IP Law Bulletin

In its first precedential decision of 2010, the Board of Patent Appeals and Interferences (BPAI) decided in Ex Parte Frye that an Examiner’s rejection is given no deference upon appellate review. Furthermore, the BPAI will not unilaterally review any arguments on a particular issue not specifically presented to the Board by the Appellant. Appellants should thus carefully consider all issues and present thorough arguments in Appeal Briefs to ensure complete BPAI review. Also of note in this case is that USPTO Director Kappos and USPTO Deputy Director Barnes joined the BPAI panel which heard this case. Although high ranking USPTO officials are members of the BPAI, along with administrative patent judges, under 35 U.S.C. § 6(a), the vast majority of BPAI panels consist only of administrative patent judges. Kappos’s and Barnes’s decision to sit on the Frye panel indicates the significance of this case to the USPTO.

For a copy of the Frye opinion, click here.

Although allegations of a patentee’s failure to disclose the best mode of a claimed invention rarely succeed in rendering asserted claims of a patent invalid, the Federal Circuit recently affirmed in Ajinomoto Co., Inc. v. International Trade Commission a determination of invalidity by the U.S. International Trade Commission (ITC) that should alert patent practitioners and inventors of the importance of disclosing the preferred mode of practicing an invention. In accordance with U.S. patent rules and as highlighted by this case, in drafting a patent application, practitioners should inquire, and inventors should disclose, if there is a preferred embodiment of a claimed invention or any other preferences that materially affect the properties of the invention.

In this case, Ajinomoto Co., Inc. (Ajinomoto) filed a complaint with the ITC alleging that Global Bio-Chem Technology Group (GBT) violated 19 U.S.C. § 1337 by importing into the United States animal feed products containing an amino acid produced by a method which infringes various claims of U.S. Patent No. 5,827,698 (“the ‘698 patent”) and U.S. Patent No. 6,040,160 (“the ‘160 patent”). Each of the asserted claims at issue recited methods that included cultivating an E. coli type bacteria having a specific genetic mutation to provide increased lysine production.

Before the Administrative Law Judge (ALJ) at the ITC, GBT admitted infringement of the claimed methods, but argued that the asserted claims were invalid because Ajinomoto’s specification failed to disclose the best mode of the invention as required by 35 U.S.C. § 112, first paragraph. GBT further argued that the patents at issue were unenforceable due to Ajinomoto’s inequitable conduct in not only failing to disclose the best mode, but also in affirmatively concealing the preferred bacterial strains and carbon sources and submitting fictitious data in support of the best mode. The ALJ agreed with GBT and found no violation of § 1337 because the asserted claims were invalid and the ‘698 and ‘160 patents were unenforceable. Ajinomoto unsuccessfully petitioned the Commission for review of the ALJ’s determination and subsequently appealed to the Federal Circuit.

35 U.S.C. § 112, first paragraph, requires that a patent specification “set forth the best mode contemplated by the inventor of carrying out his invention.” In order to satisfy the best mode requirement, an inventor must disclose the preferred embodiment of the invention defined by the claims as well as preferences that materially affect the properties of the invention. In a best mode inquiry, a court first defines the invention by construing the claims and then determines whether the inventor contemplated a best mode of practicing the claimed invention at the time of filing the application. If the inventor had a subjective preference for one mode over others, the court must then determine whether the specification’s disclosure was sufficient to allow one of ordinary skill in the art to practice the best mode of the invention.

Ajinomoto admitted before the Federal Circuit that the inventors had a preferred strain, which contained additional non-claimed genetic mutations, for producing lysine in culture, as well as a preferred carbon source within the culture medium. Nonetheless, Ajinomoto argued that the ITC erred in analyzing whether the best mode of the invention was disclosed by focusing on the “overall production of lysine,” rather than on the “innovative aspects” of the specific genetic mutations that were claimed. The Federal Circuit affirmed the ITC’s reasoning that the scope of the invention as defined by the claims covers more than the specifically-recited mutations. Indeed, because the claimed invention recites “cultivating” a bacterial host strain containing those mutations, the failure to disclose the preferred strains and carbon sources used in the cultivation process renders the asserted claims invalid for failure to disclose the best mode of practicing the claimed invention.

Although it is not necessary to label a preferred embodiment as the “best mode” within a patent specification, Ajinomoto v. ITC provides a strong reminder of the importance of providing an enabling disclosure for a preferred embodiment, as contemplated by the inventors at the time of filing of an application. Practitioners should also note that in analyzing whether the specification discloses the best mode, courts will consider all of the limitations of the claimed invention, rather than just the “novel” features that distinguish the claim over the prior art.

The Federal Circuit declined to review the ITC’s determination that the ‘698 patent and the ‘160 patent were unenforceable due to Ajinomoto’s inequitable conduct. Ajinomoto’s only contention on appeal was a single sentence that the decision on inequitable conduct should be reversed because it was based on erroneous conclusions regarding Ajinomoto’s failure to disclose the best mode. The Federal Circuit concluded that “[s]uch a conclusory assertion unaccompanied by developed argumentation does not preserve the issue for appeal.”

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

On March 22, 2010, the Federal Circuit handed down an en banc decision holding that the “written description” requirement for patent applications is distinct from the enablement requirement. The decision all but assures that the U.S. Patent and Trademark Office (USPTO) will continue its policy of heightened scrutiny for biotechnology patent applications.

The decision dealt with the first paragraph of section 112 of the patent statute, which provides:

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. [35 U.S.C. 112] (Emphasis added)

In the Ariad Pharmaceuticals, Inc. v. Eli Lilly and Co.¹ case, the Court of Appeals for the Federal Circuit upheld an earlier panel decision, reversing a trial verdict in favor of Ariad and its licensors, MIT and Harvard University against Eli Lilly, the manufacturer of Evista and Xigris, drugs for treatment of osteoporosis and sepsis, respectively. The Federal Circuit’s en banc decision found the asserted patent claims were invalid due to a lack of written description.

The Federal Circuit chose to hear this case before its eleven judges to settle whether the “written description” requirement is a requirement under section 112 separate from the enablement requirement, and, if so, to clarify the scope and purpose of the written description requirement.

In a nearly unanimous (9-2) decision, the court agreed with Eli Lilly that section 112 provides a written description requirement distinct from the requirement of providing an enabling description. One of the reasons for this requirement was to ensure that the scope of the patentee’s right to exclude “does not overreach the scope of the inventor’s contribution to the art.” In essence, inventors must demonstrate that they were in “possession” of the invention they seek to claim.

In the Ariad case, the patent at issue involved a discovery by some of America’s most prominent biotech researchers, including Nobel Laureates David Baltimore and Phil Sharp, of a transcription factor, NF-kB, which affects cytokine production. The inventors also realized that reducing NF-kB activity could treat or mediate certain immune disorders associated with overproduction of cytokines. The inventors broadly claimed methods of modulating the NF-kB pathway. For example, claim 95 of U.S. Patent 6,410,516, (rewritten in independent form) reads as follows:

A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-kB mediated intracellular signaling, the method comprising reducing NF-kB activity in the cells such that expression of said gene is reduced, carried out on human cells. (Emphasis added)

It is noteworthy that claim 95 does not specify particular compounds, either by chemical formula or any other characterizing feature, to reduce NF-kB activity. This type of invention is sometimes referred to as a “pathway” patent, in that the inventors have discovered a step in a physiological pathway and attempt to claim all agents that can modify the pathway.

The court found that the patent’s original 1989 disclosure of the invention disclosed three general categories of agents that could interfere with NF-kB activity but no therapeutic compositions. The court dismissed a prophetic example in the patent as an insufficient written description, characterizing it as “not so much an ‘example’ as it is a mere mention of a desired outcome.”

Critics of the Ariad decision argue that finding a separate written description test in section 112 requires a strained grammatical reading of the statute and that such a reading has no support in the legislative history of the patent act. Moreover, they note that section 112 clearly requires that patent applicants must provide an “enabling disclosure” of their inventions and that this is a clearer test – and one that makes the written description requirement redundant.

The Ariad decision, itself, does not provide much useful guidance on how the separate “written description” test should be applied. The majority opinion states that the applicant must “possess” the claim invention but fails to explain how this test should be applied in practice to “genus” claims. The opinion suggests that a written description of a genus requires either (1) a representative number of species falling within the genus, or (2) description of “structural features common to members of the genus so that one skilled in the art can ‘visualize or recognize’ members of the genus.” However, the opinion is not particularly enlightening on the status of species that fall within a claimed genus but are not specifically disclosed by the patentee. Moreover, the “visualize or recognize” test appears to bring the factual inquiry back to an enablement test.

The Federal Circuit’s opinion noted that “the level of detail required to satisfy the written description requirement varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Thus, for predictable arts (e.g., mechanical inventions) the written description requirement may have little impact but inventions in the fields of biotechnology and pharmacology are likely to be more strictly scrutinized for their level of detail in the written description.

The big winner in the Ariad case appears to be the USPTO because the opinion gives tacit approval to the government’s current strict approach to examination of biotechnology inventions. Since 2001, the USPTO has had guidelines in place for examiners that assume that the written description test is indeed a separate test and that it should be applied to all inventions in unpredictable arts. The most recent iterations of the USPTO position can be found in “Written Description Training Materials, Rev. 1, March 25, 2008² and in the Manual of Patent Examining Procedure §2163 “Guidelines for Written Description Rejections.”³

The USPTO guidance gives numerous examples of what will and will not satisfy the written description requirement. In one instance, the training materials propose the following hypothetical claim:

An isolated nucleic acid that encodes a protein that binds to the NDG receptor and stimulates tyrosine kinase activity.

The example also posits that the applicant has only disclosed a single protein agonist to the NDG receptor. According to the training materials, this claim must be rejected for lacking adequate written description because the application does not identify what domain of the protein binds to the receptor and reads upon numerous unidentified receptor agonists having such a binding domain, as well as nucleic acids encoding agonists with non-canonical binding domains. The training materials conclude:

Given the high degree of variability that may be found in receptor agonists, and that the number of species required to form a representative number varies proportionally with the degree of variability within the claimed genus, those of ordinary skill in the art would not consider the applicant to have been in possession of the entire breadth of the claimed genus of nucleic acids based on the single species disclosed.

Critics of the USPTO training materials have suggested that the guidance encourages examiners to question every aspect of the disclosure – including many aspects where one skilled in the art would recognize that a single example is indeed sufficient to possess many obvious alternatives. Practically speaking, they complain that biotechnology inventions are scrutinized for their concrete examples – and examiners seek to limit the claims to only cover the specific disclosed embodiments.

In the wake of the Ariad decision, it appears that applicants should expect this heightened scrutiny and challenges from examiners at every turn. Whenever possible, multiple examples, multiple species and detailed characterization of the features of the invention should be presented. In the case of the isolated nucleic acid claim discussed above, it appears clear that the applicant would have fared better if the protein domain that bound to the NDG receptor was better characterized or numerous protein agonists were described.

The written description requirement may also require disclosures of numerous ranges bracketing the specific examples to provide fallback positions. For example, if the DNA sequence encoding a protein agonist is all that is known, claiming that sequence and other sequences that have 70% identity, or 80% or 90% or 95% or 96%, etc., may be helpful.

The problem presented in the Ariad case, however, will be difficult for applicants to overcome in that the discovery of a new pathway may indeed be insufficient to claim methods of treatment by modulating the pathway. Unless a representative number of working examples of compounds that can actually perform the method are presented, the “written description” requirement may preclude patentability.

¹560 F.3d 1366 (Fed. Cir. 2009)
²http://www.uspto.gov/web/menu/written.pdf
³http://www.uspto.gov/web/offices/pac/mpep/documents/2100_2163.htm

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

The last issue of Nutter’s IP Bulletin reported that a three judge panel of the Federal Circuit upheld a finding of inequitable conduct in Therasense, Inc. v. Becton, Dickinson and Co. The Federal Circuit finding, in which Judge Linn dissented with respect to the finding of inequitable conduct, was based on an applicant’s characterization of its own prior art reference in proceedings with the European Patent Office (EPO) that were deemed to directly contradict statements made to the United States Patent and Trademark Office (USPTO) by the applicant regarding the same reference. The statements made to the EPO regarding the reference were found to be material to patentability, and thus the failure to disclose such statements was ruled to be an appropriate basis for finding inequitable conduct.

On April 26, 2010, the Federal Circuit issued an order vacating the holding of the earlier three judge panel. The Federal Circuit decided to hear the appeal of the decision of the United States District Court for the Northern District of California en banc. In issuing its order vacating the previous appeal, the Federal Circuit presented six issues for the parties to consider when presenting the new briefing; each of the issues relates to inequitable conduct. The doctrine of inequitable conduct allows a patent to be rendered unenforceable if it is found that a person associated with the filing and prosecution of a patent fails to disclose information to the USPTO that is material to the determination of patentability and was withheld with intent to deceive the USPTO.

The six issues specified by the Federal Circuit order are:

1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced?

2.  If so, how?  In particular, should the standard be tied directly to fraud or unclean hands?  See Precision Instrument Mfg. Co. v. Auto Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on the grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands?

3.  What is the proper standard for materiality? What role should the USPTO’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued?

4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Holllister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc).

5. Should the balancing inquiry (balancing materiality and intent) be abandoned?

6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.

The Federal Circuit’s decision to rehear the appeal en banc has been well received, as many in the patent community believe that current rules related to inequitable conduct need to be changed. Members of the patent community hope that the Federal Circuit will clarify the doctrine of inequitable conduct, and in doing so, help ease the growing burden on applicants that the current rules create with respect to the duty of disclosure.

It is anticipated that the en banc appeal will be heard by the Federal Circuit in October or November of this year. We will keep our readers well-informed of the developments surrounding this case.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

Our January 2010 issue included a report about the USPTO’s “Green Technology Pilot Program,” which affords applicants the ability to petition to have an application “made special” if the application pertains to environmental quality, energy conservation, development of renewable energy resources, and greenhouse gas emission reduction. This program is expected to reduce the time it takes to obtain a patent by an average of one year.¹ Similar prosecution accelerating programs for green technologies have also been initiated by the Intellectual Property Office (IPO) of the United Kingdom and the Korean Intellectual Property Office (KIPO). Applicants taking advantage of the United Kingdom program are expected to be able to obtain a patent in as little as nine months, while applicants taking advantage of the South Korean program can potentially obtain a patent in as little as one month.

To qualify for the “Green Channel” for accelerated patent examination in the United Kingdom, the patent application must relate to green or environmentally-friendly technologies and must include a statement indicating the same. Further, applicants must request: (1) a combined search and examination; (2) an accelerated search and/or examination; and (3) early publication. If each of these requirements is met, the examination of the patent will be accelerated, and according to the IPO of the United Kingdom, a patent may grant in as little as nine months.²

To qualify for “superspeed” examination in South Korea, applicants must: (1) submit an application; (2) request a prior art search to be performed by a KIPO-operated search agency; and (3) submit the search results to the KIPO. The KIPO program is more restrictive of the technologies that qualify for “superspeed” examination in comparison to the United States and the United Kingdom. Qualifying technology in South Korea must be related to minimizing the discharge of pollutants or technologies that have received green funding or authentication for green growth. However, while the average time period for ordinary examinations in the KIPO is about 18 months, patents evaluated under the “superspeed” examination program may grant in as little as one month.³

Patent applicants and assignees of applications directed to green technologies should consider these programs for expediting the patenting of their inventions in the United States, United Kingdom, and South Korea.

¹See “The U.S. Commerce Department’s Patent and Trademark Office (USPTO) will pilot a program to accelerate the examination of certain green technology patent applications,” United States Patent and Trademark Office (December 7, 2009);see also “U.S. Patent and Trademark Office Initiates Pilot Program Giving Examination Preference To Green Technologies,” Nutter IP Bulletin (January 22, 2010).
²See “Green Channel for patent applications,” Intellectual Property Office of the United Kingdom (May 12, 2009).
³See “Thanks to superspeed examination, green technology acquires patent in a month,” Korean Intellectual Property Office (October 20, 2009).

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

In Association for Molecular Pathology et al. v. United States Patent And Trademark Office et al.¹, Association for Molecular Pathology and other plaintiffs, including some physicians and cancer patients, asked a federal district court in New York, in a motion for summary judgment, to invalidate several so-called “gene patents” owned by the University of Utah and Myriad Genetics. The patents are directed to two isolated gene sequences, BRCA1 and BRCA2, that researchers had discovered to be correlated with a heightened susceptibility to breast cancer. In addition to composition claims directed to the isolated genes, the patents also include method claims for analyzing BRCA1 and BRCA2 genes (or RNA) extracted from an individual to identify the presence of mutations, if any, in those genes as well as for determining the individual’s predisposition to breast cancer based on the mutations.

Judge Robert Sweet granted the motion of summary judgment and concluded that the composition claims as well as the method claims were not eligible for patenting and hence were invalid. The judge relied, at least in part, on a Supreme Court decision from 1931, American Fruit Growers, Inc. v. Brodgex Co.², to invalidate the composition claims. In that case, the Supreme Court had held that oranges whose skin had been treated with mold-resistant borax had not been sufficiently transformed into a new and different article to be eligible for patenting. Similarly, Judge Sweet held that isolated DNA did not possess “markedly different characteristics” from its naturally occurring counterpart to be eligible for patenting.

Judge Sweet relied on the recent case of In re Bilski³, which is presently before the U.S. Supreme Court, to invalidate the method claims. In In re Bilski, the U.S. Court of Appeals for the Federal Circuit held that a method claim is patent eligible if (1) it is sufficiently tied to a particualr machine or apparatus or (2) it transfoms an article into a different state or thing. Though this “machine-or-transformation” test was enunciated in the context of a so-called “business method” patent that was directed to a method of hedging risks in commodity trading, it has been applied post-Bilski by a number of courts to medical diagnostic methods.

In this case, the defendants relied on a recent post-Bilski case, Prometheus Laboratories, Inc. v. Mayo Collaborateive Services⁴, to argue that the steps of “analyzing” and “comparing” recited in the method claims were transformative. In Prometheus, the Federal Circuit had held that the step of “determining the levels of metabolites” in a method claim directed to adjusting the dosage level of certain therapeutic drugs, in order to enhance efficacy and minimize side effects, was transformative as it involved extraction and measurement of metabolite concentrations, e.g., via high pressure liquid chromatography. Judge Sweet, however, did not agree and held that the steps of “analyzing” and “comparing” were merely mental steps. The judge went even further and indicated that even if the challenged claims “were read to include the transformations associated with isolating and sequencing human DNA,” these transformations would not render the claims patent eligible as they would be merely what Bilski characterizes as “data gathering step[s]” that are not “central to the purpose of the claimed process.”

The Federal Circuit is likely to grant certiorari on this case. Look for continued updates on this important case, as well as the Supreme Court’s upcoming decision in Bilski, in future issues of Nutter’s IP Bulletin.

¹669 F.Supp.2d 365 (S.D.N.Y. 2009).
² 283 U.S. 1 (1931).
³545 F.3d 943 (Fed. Cir. 2008).
⁴581 F.3d 1336 (Fed. Cir. 2008).

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.

This July, Benoît Battistelli will take charge as the next president of the European Patent Office (EPO). Mr. Battistelli comes to the EPO from the French Institute for Industrial Property, where he served as director general for the past six years. He will succeed the current EPO president, Alison Brimelow.  U.S. applicants should watch closely. As Ms. Brimelow’s tenure has shown, a new EPO president can mean big changes in prosecuting patents abroad.

For many years, it had been common practice, at least among U.S. companies, to amend the claims of their European applications to mirror those of their U.S. counterparts. The motivating philosophy was often to capitalize on the results of U.S. prosecution, which usually was well advanced by the time European prosecution had begun.

Policy changes brought by Alison Brimelow changed this practice. Applicants have increasingly found that the EPO refuses to enter claim amendments that are perfectly acceptable under U.S. practice. This did not result from changes in the European Patent Convention (EPC) laws, but instead came from the EPO leadership’s drive for “higher quality” patents.

At the time Ms. Brimelow took the high office at the EPO, many complained about the increasing number of patents invalidated in post-grant oppositions and in litigation. Ms. Brimelow saw increased diligence during examination as a way to remedy the problem. In 2005–2006, she led a campaign to “raise the bar” on patent quality. Among other measures taken to accomplish this goal, Ms. Brimelow enforced a stricter interpretation of EPC law, including a more rigorous application of the existing prohibition against new matter. Whatever her motivation, Ms. Brimelow’s change in enforcement policy required many U.S.-based applicants to reassess their European strategy.

To achieve desired claim coverage today, applicants should think through their European prosecution strategy before making their initial domestic filings. Since scope-enlarging amendments are particularly closely scrutinized in the EPO, broad claims and commensurate supporting language should be incorporated in the priority application. It will be wise to take the new European divisional practice into account when devising a claims strategy.  In this regard,  see the article on that subject (“European Patent Rules Changes Set to Take Effect April 1”) in the last issue of Nutter’s IP Bulletin.

It is not yet clear what changes the incoming EPO president will oversee. However, U.S.-based applicants are advised to keep a close watch as Mr. Battistelli begins his term. While any new initiatives he might institute are a mystery, it is not expected that he will throttle back on the higher examination standards put in place by his predecessor. Indeed, the backlog of applications pending before the EPO suggests otherwise.

This advisory was prepared by Nutter's Intellectual Property practice. For more information, please contact your Nutter attorney at 617-439-2000.