America-Israel Patent Law

Proposed Amendments to Regulations at Israel PTO: Powers of attorney (Part 2)

Yesterday I discussed many of the problems with the Israel’s PTO’s treatment powers of attorney. Today I discuss the ILPTO’s proposed amendments to the Regulations regarding powers of attorney.

The good news is that the ILPTO has now woken up to problem of the rules seemingly requiring a POA, and seeks to rectify it. The bad news is that the ILPTO’s proposed language not only won’t accomplish this, but (a) it will make things worse than they presently are, and (b) it doesn’t address other issues that need to be addressed, such as the appointment of multiple practitioners who are not part of the same firm (e.g. an in-house attorney along with outside counsel). 

Below I present side-by-side the current wording and the proposed wording for the relevant parts of Rule 17, in both cases my translation:[1]

Current	Proposed
17.(a). Any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action.	17.(a). Any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action. The appointee shall inform the Commissioner that he has power of attorney to take the action on the electronic application form at the time of filing the application, and if he is appointed after the filing of the application, by way of written notice which shall be delivered to the Office.
	(d) The Commissioner may, at any time, or for a specific matter, require the appointee to produce the power of attorney, and even to condition the taking of the action on the production of the power of attorney.

Ostensibly, the idea is to allow practitioners to file patent applications and to continue to take actions in those applications, without actually submitting powers of attorney, unless the Office requires such submission.  The problem is that way the proposed amendment is worded, the practitioner will need to aver upon filing that he already has a signed POA in hand. That’s worse than the present situation, since, as noted yesterday, at present a practitioner can file without a POA. 

Will practitioners be willing to make such a statement if it’s not true, viz. if they don’t have a signed POA in hand at filing time – especially if they can then be required to produce the document later? I suspect many if not most practitioners will not want to aver to something that’s not true. Thus the proposed amendment, as worded, will be a hindrance rather than a help.

Moreover, since, as also noted yesterday, the statute does not give the ILPTO the authority to close a patent application for failure to file a POA, from the perspective of making things easier for applicants and practitioners, the ostensible problem that needs addressing is one of the ILPTO’s own making, since it is the ILPTO that threatens, without authority, to close files if a POA is not filed. 

It’s also worth noting that there’s nothing in the proposed amendment to limit the power of the Commissioner to require production of a POA, i.e. that’s entirely at his discretion.  That leaves things open to abuse

It would be better to rewrite 17(a) to read something like, 17.(a). With respect to any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action. The patent agent or lawyer may provide the Office with a written power of attorney from the person appointing him; in the absence of a written power of attorney, the submission of a document by a patent agent or lawyer in an application shall constitute an assertion by the agent or attorney that he is authorized to file the document.

And new 17(d) could read, (d) The Commissioner may, by way of public notice, specify classes of documents or actions for which the Office will require from the appointee a written power of attorney in order for such document or action to be valid.  (This wording could be appended at the end of 17(a) rather than appear as its own separate sub-section.)

By wording the regulation this way, all registered practitioners would be able to file documents in all patents and patent applications, but the ILPTO could still designate certain types of actions – such as express abandonments – that would require the submission of a power of attorney.  Because the electronic filing system utilizes two-factor authentication, the Office would be able to track who filed which document, and for further ease of reference the ILPTO could require documents submitted to specify the filer’s patent agent or lawyer registration number.  It would be necessary to modify the electronic filing system to enable these functions, but those technical concerns should not be an impediment to setting good policy.

Additionally, while the ILPTO’s proposed amendment doesn’t address the matter of applicants who wish to appoint multiple practitioners who are neither “partners” (a term that is not defined in the statute or regulations) nor who “work together in the same single office”, the modified proposal here would in principle facilitate such multiple appointments, since any practitioner would be able to file a document in any application, and for those documents or actions for which a POA is required, it would easy for the office to check to be sure that person filing the paper was authorized in the POA to submit the paper.  However, for the sake of completeness, it would be necessary to amend regulations 16(f) and 17(b):

Current	Proposed
16(f) If a person gave authorization in accordance with regulation 17, the address of the authorized party shall be regarded as the address for service for the authorizer, as long as the authorization remains in force and as long as neither the authorizer nor the authorized inform the Office otherwise; this sub-section applies also with respect to the address of the authorized or any other address provided, and the authorized may inform the Office of an email address as set forth in regulation 16(b) for use with all patent applications and proceedings before the office in which the authorized represents the applicant.	16(f) If a person gave authorization in accordance with regulation 17, the address of one of the authorized party parties, designated by the authorizer, shall be regarded as the address for service for the authorizer, as long as the authorization remains in force and as long as neither the authorizer nor the authorized inform the Office otherwise; this sub-section applies also with respect to the address of the authorized or any other address provided, and the authorized may inform the Office of an email address as set forth in regulation 16(b) for use with all patent applications and proceedings before the office in which the authorized represents the applicant.
17(b) No more than one person may be authorized per matter, unless there are authorized together several persons who are partners or who work together in the same office; however, a person may authorize more than one authorized to appear and argue in his name [in litigious proceedings before the ILPTO – DJF].	17(b) No mMore than one person may be authorized per matter; the Commissioner may, by way of public notice, limit to a number not less than 10 the number of persons that the authorizer may authorize, unless there are several persons authorized together several persons who are partners or who work together in the same office; however, a person may authorize more than one authorized to appear and argue in his name.

Finally, Regulations 16 and 17 should be further amended to specify that, after issuance of a patent, if a party pays a maintenance fee, then that party becomes the address for service for maintenance fees only, while any power of attorney already on file would stay in force for any other matters.  This would eliminate the present situation in which the practitioner who prosecuted the case but is not responsible for maintenance fees continues to receive notices about maintenance fees.

 

[1] In point of fact, I’ve cleaned this up, as the draft amendments appear to contain some errors.

Proposed Amendments to Regulations at Israel PTO: Powers of attorney (Part 1)

Last week the Israel PTO announced by email proposed amendments to the regulations (rules) governing certain aspects of practice before the Israel PTO in all four areas over which it has jurisdiction - patent, trademark and design applications and registrations, and appellation of origin applications and registrations.  I did not find a corresponding announcement on the ILPTO website, but the following links to the draft regulations appear in the email announcement:

• טיוטת תקנות הפטנטים (נוהלי הרשות, סדרי דין, מסמכים ואגרות) (תיקון), התשפ"ג-2023
• טיוטת תקנות הפטנטים (הארכת תקופת הגנה – סדרי דין בבקשה לצו, בהתנגדות לצו ובבקשה לביטול) (תיקון), התשפ"ג-2023
• טיוטת תקנות סימני המסחר (תיקון), התשפ"ג-2023
• טיוטת תקנות העיצובים (תיקון), התשפ"ג-2023
• טיוטת תקנות המדגמים (תיקון), התשפ"ג-2023
• טיוטת תקנות כינויי מקור (סדרי רישום של כינויי מקור שארץ מקורם היא ישראל), התשפ"ג-2023

Comments are due by the end of the day on Sunday, June 4.[1]  Sadly, the announcement doesn’t include an email address to which to send comments. Rather, the announcement refers to each of the web pages above, which include links for people to provide comments, although I have not yet checked to see that those links work.[2] 

The principal change proposed, and on the only one common to all the proposals, is a change in the procedures for filing power of attorney.  In tomorrow’s post, I’ll relate to those proposed changes and their shortcomings.  In this post I’ll focus on the current shortcomings concerning powers of attorney.  Although I’m going to specifically POAs with respect to patents, the ILPTO has proposed the same change with the same language in the relevant regulations for trademarks, designs and appellations of origin as well.

As one would expect, in Israel applicants for patents may act pro se, or such applicants may appoint an authorized representative.[3]  The relevant provisions are set forth in rules 16 and 17 of the Patents Regulations. Rule 16 concerns providing the ILPTO with an address for service in Israel; for pending patent applications, the applicant must provide the office with such an address.  Per the most recent amendments to the regs from several years ago, the applicant may also provide an address for email service of documents.[4] 

Rule 16(f) specifies that if the applicant is represented by an authorized representative per rule 17 (see next paragraph), then the address for service must be the address of that representative.  Since probably upward of 99% of patent applications in Israel are filed via representatives, and the regulations also stipulate that representatives must file electronically, de facto these provisions collectively mean that almost all correspondence with the ILPTO must be conducted electronically.

Rule 17 concerns the appointment of representatives, and says that, by way of a written power of attorney that “shall be delivered to the ILPTO”, an applicant may appoint a representative to act on the applicant’s behalf before the ILPTO.  Rule 17 also says that a person may not appoint more than one representative per matter, unless the multiple representatives are “partners or they work together in the same single office”.

It’s not always possible to get a signed power of attorney prior to filing a patent application, so the practice of the ILPTO has been to allow practitioners to submit a patent application without a POA, and then to requisition a POA (asserting rule 17 as granting authority to requisition the POA), giving the applicant a month to provide the POA.  Failure to file the POA will result in abandonment of the application.

As someone licensed to practice before both the USPTO and ILPTO, and who also makes use of WIPO’s ePCT filing system, I’ve long found the ILPTO’s approach to be suboptimal (to put it mildly), and possibly ultra vires.

Specifically, what practitioner is going to file a new patent application that he hasn’t been instructed to file? The electronic filing system that an Israel practitioner must use to file the application won’t allow the new application to be filed without paying the filing fee (around $600 for an application of 100 or fewer pages); why would any practitioner spend that money if he hasn’t been told he’ll be reimbursed?

More importantly, a practitioner’s license is his livelihood. What practitioner is going to knowingly file an application, or a document in an application, that he hasn’t been authorized to file, particularly if doing so will prejudice the putative client’s interests? It’s a safe bet that the practitioner is only going to file something if he’s been instructed to do so, or if he hasn’t received specific instructions but has a general standing instruction from the client to keep the case pending. It doesn’t take a genius to understanding that doing something to deliberately harm the applicant or patentee could not only cost the practitioner money in a tort suit, it could be the end of his career. (For readers who have studied Gemara, this is an example of one of the definitions of the term “migo” מיגו.)

The USPTO recognizes this reality, and operates accordingly.  As in Israel, US Rule 1.33(a) requires that a new application include a correspondence address. But Rule 1.33(b) says that amendments may be filed by a practitioner who is on record as having power of attorney, or by a practitioner acting in a representative capacity per Rule. 1.34.  And Rule 1.34 establishes when a practitioner who is not of record (viz. for whom a power of attorney has not been recorded) files papers, “his or her personal appearance or signature shall constitute a representation to the United States Patent and Trademark Office that under the provisions of this subchapter and the law, he or she is authorized to represent the particular party on whose behalf he or she acts”.

That’s a smart arrangement: it makes it clear that the practitioner can act without a POA, but by doing so he’s effectively certifying that he’s authorized to act. 

Additionally, the USPTO as a matter of policy still requires a POA for the filing of two documents: an express abandonment of an application or patent, or a terminal disclaimer that foreshortens the term of the patent.  That makes sense too, since those acts irreversible and, on their face, prejudicial to the applicant/patentee’s interests.

What this means in practice is that, for example, if an applicant wants a new US practitioner to take over a file, the new practitioner can do so without having to wait to obtain a power of attorney. Of course, if the new practitioner wants to receive notifications from the USPTO about new correspondence in the case, and the like, he’ll need to record a change of correspondence, but that’s a separate matter, and doesn’t prevent the new representative from filing responses or paying fees.

The USPTO arrangement also means that if, for example, a solo practitioner will be going on vacation, and some response will need to be filed or a fee will need to be paid, he can arrange for a colleague to attend to the matter. 

So for the ILPTO to insist on the submission of a signed POA as condition for continued representation of the applicant in most situations is, from the practical standpoint, not just silly, but counterproductive.[5]

Additionally, the threat of closing the file because a POA isn’t submitted is legal hogwash, both statutorily[6] and from the commonsense standpoint: if an application is incomplete upon filing (e.g. it contains illegible drawings), and the defect is never cured, or if an applicant doesn’t respond to an examination report, those could be a reason for closing the file. But failure to submit a POA? It’s not in the same league. And in point of fact, I have had cases that were filed without a POA, in which the ILPTO has asked for a POA, which I prosecuted through to grant.

Another problem with the present system in Israel is that, as mentioned earlier, Rule 17 says that an applicant or patentee may not appoint more than one representative per matter, unless the multiple representatives are “partners [a term not defined in the patent statute] or they work together in the same single office”.  That reflects a particular way of thinking about how people work or should work together that is outmoded: people work together in different constellations and with different arrangements, and it’s unreasonable for the ILPTO to try to force them into a particular work model. Such a narrow conception of what constitutes “working together” is also prejudicial to applicants, who may want a particular team of practitioners to work on a matter, even though the practitioners are not “partners” and do not “work together in the same single office”.

Inasmuch as the present regulations limit practitioners’ freedom to make their own work arrangements, and limits applicants’ ability to choose their representatives, this narrow conception of “working together” also stands in contravention to two so-called “basic laws”, the “Basic Law: Freedom of Occupation” and the “Basic Law: Human Dignity and Freedom”, which the “High Court of Justice” (not to be confused with the Supreme Court) regards as having constitutional status.  

By contrast, USPTO allows an applicant to appoint whichever registered practitioners it wants to represent it before the USPTO.[7] Similarly, in PCT applications, WIPO makes it possible for any combination of people that the applicant desires to have access to its PCT applications, with varying levels of authorization. 

A related point is that whereas the USPTO will send out notices of correspondence in a file to up to three email addresses, and WIPO’s ePCT allows for notifications to be sent to multiple email addresses, the ILPTO will only send such correspondence to a single email address.

There’s also the problem (discussed in an earlier blog post) that the Israel PTO does not have a mechanism that enables patentees to provide correspondence addresses for maintenance fees only.

As will be discussed in tomorrow’s blog post, the ILPTO’s proposed amendments attempt to address only one of these matters, and fails even at that.

 

[1] Like in the USA, statutes in Israel often omit details about the specific means of implementation of the statutes, and say that the details will be set forth in implementing regulations.  For readers familiar with the rule-making process in the USA, the process in Israel is similar, except that formally the job of enacting the regulations is assigned to a particular minister, and the regulations must be approved by the relevant committee in the Knesset, rather than being enacted by the administrative body itself (following notice-and-comment procedures) as is the case in the USA.  In the present case, it’s clear that the impetus for these amendments is coming from the Israel PTO itself, which will then ask the Minister of Laws (a title which is unfortunately mis-translated as Justice Minister, even though the Hebrew term משפטים does not mean “justice” and is never, ever translated that way in any other context) to sign them and bring them to the committee for approval.

[2] Why allow members of the public to send a single document with comments when you can have them go to six different web sites and provide six separate sets of comments?

[3]  Namely, a licensed patent practitioner who has a technical degree and has passed the ILPTO licensing exams, or, in keeping with the practice in banana republics, any one of the tens of thousands people who don’t have a technical background but have a law degree as a first degree and have passed the lawyer licensing exams – because we all know that law school is much, much more difficult than getting a STEM degree and passing the lawyer exams imbues people with wisdom otherwise not imparted to mere mortals.

[4] Until now, Rule 16 precluded email service of the patent certificate itself, and required the office to send a paper certificate, but the proposed amendments will allow the patent certificate itself to also be sent by email; patentees will have the option of requesting a paper copy from the ILPTO, presumably for a fee.

[5] The ILPTO’s position on this is that its hands are tied, and that Rule 17 as presently worded forces it to require the submission of a written POA. I find that disingenuous, because there are other areas where the ILPTO in effect doesn’t enforce the statute or the rules. But as those situations sometimes accrue to clients’ benefit, I’m not going to discuss them here.

[6] The ILPTO says that its notice to submit a POA constitutes a “notification of defects” under section 20 of the statute, and therefore failure to reply is cause to close the file, but that’s just plain wrong. Section 20 of the statute says that if the examiner or the Commissioner find that the (claimed) invention is unpatentable or that the application fails to meet the requirements of sections 11-16A of the statute (none of which say anything about a power of attorney), the then the Office will notify the applicant. Section 21 says that if the applicant doesn’t fix the defect(s) within a specified time, the Commissioner will refuse the application. So there’s no statutory basis for closing the file – viz., refusing the application – for failure to file a POA.

[7] The mechanism by which this is done at the USPTO will wait for a later blog post.

Pfizer’s Paxlovid: A New Drug Without A Patent

That title is a bit misleading, because Paxlovid does have patent protection. But that wasn't the case when it was first approved. 

“Paxlovid” is the name given to Pfizer’s product for the treatment of COVID-19 infections. The product is actually a combination of two antivirals, ritonavir, which has been around since the 1990’s, and nirmatrelvir, which is brand-spanking new.  (For an account of how this molecule was conceived in the first half of 2020, and how testing revealed some non-obvious choices of substituent groups, see here.)  The two drugs are packaged as separate pills but sold in a single box as “Paxlovid”. 

Paxlovid was first approved for use on an emergency basis in December 2021 for patients age 12 and up.  It remains approved on an emergency use basis (the most recent update to the “FACT SHEET FOR PATIENTS, PARENTS, AND CAREGIVERS” was updated less than a week ago, on August 26, 2022), although a study published last week in the New England Journal of Medicine by a team of Israeli researchers concludes that nirmatrelvir does little for young patients. As practical matter, here in Israel it is available only to those aged 60 and over.

Pfizer filed a series of provisional applications covering nirmatrelvir (then called PF-07321332) between September 3, 2020 and May 29, 2021, culminating in a US non-provisional filed August 5, 2021.  The corresponding PCT/IB2021/057281 was filed August 6, 2021 and published as WO 2021/250648 on December 16, 2021; it has since been nationalized in at least 20 countries.  The first patent to issue in this series was US11351149B2, which issued on June 7, 2022 – more than five months after the initial emergency FDA approval.  As of this writing, there is no Orange Book entry for nirmatrelvir, meaning the ‘149 patent is not listed in connection with the drug (which may be due to the authorization being an emergency use authorization rather than a standard FDA drug approval). 

Pharma patents have been part of my work since I started in the patent field. I don’t recall any case in which a drug received approval before a patent covering the active ingredient had issued.  Presumably, the even if standard FDA approval for Paxlovid is forthcoming in only a few years, the earlier initial emergency approval relative to the patent issuance will preclude the granting of a patent term extension for the ‘149 patent: if timing of patent issuance and FDA approval are such that 14 or more years of patent life remain at the time of FDA approval, no PTA will be forthcoming (35 U.S.C. §156(c)(3)).

English Translation of Israel PTO Notice About Work Arrangements Under Coronovirus Shut Now Available

Further to yesterday's blog post, today the ILPTO published an English translation of its notice about work arrangements during the Coronavirus shutdown.

Update March 27: the ILPTO published a further clarification on March 25. English version here. If you're recording a pledge against a patent, the 90-day limit to do so still applies, and the office will record the pledge. If you are a patent practitioner trainee on now unpaid leave, you should read the update.

Updates from Israel PTO Re: Work During Coronavirus Shut-Down

On Saturday night, March 21, the Israel cabinet agreed to reduce the number of public sector employees still working.  Yesterday, March 22, the Israel PTO published a four-page explanation of how it is implementing this decision, which remains in effect until May 1, 2020 or until the ILPTO publishes a new notice, whichever comes later.  [Update, March 24: the ILPTO has now published its own English translation of the notice.]  The main points are that:

• many employees were already working from home, and will continue to do so; registration certificates will continue to issue, and the Patents, Trademarks and Designs Journals will continue to publish at the end of each month;
• the ILPTO will strive to meet its obligations under treaties (e.g. providing PCT search reports on time), and to issue renewal certificates on time, but certain services (recording assignments, licensing new practitioners, notices of formal defects in PCT national stage applications, daily notices of outgoing correspondence) will be delayed at least until after Passover (April 15, 2020);
• the ILPTO will continue to accept submissions electronically and, for those parties permitted to do so, in person or by regular post, but in-person meetings and proceedings before the ILPTO, including hearings in adjudicatory proceedings, will remain in suspension;
• deadlines for filing new applications, responses to office actions and the like will not be held in abeyance, but non-statutory deadlines in adjudicatory proceedings will be suspended;
• applicants or other parties in proceedings before the ILPTO who are unable to timely make submissions as a result of coronavirus-related circumstances may request extensions or reinstatement based on those circumstances, which will be taken into account when deciding whether or not to grant the extension or reinstatement;
• in cases in which the ILPTO has an announced policy capping the number of extensions, that cap will be temporarily be waived, but statutory deadlines (e.g. for opposing a patent application or requesting a patent term extension) cannot be waived;
• in order to allow applicants/owners to file requests for extension/reinstatement, at least until May 1, 2020, no files will be closed for an applicant’s/owner’s failure to take an action, nor will the ILPTO send pre-file closure notices (which in many instances are a prerequisite for closing a file).

We elaborate on each of these below.

There are two ways in which the coronavirus outbreak affects the ILPTO: fewer people are physically in the ILPTO, and by order of the Cabinet, the ILPTO’s workforce needs to be reduced; and parties with matters before the ILPTO may be unable to meet deadlines.  Yesterday’s letter clarifies how the ILPTO is dealing with both of these aspects.

In the main, the ILPTO is attempting to maintain a “business as usual” approach.  Thus the ILPTO will still do intake on new patent, trademark and design applications; examiners will still examine cases, although the pace of examination will slowed; the Office will continue to publish the Patents, Trademarks and Designs Journals each month; and the Office will issue registration certificates, although the Notice recommends that, given possible disruptions in Israel Post, registrants download copies of the certificates.  The ILPTO will likewise strive to meet its obligations under international treaties, such as PCT examination, and it will deal with requests for immediate processing of applications, e.g. due to the inventor’s age. 

However, certain less-critical functions will be suspended altogether: the processing of changes in ownership or the name of the applicant/owner, recording of liens and the like (except for changes in local address for service, which will still be processed); the processing of registration of new practitioners and registration for practitioner examinations (except for complaints against practitioners); the sending of notices regarding formal defects in PCT national stage applications; and the emails that the ILPTO sends to practitioners, informing them of the cases in which correspondence issued, to enable practitioners to track that correspondence (in case a piece of correspondence wasn’t received). 

For over a week the ILPTO has not been receiving the public, and this will continue, which means inter alia that there will be no in-person examiner interviews, nor will any hearings in adjudicatory matters take place.  The notice states that there will, however, be someone answering the telephone during regular business hours. With most personnel remaining at home, it is unclear if callers will be able to obtain the clarifications they seek, even if they get through to the ILPTO.

Perhaps of greater to interest to parties with deadlines in matters before the ILPTO is the question, “Whither my deadline?” 

The first thing to note is that the Commissioner has discretion about granting deadlines in many matters, but certain deadlines are set by statute and cannot be extended.  Specifically, in patent matters, the following deadlines are not extendible:

• for third parties to request immediate examination of another’s patent application per §18(c);
• for filing an opposition to patent a application under §30,
• for payment of renewal fees per §56 and §57,
• for opposing the reinstatement of a patent under §61,
• for notifying the Commissioner of the granting of extension orders for reference patents in the USA and Europe under §64E(e)(2),
• for opposing the grant of a patent term extension (PTE) under §64F,
• for paying the fees to keep a PTE in force under §64M,
• for submitting a PTE application under §64O,
• to oppose under §73(c) the revocation or cancellation of a patent, and
• to oppose a change in the Register under §170(c).

Similarly, the deadlines for opposing a trademark registration and for paying trademark renewal fees per §24 and §33 of the Ordinance cannot be extended, and the deadlines for certain actions in design registrations are likewise not extendible.  (From the wording of the Notice, it sounds like the Commissioner would like to have the authority to extend some of these deadlines, but knows that he doesn’t, and may seek a change in legislation at a later time to address this.)

Second, in all other cases the Commissioner has discretion to grant extensions.  In some instances, though, he has published notices according to which, a priori, he has limited the number of extension available.  Thus, for example, during the substantive examination phase of a patent application, the ILPTO’ stated policy is that it will grant extensions without a showing of cause upon the payment of a fee, but that it will not grant more than four months of extension at one time, and not more than 12 months’ extension total over the course of examination.  The Notice says that at least until May 1, 2020, these caps will not be emplaced, and that extension periods falling within the period of March 22, 2020 through May 1, 2020 inclusive will not be included in capped period.

In some instances in which the Commissioner has discretion to grant an extension or to reinstate an application or registration, there is a criterion for granting the extension/reinstatement, either by dint of the statute or self-imposed by the ILPTO.  Thus, for example, a patent applicant who fails to file an application within the priority year may request an extension for the priority claim, and per §164 the Commissioner may only grant such extension if he determines that the failure to timely file in Israel was due to circumstances over which the applicant had no control and that could not be prevented.  In other instances, a showing of “reasonable cause” must be made.  The Notice points out that inability to file a document or pay a fee on time due corona virus-related circumstances may constitute circumstances that amount to “reasonable cause” or circumstances over which the applicant had no control, but that each case will be judged on its own merits.  Requests for extension on such basis may be made either before the initial deadline, or retroactively.

The Notice states that deadlines in adjudicatory proceedings are suspended at least until May 1, 2020 or further notice, whichever is later, but that the adjudicators will continue “to work as normal”, which we understand to mean that decisions in cases in which all hearings and submissions have concluded will continue to issue.

The Notice says that, in any event, in order to allow parties that have missed deadlines to make their case for extension/reinstatement, until May 1, 2020 or further notice, whichever is later, no files will be closed for failure to take a required action, nor will the ILPTO send pre-file closure notices, which in many instances are a prerequisite for closing a file.

Finally, it is to be noted that the ILPTO would have been closed anyway for Passover, from April 8 through April 15, 2020, inclusive.  Hence any deadlines that fall on these dates would in any event have been statutorily deferred to April 16, 2020, and thus filings or payments due on these dates will be considered timely if made on or before April 16, 2020.

 

Update, March 27:

(a) the ILPTO published an English version of its March 22 announcement.

(b) on March 25 the ILPTO issued a further clarification in both Hebrew and English: since the statute imposes a 90-day limit to record a pledge against a patent, the ILPTO will continue to process the recording of such pledges. And if you're a patent practitioner trainee and you're now on unpaid leave, you should read the announcement

Angiomax Patents: They’re Dead, Jim

It’s been a while since we wrote about Angiomax (the API of which is bivalirudin).  The hiatus was because, in the wake of the “Dog Ate My Homework Act” which was part of the so-called America Invents Act in 2011, The Medicines Company was given a reprieve from its attorneys’ mistake (they missed the deadline for filing for a patent term extension because the person docketing the action listed the deadline as two months from FDA approval instead of 60 days) and its basic patent covering the active ingredient of this drug, US 5196404, was extended from July 2010 until December 2014.   

TMO actually had some additional protection: it obtained two additional US patents, 7582727 and 7598343 (discussed here and here), prior to the nominal expiration of the ‘404 patent, and listed these in the FDA Orange Book.  Unlike the ‘404 patent, the ‘727 and ‘343 patents were involved in ANDA litigation.  Now the Federal Circuit has laid those two patents to rest, apparently clearing the road for generic bivalirudin.  In a decision issued last Thursday (The Medicines Company v Hospira, Inc.), the CAFC reversed the District Court and said that the asserted claims were invalid because of the on-sale bar: more than a year before the patent application was filed, TMO had purchased the product having the requisite purity from a supplier which had used the recited process to make the product. 

Distinguishing from cases where the experimental use exception to the on-sale bar applies, the CAFC noted that these were commercially usable batches worth about $10 million apiece, and that there is no “supplier” exception to the on-sale bar, so the fact that the sale was made to TMO itself was of no avail.  Thus, said the CAFC, the claimed product was on sale more than one year before the patent applications were filed.  As Dr. McCoy would say, “He’s dead, Jim.” 

Of more interest to this reader, but not elaborated on by the court, was the characterization of the claims as product-by-process claims.  One usually thinks of product-by-process claims as being worded, “A product X which is prepared by the process of mixing A with B and heating at temperature C.”  Claim 1 of the ‘343 patent, the only independent claim of that patent at issue, certainly qualifies a p-b-p claim:

1. Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1) and a pharmaceutically acceptable carrier, for use as an anticoagulant in a subject in need thereof, said batches prepared by a compounding process comprising:

(i) dissolving bivalirudin in a solvent to form a first solution;

(ii) efficiently mixing a pH-adjusting solution with the first solution to form a second solution, wherein the pH-adjusting solution comprises a pH-adjusting solution solvent; and

(iii) removing the solvent and pH-adjusting solution solvent from the second solution;

wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp⁹-bivalirudin that does not exceed about 0.6% as measured by HPLC. [emphasis added]

Claim 1 of the ‘727 patent, however, reads:

1. Pharmaceutical batches of a drug product comprising bivalirudin (SEQ ID NO: 1) and a pharmaceutically acceptable carrier for use as an anticoagulant in a subject in need thereof, wherein the batches have a pH adjusted by a base, said pH is about 5-6 when reconstituted in an aqueous solution for injection, and wherein the batches have a maximum impurity level of Asp⁹-bivalirudin that does not exceed about 0.6% as measured by HPLC.

Where's the process?  Initially the court stated that the two patents “include product-by-process claims describing” the discovery of the process that led to the claimed invention.  But later in the decision the court seems not to distinguish between the two patents in this regard:

“We find no principled distinction between the commercial sale of products prepared by the patented method at issue in D.L. Auld Co. and the commercial sale of services that result in the patented product-by-process here. The Medicines Company paid Ben Venue for performing services that resulted in the patented product-by-process, and thus a “sale” of services occurred.” 

“Accordingly, we find that the district court clearly erred in finding the Ben Venue sale of services did not constitute a commercial sale. To find otherwise would allow The Medicines Company to circumvent the on-sale bar simply because its contracts happened to only cover the processes that produced the patented product-by-process.”

Was the CAFC construing the statement “wherein the batches have a pH adjusted by a base” in the claim 1 of the ‘727 patent as evincing a p-b-p claim?  Or was characterizing this claim as a p-b-p claim just an oversight?  The court didn’t say, and it doesn’t appear that the question is germane for the on-sale bar determination – i.e., it’s dictum.  But today’s dictum sometimes has a way of becoming tomorrow’s holding...

You Can’t Win ‘Em All: Amgen’s Successful U.S. Patenting Strategy Results In Denial Of Patent Term Extension in Israel

The statutory amendments to US patent law adopted in September 2011 were only the latest (if the most far-reaching) in a series of changes to US law following the major revision of 1952.  Another significant change occurred on June 8, 1995, when the USA switched from a 17-years-from-grant system to a 20-years-from-earliest-filing system.  The transition was accompanied by a provision that the term of any granted patent in force on that date, or which was subsequently granted on an application filed before but still pending as of that date, would be the longer of 17 years from grant or 20 years from the earliest filing date.

In anticipation of the change, there was a rush of filings in early June 1995, as applicants attempted to file applications that would benefit from this “best of both worlds” situation.  As reported by Dennis Crouch on Patently-O earlier this year, there are still a few hundred applications pending that were filed before the change was made that, if allowed, will be in force for 17 years from grant.  (Conversely, the filing of a continuation application after June 8, 1995 subjects the application to the 20-years-from-earliest-filing-date provisions; Aaron Feigelson has found more than few patents that as a result of the change were “dead on arrival”.)

Amgen made good use of the change in the law.  It has five US patents filed before June 8, 1995 that trace their lineage to the 1980’s, some as far back as 1983, all of which issued later; three of these were filed on the eve of the statutory switch: no. 5,547,933 (filed June 7, 1995, granted August 20, 1996); 5,618,698 (filed June 6, 1995, granted April 8, 1997; 5,955,422 (filed August 2, 1993, granted September 21, 1999); 5,756,349 (filed June 6, 1995, granted May 26, 1998), and 5,441,868 (filed in 1987, granted in August 1995). 

Collectively these patents cover Amgen’s blockbuster drug Epogen^® (recombinant erythropoietin, “EPO” or epoetin alfa).  In 2007, several of the patents were found to be infringed and not invalid, resulting in Roche being unable to bring its competing Mircera^® product to market; in 2009, Roche and Amgen settled their dispute, with Roche stipulating to the validity and infringement of all five patents, and agreeing to keep Mircera off the market until July 1, 2014.  Epogen was first approved by the FDA in 1989, meaning Amgen secured 25 years of effective patent protection for this drug in the USA.   

A related Amgen product is Aranesp^® (darbepoetin alfa), which like Epogen is used to treat anemia in certain situations.  According to the prescribing information, darbepoetin alfa is a modified version of erythopoietin (EPO); in particular darbepoetin alfa

“is an erythropoiesis-stimulating protein that is produced in Chinese hamster ovary (CHO) cells by recombinant DNA technology.  Aranesp is a 165-amino acid protein that differs from recombinant human erythropoietin in containing 5 N-linked oligosaccharide chains, whereas recombinant human erythropoietin contains 3 chains.  The 2 additional N-glycosylation sites result from amino acid substitutions in the erythropoietin peptide backbone. The approximate molecular weight of darbepoetin alfa is 37,000 daltons.”

As with EPO, in the case of Aranesp Amgen made good use of the change in US patent term calculations: it filed USSN 08/479,892 on June 6, 1995, claiming continuation and continuation-in-part priority back to a 1989 application.  The ‘892 application matured into US Patent No. 7,217,689 on April 25, 2007, with an nominal expiration date 17 years later, viz. April 25, 2024.  Aranesp was approved by the FDA in 2001, meaning the drug will enjoy an effective 23 years of patent protection in the USA if the ‘689 patent isn’t invalidated. 

Where the story gets interesting, at least from an Israeli perspective, is when we look at what happened in the corresponding case in Israel.  Aranesp was approved by the Israel Ministry of Health in 2002; on the patent side, Israel patent no. 110669 was filed in 1994 and claims priority from USSN 08/108016, a 1993 application in the US priority chain for the US ‘689 patent.  IL 110669 was granted in 2009 and, absent a patent term extension (PTE), will expire in August 2014. 

The patentee filed a request for a PTE within the prescribed time after the grant of IL 110669.  But here it ran into a technical problem.  The statute defines a “basic patent”, which is the Israel patent for which the PTE is sought and that “protects” the API (or formulation, or method of making either); and the statute defines something called a “reference patent”, which is a patent in any one of several recognized jurisdictions that also protects the API (or formulation, or method of making either).  Section 64D(5) of the statute says that if the FDA approved the patent-protected product or process, then in order to receive a PTE in Israel, a “reference patent” in the USA must have received a PTE from the USPTO. 

In its Israel PTE application, Amgen stated that the reference patent in the USA is the ‘689 patent.  That makes sense: claim 3 of IL 110669, for example, reads,

3. An analog of human erythropoietin which is: Asn³⁰Thr³²Val⁸⁷Asn⁸⁸Thr⁹⁰ EPO.

which is quite similar to claim 23 of the US ‘689 patent, which reads,

23. An analog of human erythropoietin comprising the amino acid sequence of human erythropoietin from residues 1–165 as shown in SEQ ID NO: 26 except for the amino acid changes Asn³⁰Thr³²Val⁸⁷Asn⁸⁸Thr⁹⁰ EPO.

The problem for Amgen was that no PTE was ever issued for the US ‘689 patent, which according to 64D(5) means that IL 110669 isn’t eligible for a PTE either.  Indeed, no PTE for the US ‘689 could have issued, since a PTE in the USA can’t extend the patent more than 14 years from the date of FDA approval, viz. 2015, and here the US ‘689 patent won’t expire until 2024, so the patent wasn’t even eligible for a PTE. 

Realizing it had a problem on its hands, Amgen argued in its Israel PTE application, and then in ex parte proceeding before the ILPTO Commissioner, that it was nevertheless entitled to a PTE for IL 110669, inter alia because the term of the US ‘689 “reference” patent had effectively been extended by virtue of the change in US law.  Citing some earlier district court and ILPTO decisions, in a written decision from September 27 the Commissioner rejected Amgen’s arguments, on the grounds that the statute was clear and that it wasn’t his place to engage in “purposive construction” of the statute when his task in deciding PTE applications was purely ministerial.  Amgen had FDA approval for the drug but no PTE for a US patent protecting the drug, hence he could not issue a PTE in Israel. 

Thus Amgen’s choice to file June 6, 1995, and thereby obtain the “best of both worlds” for its US patent term, doomed its chances of obtaining a PTE in Israel.  Of course, at the time, there was no PTE legislation in Israel, and even if there was, given the disparities in the two markets, and the billions of dollars Amgen has made and will continue to make with Aranesp, this one would have been a no-brainer.

Interestingly, had Amgen chosen to file the ‘892 application two days later, when it would have been subject to the 20-years-from-earliest-filing limitation, it probably still would have lost out on a PTE in Israel: the US ‘689 patent – the one that issued in 2007 – would then have been set to expire in 2003, four years before it issued, and by dint of the FDA’s 2001 approval of the drug, would have been eligible for a PTE only until 2006, a year before the patent issued.  So even with the grant of temporary PTEs by the USPTO until 2006, Amgen may well have found itself in the same boat as far as Israel goes.  Then again, maybe not: as noted above, the USPTO isn’t averse to issuing patents that are DOA, so perhaps a 2007 grant with an earlier, albeit temporary, PTE, would have been sufficient to gain PTE eligibility in Israel.

[Editorial comment: the Commissioner reached the right decision in this case, but it would be nice if he and his staff would start being equally circumspect in their reading of the statute on other matters, such as “overlap” between applications, or with regard to the timing of the filing of divisional applications, both areas in which the ILPTO has in recent years invented new laws not found in the statute.]

 

New Job Opening at the Israel PTO: Affirmative Action or Reverse Discrimination?

This morning on its web site the Israel PTO published notice of a job opening.  (I was looking for word about the new patent statute amendments, but but found nothing; a lengthy post on that topic is in the works.)  What caught my eye was the title of the announcement, "Publication of Notice of Position of Coordinator (Patent Matters) For Minorities".  Curious as to what the last clause meant, I read further.  

Turns out the job primarily involves dealing with the formal aspects of applications for patent term extension, although other formalities associated with patents, such as updated address changes, are included in the job responsbilities as well.  A high school education is required, and some job experience is required for candidates with no additional education; the job is open to both men and women, and preference will be given to candidates who have successfully completed the civil service examinations.  

But the most interesting part was the statement right under the headline: "The position is intended for the non-Jewish population including the Druze and Circassian population".  They might as well have written "Jews need not apply".

I'm all for encouraging minorites to work in the civil service, but should a candidate who is substantively qualified for a position be specifically excluded from it because he's Jewish (or Druze, or Arab, or a Russian-born Christian)?  For that kind of treatment there are plenty of other places I could live.

Do As I Say, Not As I Do: More Hypocrisy From The USA Regarding Israel’s IP Regime; Death Knell for a Bad Supreme Court Decision?

To the extent I’ve had time to post over the last few months, most of the posts have been devoted to the adoption of legislation enabling 18-month publication of patent applications in Israel, and in particular to the ongoing deliberations in the Knesset’s Constitution, Statute and Law Committee in this regard.  Today’s post is no different, since today and tomorrow, the committee will meet again to consider this bill.  

Early Publication

At present it appears likely that the bill will pass in a form that requires publication of all patent applications, including those that are presently pending.  As I’ve argued before, I think this is unfair to applicants who filed their patent applications under the current, no-publication-until-acceptance-of-the-application system.  I have no doubt that the vast majority of applicants have no objection to their presently pending applications publishing, particularly since, in most cases, corresponding applications have published abroad.  Nevertheless, I am equally certain that there are a handful of applications that were filed because their owners knew that the contents of the applications would stay secret until the conclusion of substantive examination, and/or whose owners have made business plans in reliance on such secrecy.  It’s not fair to change the rules for those applicants in the middle of the game.  If one conceives of the patenting process as a contract between the state and the applicant, forcing early publication of an application after telling the applicant that his application will remain secret constitutes a breach of the contract on the part of the state.  (For that reason, one wonders if a clause forcing publication of all pending applications would hold up to so-called constitutional scrutiny before the so-called High Court of Justice.)

Rather than requiring publication of all pending applications, the statute should provide an opt-in clause: those applicants who want their pending applications to publish now should be allowed to tell the ILPTO to publish such applications.  This would largely achieve the goals of early publication, without adversely affecting those applicants who have relied on the non-publication in making their businesses decisions until this point.

There is, however, another aspect of this legislation that I haven’t previously discussed: the hypocrisy that lies behind this amendment.  It’s no secret that the USA, in particular the Department of Commerce and the U.S. Trade Representative, been pressuring Israel for some time to adopt an 18-month publication regime.  To this end, the U.S. Commerce Secretary and Israel’s Minister of Trade signed an agreement two years ago that stipulated, inter alia, that Israel would adopt such regime (in exchange for the USA calling Israel a good guy and taking off the USTR’s list of bad guys who don’t honor IP, like China; I’ve written before about the ludicrousness of that comparison).  

Now, there are good arguments in favor 18-month publication regimes, which explains why they are the standard in the developed world.  Indeed, Israel likely would eventually have adopted such a regime even without prodding from the USA, as there’s no real opposition in Israel to 18-month publication.  But in negotiating with the USA, apparently no one on either side checked to the situation regarding 18-month publication in the USA itself before proposing what Israel should do.  That, or the Americans feel free to be hypocrites.  I say that because, as anyone familiar with US patent law knows, when the USA adopted early publication in 1999, it didn’t make publication compulsory for all applications.  Publication only applied for applications filed after a certain date, and even then, applicants could opt out of publication, by signing a statement that no corresponding application had been filed in an early-publication country.  The penalties for falsely making such a statement are draconian – you lose your patent – but in principle your application need not be published before it is granted.  

That being the case, why on earth has Israel agreed not only to publish all applications in the future, but even to publish currently pending applications?  The USA did neither of these things.  In this case, what’s good for Uncle Sam should be good enough for Uncle Moshe.  I doubt that today and tomorrow, the Knesset committee is going to tell the Americans where can they put their “early publication for all” demands, but it would sure be sweet if it did.  

Rescinding A Wrongly-Decided Supreme Court Decision

Israel’s Supreme Court has a reputation as the world’s most activist court.  This reputation has been earned primarily in its role as the so-called High Court of Justice, which hears claims against state activity, but the Court’s activism extends to the civil sphere too, including the IP arena.  To illustrate:

Imagine you’re a manufacturer of air conditioning vents.  You see that a competitor has a very successful model of vent.  After doing some research you discover that his vent is a copy of a vent that was invented abroad by someone else many years ago.   Or you find that although your competitor developed the vent himself, he never sought to protect it via a patent or registered design, even though such protections are available by statute in Israel.  Or that in fact, he patented it, but the patent expired last year.  Being a logical person, you would conclude that under the circumstances, not only are you free to manufacture and sell your own version of the vent, but that you can market for a lower price, thus benefitting consumer. 

Unfortunately, you’ve overlooked the fact that you’re in Israel, where marriages between logic and public policy are infrequent and purely coincidental.  In the present case, we have a flawed 1998 Supreme Court decision, popularly known as the AShI”R decision, that gums up the works.   In AShI”R, various parties who produced articles which were not protected by patent or other intellectual property laws – either because the parties hadn’t sought IP protection, or because IP protection wasn’t available (e.g. because the article was already known and therefore not patentable), or because the parties had availed themselves of statutory IP protection but it had expired – sought relief against competitors who copied their products.  The Supreme Court ruled that they were entitled to protection.  In so doing, the Court turned logic, and the rationale behind the country’s patent and design legislation, on its head.  How so? (If you’re an IP practitioner, the next paragraph will be clear to you, so skip ahead.)

Modern patent regimes are based on a quid quo pro: in exchange for disclosing a new and non-obvious invention, in a manner that enables competitors to copy the invention, the state grants the inventor a limited period of exclusivity – currently 20 years from the date of filing the patent application – during which the inventor can prevent others from making, using, selling, or offering to sell the invention.  The expected receipt of such a period of exclusivity encourages investment in R&D, particularly in areas where high outlays of capital are necessary to bring a product to market.  The grant of the exclusivity, which is a matter of public record, encourages others to develop new, non-infringing ways to compete, which usually leads to more efficient technologies and lower prices.  The temporal limitation of the exclusivity ensures that even if no non-infringing alternatives are developed, competition will eventually be possible, along with concomitantly lower prices; it also allows competitors to make business decisions on the basis of predictable dates, viz. the expiration date of the patent.  The logic behind design protection is similar, although the investment involved is usually smaller, and the scope and duration of protection more limited.

In AShI”R, the Supreme Court ignored the patent and design statutes and the public policy considerations underlying them, and in effect said that copying per se is bad, even though the Knesset, in accordance with sound economic policy, had already determined that copying per se isn’t bad.  As the Aramaic expression goes, kulei alma lo pligei (everyone agrees – except, apparently, Israel’s Supreme Court) that a party that chooses not avail itself of the protection afforded by IP statutes should not be entitled to such protection through the backdoor of the courts; among other things, to provide protection in such cases undermines the predictability that the patent statute seeks to provide, and discourages the public disclosure that the patent statute seeks to obtain. 

The egregiousness of the Court’s decision is all the more true in cases in which patent protection isn’t available, either because the article in question isn’t substantively patentable (it was known or is obvious over what was known) – society has no interest in granting exclusivity on something that’s already known – or because patent protection for the article being copied has already been exhausted, in which case the Court’s decision effectively amounts to an extension of the patent term for an indeterminate length of time, and an abrogation of the contract between the state and inventor when the state agreed to give the inventor a 20-year term of protection.  (Indeed, the patent statute includes provisions for the extension of patent term, but they apply to a narrow set of circumstances that do not include any of the situations under consideration in AShI”R.)

More than 13 years after the AShI”R decision was handed down, the Knesset may finally be poised to lay this bit of judicial folly to rest.  The 18-month publication to be discussed in committee today and tomorrow also contains language that would effectively rescind AShI”R with respect to patents, in so doing reinforcing the patent regime in Israel.  According to the bill, a court would be precluded from hearing a claim based on the manufacture, use, sale or offer for sale of an invention that is unpatented, irrespective of the reason why that invention is unpatented. 

Of course, it ain’t over till it’s over, so it’s possible that despite unusual consensus in the legal, business and academic communities about the need to rescind AShI”R, political machinations may do their worst, and this provision of the bill may be buried in committee in order to placate the whims of certain individuals with their own agendas.   Here’s cautious optimism that the MKs on this committee will do the right thing and restore the patent statute’s primacy in governing the protection of new and non-obvious inventions.

 

The USTR's Rite of Spring

Igor Stravinsky’s The Rite of Spring describes, in musically graphic terms, the sacrificing of a young maiden as part of a pagan ritual.  In recent years, the United States Trade Representative has taken to engaging in its own rite of spring, namely publishing its “Special 301 Report”.  This report purportedly addresses “the adequacy and effectiveness of U.S. trading partners’ protection of intellectual property rights (IPR)”.  In fact, that description of the report, taken from the USTR website, is something of a misnomer, as the bulk of the report focuses on what the USTR considers to be the inadequacy and ineffectiveness of its trading partners’ protection of IP rights: of the 77 countries reviewed, over half – 42 – wound up on one of the three lists of countries that don’t measure up to the USTR’s standards.  

As has become an annual part of the USTR’s ritual, Israel once again has found itself on the “Priority Watch List”, i.e. among the worst of the worst, like China.  Which for several reasons makes people who follow the Israel IP scene pause to wonder what political agenda was behind this year’s Special 301 Report, and why yet again Israel merited being the USTR’s sacrificial maiden.  

First, categorizing Israel with China is absurd.  Ignore for the moment that population-wise China is about 200 times larger than Israel, and that its GDP likewise dwarfs Israel’s.  Among the major issues with China are the widespread production of counterfeit goods and theft of trade secrets.  But there’s nothing to compare when it comes to Israel.  Regarding counterfeits, even proportionally to Israel’s size, the problem of counterfeit of goods in Israel nowhere near approaches that in China.  That’s in large part because Israel has statutory measures granting IP rights, and the executive and judicial bodies in Israel work with the rights holders to enforce those rights.  Contrast that with China, where, if statutory protections even exist, the authorities often turn a blind eye to the goings-on.  China manufactures and exports goods bearing counterfeit marks, but if those goods show up Israel, the mark owner can have them seized; Customs will sua sponte hold such goods at the port; and once seized, the fakes will eventually be destroyed, with someone from the infringing side being made to bear the costs.  Similarly, Israel has trade secret legislation, which likewise can be and is enforced.  

In fact, the USTR deems Israel’s level of protection in these areas to be sufficient.  So if Israel provides what the USTR considers to be adequate protection and enforcement on the counterfeit and trade secret theft front, what’s the USTR’s beef with Israel?  Purportedly inadequate legislation in three areas, two of them tied explicitly to pharmaceuticals: data exclusivity, patent term extension calculation, and early (18-month) publication of patent applications.  

 This brings to the fore the second puzzling aspect of the USTR’s categorization of Israel: Israel already has data exclusivity and patent term extension provisions.  It’s just that the USTR decided the protections already in place aren’t quite good enough.  That issue was actually addressed last year, when the U.S. Secretary of Commerce and the Israel Minister of Industry and Trade reached an agreement, and the USTR seemed prepared to divest Israel of its “habitual offender” status.  As reported in earlier posts (here and here), in accordance with that agreement, changes would be made to Israel’s existing data exclusivity legislation (the period of exclusivity would be lengthened from five to six-and-half years, although the legislation would still not be an impediment to Israeli drug exporters), and to its existing patent term extension (PTE) legislation (the process for obtaining PTEs and calculating PTE would be simplified, and a mechanism for filing PTE requests before receipt of MOH approval or grant of the patent would be enabled).  Furthermore, Israel patent applications, which hitherto were opened to the public only upon completion of substantive examination by the ILPTO, would be opened 18 months after the priority date.  (In fact, as reported here, a draft bill to this effect had already been circulated for comment before the agreement was signed.)  It was agreed that the legislative changes would be made quickly, and once they were made, Israel would be dropped not only from the “priority watch list” but also from the “watch list” (which lists not the worst of the worst but the merely bad). 

What the USTR may or may not have taken into account when making that last stipulation was the snail’s pace of the Israel legislative process.  Even if that was an oversight, it doesn’t make the USTR’s position any less disingenuous.  It’s not like Israel hasn’t moved at all on these things, or that the Minister out-and-out lied.  To the contrary: as the USTR well knows, there is movement, and a good faith effort is being made to push all the pieces of legislation forward.  In some cases, the delay has been due to as mundane an issue as the government ministries responsible for drafting the legislation being short-staffed.  That makes Israel an “IP offender” on the order of China? 

Moreover, the USTR didn’t tell the Israelis was that the USTR itself would further slow the amendment process, by insisting on reviewing and approving drafts of legislation.  (Why the Israeli bodies charged with drafting that legislation acceded to the USTR’s request is both puzzling and disconcerting.)  So while legislation on all three fronts is slowly making its way through the system, that’s not good enough for the USTR, which cited the failure to enact the promised reforms – the “failure” to which the USTR is partly to blame – as the primary reason for putting Israel back on the priority watch list.  As Arlo Guthrie might say, you got a lot of damn gall. 

It’s also more than a little hypocritical for the USTR to be impatient with Israel.  The Israeli legislation isn’t moving along any more slowly than “patent reform” in the USA, which has been percolating in Congress in one form or another since 2005, and only now appears to be on the cusp of being adopted.  And unlike the changes Congress seems set to adopt, Israel’s changes probably won’t gut its patent system, as Senator Leahy seems hell-bent on doing in the USA. 

The Special 301 also "encourages" Israel to adopt statutory damages for copyright infringement.  Hello, McFly?  Someone at the USTR ought to learn Hebrew: Israel copyright law has had statutory damages for an awfully long time, including in the 2007 revision of the Copyright Act.  Actually, they don't even need to learn Hebrew: learning how to use the internet would be sufficient, since WIPO Lex actually contains an English text of that statute, and section 56 says in plain English that a copyright holder is entitled to up to 100,000 shekels for damages, without the need for proof.  So before the USTR criticizes Israel for not having what it deems to be 21st century IP laws, the USTR itself might try joining the 21st century.

By publishing this report, and continuing to equate Israel with China because Israel’s data protection and patent term extension schemes aren’t quite what the USTR wants, the USTR only undermines its position in the eyes of Israeli policy makers and those who follow IP law.

Physician's Lament: Let's Give Away New Drugs For Free

In October I wrote about the paragraph IV challenge to Eli Lilly’s anti-lung cancer drug Alimta^®, royalties from which had paid in full for a new $280 million chemistry building at Princeton University, the patentee.  In November, Princeton and Lilly prevailed at the district court, and in December the Princeton Alumni magazine carried a story about the university’s victory.  This prompted a letter from an alumnus – a physician by trade – bemoaning the P-IV lawsuit instituted by Princeton and Lilly, and the resulting “additional five years” of exclusivity, beyond the original patent term expiry in 2011, from which Princeton and Lilly would now benefit.  “It is likely that the standard seven-year period of patent protection has been enough to cover the development cost of the drug”, he wrote, asserting that while the university had benefited immensely from the drug, the deferment of the entry date for generic competition until 2016 would harm low-income patients who could not afford the $2800 per dose price tag.  “It is disheartening to see the University harming low-income patients and contributing to the high cost of American health care in this way”, he concluded.

 

Now, this may sound surprising coming from a patent attorney who spends a fair amount of his time protecting new molecules, but I’m a big fan of generic drugs.  You won’t catch me buying a name-brand version of ibuprofen, my pain-killer of choice.  However, I’m also a big believer in new drug development, and that costs big bucks.  And frankly, if it’s a choice between erring on the side of giving an innovator a longer period of exclusivity than necessary for its new life-saving drug – with a concomitantly high price for the drug – versus never having that drug reach the market because sufficient exclusivity wasn’t available, I’d rather have the innovator benefit from a few extra years of exclusivity.  So between that and some factual errors in his letter, I couldn’t let Dr. Herr’s remarks go without comment.  I reprint below (with some hyperlinks inserted) the long version of a letter I sent to the Princeton alumni magazine; my understanding is that a much-edited 275-word version will appear in the print edition of the magazine a few weeks hence.

As a patent attorney who has worked on both sides of the innovator/generic drug company divide, I was disappointed to see the position espoused by a health care professional with regard to the economics of innovative drugs like Alimta^® (David Herr ‘65, letters, January 19, 2011).

The FDA, acting as the public’s guardian, requires that new drugs meet stringent safety and efficacy standards.  The overwhelming cost of new drug development lies in the hundreds of millions of dollars spent in clinical trials to demonstrate compliance with those standards.  Furthermore, for every new drug candidate that receives FDA approval, dozens more fail somewhere during clinical trials, and hundreds more never even make it out of the laboratory.  Those many failures are funded by the few successes.  Put bluntly, if you want new drugs tomorrow, you’re going to have to foot part of bill today, because without a reasonable expectation of profit, no company is going to invest the kind of money required to develop new drug candidates.  So while Alimta^®, now approaching seven years on the market, may or may not have already paid for its own development, giving it away to generic competition at this time, as Dr. Herr seems to suggest be done, would doubtless harm the development of the next cancer-curing drug. 

Indeed, that Alimta is an anti-cancer drug already makes it exceptional.  According the only peer-reviewed study published on the subject (Grabowski, Nature Reviews Drug Discovery, Vol. 7 (June 2008) pp. 479-488), a new drug needs about 13-16 years of market exclusivity following its launch in order to justify its development.  Such market exclusivity is presently pegged to patents, which since 1995 have been limited temporally to 20 years from filing, with a possible extension of up to five years for delays in launch due to the FDA approval process.  But meeting FDA requirements for drugs for the treatment of cancer and chronic diseases like Alzheimer’s takes longer than it does for other types of drugs. 

Alimta^® itself is a case in point: the first patent application on the active ingredient was filed in 1989 and eventually granted as US 5,344,932 in August 1994 (not 2004, as stated by Dr. Herr), giving rise to an August 2011 expiration date.  However, FDA approval for the drug only came nine-and-a-half years later, in February 2004 – fourteen-and-a-half years after the filing of the initial patent application.  Without the possibility of a patent term extension to compensate for slow FDA approval (which extension was ultimately granted, until 2016), it is doubtful that Alimta^® would have reached the market; without the profits generated by Alimta^® over the next five years (for example, if another generic drug company were to successfully challenge the patent during that time), other promising new drugs may die in the pipeline.

Incidentally, neither the grant of a patent nor a patent term extension is a guarantee that the innovator will have market exclusivity for that optimal 13-16 year period.  Under the current system, which ties new drug exclusivity to patents, litigation over the validity of those patents is de rigueur; generic drug companies will usually be considered remiss if they don’t challenge an innovator’s patents.  And for reasons I won’t go into here, the deck is currently stacked against the innovators when it comes to patent validity challenges.  What bears mention is that making the timing of entry of generic competition dependent on the outcome litigation creates unpredictably for both innovators and generics manufacturers.  The potential for the untimely loss of market exclusivity due to the loss of a patent thus becomes part of the pricing calculus for innovators.  For this and other reasons, it would probably better to move to a set-term-from-FDA-approval regimen for determining market exclusivity; I discussed this a few months ago in a blog post written in response to an earlier PAW article about the Alimta^® litigation.

Returning to Dr. Herr’s letter, it is heart-wrenching to see someone suffer from a terminal disease solely because they can’t afford the treatment.  But would Dr. Herr prefer that in 30 years’ time his progeny have no more choices for life-saving therapies than are currently available, because in his own lifetime he gave away today’s profit-generating drugs and thus undermined future drug development?

There is, of course, a place for generic drugs in this system: after the 13-16 year window of exclusivity that makes new drug development financially worthwhile.  Not only does the arrival of generic competition cause the price of drugs in the U.S. to plummet precipitously, making those medications affordable for nearly everyone, but without the threat of generic competition, innovator companies would have less incentive to develop new drugs.  

Finally, in the global scheme, the construction of a new chemistry building at Princeton using royalties from Alimta^® is also a good thing.  The old Frick building was well past its prime was I was there in the late 1980’s; at least a few of the many students who will be trained in the new building will over the course of their careers contribute to humanity by participating in new drug development, or by developing generic versions of older drugs.

Daniel Feigelson '90

Rehovot, Israel

Another Fine Mess: What do IBM, Boehringer Ingelheim and Amgen Have In Common?

A few weeks ago I posted about the Commissioner of Patents getting very publicly raked over the coals by a legislator for having unilaterally decided a few years earlier to cease paper publication of the Patents Journal by the Government Press Office (GPO), as required by statute, and to instead only publish the Journal on the ILPTO’s website, all the while continuing to collect the publication fees set by law.  The incident occurred in the context of a committee hearing in the Knesset in which the topic of discussion was a statutory amendment that would enshrine the practice prospectively and ex post facto give legal force to the online publication that had already taken place.  Although the committee decided to put off further discussion until later, I noted at that time that (a) the failure to engage in paper publication cast a cloud over the validity of several thousand patents, but (b) for that very reason the Knesset would enact the proposed legislation to retroactively fix the situation. 

Perhaps unsurprisingly, it only took a few days for some cash-hungry lawyers and some potential plaintiffs to find each other and to file suit against the Commissioner, seeking to have the suit declared a class action.  After all, a single thousand-shekel publication fee paid by an individual applicant is hardly worth fighting over, but if several million shekels in official fees paid by thousands of applicants are at stake, a win would be a windfall for the lawyers, and the plaintiffs might even see a few shekels themselves.  The reasoning evinced in the complaint is seriously flawed, but that’s the topic for a later post. 

In the interim, the ILPTO got the message: on October 31, 2010, it published Patent Journals Nos. 2/2010, 3/2010 and 4/2010, but this time it made sure to have the GPO simultaneously print a copy of each Journal, so that there was simultaneously publication online AND in “Reshumot”, the official state publication organ.  No doubt about it, these three Patents Journals are definitely kosher.  

Today’s post focuses on some of the many patents the status of which is presently in question, and which are in need of a legislative fix.

Exhibit A is a group of patents belonging to IBM.  The four patents in question, IL 151545, IL 153888, IL 157506, and IL 159655 all lapsed in 2007-2008 for failure to pay maintenance fees.  When IBM discovered the oversight, it filed requests to reinstate the patents, in August and October 2009.  Notice of the requests to reinstate were published in the Patents Journal online on the ILPTO website, but paper copies weren’t published.  In the absence of opposition, all four patents were reinstated.  Or were they?  The statute requires that notices of requests to reinstate be published in “Reshumot” by the GPO.  Since formally such publication never took place, it can be argued that technically these four patents still haven’t been reinstated and are therefore presently unenforceable.

Actually, in this particular case, it gets even better: it’s not clear that any of the four patents were actually granted.  The original publication per §26 of the statute of notices that the applications had been allowed by the ILPTO also took place on the ILPTO’s website, without a corresponding paper publication in “Reshumot”.  Since publication in Reshumot is a sine qua non of the patent grant process, it can be argued that technically these patents are still merely applications awaiting publication in Reshumot.  If that’s the case, then IBM should probably ask for a refund of the fees it paid to reinstate the “patents”…

Of course, at worst for IBM, the ILPTO could now publish a paper version of the Patents Journal that would list these four patents.  While that would represent several years lost from the life of the patents, the patents would still be in force.  As will presently be explained, that option isn’t available for our next exhibit.

Exhibit B is IL 95691.  This patent covers tiotropium bromide monohydrate.  That’s the active ingredient in Boehringer Ingelheim’s product Spiriva®, a drug for treating chronic obstructive pulmonary disease.  Spiriva had worldwide sales of over 2 billion Euros in 2009.  The patent was filed on September 14, 1990, but the drug wasn’t approved by the local health authorities until 2004, making the patent eligible for a patent term extension (PTE).  Boehringer timely applied for a PTE, and in March 2010 the ILPTO published notice of intent to grant the extension; the PTE was ostensibly granted several months later in the absence of any opposition thereto. 

But here too, the publication of the notice of intent to grant the PTE occurred only on the ILPTO website, not in the GPO-published, cellulose-based “Reshumot”.  Technically, then, the Commissioner wasn’t authorized to grant the PTE, the “granted” PTE is a nullity, notice of the intent to grant still awaits paper publication in “Reshumot”, and only thereafter can the Commissioner grant the PTE.  

Now we come to the real problem: without a valid PTE, this patent expired in September 2010.  And under the current statute, the Commissioner is neither empowered to grant interim PTEs prior to expiration of the patent (in contrast to the situation in the USA), nor is he authorized to grant a PTE after the expiration of the patent.  In other words, without amendment of the statute to retroactively give legal force to the online publication, this patent is dead.  I don’t know what the local market for Spiriva is, but if it’s doing 2B Euros annually it has to be worth at least a few million here in Israel.

Exhibit C is IL 95572.  This patent covers etanercept, a version of the alpha- and beta-receptors of tumor necrosis that is the active ingredient in Immunex’s (Amgen’s) Enbrel®.  Enbrel, which is indicated for various types of arthritis, had sales of nearly 3.5 billion dollars in 2009.  Enbrel was approved by the Israel Ministry of Health in 2000.  Unfortunately for Immunex/Amgen, although the patent application was filed in 1990, the ILPTO didn’t allow the application until 2008, at which point it was published in the Patents Journal.  Online.  Without a paper publication in “Reshumot”.  So again, technically, the grant of this patent is a nullity, and Immunex needs to await paper publication before it can get its patent.  The only problem with that is that the 20-year term for this “patent” ended in April 2010.  Moreover, this “patent” was eligible for a PTE, and ostensibly received such a PTE, but again, the notice of intent to grant the PTE was only published online, not in “Reshumot”.  So, as in the case of Spiriva, the patent for the API for Enbrel is no longer in force, the Commissioner can’t grant a PTE, and the only hope for getting patent protection at this point is for a retroactively effective amendment to the statute.  The good news for Immunex/Amgen is that since this is a biologic drug rather than a traditional small molecule, it may be a while before generic competition is in a position to receive Israel Health Ministry approval. 

It’s unclear to me why the Knesset committee chose to stall action on this amendment last month.  If, as it seems it may be, the committee chairman, David Rotem, is either trying to capriciously flex his legislative muscle or simply nursing a bruised ego, the present situation is reminiscent of a Laurel & Hardy film.  I stand by my prediction that the Knesset will enact the necessary amendment to fix this problem.  The Commissioner’s motives in this case were the right ones: online publication is a faster and far more efficient way to disseminate the notices that hitherto have been published in “Reshumot”.  True, he should have lobbied the Knesset to make the change first, or at least seen to it that at least one paper copy of the Journal would be published by the time the Journal went online.  Nevertheless, the fact that he didn’t get the statute changed first is no excuse for committee chairman to keep the necessary amendment holed up in committee.  Such failure to act would be folly.  Ultimately, no one has been harmed by the online-only publication.  To the contrary: the filing of oppositions to patent applications has continued apace, indicating that the notice function of publication is being met.  Israel patents continue to be indexed in international patent databases, such as the EPO’s Inpadoc and Derwent’s WPI.  It’s inconceivable that the thousands of patent applicants stand to lose their patents because of Knesset inaction.