America-Israel Patent Law

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)).

A Good Explanation of the Problem with "Progressive" Views of Big Pharma

James Meigs has a piece in the newest edition of Commentary entitled "Thank God For Big Pharma".  It doesn't say anything that's not already familiar to people involved in the pharmaceutical development process, but it's still a good read.  My only criticism: he doesn't mention Bayh-Dole, but he does discuss what would happen if the private sector were taken out of the drug development process, which is what some politicians seem to be angling for (by depriving drug companies of profits).  As I've said more than once before, I'd rather someone make huge profits and there be new drugs (or in the past year, new coronavirus vaccines) than no one make huge profits and there be no new drugs; and I'm glad there's a generic drug industry to make sure that, in nearly all cases, those drugs eventually become generic, at which point their prices drop precipitously. Together those two things drive new drug development.

Free Speech, The Right to Petition, and Patent Infringement: A Thought on Hatch-Waxman and ANDA Filings

This is longish post, prompted by a comment made by Dennis Crouch at his PatentlyO blog.  Since much of it deals with the background of the Hatch-Waxman amendment, with which some readers are familiar, I’ll cut to the chase: in discussing the recent CAFC decision in Valeant v Mylan, Dennis suggested that there may be a first amendment issue lurking in the fact that 35 USC §271(e) says it’s an act of patent infringement to submit a paragraph IV ANDA to the FDA. He thinks this might be an infringement of the constitutional right to petition the government and the right to free speech, both enshrined in the First Amendment of the US Constitution. I think that suggestion is baloney.

By way of background: Hatch-Waxman is the 1984 US law (which amended both the Food, Drug & Cosmetic Act and the Patent statute) that was a boon for both drug innovation and for the generic drug industry.  Until that time, a generic drug manufacturer (“GDM”) had to wait until a patent (or patents) expired before even undertaking experiments to begin manufacturing a patented drug, including experiment to obtain data to be submitting to the FDA in support of the request for approval of the generic drug. Under H-W, prior to patent expiration those generic drug manufacturers can do almost everything necessary to bring the product to market.  GDMs can thus seek FDA approval for their drugs prior to patent expiration, so that they can be ready to go to market as soon as the patents expire.  (H-W also instituted a tightly circumscribed mechanism for limited patent term extension for drug patents, but that’s not germane to the present discussion.)

Additionally, instead of replicating all of the (time consuming and expensive) clinical work of the originator, it’s sufficient for a GDM to show that its generic drug is bioequivalent to an approved drug.  The GDM can thus submit an “abbreviated new drug application”, aka an ANDA, to the FDA.

Under H-W, patentees submit to the FDA lists of patents that cover their approved drugs; the FDA compiles these in a publication commonly referred to as “the Orange Book”.  When filing an ANDA, a GDM must make a certification with respect to the patent status of the drug.  The GDM may certify that there are no relevant patents in the Orange Book, or that there are patents but the GDM will not market the drug until after those patent expire. 

But H-W includes a provision to encourage challenges to patents, or to encourage companies to work around patents, in order to get generics to market earlier (and thus reduce drug prices): the ANDA filer may certify that there are patents, but that those patents are invalid and/or not infringed.  Under H-W, the submission of an ANDA containing such a certification, known as a “paragraph IV” certification, constitutes an act of infringement (as codified at 35 USC §271(e)), and if the patentee sues the ANDA filer for infringement within 45 of being notified of the ANDA filing, the FDA is precluded from examining the ANDA submission for 30 months.  But the first ANDA filer that is successful in its challenge gets 180 days of exclusivity vis-à-vis other GDMs.

ANDA litigation is somewhat anomalous, in that it’s only the submission of the ANDA with the paragraph IV certification that constitutes infringement – no actual infringement has taken place, because, in the absence of FDA approval, no product has yet been sold or put on the market.  So in the case of ANDA litigation, the patent infringement/validity question is normally resolved before any traditional infringement has taken place, the GDM is thus not potentially on the hook for a large damage award since the patentee hasn’t suffered an actual injury, and usually the public gets lower-cost generic drugs at an earlier stage than it would have in the pre-H-W era.

So much for a run-down of the Hatch-Waxman regime.  If you’ve hung with me for this long, you’re surely asking, “What does all of this have to do with free speech?”  In my view, nothing, but last week, in discussing the CAFC’s, Valeant v Mylan decision, Dennis Crouch suggested it does.

The Valeant decision actually focused on something completely different, namely the question of the proper venue for entertaining an ANDA infringement suit, following the Supreme Court’s 2017 TC Heartland decision.  That question boils down to where the act of infringement occurred or where the defedant’s place of business is located.  The court held that in this case, since the ANDA was submitted from Mylan’s headquarters in West Virginia, that’s where the act of infringement occurred, and so venue was proper in WV, not in New Jersey where the suit had been filed.  But in discussing the case, Dennis Crouch, a law professor and blogger, suggested that by defining a paragraph IV ANDA submission as constituting infringement, 271(e) might run afoul of the First Amendment, stating

“There has been some debate about the how to think about §271(e).  It seems odd that “to petition the Government” constitutes an act of infringement. (Quoting the First Amendment, U.S. Const.).”

and then going on to write,

“Although I have not developed this argument, the court’s straight-read of the statute here places the provision on rocky First Amendment grounds regarding both speech and gov’t petitions.  The court considered some of these issues in the personal-jurisdiction context in Zeneca Ltd. v. Mylan Pharm., Inc., 173 F.3d 829 (Fed. Cir. 1999)”

I find both assertions puzzling, and the first one to be misleading.  The First amendment reads,

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

As an initial matter, the FA guarantees the right to petition for the redress of grievances.  An ANDA filing can probably reasonably be construed as a petition, but it is not a petition for a redress of a grievance.  It is a petition that is entirely the result of federal legislation. The FDCA creates something called an ANDA, and 35 USC §271(e) doesn’t curtail the ability to do that. Indeed, as I explained above, the relevant provisions of both the FDCA and the Patent Statute were enacted simultaneously, as part of a single package, with the passage of the Hatch-Waxman amendment.  To paraphrase, all that 35 USC §271(e) says is, “The FDCA allows GDMs to try to piggyback on the work done by others, by filing something called an ANDA; but understand that such a filing, under certain circumstances, may constitute patent infringement.” Indeed, H-W was designed to encourage paragraph IV challenges and the ensuing litigation, as a means of getting generic drugs to market more quickly.  So no right to petition is curtailed by 35 USC §271(e), let alone a right to petition “for redress of grievances”.  That aspect of the First Amendment is not implicated by the H-W scheme. 

Additionally, no speech is being prohibited or curtailed by 35 USC §271(e).  GDMs can file their ANDAs, and say whatever they want.  It might be imprudent for them to say something like, “We actually think the patents we’re challenging are valid and infringed” in a shareholder report, but a GDM is still free to say so, even as it files its ANDA asserting that those patents invalid and/or not infringed.

As noted, the filing of an ANDA is only defined as an act of infringement if it includes a paragraph IV certification. The ANDA filer can choose not to go to market until after the patents expire, in which case the ANDA filing doesn’t constitute infringement. If the ANDA filer makes a paragraph IV certification, the patentee may choose not to sue for infringement, in which case the FDA will process the ANDA, without the 30-month stay.  And in the worst case scenario, there’s litigation and the ANDA submission is found to constitute infringement, in which case, as noted, there are no damages (since there’s no FDA approval and nothing has been sold), and the ANDA filer merely needs to wait until the patents have expired.

Of course, the GDM has the option of foregoing the ANDA route and instead developing its own data and submitting that as a regular NDA rather than an ANDA, in which 35 USC §271(e) wouldn’t come into play.

Moreover, the ANDA filer has benefited from the safe harbor of Hatch-Waxman, which says that doing the acts necessary to compile the data for the ANDA submission (e.g. synthesizing the active molecule) *doesn’t* constitute infringement, even though those acts normally *would* constitute infringement.

Finally, there’s no criminal penalty attached to a paragraph IV ANDA filing – the remedies for patent infringement are civil.

In short, I don’t see where there are any first amendment issues here – neither from the free speech aspect, nor from the right to petition aspect.

The sheer inanity of the suggestion that 35 USC §271(e) might not pass constitutional muster is brought into sharp relief when one consider the alternatives to the present arrangement under H-W. One alternative is the pre-Hatch-Waxman arrangement, under which the acts necessary to prepare an FDA submission constitute infringement, and thus competitors need to wait until the patents expire before even beginning to prepare generics – or they need to send such work offshore, to a country where such acts don’t constitute infringement. This is where we would be if the Supreme Court were to strike down the entirety of Hatch-Waxman as unconstitutional.

Another alternative is to provide the safe harbor of H-W, but without stipulating that submitting an ANDA to the FDA constitutes infringement. Then the ANDA filer may get FDA approval, but then will have to decide whether or not to launch “at risk”. And if, as is likely an, infringement suit follows, the patentee’s ability to obtain an injunction is uncertain, and the ANDA filer may be subject to a damage award if it does launch at risk.  This would be the situation that would result were the Supreme Court to decide that the provisions of Hatch-Waxman are severable (severability being on many lawyers’ minds this week in the wake of arguments about Obamacare before the Supreme Court in California v Texas), and that §271(e) specifically is unconstitutional.

It doesn’t appear to me that either of those alternatives is better than the present system under H-W.  Indeed, I think Hatch-Waxman is one of the few pieces of federal legislation that actually accomplished what it set out to accomplish and serves the public well.  Would it be worth it to the public to jettison the present H-W system on the basis of a specious First Amendment argument? In this connection, see Judge Gajarsa’s discussion in Zeneca v Mylan that Dennis mentioned on this point.

Bottom line: there’s no First Amendment issue with 35 USC §271(e), and it’s pity that this suggestion was made by Dennis in his blog.

Modeling Pandemics: An Illustration of Why Hindsight Reasoning Drives Patent Applicants Crazy

A friend shared this link to a comic-style presentation of the difficulties inherent in modeling a pandemic. In nutshell, lots of potential variables (not all of which are necessarily relevant in all contexts), and not enough data to populate those variables.  Ergo the predictions arising from those models may be wildly off.  

For many patent practitioners, there's a familiarity there, that comes from dealing with a prior art document that throws in everything but the kitchen sink.  It's not unusual for some patents or published applications to provide long lists of the potential identities of various components in a pharmaceutical or other formulation, or in a process for making a chemical compound or a formulation, or to provide long lists of potential substituents at various positions of a molecule.  Or maybe the patent recites broad ranges for the amounts of various components in a formulation or a process. 

When all those variables are taken into account, there may be millions or hundreds of millions of possible combinations.  Even the best-funded applicants can only provide a few hundred examples to illustrate those millions of possible combinations, and more often than not, the application will provide only a handful of examples.  And yet for a patent examiner - speaking, of course, for the hypothetical person of average skill in the art - when looking at that earlier publication as prior art, it was always obvious to pull out the much narrower group of combinations or the specific combination that's claimed in your client's own pending application. 

Sure. Just like it's easy to model a viral pandemic. 

Abbvie To Suspend Enforcement of Kaletra Patents (Maybe); Probably Unrelated to Israel

After last week's fanfare (in Israel, anyway) about the Israeli government exercising rights under section 104 of the patent statute to allow importation of a generic of Abbvie's Kaletra tablets, this week reports are surfacing that Abbvie is suspending enforcement of its Kaletra patents worldwide, or possibly waiving its rights altogether, if the reporting in The Financial Times is accurate.  The FT piece seems to imply that Abbvie took this course of action as a result of Israel's action, but that conclusion is questionable.  As one person working for the state of Israel noted, it's clear that Abbvie couldn't meet demand at the present time, so why not allow others to supply the drug?  And given the unimpressive results from tests in China in January, it's likely that Abbvie suspects, or possibly already knows, that the drug will be ineffective against COVID-19.  In which case it's a publicity win for Abbvie. 

It's worth noting that there's nothing on Abbvie's site about this.  While the FT report begins by stating, dramatically, "AbbVie is giving up its patents on a combination drug that is being studied as a coronavirus treatment", the FT story later says "The company gave notice of the change last week, according to a document seen by the Financial Times..."  Inasmuch as that document isn't presented on FT's site, Abbvie evidently only showed it under an agreement of confidentiality. 

Since Kaletra is used to keep HIV/AIDS in check, but not to eradicate the disease, and therefore must be taken regularly by patients, it's difficult to believe that Abbvie would willingly forfeit profits from the drug in those countries where patent protection is still in force.  Perhaps Abbvie has simply indicated it won't enforce its patent against importers who import for purposes of COVID-19 testing.  Time will tell.

A Few More Thoughts On Israel’s Exercising Its Right to Exploit Abbvie’s Patents

As I mentioned yesterday, the Minister of Health signed an order this week allowing the state to import generic Kaletra (a combination of lopinavir and ritonavir) to be used, potentially, against COVID-19.  I’d like to share two observations about this.

The first is that, despite the increasingly strict isolation measures the state has been putting in place over the past several weeks – people are now supposed to leave their homes only in very limited circumstances – these strictures are being emplaced in a manner that English speakers would says comports with the Rule of Law: the state is following its own legal procedures, to the point that implementation of the latest set of restrictions was delayed by several days until they could be properly published in the Israeli equivalent of the Federal Register. 

This approach can be seen in how the Health Minister’s order allowing importation of generic Kaletra came about, and what the order says. The state didn’t say, “We’re the state and we can infringe willy-nilly”, let alone start importing generic product without informing the patentee or its licensed importer.  The state followed the patent statute. The order itself invoking the state’s statutory rights was prepared by a team of lawyers from several state offices who worked behind the scenes, and those lawyers are not anonymous, but are well-known to people who work in IP in Israel. And, I as noted yesterday, the order is fairly limited in its scope: it’s for a specific solid-state formulation, and is only to be used in corona virus treatment, not treatment of HIV/AIDS. Moreover, the order was issued because the patentee, Abbvie, can’t keep up with demand. Presumably, if Abbvie could keep up with demand, the state would not exercise its rights to import.

Additionally, the patentee will be entitled to compensation for the infringement. It remains to be seen where that will be set, but no one expects Abbvie to walk away from this with nothing.

It instills a measure of confidence that even in tough times, the state makes an effort to follow its own laws. That’s not a given in many parts of the world.

The second observation is that of the three patents listed in the order, the inclusion of two of them is questionable. IL 173939 and IL 207260 are a parent and divisional, and they claim a solid pharmaceutical form per se and a method of making a solid pharmaceutical form. The independent claim of IL 173939 reads,

1. A solid pharmaceutical dosage form which comprises a solid dispersion of at least one HIV protease inhibitor selected from the group consisting of lopinavir, ritonavir, and a mixture thereof, at least one pharmaceutically acceptable water-soluble polymer having Tgof at least 50ᵒC, wherein said water-soluble polymer constitutes from 50 to 85% by weight of the total weight of the dosage form, and at least one pharmaceutically acceptable non-ionic surfactant having HLB value from 4 to 10.

That claim, and several other claims of the ‘939 patent, are presumably infringed by the importation of generic Kaletra.

The independent claim of 207260 reads,

1. A method of preparing a pharmaceutical solid dosage form, comprising:preparing a homogeneous melt of at least one HIV protease inhibitor selected from the group consisting of lopinavir, ritonavir and a mixture thereof,at least one pharmaceutically acceptable water-soluble polymer having Tg of at least 50ᵒC,andat least one pharmaceutically acceptable non-ionic surfactant having HLB value from 4 to 10, wherein the melt is prepared by melt-extrusion; allowing the melt to solidify to obtain a solid dispersion product; and forming tablets, wherein the tablets further comprise one or more additives selected from the group consisting of flow regulators, disintegrants, bulking agents and lubricants.

If the manufacturer uses an infringing process to make its product, then importation of the drug constitutes infringement, and Abbvie will argue it is entitled to compensation for such infringement.  But it’s also possible that this claim is not infringed by the process by which the generic Kaletra is manufactured, in which case the state will argue that Abbvie isn’t entitled to such compensation.  The bottom line is that to obtain royalties on the basis of the ‘260 patent for the importation of the generic drug, Abbvie will need to show that the imported material is prepared by the claimed process.

The third patent listed in the order, IL 185930, has two independent claims:

1. Use of a solid dispersion comprising lopinavir and ritonavir; at least one pharmaceutically acceptable water-soluble polymer having Tg of at least 50ᵒC, wherein said water-soluble polymer constitutes from 50 to 85% by weight of the total weight of the dosage form; and at least one pharmaceutically acceptable non-ionic surfactant having HLB value from 4 to 10, in the preparation of a medicament for treating HIV/AIDS in a patient in fasted state.

3. Use of a solid dispersion comprising lopinavir and ritonavir; at least one pharmaceutically acceptable water-soluble polymer having Tg of at least 50ᵒC, wherein said water-soluble polymer constitutes from 50 to 85% by weight of the total weight of the dosage form; and at least one pharmaceutically acceptable non-ionic surfactant having HLB value from 4 to 10, in the preparation of a medicament that is taken without food for treating HIV/AIDS in a patient.

Both of these claims are in “Swiss” format, a format that is used in many countries that prohibit the patenting of methods of treatment of people (often on moral grounds), as a way to get around such prohibitions. The intended use recited at the end of these two claims would presumably be understood by a court in Israel as limiting these claims to methods of preparation of formulations that are intended for use in treating HIV/AIDS. Since the Health Minister’s order is limited to importation for the treatment of corona virus, that importation presumably doesn’t infringe.

Then again, maybe it does: the generic drug that will be imported is made in India, and as all approvals of the drug worldwide at this time are for the treatment of HIV/AIDS, Abbvie will likely argue that the manufacture of the drug product meets all the limitations of these two claims – the drug is being made for treating HIV/AIDS – and that the fact that Israel is importing the drug for an off-label use doesn’t change the fact that the drug was manufactured for the treatment of HIV/AIDS.  Abbvie will thus seek additional compensation on this basis.

What I find particularly interesting about the inclusion of the ‘260 patent in the Minister’s order is that a few years ago, the Israel PTO sua sponte stopped accepting Swiss style claims, on the grounds that such claims do not recite a product or process.  That reversal of position contradicted decades of precedent in which such claims had been accepted by the ILPTO, and in which such claims had been litigated and not once found to be invalid on the grounds that Swiss claims per se are unacceptable. 

It is tempting to think that the fact that one of the lawyers involved in preparing this week’s importation order works in the ILPTO signals a change of heart on the part of the ILPTO, but that’s probably reading too much into it: my understanding is that the lawyers who drafted the order didn’t actually look at the patents, and merely listed those that they were told by the patentee or the patentee’s licensed importer might be infringed by unauthorized parallel importation.  If the state and Abbvie are unable to come to terms about the appropriate compensation, and the matter goes to the Compensation and Royalties Committee for adjudication, the question of the permissibility of Swiss claims per se may finally be addressed head-on.

Examination under Section 17(c): Be Careful What Statutes You Wish For

This is a story about how a good idea that originated in the Israel PTO tripped over its own shoelaces (in a manner of speaking) when it was eventually enacted into law.

The story begins in the late 1980’s, when the Israel PTO had a significant backlog in the examination of patent applications.  The Commissioner at the time had (or had suggested to him) a bright idea: why carry the load all by yourselves when there are other patent offices examining related applications? 

Thus was born Commissioner’s Circular no. 9, which said that if applicants for Israel patents amended their claims to correspond to claims granted in corresponding patents in certain other jurisdictions, notably the USA and the EPO, then the ILPTO would view those claims as meeting local criteria for novelty, inventive step, unity of invention, sufficiency of description and clarity of the claims.

The idea proved to be so good that in 1995, during major round of statutory amendments, this policy was written into the statute as §17(c). 

Neither Circular no. 9, nor §17(c) after it, solved all of an applicant’s problems, however.  In particular, section 7 of the Israel statute forbids the patenting of methods of treatment of the human body.  So those granted US claims reciting “A method of treating X, comprising administering to a patient in need thereof drug Y…” can’t be granted in Israel.

Under Circular no. 9, the ILPTO was willing to allow applicants to convert such method of treatment claims to “Swiss” style claims or purpose-directed product claims, and to proceed in accordance with the Circular.  This was true as well for many years under §17(c). 

More recently, however – perhaps as a result of the ILPTO’s effort to draft written examination guidelines, perhaps due to changes over time in senior ILPTO personnel, perhaps owing to both – the ILPTO has taken a stricter view of the application of §17(c) with respect to method of treatment claims.  In particular, sub-section 4 of §17(c) states that one of the requirements is that:

“(4) the claim or claims in the application are identical to the claims in the parallel patent, but the application can include fewer claims that those in the parallel patent;”

In recent years, the ILPTO has taken this literally, and will not allow applicants seeking to invoke §17(c) to amend method of treatment claims to “Swiss” or purpose-directed product format.  If such method of treatment claims appear alongside claims on compounds and/or pharmaceutical compositions, the method of treatment claims will need to be cancelled if §17(c) is to be used, and a divisional with the claims rewritten in an acceptable format filed.  The divisional will not be able to benefit from §17(c). 

When this practice was initiated by the ILPTO, the Office maintained flexibility in the application of the practice with respect to method of treatment claims – Circular no. 9 was simply a way for the Office to say, “We’ll accept the word of the USPTO or the EPO regarding these claims and this application if you, the applicant, want us to. To the extent this may call the validity of the patent into question, caveat emptor.”  And that was the way the statutory provisions were viewed by the PTO in the years after their enactment, likely because the same Commissioner who issued Circular no. 9 was in office for several years after §17(c) was enacted. 

It’s ironic that the ILPTO now views itself as constrained by a statutory provision that was intended to enshrine in the statute the practice that the ILPTO itself initiated and applied with a greater measure of flexibility than is presently the case.

So when making statutory amendments, as in many other things, be careful what you wish for.

T-Cell Targeting of Tumor Cells: The Long Road Between Concept and Commericialization

The hottest story in Israeli biotech in 2017 was the August acquisition of Kite Pharma by Gilead Sciences for 11.9 billion dollars, and the announcement in October of FDA approval of the leading drug candidate that Gilead obtained in the purchase, Axicabtagene Ciloleucel, which is being marketed under the name Yescarta for the treatment of large B-cell lymphoma. 

Almost as hot a story, at least in the Hebrew press, was the ensuing (and still ongoing) legal battle between two of the academic scientists involved in the development of the technology that was the subject of the deal.  And herein lies a tale that illustrates the sometimes huge difference between coming up with a good idea, and translating that idea into a commercial product, particularly in the biotech area.

What Kite developed, and what Gilead was keen on, was T-cell (lymphocyte) therapy for fighting cancer.  The idea is to take a patient’s own T-cells and to genetically modify them so that they produce proteins that cause them to bind specifically to cancer cells and, upon such binding, attack the cancer cells.  The modified T-cells are then reintroduced into the patient.  The T-cells will now target the cancer, ideally without targeting the patient’s other cells, and without eliciting an immune response against the T-cells themselves (since the patient’s immune system recognizes those T-cells as its own).  Videos illustrating the two platforms Kite is developing can be seen here.

The genesis for this theory goes back to the late 1980’s and early 1990’s, when Professor Zelig Eshhar of the Weizmann Institute had the idea if one could modify lymphocytes to produce particular proteins, one could target cancer cells with those T-cells.  The first student who demonstrated proof-of-concept was Gidi Gross, although over the years a number of people in the Eshhar lab, among them my wife, worked on such targeting. 

The work resulted in peer-reviewed articles. It also resulted in several patent applications which, years later, yielded US patents.  In particular, US 5,906,936, (“Endowing lymphocytes with antibody specificity”), US 5,912,172 (“Endowing lymphocytes with antibody specificity”), and US 7,741,465 (“Chimeric receptor genes and cells transformed therewith”) were filed listing Zelig Eshhar, Tova Waks and Gideon Gross as inventors.  A fourth inventor, Daniel Schindler, was listed on the ‘465 patent. All three patents have pre-TRIPS filing dates, but the first two US were granted in 1999 and thus expired no later than 2016.  The ‘465 patent, however, was only granted in 2010, and thus if maintenance fees are paid will only expire in 2027 (assuming it survives the inevitable challenges to its validity).  The first claim of this patent reads,

“1. A chimeric DNA comprising: a first DNA segment encoding a single-chain Fv domain (scFv) comprising a V_L linked to a V_H of a specific antibody by a flexible linker, and a second DNA segment encoding partially or entirely the transmembrane and cytoplasmic, and optionally the extracellular, domains of an endogenous protein, wherein said endogenous protein is expressed on the surface of lymphocytes and triggers the activation and/or proliferation of said lymphocytes, which chimeric DNA, upon transfection to lymphocytes, expresses both said scFv domain and said domains of said endogenous protein in one single, continuous chain on the surface of the transfected lymphocytes such that the transfected lymphocytes are triggered to activate and/or proliferate and have MHC non-restricted antibody-type specificity when said expressed scFv domain binds to its antigen.”

The ownership of the three patents has an interesting history.  As with all patent applications originating at Weizmann, they were originally assigned to Yeda Research & Development Company Ltd., Weizmann’s tech transfer company.  Yeda in turn licensed the patents to Baxter, but after a year or so without positive results, Baxter gave up.  Yeda also assigned a one-third right in two of the applications to the NIH, which ostensibly reverted back to Yeda (although assignment record at the USPTO doesn’t seem to clearly reflect this).  Yeda then offered to sell its rights in the patents to the inventors.  Eshhar, Waks and Gross acted on the offer; Schindler chose to not to buy into the patent on which he was named as an inventor. So in 2004, assignments from Yeda to the three inventors were recorded at the USPTO (including a waiver of interest statement from Schindler).  In August, 2011, the remaining two inventors assigned their rights to Eshhar, and in 2013, he assigned his rights in the patents to Cabaret Biotech Ltd., a company owned by him.  Cabaret then licensed the patents to Kite Pharma.

According to the Hebrew press, Zelig Eshhar made about 71 million dollars as a result of the sale of Kite Pharma, most of it in the form of stock. At which point Gidi Gross filed suit, claiming he is owed 15% of that $71 million.  Last week, Zelig’s lawyers fired back, saying that Dr. Gross was not only fully compensated but given more than his financial due by Zelig. 

As the Israel court system is notoriously slow, I don’t expect a resolution of this matter for several years.  But living in Rehovot and having not only a spouse but friends I see regularly who worked in the Eshhar lab, the case has been a topic of conversation.  And it highlights the disconnect many people between being credited with research and the financial gain that comes with successful commercialization. 

In terms of credit, between 1989 and 1996, Gross and Eshhar were co-authors on at least 10 papers; two more such papers were published more recently, in 2014 and 2016.  Gross was listed as first author on several of those papers.  Additionally, Gross is listed as one of the inventors on the three aforementioned patents.  Hence no one denies that Dr. Gross made contributions to the development T-cell targeting. 

On the other hand, insofar as commercialization goes, it was Professor Eshhar who for nearly 30 years maintained the belief that modification of T-cells could result in therapy.  As my wife put it, when she worked on her PhD, all the mice died.  Not just hers, but those of her fellow students as well.  Additionally, at the time, there were other labs working on the same general idea, and they were actually considered to be farther along in developing the technology.  Yet they didn’t manage to commercialize it.  Baxter tried, but gave up on the project. Yeda, unable to find any suitors, gave up on the project.  But Zelig persisted.  And eventually someone became convinced that despite the previous failures, this technique could work, a belief borne out by the approval of Yescarta.  That’s why Zelig is making over $70 million on the deal.  It’s a point that patent attorneys and entrepreneurs appreciate, but one often lost on people not familiar with the commercialization process.

The terms of the 2011 assignment from Waks and Gross to Eshhar aren’t public.  It’s possible that Zelig orally promised Gidi a percentage of future profits or shares or whatever, but even if that’s so – and Eshhar disputes that such a promise was even made - it seems that the 15% that Gross now claims he is owed wasn’t set forth in a written document, since such a document would presumably have been included in the court filings, and the Hebrew press doesn’t mention such a document.  The Hebrew press has reported that Yeda is entitled to about 0.2% of $71 million; clearly, while Yeda is no doubt smarting right now about having given up on this technology, the agreement setting forth the terms of the 2004 transfer of ownership from Yeda to the inventors was in writing, and Yeda has (thus far) had the good sense not to sue to try to get more than it agreed to. Oral agreements constitute agreements under Israel law, but obviously the evidentiary burden on the party asserting the existence and the contents of an oral agreement is high.

Of course, it’s equally plausible that the lawsuit is the result of seller’s remorse, and that Gross now thinks he should have demanded more back in 2011.  And he may feel that, despite being credited on papers and patents, he feels he hasn’t been given sufficient credit for his role: in 2015, Zelig Eshhar was given the Israel Prize by the State of Israel for his work in the development of chimeric T-cell; Gidi Gross was not so honored.

The unfortunate part of this story is that, by all reports, Gross and Eshhar remained not just colleagues but friends long after a Gross had left the lab.

Are Assignments to the Iroquois the Antidote? Allergan’s Atypical Action

Interesting news item from last week: according to Allergan’s web site, on September 8 Allergan and the Saint Regis Mohawk Tribe announced that Allergan had assigned several patents to the Tribe.  The patents are listed in the Orange Book for Allergan’s Restasis product, a formulation of cyclosporine for ophthalmic delivery.  A trial in ANDA (Hatch-Waxman) litigation concerning the patents (with Mylan, Teva Pharmaceuticals, Akorn and Inno Pharma as defendants) was completed in Texas on September 1, but a decision has not yet been rendered.  When it is eventually given, that decision is certain to be appealed.

As stated in the press release, the rationale behind the assignment was to render the patents safe from attack before the USPTO’s Patent and Trademark Appeal Board (PTAB).  Numerous Inter Partes Review proceedings (IPRs) have been instituted against the patents before the PTAB.  But patents owned by States of the USA – and by extension, patents owned by state universities, which are considered organs of their respective states – are immune from attack before PTAB under the doctrine of sovereign immunity.  Indian tribes also enjoy a degree of sovereign immunity, and in the present case Saint Regis’ lawyers’ reasoned that tribal ownership of patents would confer the same immunity from PTAB proceedings enjoyed by state owners.  Allergan’s lawyers agreed…or at least they felt it was worthwhile to transfer the ownership. 

I profess no expertise in the law of tribal sovereign immunity, and have no opinion about whether or not the transfer of ownership will confer the desired immunity from the PTAB.  From the little research I’ve done, Allergan’s position appears to be one that has at least some substance to it and can’t be dismissed out of hand.  See, e.g., Michigan v. Bay Mills Indian Community et al., 134 S.Ct. 2024 (2014).  I suppose that in addition to arguing that tribal sovereign immunity doesn’t apply here, the IPR petitioners will also argue that the assignment itself is a sham, an argument that may be bolstered by the fact that (according to the press release) Allergan paid the Tribe to take the ownership of the patents; usually it is the acquirer that pays.  

But even if the sovereign immunity argument isn’t a slam-dunk, and even if the transfer is ruled a nullity, it’s hard to see where Allergan has anything to lose.  As has been well-established over the past few years, the PTAB is to patents what the University of Chicago is to fun: the place where they go to die.  The standard of proof for invalidation at the PTAB is lower, and thanks to the CAFC (except for Judge Newman, may she live and be the sharpest judge on the court until she’s 120) punting on the issue of estoppel/preclusion, a finding of “not invalid” by a court doesn’t preclude a later finding of “invalid” by the PTAB on the same patents, even vis-à-vis the same challengers.  So even if the chance that the PTAB proceedings are taken out of play is small, that’s a good thing for a drug with sales of $1.5 billion last year.  Given the appeal processes that are sure to ensue from the Texas litigation and any PTAB decisions, and given the reticence of most generic drug manufacturers to launch “at risk” (i.e. without having in had a final, unappealable decision against the patents), anything that can extend the appeal process is probably a good thing for Allergan, each additional day of exclusivity in the market being worth tens of millions of dollars.  And of course, Allergan – er, Saint Regis – could win on the sovereign immunity question.

If that happens, we’re likely to see other assignments of pharmaceutical patents to Indian Tribes in order to avoid exposure to the PTAB.  Certainly Orange-Book listed patents, which are litigated prior to the grant of FDA approval for the generic, and are thus usually litigated before any infringing product reaches the market, will be transferred in this manner.  Transferring non-Orange Book patents is a bit less attractive: injunctions, one of the two remedies available to patent owners, have not been a sure thing since the Supreme Court’s eBay decision over a decade ago, and monetary damages, the other remedy, have to be commensurate with the patent owner’s losses. But since no tribe actually makes and sells pharmaceuticals, the amount of damages to which it would be entitled would be much smaller than the amount that would likely be awarded if the patent owner were the pharmaceutical company itself. 

On the other hand, the Saint Regis Mohawk Tribe is already the assignee of pending US patent application no. 13365090, entitled “MOBILE ELECTRONIC DEVICES UTILIZING RECONFIGURABLE PROCESSING TECHNIQUES TO ENABLE HIGHER SPEED APPLICATIONS WITH LOWERED POWER CONSUMPTION”, published as US 20130157639, the assignment having been recorded and executed on August 2, 2017.  So apparently someone thinks it’s worth protecting a non-Orange Book, non-pharma patent from PTAB attack.  Perhaps the Tribe is planning to go into the patent troll business.

One other interesting question is, will the state universities try to get in on this game too? At least for now, transferring rights to a state university as a means to insulate patents from the PTAB would seem to be a better bet than transferring to an Indian tribe, since the law of sovereign immunity for the former is already settled whereas it’s still an open question with respect to the latter. 

I also note that as of this writing, the USPTO still isn’t showing that the assignments from Allergan to Saint Regis have been recorded. I assume that’s going to change in the next few days. [UPDATE, eight hours later: now the assignment for one of the patents, 8629111, is showing in the patent assignment search.  Executed and recorded September 8, 2017.  It's one of six patents the assignments of which were recorded at the same time.  But the assignment document itself identifies numerous patents that were assigned - 33 by my count, plus 11 pending non-provisional applications. ] 

Anyway, bravo to Saint Regis’ and Allergan’s attorneys for some creative lawyering.  We’ll see where it goes.

In a Free Market, You Can't Beat The Law of Supply and Demand - Follow-Up

As mentioned in just about every US newspaper, as well as on this blog, last month a company called Turing Pharmaceuticals and its apparently sociopathic CEO gained notoriety for buying the US distribution rights to an off-patent drug called "Daraprim" (the active ingredient of which goes by the generic name pyrimethamine) and then jacking up the price more than 55-fold, from $13.50 per pill to $750 per pill.  Apparently the company's CEO figured that with a small market for the drug, it wouldn't be worthwhile for a competitor to jump into the fray with a cheaper alternative, and therefore Turing could withstand any negative press the price-gouging would engender, because, after all, profits are profits.  But as we wrote at the time, "Logic would seem to dictate that if someone else can make and sell these pills for less and still make a profit, they will, and that the competition will force a correction in the price.  However, the fact that the market for this drug is small may augur against such competition, particularly if the entry barrier is high.  Time will tell."

Now it looks like Turing's CEO calculated incorrectly.  On October 22, a company called Imprimis Pharmaceuticals issued a press release in which it announced that it would start selling pills containing pyrimethamine, combined with leucovorin (to offset a side effect of pyrimethamine) for under $1 each, even less than the price advertised for Daraprim by an online Canadian pharmacy.  We've no idea if at this price Imprimis will profit, lose money or just break even from its pyrimethamine sales. If nothing else, Imprimis understands that the chance to play the hero is worth something.

In a Free Market, You Can't Beat The Law of Supply and Demand

Periodically there are reports in the news about the price of some drug being high, and the blame is usually placed on patents, particularly patents that cover not the active pharmaceutical ingredient (API) per se but later-filed (and thus later-expiring) patents that protect the use of the API or formulations containing it.

As is well-understood by patent practitioners, the exclusivity afforded by patent protection is what allows drug development companies to invest the resources necessary to shepherd the drugs through clinical trials to market.  I've seen clients' promising drugs shelved in the development process not because of poor clinical results, but because the duration of patent protection available was short, thus making them bad risks for investors.  Hence I've long advocated that we're better off erring on the side granting patent protection for a little more time than necessary than less time than necessary.  I'd rather see new drugs developed than not, and in the long run patents expire and competition from generic drug manufacturers will drive the price of the drugs down.  Better the drug development companies make some extra money during that time than the drugs never see the light of day.

One aspect of this dynamic that tends to receive less consideration is what happens after the patents on a drug expire.  If the drug is highly profitable, it's common for several generic drug companies to entire the fray, precipitating a drop in price.  But what happens when there's no competition?

There's a story in the New York Times this week illustrating the perils of that latter scenario.  The API pyrimethamine has been on the market for over 60 years.  Its patents expired long ago.  But it's only made by one manufacturer.  So after US marketing rights changed hands a number of times in the recent past, the current owner of the rights decided to raise the price.  By over 50-fold, from $13.50 a pill to $750 per pill.  In the USA that's legal, but such legality doesn't make the practice any less disgusting.  (See נבל ברשות התורה if you don't follow that idea.)

Logic would seem to dictate that if someone else can make and sell these pills for less and still make a profit, they will, and that the competition will force a correction in the price.  However, the fact that the market for this drug is small may augur against such competition, particularly if the entry barrier is high.  Time will tell.  

Interestingly, the NYT article doesn't mention something commonly mentioned in the discussion of drug prices, namely the possibility for competition through parallel importation of the drug from a country (like Canada) where there are price controls, and/or where the distribution remains in less greedy hands.  Dr. Google indicates that this online pharmacy in Canada is offering the drug for US$1.67 per tablet.  Why fork over a $150 co-pay to get a single pill through your US health insurer when for the same money you can get 90 tablets from Winnipeg?

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.]