America-Israel Patent Law

The Cross-Purpose Congress and PCT Searches

While "patent reform" bills that make little sense continue their advance through Congress toward enactment (see extensive reporting on this at www.patentdocs.org), the same gang of idiots politicians can't get its act together regarding a budget.  For the USPTO this means a return to the dark days of fee diversion: without a budget, the USPTO is stuck at last year's funding levels, so that for the remainder of this fiscal year it will be bringing in about $100,000,000 that can't spend.  Of necessity, then, the USPTO has to cut planned spending.  What a wonderful way for Congress to promote the progress of useful arts and sciences: maim the patent statute AS WELL AS the office charged with implementing that statute.  Nice work, guys.  (Some backbone from Mr. Obama might also have helped avert this mess.)

Yesterday Dennis Crouch reported USPTO Director David Kappos' announcement to employees explaining how the USPTO plans to deal with the effective budget cuts.  Among other things, "PCT search funding is cut severely".  Translation: if you want a PCT search report done on time, don't use the USPTO until it gets its budget back.  For entities filing with the Israel Receiving Office, that means using the EPO -their only other choice - as the PCT search authority; the Israel PTO is still not qualified as a PCT search authority.  The good news for people using the US RO is that they'll still have Australia and Korea (and soon Russia) available for their PCT searches - and at lower cost than the now-grinding-to-a-halt USPTO PCT search mechanism.  Plus a good PCT written opinion or IPRP can be used for a PPH request down the road.  If Congress doesn't want the USPTO to spend its money, then there's no reason for users of the USPTO to give the USPTO more money than necessary.

If You Add A Dependent Claim And No One’s There to Hear It, Does it Make Any Noise? – Part III: It Does, But Only if the Forest is in the U.S.A.

In December I posted about In re Tanaka, a case before the CAFC in which the question was whether or not an applicant’s desire to add a new dependent claim, but to make no other changes to his application, was sufficient to give him grounds to amend the application under the reissue statute, 35 U.S.C. §251: 

Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inopera­tive or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.     * * * 

The Board of Patent Appeals and Interferences had ruled that since Tanaka did not assert a defective specification or drawing, his desired amendment did not give him the right to seek reissue of his patent under that prong of the statute, and that the case law held that failing to include a dependent claim did not constitute claiming more less than the patentee had a right to claim – after all, by definition a proposed dependent claim must fall within the scope of some already-existing claim, so the patentee could not be deemed to have claimed more or less than he was entitled to.  Thus the BPAI left in place a strange situation in which a person who was only guilty of leaving out a dependent claim had no recourse, but if the patentee had really screwed up big time, for example by mislabeling a figure, making a mis-statement in a claim, or gaining allowance of a claim that encompassed the prior art, then that patentee could seek reissue on those grounds – and at the same time introduce new dependent claims as well. 

Last week a split panel reversed the BPAI.  Citing to In re Handel – one of the decisions of the Court of Customs and Patent Appeals (CCPA, the predecessor of the CAFC) relied upon by the BPAI – Judge Linn, writing on behalf of himself and Judge Bryson, said that in that case, Judge Rich had explicitly said that adding new dependent claims was a way of correcting a defect in a patent: claiming less than the patentee had a right to claim, in the sense that the patentee included fewer claims than he had a right to include.  Thus, said Judge Rich in Handel, “[t]he narrower appealed claims are simply a hedge against possible invalidity of the original claims should the prior use be proved, which is a proper reason for asking that a reissue be granted.”  Judge Linn then stated that “While this court has since characterized that view [of Judge Rich] as dictum, it has not departed from it.” 

He then went on to show how allowing reissue applications solely for the purpose of incorporating new dependent claims was long-established practice.  Among other things, he noted that

“Claims of narrower scope can be useful to clarify the meaning of broader, independent claims under the doctrine of claim differentiation. Phillips v. AWH Corp., 415 F.3d 1303, 1314 (Fed. Cir. 2005). And dependent claims are also less vulnerable to validity attacks given their more narrow subject matter. Thus, the omission of a narrower claim from a patent can render a patent partly inoperative by failing to protect the disclosed invention to the full extent allowed by law.” 

Addressing a concern raised by Teva in an amicus brief, namely that “the public has an interest in preventing patentees from seeking reissue only to add narrower claims because such practice limits the public’s ability to rely on what is actually claimed in an issued patent”, the majority noted that 35 U.S.C. 252 gives courts equitable discretion to allow third parties who “prior to the grant of a reissue, made, pur­chased, offered to sell, or used within the United States, or imported into the United States, anything patented by the reissued patent, to continue the use of, to offer to sell, or to sell to others to be used, offered for sale, or sold, the specific thing so made, pur­chased, offered for sale, used, or imported unless the making, using, offering for sale, or selling of such thing infringes a valid claim of the reissued patent which was in the original patent.”  Thus, presumably, if an originally issued broad claim could be shown to be infringed but invalid, and a narrower, infringed and valid claim was only added during reissue, a company that in the interim began to infringe the originally-granted broad claim, or that even merely made “substantial preparations” to do so, could seek equitable relief to continue its activities.

Judge Dyk dissented, arguing that not only was there was no CCPA or CAFC precedent directly on point, but that there was Supreme Court precedent (Gage v Herring, 107 U.S. 640 (1883)) that precluded reissue applications solely to add new dependent claims.  The majority distinguish Gage on grounds that that decision was given under a very different reissue statute.

In the companion Israel case I discussed, Schwarz Pharma chose not to appeal the hearing officer’s ruling that a new dependent claim could not be added after an application had bee allowed, so overruling that decision will have to await another day.

Deja Vu All Over Again – Deputy Commissioner’s Reach Exceeds His Grasp

I’ve complained in this blog about the previous Commissioner’s predilection for exceeding his authority.  From a just-published decision of Deputy Commissioner Noah Shlomovitz (released today but dated March 30), we see that the ex-Commissioner isn’t the only person infected with this particular bug.

The decision concerns an opposition to Lilly Icos’ patent application no. 147642, which is a national phase application in Israel of WO 2001/008688.  The corresponding U.S. and European patents are US 6,821,975 and EP 1200092; the U.S. patent is one of seven presently listed in the FDA’s Orange Book for Eli Lilly’s drug Cialis for the treatment of erectile dysfunction.  The claims as originally allowed by the ILPTO correspond to those of the European patent.

After allowance in 2006, a pre-grant opposition was filed by Teva.  Since the ILPTO does not make opposition files available electronically, I assume for the present discussion that the claims remained unchanged during the opposition. 

According to the DC’s decision, after both sides submitted their written evidence-in-chief and hearings were held before the DC at which the sides cross-examined each other’s witnesses and experts, the opposition was withdrawn by agreement of the parties. 

That should have been the end of the story…but if it was I wouldn’t be writing this blog post, would I? 

The rub here is that §34 of the patent statute says that “If an opposition was filed per §30 and cancelled afterward, the Commissioner is allowed to not grant the patent, if as a result of the opposition material was shown to him according to which the patent application should not have been allowed a priori.”  In this case, the DC invoked his power under §34 and determined that the application should not have been allowed a priori.  And that’s where the problems with the decision begin. 

First, Rule 74 says that if the Commissioner exercises his power under §34 of the statute, viz. after cancellation of the opposition he refuses to grant the patent because of material that came to light during the opposition proceedings, he must provide the patent applicant with a detailed explanation of his reasoning.  Rule 74 then goes on to say that within 30 days of service of the Commissioner’s reasoned explanation for refusal under §34, the applicant may respond in writing to explain why the Commissioner should not exercise that power, and that if the applicant so responds, the Commissioner must grant the applicant the opportunity to present oral arguments. 

The difficulty is that in this instance, rather than provide detailed reasons as required, the Deputy Commissioner stated that he would provide a more reasoned explanation for his decision at a later date.  Now, if the DC had said that the 30-day clock would only begin to run upon service of that yet-to-be-delivered detailed explanation, he might be on ok grounds – although since in Israel there’s no mechanism to compensate patentees for time lost off the life of their patents due to oppositions, the DC probably should have either let the patent issue, or provided a detailed explanation of his reasoning.  Or at least waited until the detailed reasons were written before informing the applicant that he was going to refuse the application under §34.

But not only did the DC fail to say that the patentee’s 30 days would run from service of the detailed explanation, he actually went so far as to say that the patentee’s time would run from March 30 and be shortened to April 16 – including any oral arguments to be made.  Why?  Because, it turns out, the DC is leaving office at the end of April, and since he’s the one who’s familiar with the case and presided over the cross-examination of the witnesses and experts, it would be inefficient to turn the case over to another hearing officer who is completely unfamiliar with the matter.  (He didn’t mention that in addition the ILPTO will be closed from April 18 through the 25th and reopen on the 26th for Passover.)

Perhaps the DC thought that in doing this, he was being fair to the applicant.  He’s correct that putting the matter before another hearing officer would slow things down tremendously, and result in the loss of the impressions of the witnesses that the DC formed during the hearings.  But even if he is well-intended, that doesn’t give him the authority to derogate from the procedures and timelines set forth in the rules.  Who is he to prejudice the applicant in that way, by foreshortening its time to respond?

If Mr. Shlomovitz felt so strongly that a patent shouldn’t be granted, he should have delayed his departure from his position for long enough to see the job through properly.  Alternatively, if he was so intent on leaving office by the end of April, a more fair result would have been for him to have let the patent issue, without saying to anyone why he thought it shouldn’t.  I say that because it’s not some amorphous public that would be adversely affected by the grant of an invalid patent, but rather the local competition, viz. the local generic drug companies.  But those companies are adept at protecting their own interests and attacking patents they find problematic; Mr. Shlomovitz need not look out for them.  Of those companies, only Teva thought it worthwhile to file a pre-grant opposition, and since Teva dismissed its opposition, Mr. Shlomovitz should have let the patent issue – if none the other generic drug companies care about this patent, why should the DC?

Moreover, in addition to pre-grant oppositions, Israel has post-grant cancellation proceedings, so if any of the generic drug companies other than Teva were to suddenly find an interest in this patent, they could avail themselves of that route.  The materials from the opposition would be available to them, and the generic drug companies employ chemists and pharmacologists who understand the science involved.  (Mr. Shlomovitz is neither a chemist nor a pharmacologist.)

The second gaffe on the part of the DC is that he said that per §159 of the statute, he would allow the opponent, Teva, to be involved in the proceedings pursuant to rule 74.  §159 says that “The Commissioner shall exercise any power granted him by this statute after an opportunity has been given to any person who, in the Commissioner’s view, might be injured by his decision, to present his arguments before the Commissioner.”  But Teva dismissed the opposition.  That not only indicates that in Teva’s own view, it will not be injured by the grant of the patent.  It means that Teva is now estopped from attacking the validity of the patent, whether in proceedings before the ILPTO or before the courts.  The statute does not give the DC the authority to resurrect the legally dead.

Also, reading between the lines, one suspects that at this point in time Teva is as interested as Lilly in the patent being granted: given the late stage at which Teva withdrew the opposition - after the sides had brought witnesses to the Patent Office and conducted cross-examination - and that the withdrawal was by assent of both parties, it's a fair assumption that Teva and Lilly reached an agreement under which Teva received some sort of inducement not to pursue the opposition to the end - a convenant not to sue, or a reverse payment to keep a Teva version of the drug off the market, or something of that nature.  So the guess here is that right now Teva would be perfectly happy for Lilly to have a patent to keep Teva's competitors at bay, and would be disappointed were the patent to be denied.

Mr. Shlomovitz would have done well to recall the recent incident in which a former minister was convicted of a crime but received no jail time.  Unlike in the USA, in Israel the prosecution may appeal both a finding of not guilty as well as the sentence passed on the convicted.  However, at the time the deadline for appeal came up, the prosecutors were on strike, and an appeal against the lenient sentence was not timely filed.  When shortly afterward the prosecutors returned to work and asked for an extension to appeal, the courts said, too bad.  The guilty ex-minister – whose last name, incidentally, can be scrambled to spell “Hayignov”, which in Hebrew means, appropriately enough, “he who shall steal” – is out free.  If the country can suffer a crooked politician out walking free, surely it can suffer a patent that no one except the DC himself has objection to.

* * *

Although Mr. Shlomovitz didn’t provide detailed reasons for his refusal, as required under Rule 74, he did say that his reasoning in brief was that the essence of the invention pertained to tadalafil, specifically the problem of its solubility; that the invention solved the problem by breaking the solid bulk tadalafil into very small particles, whereby increase the rate of dissolution to enable “rapid onset” of the effects of the drug; but that according to the material before him, it was obvious to any average professional (he didn’t say in what field) that decreasing particle size would increase the dissolution rate, and that even the prior art that Lilly Icos asserted taught away from the invention actually showed that decreasing particle size was always the first thing one would try in order to increase the rate of solubility.

Not having seen either the parties’ submissions, including the prior art relied upon, or the transcripts of the cross-examinations, and not having seen Mr. Shlomovitz’s still non-existent full reasoning, I won’t comment at this stage on the substance of his decision, save for one point: the brief explanation provided in the March 30 decision doesn’t relate to each claim separately, but only relates to the claims as a whole.  But even if one accepts that decreasing particle size is the most obvious way to increase the dissolution rate, that might affect claims 1 and 5 (reproduced below), but how does that necessarily lead one to the specific C_max and AUC recited in claim 8?

1.A free drug particulate of a compound having a formula

  

and pharmaceutically acceptable salts and solvates thereof in which the compound is present as solid particles not intimately embedded in a polymeric co-precipitate, wherein at least 90% of the particles have a particle size of less than about 40 microns.

5.A pharmaceutical composition comprising: (a) a free drug particulate of a compound having a formula

 

and pharmaceutically acceptable salts and solvates thereof in which the compound is present as solid particles not intimately embedded in a polymeric co-precipitate, wherein at least 90% of the particles have a particle size of less than about 40 microns; and (b) one or more pharmaceutically acceptable carriers, diluents or excipients.

8.A pharmaceutical composition comprising: (a) a free drug particulate of a compound having a formula

 

and pharmaceutically acceptable salts and solvates thereof, in which the compound is present as solid particles not intimately embedded in a polymeric co-precipitate; and (b) one or more pharmaceutically acceptable carriers, diluents or excipients, wherein the composition exhibits a C_max of 180 to 280 micrograms/liter or an AUC of 2280 to 3560 microgram hour/liter, measured using a 10 miligram [sic] dose of the compound.