is aware that members of Congress and the public have asked the Federal Trade Commission (FTC) to investigate the potential anti-competitive effects of the increase in the price of Norvir®. The NIH agrees that the FTC is the appropriate agency to address this issue. After carefully considering all the information provided and otherwise made available, the NIH does not believe the initiation of a march-in proceeding is warranted." In the Case of NORVIR
  • "It is important to the NIH that pharmaceutical companies commercialize new health care products and processes incorporating NIH-funded technology thereby making the technology available to the public. A central purpose of the Bayh-Dole Act involves the development and commercialization of such products out of federally-funded research." In the Case of NORVIR
  • "The NIH denied the petition finding no grounds to exercise its march-in rights" Wikipedia PDF of Case
• In the Case of Xalatan
  • "The letters expressed concern that the price of Xalatan is higher in the United States than in Canada or Europe. Xalatan is covered by licenses and patents and marketed by Pfizer for the treatment of patients with Glaucoma." In the Case of Xalatan
  • "Similar to the other two cases, the record in this instance demonstrates that Pfizer has met the standard for achieving practical application of the applicable patents..." In the Case of Xalatan
  • “the extraordinary remedy of march-in was not an appropriate means for controlling prices.” Wikipedia PDF of Case

Patent Pools

(ADDED TO PAPER)

• "An agreement between two or more patent holders to license one or more of their patents to one another, or to license them as a package to third parties who are willing to pay the royalties that are associated with the license." Patent Pools provide a reduction in transaction costs but they also risk anti competitive effects and the shielding of weak patents. (Esther van Zimmeren et al. 2006)
• Advantages
  • The benefits of a patent pool include (Verbeure, B. et al., 2006):
    • possible elimination of stacking licenses,
    • reduction of patent licensing transaction costs,
    • a decrease in patent related litigation.
• Disadvantages
  • While these potential benefits are appealing in many industries, the biotechnology industry lacks standard-driven incentives found in other industries which may reduce the gains possible by creating a biotechnology patent pool. The article hypothesizes that “standards can be an important trigger to set up a pool, as illustrated in the electronics and telecommunications sectors, and this might also be true in the field of genetics” (Verbeure, B. et al., 2006).
  • US Antitrust law limits the behavior of patent pools which have the potential to exert unfair market pressure. (Verbeure, B. et al., 2006)

Patent Clearing Houses

(ADDED TO PAPER)

• A "mechanism by which providers and users of goods services and/or information are matched." (Esther van Zimmeren et al. 2006)
• The Structure of Patent Clearhouses
  • The Zimmeren article provides a useful framework for understanding the patent clearinghouses (Esther van Zimmeren et al. 2006)
  • Five types.
    • Two types of clearinghouses provide access to information on the patented inventions: information clearing houses and technology exchange clearing houses. Information clearing houses provide basic information related to the technology. They have a low barrier to entry but require constant maintenance. The technology exchange clearing house model adds licensing information to the basic information related to the technology to provide a means for initiating negations. (Esther van Zimmeren et al. 2006)
    • There are three types of clearing houses are analyzed that not only offer access to information but also facilitate the use of the patented inventions: the open access clearing house, the standardized licenses clearing house, and the royalty collection clearing house. The open access clearing house provides free use of patented inventions. The standardized licenses clearing house provides standardized licenses for the use of patented inventions. The royalty collection clearing house provides standardized licenses, royalty collection, monitoring of the patents, and a dispute resolution mechanism. (Esther van Zimmeren et al. 2006)

The Advantages and Disadvantages of Patent Clearhouses

• Advantages
  • The Zimmeren article states that clearinghouses provide the advantages of simplifying licensing negotiations, increased visibility of the patent rights, streamlining of royalty collection, and possible decreased enforcement costs.
• Disadvantages (Esther van Zimmeren et al. 2006)
  • The Zimmeren article states the difficulties and problems of clearinghouse include having the potential for anti-competitive effects, loss of patent holder control, high levels of patent holder participation are required for success, set up of the clearinghouse is complex, standardized licenses lack flexibility found in negotiated licenses, and trade secret secrecy data cannot be easily maintained. (Esther van Zimmeren et al. 2006)

A proposal for a registration system that provides for three phases with different levels of exclusivity and protection

(ADDED TO PAPER)

(J.D & Munzer n.d., 2000)

• Phase One: "gives a registrant five years of exclusive protection" (quoting abstract)
• Phase Two: "provides a registrant with inexclusive protection and the right to a governmentally determined royalty if others develop a commercial product within that time." (quoting abstract)
• Phase Three: "begins fifteen years after registration; the EST now enters the public domain and the former owner of the EST now receives no licensing fees or royalties." (quoting abstract)

Legislative Activity

• The Genomic Research and Accessibility Act
  • 110th Congress, 1st Session, H. R. 977
    • To amend title 35, United States Code, to prohibit the patenting of human genetic material.

Licensing

Licensing Approaches

(ADDED TO PAPER)

Four licensing approaches considered by the Van Overwalle article: (Geertrui Van Overwalle et al., 2005)

• Free access to the genetic sequences but royalty payments for the commercial test kits
• Licensing to laboratories at a rate that makes the commercial test kit more economical
• Exclusively licensing to a limited number of laboratories
• Biological Innovation for Open Society license that makes improvements to the patent shared as a way to facilitate cooperative invention.

Compulsory Licensing

(ADDED TO PAPER)

• A compulsory license occurs when the government or court compels a patent owner to license their rights. There is no general provision for compulsory licensing under the patent statute, only very specific instances where it will be applicable. This has not been applied to licensees in genetics so far. (Geertrui Van Overwalle et al., 2005)

Licensing Behavior

(ADDED TO PAPER)

• The likelihood of granting a license for patented DNA sequenceswas was found to be similar for firms and nonprofits but nonprofits were far more likely to grant exclusive licenses. This use of exclusive licensing demands further study to find out if the use of these licenses is justified or merely a default practice with little substantive justification. (Henry, M. et al. 2002)
• A Merz article investigating genetic test patent history for Hemochromatosis (HFE) gives a detailed patent history is developed to show how patent ownership and licensing complexities can have measurable effect on the development and performance of genetic testing. (Merz, J.F. et al., 2002)
  • The patent ownership of HFE testing begins with Mercator Genetics in 1998. Next, Progenitor, Inc. merged with Mercator and was assigned its patents. SmithKline Beecham Clinical Laboratories then became the exclusive license of Progenitor’s HFE patents. Following the licensing deal, SmithKline Beecham Clinical Laboratories was sold to Quest Diagnostics. Finally, Bio-Rad Laboratories, Inc., acquired the HFE patents from Progenitor. (Merz, J.F. et al., 2002)

Trade Secret

Trade Secret Caselaw

(ADDED TO PAPER)

• Microbiological Research Corp. v. Muna, 625 P.2d 690, 700 (Utah 1981)
  • Holding: no combination secret found for a diagnostic kit when the process included nothing more than the "skill and knowledge of the trade"
  • Facts:
    • a medical diagnostic kit manufacturer against a former microbiologist employee
    • At issue was the trade secret protection of "certain techniques and chemical formulations in the manufacturing process of the diagnostic kits"developed by the former microbiologist employee (59 A.L.R.4th 641)
  • The court's analysis

1. Information claimed as trade secrets was published in the medical literature
2. The information known to others in the microbiologist's field of expertise
3. The information was part of the microbiologist's own skill and knowledge.

Limits of protection

(ADDED TO PAPER)

• Trade secret protection does not prevent other researchers from independently discovering, disclosing, and using their discovery.
  • Limitations of trade secret
    • However, filed but unpublished patent application may block use of the discovery if the researcher is not first to invent.
    • The experimental use exception (Madey v. Duke) is very narrow. (14 MITTLR 43)
• "Thus, while the unavailability of gene patents may lead to disclosure delays, arguably these costs are outweighed by the benefits of preserving new gene discoveries for the genetic commons." (14 MITTLR 43)

Reverse Engineering

(ADDED TO PAPER)

• A product may be "reverse-engineered"
  • With diagnositic kits: "What the inventor typically sells is a reagent test kit or apparatus for use in practicing the method. The method must be disclosed to the buyer and cannot be kept as a trade secret." (13 ALBLJST 145,149)
  • For these reasons patent protection is preferred for elements of the kit that can be reverse engineered or must be disclosed with sale.

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