Patentability Standards for Follow-On Pharmaceutical Innovation
Publication: Biotechnology Law Report
Volume 37, Issue Number 3
Abstract
Follow-on pharmaceutical innovation occurring after the initial discovery of a drug active ingredient plays an important, but at times underappreciated, role in providing innovative solutions to compelling medical needs. Examples of follow-on innovation include new forms of a drug with improved safety-efficacy profiles, new formulations and dosages providing improved patient outcomes, and new methods of using an established drug more safely or to treat new indications. Patents play a critical role in incentivizing the research, development, testing, and ultimately commercialization of follow-on pharmaceutical innovation, and in doing so provide substantial benefits for public health and patients' quality of life. There is, however, a body of literature characterizing patents directed towards follow-on innovations as “secondary pharmaceutical patents.” Some have even gone so far as to propose that the criteria for patentability should be enforced more stringently with respect to follow-on pharmaceutical inventions as compared to other inventions. The underlying assumption of such proposals is that follow-on pharmaceutical innovations are somehow secondary to other pharmaceutical innovation, and thus less deserving of patent protection. In this article, we refute the notion that follow-on pharmaceutical innovation should be categorically singled out for unfavorable treatment under the patent laws, and provide numerous examples of the value that follow-on innovation brings to medicine, and ultimately to patients. We also propose, in view of the international treaty obligations set out in, inter alia, the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”), standards and best practices for assessing the patentability of inventions arising out of follow-on pharmaceutical innovation. These are essentially the same stringent standards applicable to “primary” pharmaceutical innovation, and inventions in general. This article provides numerous examples from jurisdictions around the world in which patent offices and courts have applied the well-recognized requirements of patentability, including patent eligibility, novelty, inventive step and industrial application, to follow-on pharmaceutical inventions, and in so doing have advanced innovation in public health and ultimately the lives of patients.
It is generally recognized that most pharmaceutical innovation depends uniquely and critically upon the availability of effective patent protection.1 Even economists such as Bessen and Meurer, who are otherwise skeptical that benefits outweigh the costs of the patent system, explicitly acknowledge that pharmaceutical innovation is a special case where the benefits of patent protection likely outweigh the costs.2 The underlying basis for the particular importance of patents to pharmaceuticals is, in addition to the expense and riskiness that comes with developing new drugs in the laboratory, the extremely high cost and length of time involved in subsequently bringing that nascent drug out of the laboratory and transforming it into a safe, effective, and well-characterized human therapeutic. Even then, the innovator must conduct the extensive human clinical trials required to achieve marketing approval from a regulatory authority (e.g., the U.S. Food and Drug Administration [FDA] and its European counterpart, the European Medicines Agency [EMA]). Patents on pharmaceuticals are also particularly important due to the relative ease with which, in the absence of patent protection or some other form of exclusivity, a generic competitor can bring a bioequivalent product to market once the innovator has secured regulatory approval and established a demand for the product.
In specific areas of the life sciences, such as algorithm-based third-generation diagnostic methods, orphan drugs, and antibiotics, there is, in light of recent developments, arguably reason to think about alternative incentives that could complement the patent system. This might entail, for example, a more flexible use of regulatory exclusivities (such as an extended exclusivity period for certain categories of drugs, such as biologics and orphan drugs, upon submission of regulatory test data) or public-private partnerships and investments. The currently available regulatory exclusivities will, in many cases, be insufficient to incentivize the optimal level of pharmaceutical innovation. This is because the regime for protecting test data, including through regulatory exclusivity, is focused on incentivizing only one particular segment of the long process of new medicine development and approval—i.e., the development of test data required to demonstrate safety and efficacy of the medicine, which is required for regulatory approval.3 Such test data protection must be accorded without regard to whether the medicines at issue are covered by patents.4 For most medical technologies, the patent system will therefore remain the backbone of the innovation system, and will continue to serve as a pillar on which the industry evolves.
In recent years, however, there has been a movement to categorically distinguish between, on the one hand, patents on new chemical entities, i.e., new pharmaceutically active compounds, and on the other hand, patents directed towards follow-on innovations, often referred to as “secondary patents.” Follow-on innovation encompasses, for example, new therapeutic uses of previously disclosed compounds, new formulations or routes of administration, combination products, and the like. While acknowledging the importance of “primary patents” directed to new chemical entities, some have argued that the inventions covered by “secondary patents” are generally less deserving of patent protection, and that the costs to society imposed by patents on follow-on innovations outweigh the benefits, concluding that these patents should be disfavored and discouraged.5 Such critics, however, fail to acknowledge that the scope of so-called secondary patents invariably will be narrower than first-in-class pharmaceutical innovations, because these later-filed patents must define an invention that is novel and not obvious over the older pharmaceutical product.6 Thus, new, nonobvious, and useful improvement patents do not necessarily block use of known and previously existing pharmaceutical products.
In 2015, the United Nations Development Programme (UNDP) issued a document entitled Guidelines for Pharmaceutical Patent Examination: Examining Pharmaceutical Patents from a Public Health Perspective (the “Guidelines”).7 The Guidelines represent a follow-up to an earlier document, Guidelines for the Examination of Pharmaceutical Patents: Developing a Public Health Perspective—Working Paper (the “Working Paper”), which was published in 2007 as a working paper by the International Centre for Trade and Sustainable Development (ICTSD), the United Nations Conference on Trade and Development (UNCTAD), and the World Health Organization (WHO).8 The Guidelines provide “recommendations” as to how patent examiners should examine secondary pharmaceutical patent claims in a manner that would, according to the author of the Guidelines, “protect public health and promote access to medicines.”9 The recommendations generally call for heightened patentability requirements, which, if implemented, would essentially deny patent protection to various categories of pharmaceutical innovation that are currently afforded patent protection.10 In 2016, the United Nations Secretary-General's High-Level Panel on Access to Medicines suggested that the patent offices of individual countries should apply these “public health-sensitive guidelines” as an “important policy tool to improve health technology access.”11
With respect to some categories of secondary inventions, including polymorphs, enantiomers, and combination products, the Guidelines recommend that patent offices treat the invention as per se unpatentable. With respect to other secondary inventions, such as new salt forms and prodrugs, the Guidelines do not go quite so far, but essentially create a rebuttable presumption that patents should be denied unless some exceptional factor is present. For example, the Guidelines opine that “[a] claim on a prodrug will generally fail to meet the inventive step standard unless evidence is provided that overcomes pharmaceutical or pharmacokinetically based problems of the parent drug in a non-evident manner.”12
In 2017, one of the authors of the present article published In Defense of Secondary Pharmaceutical Patents: A Response to the UN's Guidelines for Pharmaceutical Patent Examination (“Defense of Secondary Patents”), which challenges many of the assertions made in the Guidelines; the article provided numerous examples of secondary patents that had withstood validity challenges in the courts and patent offices throughout the world and which were directed towards secondary inventions clearly meriting patent protection.13 The present article extends that work, explaining the importance of secondary patents to pharmaceutical innovation, and thus human health, and proposing what the current authors consider to be the appropriate standards and criteria to be applied in assessing the patentability of these sometimes underappreciated aspects of innovation.
1. The Importance of Follow-On Pharmaceutical Innovation
As indicated above, the Guidelines regard a broad variety of follow-on pharmaceutical innovation categories as being unworthy of patent protection. According to the Guidelines, these include: “selection patent” inventions; polymorphs; isolated enantiomers when the racemic mixture was previously disclosed; salts with advantageous properties over the drug in its free base/acid form; ethers or esters with advantageous properties over the drug in its free base or acid form; pharmaceutical compositions (formulations); claims over the dose of a drug; combinations of known drugs; prodrugs; metabolites; and new medical uses of a known drug.14
As an initial matter, it bears noting that the Guidelines assume a false dichotomy between primary patents and secondary patents when, in fact, it is often the case that the value of a follow-on patent is comparable to, or might even exceed, that of a primary patent. For example, in some cases a patent characterized as “secondary” based on the nature of the innovation (e.g., a new method of use) functions as the primary or, in some cases, the only patent incentive for bringing a drug to market. This could be the case, for example, for a chemical compound that has long existed in the prior art but has never been used as a therapeutic; or for a chemical compound that is covered by a primary patent that has already expired or will expire by the time the drug comprising the ingredient can achieve regulatory approval.
The HIV drug, AZT (zidovudine), provides a good example of a case in which a “secondary patent” functioned as the primary patent that enabled the necessary investment to bring a lifesaving drug to patients throughout the world. The Guidelines specifically point to AZT (zidovudine) as an example of a “new medical use,” based on the fact that the drug was initially studied as a potential cancer drug, and it was only after further research and development that it was shown to be useful in the treatment of HIV.15 Ironically, the Guidelines extol the virtues of AZT as a “drug effective in both the treatment of AIDS and the reduction of mother-to-child transmission,” and as the “first breakthrough in AIDS therapy,” but nonetheless would begrudge its inventors the patent which played such a critical role in making this technology available to doctors and their patients.16
It is important to emphasize that AZT began its life as a failed attempt at a cancer drug. It was first synthesized in the 1960s and it was described in published articles in the early 1970s; by the time researchers began to study it as a candidate for the treatment of AIDS, a primary patent on the compound per se was clearly precluded by the prior art. Fortunately, the drug company Burroughs-Wellcome was able to secure a method-of-use patent (which the Guidelines categorize as a secondary patent) directed towards treatment of HIV with AZT. It was this patent that provided the critical incentive necessary to translate early research identifying the therapeutic potential of AZT into a safe, effective, and FDA-approved therapeutic.
Another example is Evista (raloxifene), initially approved by the FDA in 1997 for use in the prevention of osteoporosis in postmenopausal women. Raloxifene is an antiestrogen and was initially studied as a potential treatment for breast cancer. Significantly, the patent on raloxifene issued on November 29, 1983, and hence had about only three years left by the time the FDA approved Evista.17 Were it not for the ability of Eli Lilly to secure a follow-on patent on a new method of using the drug, i.e., for use in the prevention of osteoporosis in postmenopausal women, there would have been insufficient patent protection to incentivize the investment necessary to bring it to market.18 Furthermore, the promise of additional follow-on patents incentivized Eli Lilly to continue research and development of improved, beneficial uses of the compound and, as a result in 1999, the FDA approved use of raloxifene in the treatment (as opposed to prevention) of osteoporosis in postmenopausal women; in 2007, the FDA approved another use of the drug, this time for reducing the risk of invasive breast cancer in postmenopausal women with osteoporosis and in postmenopausal women at high risk of invasive breast cancer.
Defense of Secondary Patents provides numerous further examples of important pharmaceutical innovations that were protected only by follow-on patents and likely would not have been developed if pharmaceutical companies perceived that such protection would not be available. For example, Zyprexa (olanzapine) is a drug treatment for schizophrenia that was protected by a selection patent,19—a patent upheld by courts in Norway, the United Kingdom, Austria, and the United States—in spite of the fact that the compound was generically disclosed in the prior art.20 If these patent offices and courts had followed the recommendations set forth in the Guidelines, the selection patent that played such a critical role in bringing this important drug to market would have been denied. As a consequence, perhaps the drug would have never been made available to patients and, even if it were, the denial of patent protection would have severely discouraged pharmaceutical companies from investing in future products only amenable to protection by a selection patent.
The antibiotic cefuroxime, a member of the cephalosporin family and the subject of U.S. Patent Number 3,974,153, provides yet another example.21 Glaxo developed cefuroxime in the 1970s, but, because of the compound's poor bioabsorption characteristics, it was necessary to administer it by intravenous or intramuscular injection, severely limiting its usefulness as an antibiotic.22 Glaxo scientists persevered and ultimately developed a family of cefuroxime esters that had improved bioabsorption, which allowed for oral administration.23 This ester was the subject of two patents, U.S. Patent Numbers 4,267,320 and 4,562,181, and the availability of these patents provided the necessary incentive for the development of these important orally administered drugs sold under the trade name Ceftin.24 Without the availability of patents for esters, these oral antibiotics would have likely never been developed.
The Guidelines also advise against the patenting of new drug formulations, opining that “[p]atent applications on compositions [i.e., formulations] will normally confront an objection of lack of inventive step.” But new formulations of existing drugs can provide significant benefits to patients, and the research and development necessary to bring a new formulation to market should not be disincentivized by an inappropriately heightened inventive step requirement for formulation inventions.
One example that illustrates this point is Lumigan, a drug used to treat glaucoma.25 Glaucoma is an eye disease associated with elevated intraocular pressure (IOP), which, if left untreated, can lead to permanent vision loss and blindness.26 Lumigan can slow the progression of the disease by reducing IOP.27 Unfortunately, the original formulation of Lumigan approved by the FDA in 2001 had a tendency to cause severe hyperemia (i.e., red eye), and for that reason patients would often, without consulting their physician, discontinue use of the drug, which sometimes led to blindness.28 There was clearly a need for an improved formulation that would reduce the adverse side effect and thereby improve patient compliance. Luckily, the incentive of patent protection was available to spur further research, which ultimately led scientists at Allergan, the company that marketed Lumigan, to develop an improved formulation having a substantially reduced tendency to cause hyperemia.29 As noted by the Federal Circuit, the difference between the original and improved formulations is essentially “the difference between an effective and safe drug and one with significant side effects that caused many patients to discontinue treatment.”30 This is the very sort of innovation that should be promoted by patents, and not discouraged by misguided concepts of patentability allegedly intended to promote public health.
Extended-release formulations comprise an important class of new drug formulations, allowing drug administration at much more infrequent intervals than the immediate-release formulations that typically enter the market first. Although some complain that patents on extended-release formulations facilitate improper extension of market exclusivity (referred to by some disparagingly as “evergreening”), in fact, extended-release formulations can provide substantially improved therapeutic outcomes for patients. The availability of a drug that can be taken once a day (instead of multiple times throughout the day) has been shown to improve patient compliance, a significant issue with many drugs, particularly in the case of drugs taken by patients with dementia or other cognitive impairments. Furthermore, immediate-release formulations that are rapidly metabolized and must be administered throughout the day can lead to peaks and valleys in blood levels of the drug, with an initial spike shortly after the drug is taken followed by low blood concentrations in the period of time preceding the next administration of the drug. Again, it is important to recall that a “secondary” patent on a new drug formulation, such as an extended-release formulation, does not prevent generic companies from producing the drug formulation originally protected by the primary patent, once expired.
The process of generating and obtaining FDA approval for a modified-release formulation is expensive and often fraught with unpredictability.31 Without a patent incentive, drug companies would be less inclined to invest in the development of these products. Amrix, a modified-release dosage form of the skeletal muscle relaxant cyclobenzaprine hydrochloride, is a good example of an improved formulation that provides substantial benefits to patients, and whose patent was upheld as nonobvious by U.S. courts (i.e., the Court of Appeals for the Federal Circuit).32
Combination products, which combine two or more active pharmaceutical agents in a single formulation, can provide significant benefits to patients.33 These products have been widely adopted for diseases such as diabetes and cardiovascular disease, providing significant advantages over monotherapies, and resulting in improved patient compliance.34
The Guidelines acknowledge that combination products can satisfy the inventive step standard, at least when a synergistic effect can be demonstrated. In fact, there are good policy rationales supporting the availability of patent protection for inventive combination products, particularly, but not exclusively, when the combination results in a synergistic effect. Patents provide an incentive for innovators to discover combination products that provide improved therapeutic outcome compared to either individual active ingredient. Perhaps even more significantly, patents (along with test data protection) provide an incentive to fund the expensive human clinical trials necessary to verify and validate the clinical benefits of the combination.
The patenting of follow-on pharmaceutical innovations can play a particularly important role in providing meaningful access to lifesaving drugs for those living in the developed and developing world alike. For example, Abbott Laboratories developed a heat-stable formulation of Ritonavir, an antiretroviral drug used to treat HIV infection and AIDS. The World Intellectual Property Organization (WIPO) has lauded the patent directed to this “secondary” improvement, finding it to be “particular[ly] importan[t] for developing countries with elevated ambient temperature.”35
1.1. Substantial incentives are necessary for follow-on inventions
With respect to inventions categorized as “secondary,” in the same way as “primary” inventions, there are significant costs and risks associated with translating these inventions into approved drugs. It is important to bear in mind that patents are not only important for incentivizing invention, but also for incentivizing the substantial investment needed to turn an invention into a useful product. As pointed out by Professor Rob Merges, “patents may have a greater impact on incentives to develop as on incentives to invent,”36 and this is particularly the case with respect to pharmaceuticals, given the huge uncertainty as to whether a promising invention will actually prove viable in the market. Extensive and expensive human clinical trials are needed to assure the safety and efficacy of follow-on pharmaceutical inventions if they are going to provide any benefit to the public and, to the extent available, test data protection alone is often not sufficient to incentivize the funding of such trials.
1.2. Improvement should not be viewed solely in terms of therapeutic properties
Some of the critics of follow-on patents suggest that inventions that do not directly improve the therapeutic properties of a chemical compound are unworthy of patent protection. But to the contrary, improvements that do not directly improve therapeutic effect can nonetheless provide substantial benefits to patients. For example, with respect to patents on new salt forms of a chemical compound, the Guidelines paper itself acknowledges “[t]he choice of a salt for a particular drug is important in obtaining certain desirable characteristics related to stability, bioavailability, manufacturability and route of administration to the patient.”37 Inexplicably, however, the Guidelines recommend against the patentability of a new salt form in spite of these advantages.38
It would be a mistake to disregard these non-therapeutic values in an assessment of obviousness or utility. As noted by the Federal Circuit's Judge Lourie, it would not be sound policy to require an improvement in therapeutic properties over the prior art as a requirement of patentability, and to negate the importance of other physical properties of a claimed compound or salt.39 Oftentimes, the benefits of a particular salt form reside not in therapeutic effect but in other properties that nonetheless contribute substantial value to the product and, ultimately, patients.40
1.3. The alleged problem of “evergreening”
The campaign against secondary patents is motivated in large part by a concern that follow-on patents facilitate “evergreening” of pharmaceutical products. The assumption is that follow-on patents are used to extend the effective term of patent protection for a drug beyond that provided by an initial patent. For example, the Working Paper asserts that if “claims on combinations are accepted subsequent to a patent on the relevant active ingredient/s, the patent owner may be able to indirectly extend the term of protection granted under the basic patent.”41 Similarly, the Guidelines assert that “[i]t has been common in the pharmaceutical industry to file patent applications on particular salts as a means of evergreening.”42
In these circumstances, the concern over such so-called evergreening is, however, to a large extent illusory. For example, in some cases, such as the examples of AZT or Evista described above, there is no primary patent protection available for the compound, or the primary patent will expire soon after the initial approval of the drug, such that the follow-on patent is in fact the primary protection for the product.
Even in cases where a pharmaceutical active ingredient came to market with the protection of a primary patent that provided a substantial period of exclusivity, it is important to bear in mind that a follow-on patent directed towards a new use or new formulation cannot extend the term of the original patent. Once the primary patent expires, there is no patent-based restriction on the ability of generic competitors to bring competing versions of the original formulation to market.43
In Lundbeck v. Generics, a court in the United Kingdom specifically pointed out that a follow-on patent claiming escitalopram, a purified enantiomer of citalopram, did not prevent a number of manufacturers from selling generic versions of the original racemate drug in the U.K. once the original patent had expired.44
A patent on a salt form of a drug is generally quite narrow, limited as it is to that particular salt form.45 There are many different potential salts that can be made of a drug and, if it is easy to find another one that works (as is apparently assumed by the Guidelines), then a competitor can avoid the patent by simply using another salt.46 In contrast, if there is real value and nonobvious differentiation in the particular salt that is claimed, then good policy would dictate that an appropriately narrowed patent be allowed for that particular salt form in order to create the necessary incentive for innovators to deliver the benefits of that nonobvious value and differentiation to patients.
Significantly, a generic company seeking to sell a competing version of an active ingredient whose patent has expired is free to do that, so long as they do not use the particular salt form that is patented.47 In the U.S., for example, there are two pathways for obtaining approval for follow-on drug products under sections 505(b)(2) and 505(j), respectively, of the Federal Food, Drug, and Cosmetic Act.48 Although generic companies typically rely on the section 505(j) (Abbreviated New Drug Application [ANDA]), section 505(b)(2) provides an alternative mechanism for seeking approval to market a modified, but nonetheless bioequivalent, formulation, such as a different and unpatented salt form.49
The nature of the patent right is such that the restraining potential of a patent is directly proportional to the value of the underlying patented technology. If a patented invention is insubstantial, then the patent should have an insubstantial effect on the availability of drugs on the market, since prior treatments remain available. If, however, a patented invention provides truly substantial benefits when compared to preexisting products, then it might very well be the case that the patent will significantly impede competition during the life of the patent. This result highlights the essence of how patents incentivize advances in medicine. It is important to remember that this impediment to competition applies to only the newly improved product; a newly issued follow-on patent will generally not directly impact the availability of generic versions of the original product.
To illustrate this principle, it might be useful to consider two extreme scenarios, one in which a follow-on patent covers a trivial, insubstantial improvement on an existing drug, and the other in which the follow-on patent covers a substantial improvement that vastly enhances the pharmaceutical value of an existing drug. In the first example, the patent should have little, if any, effect on the market for the drug, since by definition the improvement patent will not cover the existing drug, and patients can choose to continue using the existing drug without infringing the follow-on patent. In the second example, the patent will no doubt limit competition and allow the innovator to reap some reward for the improvement, but this is precisely the incentive patents provide and, without which, the improvement never would have been made available to patients. As leading patent authority (and one of the most highly regarded judges in the history of the U.S. Court of Appeals for the Federal Circuit) Judge Giles Rich put it, “[a] monopoly on something nobody wants is pretty much … a nullity. That is one of the beauties of the patent system. The reward is measured automatically by the popularity of the contribution.”50
For example, as discussed above, Allergan received a patent on a new formulation of the glaucoma drug Lumigan, which had a greatly improved safety-efficacy profile compared to the original product. This follow-on patent in no way extends the patent protection for the original formulation, leaving doctors and their patients with a choice—use the original formulation or the new improved formulation. If the improvement were not substantial, consumers would be free to choose a generic version of the original formulation, and the follow-on patent would in no way impede generic competition. If, on the other hand, patients truly benefit from the improved safety-efficacy profile, they will choose to pay the premium associated with patent protection, until the follow-on patent expires and generic competition begins for the improved version. It is this premium during the limited life of the follow-on patent that provides a crucial incentive to bring improved products to market. A policy aimed at discouraging or even barring follow-on patents would dramatically decrease the incentive for the development of substantially improved versions of drugs. At the same time, follow-on patents on trivial improvements should not be a problem since, upon expiration of the primary patent, generic producers can continue to produce, and consumers can choose to continue using, the original formulation.
With regard to combination products, a patent that claims a pharmaceutical combination comprising active ingredient A and active ingredient B would under no circumstances extend, either directly or indirectly, the term of protection of a “basic patent” directed toward either A or B. It is a well-established axiom of patent law that a product or process that would literally infringe a patent claim after the patent issues renders the claim invalid for lack of novelty if it is disclosed in the relevant prior art.51 If active ingredients A and B were already well known prior to the invention of the combination, patent claims directed toward the combination could not be infringed by any use, making, sale, or importation of A and B, as long as they have not been combined in the manner covered by the patent. That would include use of the two products in combination, except in the context of the combination drug product. Thus, for example, the patent would not prevent anyone from using the knowledge that the combination of the drugs is particularly beneficial to take the two drugs concurrently but separately.
A critic of follow-on patents might argue that, even in cases in which the follow-on patent covers a trivial or illusory improvement, a drug company may promote the improved version and convince doctors to prescribe it in spite of it being more expensive than the original product and providing little, if any, additional benefit. If that were the case, it would not be the fault of the patent system; it would be a deficiency in the market that should be corrected. In a well-functioning healthcare system, doctors and third-party payers should be in a position to assess the cost-benefit ratio for a new version of a drug, or for a new method of using it, and encourage patients to pay only an additional cost that is commensurate with the benefit. Rather than undercutting the patent incentive, regulators must look elsewhere in trying to discourage this type of scenario. In addition, it should be remembered that patent law's nonobvious, novelty and utility criteria as applied today would already have filtered out the old or trivial products and uses.
Rather than the blanket presumption against patents on new formulations endorsed by the Guidelines, which would tend to deny patent protection for both minor improvements and highly significant improvements, the needs of patients would be better served if the market (taking into account the needs and desires of patients and healthcare providers) were allowed to determine the value of a new formulation on an existing drug. If the improvement is of such significance that it justifies a cost premium, then society has benefited from the development of this improved mode of drug delivery and payment of the premium is justified, in the same way that it is by the initial development of a therapeutically useful new active ingredient. If the improvement is nominal, then consumers and purchasers should refuse to pay the premium, which they can do by simply purchasing the original formulation from generic companies at a discounted price.
Historically, there was a potential for “evergreening” in the U.S. when patents received a 17-year term starting at the date the patent issued. A pharmaceutical company could delay issuance of a selection patent, and thereby extend protection afforded by an earlier issued genus patent covering the same molecule. However, under an approach that ties the patent term to the date of filing, this is no longer a viable approach for extending patent protection. Once a pharmaceutical company identifies a superior species, it is incumbent upon that company to file its patent application disclosing and claiming that species (i.e., the selection patent) in a timely manner. Otherwise, the activities of the pharmaceutical company in developing the drug will create prior art that destroys the novelty of that species. For example, numerous U.S. court decisions have found that activities associated with the development of a drug for clinical trials creates prior art preventing the patenting of the drug.52 The 20-year clock will inevitably start ticking years before the drug enters the market, thereby preventing the pharmaceutical company from unduly extending the term. The term will in fact be appropriate, keyed to the discovery of the specific molecule that is being developed, rather than to a genus of molecules that might have been disclosed years earlier, but disclosure of which did not identify the species which provides the pharmaceutical benefit.
2. The International Framework for Examining the Patentability of Follow-On Pharmaceutical Inventions, and Recent Controversies
As a starting point, is important to note that while each country has some discretion to adopt an individualized standard for patentability consistent with the policy objectives of that nation, in many cases this discretion is constrained by international treaties. For example, there are 164 Members of the World Trade Organization (WTO), which have each agreed to respect the disciplines of the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”).53 This places substantive limitations on the ability of WTO members to raise the bar for patentability, as the TRIPS Agreement requires that its members provide certain minimum levels of protection.54 Sometimes, this point is lost in discussions of international and domestic patent policy.
Article 27.1 of the TRIPS Agreement provides the basic agreed-upon patent eligibility requirements for all WTO members: “[P]atents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.”55 In other words, if an applicant for a patent in a WTO member seeks to register any invention, whether product or process, in any field of technology, which is “new,” “involve[s] an inventive step,” and is “capable of industrial application,” then the WTO member is obligated to grant a patent on that invention (subject to the disclosure and procedural requirements, and the exceptions, all discussed below).56
Notably, while Article 27.1 sets forth, at a minimum, the subject matter that generally must be patentable in a WTO member, the TRIPS Agreement is clear that WTO members have the flexibility to provide additional protection beyond that which is specifically required by the TRIPS Agreement. In particular, Article 1.1 of the TRIPS Agreement provides that “[m]embers may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.” Pursuant to this flexibility, WTO members can structure both the grant of the patent, and the rights conferred, to whatever policy goal is intended—provided that grant and conferral do not otherwise violate the TRIPS Agreement.
The UN Secretary-General's High-Level Panel Report on Access to Medicines proposes that WTO member governments are “free” to interpret terms in the WTO Agreements in pursuit of public policy objectives. However, as one of us has previously pointed out, “there is no basis [] in public international law or in WTO practice” for some of the proposals that have been made with respect to limiting patent protection for follow-on patents.57 More particularly, even measures taken for the avowed purpose of “protecting public health” must be “consistent with the provisions of [the TRIPS Agreement].”58
The TRIPS Agreement in no way sanctions subject-matter-specific heightened requirements of patentability, including with respect to follow-on pharmaceutical patents. To the contrary, the antidiscrimination provision in the TRIPS Agreement affirmatively precludes such measures.
For example, Article 27.1 of the TRIPS Agreement (second sentence) provides that “patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.” Heightened patentability standards focused only on pharmaceutical inventions would arguably constitute a discriminatory practice based on the “field of technology,” that would be prohibited by Article 27.1 of the TRIPS Agreement. Moreover, as previously noted by one of us, the nonobviousness standard mandated by the TRIPS Agreement is inherently fact-based and can only be assessed on a case-by-case basis, rendering the Guidelines' preconceived presumptions of non-inventiveness, with respect to a specific category of invention, inconsistent with the TRIPS Agreement.59
In our view, beyond constituting a potential violation of the international obligations under the TRIPS Agreement, it is otherwise inappropriate and counterproductive for countries to impose additional requirements of patentability beyond those set forth in the TRIPS Agreement, as exemplified by the “enhanced efficacy” requirement set forth in section 3(d) of the Indian Patent Act, and as applied in Novartis AG v. Union of India.60
Section 3(d) of that Act excludes from patentability the:
mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.61
Section 3(d) of the Indian Patent Act is problematic because it charges the patent office with making a determination of enhanced efficacy, rather than letting healthcare providers, patients, and third-party payers assess whether the new formulation provides sufficient additional benefit to justify any additional cost. As noted above, a patent on a new formulation cannot block access to the original formulation of a drug.
There are two readily apparent dangers of leaving the determination of enhanced efficacy in the hands of a patent examiner. For one, there is a danger that the examiner will focus the inquiry solely on therapeutic efficacy, while giving insufficient weight to improvements relating to stability, ease of administration, etc., which although not directly therapeutic can provide substantial benefits to patients.
The second danger is that an enhancement of therapeutic efficacy might not be demonstrated and validated until long after the initial discovery of the formulation. If no patent is allowed, then there will be no incentive for developing and testing the formulation in patients, such that the enhancement might never even be identified. If the patent issues, however, there will be such an incentive and, if a substantial improvement can be sufficiently demonstrated, then the public will be able to make the decision of whether to pay the higher price for that improvement or to stay with the original version.
3. Best Practices for Evaluating the Patentability of Follow-On Pharmaceutical Inventions
3.1. Patentable subject matter
The threshold requirement of patentability is patent eligibility, which asks whether the claimed subject matter is of the type eligible for patent protection. In the context of Article 27.1 of the TRIPS Agreement, this concept is captured by the term “invention.”62 The U.S. Supreme Court has held that, while “anything under the sun made by man” is patent eligible, abstract ideas, laws of nature, and natural phenomena are not.63 The prohibition against patents on laws of nature/natural phenomena has precluded patentability for certain life science innovations, including some natural products and diagnostic methods, but as properly interpreted, this should have no bearing on follow-on pharmaceutical inventions.64
Indeed, it is hard to imagine a follow-on pharmaceutical invention that does not fall within the scope of patent eligible subject matter. Rather, the difficult questions arise at the stage that a patent examiner is adjudging non-obviousness and, to a much lesser extent, novelty and utility.
The situation is similar in Europe, where patents directed to some life science inventions and related diagnostic methods also remain—despite a more permissive legislative framework for patent eligibility—highly controversial. European limitations can mostly be found on the scope of protection level, whereas both legislation and case law would regard most follow-on pharmaceutical inventions as patent eligible under EPC Articles 52 and 53.65
Unfortunately, however, at some points the Guidelines seem to suggest that certain follow-on pharmaceutical inventions should be treated as patent ineligible regardless of their inventiveness and medical utility. For example, at one point the Guidelines recommend that new methods of using a drug should be treated as mere “discoveries,” and thus presumably patent ineligible.66 As the U.S. Supreme Court recently emphasized, however, the patent eligibility standard should not affect new methods of using a drug in treatment,67 no doubt recognizing the potential for severely undermining the incentive for the development of new methods of using drugs, such as the use of AZT for the treatment of HIV. It also flies in the face of science to characterize the development of a new method for treating disease by means of a synthetic compound as a “discovery” of a natural phenomenon, given that neither the pharmaceutical nor its introduction into a human body at therapeutic levels occur naturally.
The Guidelines further seem to suggest that drug metabolites are not patent eligible since they can be produced by physiological processes in a patient's body. However, as a general matter, a drug metabolite resulting from physiological breakdown of a synthetic compound in the human body is itself a non-naturally occurring chemical compound, clearly distinguishable from naturally occurring metabolites. If such a metabolite can be synthesized synthetically and a use identified, there should be no patent eligibility bar to prevent it from being patented.
Furthermore, drug metabolites can themselves constitute extremely important contributions to medicine, providing substantial benefits in safety and/or efficacy relative to the parent drug that is metabolized to form the metabolite. Fexofenadine hydrochloride (Allegra) provides a dramatic example of this and illustrates how important patent protection for metabolites can be. Fexofenadine is the metabolite of terfenadine (Seldane) which, prior to Allegra, was a widely used antihistamine.68 In fact, it was the first antihistamine approved in the United States that did not cause somnolence (drowsiness), an important safety advantage to people who use antihistamines. Subsequently, terfenadine was found to cause serious adverse cardiovascular events in patients taking the drug. Fortunately, however, researchers discovered that the active metabolite of terfenadine, fexofenadine, is responsible for the desired beneficial properties of terfenadine, but does not risk of serious cardiovascular adverse events. Based on the availability of fexofenadine, in 1997 the FDA proposed to withdraw approval of drug products containing terfenadine, e.g., Seldane, transitioning patients from the parent compound to the active metabolite and, in so doing, significantly improving patient safety.69 Shortly thereafter, the manufacturer of Seldane voluntarily removed the product from the marketplace.70 Without the availability of patent protection for metabolites, fexofenadine would not have benefited from patent protection, dampening any incentive for its development and approval as a safer alternative to terfenadine.
3.2. Utility/industrial application
In order to be patentable under U.S. law, an invention must provide a practical utility that is substantial, specific, and credible.71 In Europe, Article 52 of the European Patent Convention (EPC) requires that inventions should be “susceptible of industrial application,” whereas Article 57 EPC stipulates that “an invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.” The utility/industrial application threshold is thus generally quite low and, for the vast majority of inventions, poses no significant barrier to patentability.
Article 27.1 of the TRIPS Agreement lists this requirement as “capable of industrial application,” and then goes on to clarify that this phrase is to be understood as synonymous with the term “useful.”72 At the time of the TRIPS negotiations, this requirement of patentability was expressly defined in the Patent Cooperation Treaty (PCT), and well understood by the drafters of the provision. Specifically, PCT Article 33(4) provided that “a claimed invention shall be considered industrially applicable if, according to its nature, it can be made or used (in the technological sense) in any kind of industry. ‘Industry’ shall be understood in its broadest sense, as in the Paris Convention for the Protection of Industrial Property.”73
Lack of utility is normally only an issue for a newly identified chemical compound or genetic sequence for which no reasonably plausible practical utility has been identified as of the application filing date.74 But this has not been a problem for follow-on pharmaceutical inventions, nor should it be, since by their nature these inventions involve a new form or mode of use of a pharmaceutically active chemical entity of known therapeutic potential.
It is important to emphasize that compliance with the utility requirement does not require a showing that the follow-on invention provide some beneficial utility not otherwise provided by the prior art. Often times, the relative benefits of a follow-on invention relative to the prior art will be established only after significant downstream development and clinical testing, which will not occur in the absence of patent protection. The Federal Circuit made this point in In re Brana, for example.75 If a follow-on pharmaceutical invention does not provide any significant benefit over the prior state of the art, the regulatory authorities and a well-functioning market will ensure that the patent will not significantly impact access to medicine.
At one point, the Guidelines propose that product claims directed toward “the dose of a drug fail to comply with the industrial applicability requirement,” i.e., the utility requirement.76 To the contrary, however, a new and nonobvious dosage of a known drug can provide significant benefits in terms of both safety and efficacy, and investment in the research and development of new and improved dosages of existing drugs should not be discouraged by a blanket prohibition on patent protection for new dosages (which is what the Guidelines seem to recommend).
3.3. Novelty
In order to be patentable, an invention must be “novel,” as that term is used in its legal sense. An invention lacks patentable novelty if it is anticipated by the prior art, which has been defined by statute and case law in domestic systems.77 In including the novelty requirement, Article 27.1 of the TRIPS Agreement uses the term “new,” which, based on an analysis pursuant to the Vienna Convention on the Law of Treaties (VCLT), can be understood as an invention that is different than what has been described in the prior art, as defined by reference to the effective filing date of the claimed invention.78
In the U.S., for example, prior art comprises printed publications, sales or offers for sale, and public uses, as well as certain non-public commercial uses and non-published patent filings.79 In Europe, Article 54(2) stipulates that the state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application. In general, the novelty requirement should be applied to follow-on pharmaceutical inventions in the same manner as it is applied to inventions in general; if a purported invention was adequately disclosed in the prior art, the invention is not patentable, but otherwise the invention should satisfy the novelty requirement.
There is one category of secondary patent discussed in the Guidelines, so-called “selection patents,” which deserves mention in this regard, since the Guidelines improperly suggest an interpretation of the novelty requirement that is entirely inconsistent with established practice and good policy. The Guidelines define a “selection patent” as a patent claiming:
a subgroup of elements … selected from a larger group and claimed on the grounds that a new, unexpected property has been found. For instance, if a Markush claim was admitted in relation to a set of pharmaceutical compounds, the patent owner might later file a new patent application covering one or more of such compounds.80
The Guidelines recommend that selection patents should not be granted, asserting that the “selection of elements included in the disclosed group lacks novelty, such as in the case of compounds disclosed in a prior generic chemical structure or included within a numerical range.”81 To the contrary, it is well-established in multiple jurisdictions that disclosure of a genus of structurally related molecules, either in the context of a Markush claim or otherwise, is not necessarily sufficient to render a subsequent claim directed to one or more species of the genus on the basis of lack of novelty or obviousness.82 The rationale behind this principle of patent law is that, as a practical matter, a paper disclosure of many structurally related molecules does not necessarily provide sufficient direction for one of skill in the art to identify a specific member of the genus possessing a desirable pharmaceutical property, especially a property not shared by most other members of the genus. At the same time, the selection of a specific member or members of a genus that possess a property to a greater degree than most members of the genus can constitute a patentable invention of great benefit to patients.
Identifying this potentially groundbreaking pharmaceutical agent from an astronomical pool of candidates can be like finding a needle in a haystack. Although a disclosure of thousands or millions of chemical compounds might in some hyper-literal sense disclose each compound, practically speaking it does not in any way put society in possession of those rare needles that might provide very real health benefits. It is very easy to disclose on paper that an astronomically large genus is of structurally related molecules, but such a disclosure does not put the public in possession of particular members that have exceptional pharmaceutical properties, which are in many cases only identified through painstaking research.
It bears noting that in some cases a selection patent will function as the primary patent protecting an important drug, without which there would be no incentive to bring that drug to market. For example, the previously disclosed genus encompassing the drug might not be patented at all, or if it is patented, that patent might have issued years before the discovery of the pharmaceutically superior species within the genus. In other words, in some cases the disclosure of the genus does not serve as the basis for any meaningful patent protection for the later-discovered species. If selection patents were not allowed, then under such a scenario there might be no patent incentive for the development of the compound into an approved drug.
A so-called Markush group disclosed in a prior art patent can in some cases encompass millions or even billions of molecules.83 However, the mere fact that a generic description of a common structural core with multiple substitution sites can encompass so many molecules should not render each of those molecules unpatentable, particularly a molecule that the prior art generic disclosure does not specifically point out, and which has never actually been made or tested. In the pharmaceutical arts, the physiological and therapeutic effect of a chemical on the body might in some cases be predicted based on chemical structure, but it can be confirmed only by actual testing. Until a compound has been made and actually tested, there is no way to know exactly how it will function.
A broad patent claim encompassing a billion compounds might be fully enabled, in that a large number of those compounds share a common functionality with those molecules that were actually synthesized and tested. But amongst this large group, there could be some molecules with unexpected properties, and if a pharmaceutical researcher perseveres and actually synthesizes and tests a molecule and discovers these unexpected properties for the first time, the existence of the earlier generic disclosure in a prior art patent should not prevent this inventor from patenting her invention. Without a patent on this new molecule, there will in many cases be insufficient incentive to develop it into a drug, especially if the earlier prior art patent is owned by another company, or will expire shortly.
An example of this can be seen in In re Baird, a decision in which the U.S. Court of Appeals for the Federal Circuit upheld the validity of a patent directed toward the pharmaceutical active ingredient bisphenol A, in spite of the fact that the prior art disclosed a generic diphenyl formula which encompassed bisphenol A.84 Similarly, in Olanzapin, the German court clarified that, as a general matter, a generic structural formula does not constitute disclosure as such of the single compounds covered by that structural formula.85 Moreover, the EPO's case law and examination guidelines acknowledge the novelty of overlapping chemical formulae, if:
the claimed subject-matter is distinguished from the prior art in the range of overlap by a new technical element (new technical teaching), see T 12/90, point 2.6 of the reasons, for example a specifically selected chemical residue which is covered in general terms by the prior art in the overlapping area, but which is not individualised in the prior art document. If this is not the case, then it must be considered whether the skilled person would seriously contemplate working in the range of overlap and/or would accept that the area of overlap is directly and unambiguously disclosed in an implicit manner in the prior art (see for example T 536/95). If the answer is yes, then novelty is lacking.86
3.4. Nonobviousness/inventive step
Of course, in order to be patentable an invention must be more than just novel and useful, it must also be nonobvious. Many would agree that this is the core requirement of patentability, since it gets at the heart of what it means to be an invention. The standard for assessing the obviousness of inventions in general is fairly well established in domestic laws.
The TRIPS Agreement specifically refers to the term “inventive step,” as used in Article 27.1, as being synonymous with “non-obvious.”87 Although the TRIPS Agreement itself does not define this concept, the meaning of “involve an inventive step” and “non-obvious” can be established through an interpretation pursuant to the rules set out in the VCLT, including Articles 31 and 32 thereof.88 Notably, the meaning of these terms was well established at the time that the TRIPS Agreement was negotiated, as reflected in the definition in the PCT, which provided that “a claimed invention shall be considered to involve an inventive step if, having regard to the prior art as defined in the Regulations, it is not, at the prescribed relevant date, obvious to a person skilled in the art.”89 Importantly, both the dictionary definition90 and the PCT definition imply that any decision on “inventive step” or nonobviousness should be made on a case-by-case basis.91
In the EPC, the criterion of inventive step is regulated in Article 52(1), which merely establishes the requirement that all inventions must involve an inventive step to be patentable,92 and Article 56, which refers more specifically to the concept of inventive step.93 Article 56 EPC, which is binding on both the proceedings for a grant of a European patent and on national revocation proceedings against a European patent, requires, inter alia, that “an invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art.”
Thus, the EPC precludes patent protection for any novel invention that, in light of the state of the art, is obvious to a person skilled in the art. The “state of the art,” as defined for the novelty requirement in Article 54(2) EPC, comprises “everything made available to the public by means of written or oral description, by use, or in any other way, before the date of filing of the European patent application.” Yet novelty and inventive step are separate criteria. Novelty exists if there is any divergence between the invention and the known art. The “inventive step” criterion basically requires that there must be specific degree/quality of distinction from the prior art before a patent can be granted. This question arises only if there is novelty.94
One important difference is that in the assessment of Article 54, the items of prior art are evaluated individually, whereas Article 56 requires evaluation of the combined prior art in order to examine which further development of the state of the art a skilled person would deduce from this combined material. The invention claimed must normally be considered as a whole. For a claim consisting of a “combination of features,” this implies that an argument cannot be made that the separate features of the combination taken alone are known or obvious and that “therefore” the whole subject matter claimed is obvious.95 Generally speaking, the greater the number of prior art references that must be combined, the greater the likelihood that an inventive step exists. An inventive step is present if the invention lies beyond the contemplation or capability of the skilled person who is presumed to have access to the state of the art in full.96
Similarly, under U.S. law, the fundamental inquiry is whether the claimed invention would have been obvious to a person having ordinary skill in the art (PHOSITA) in view of the relevant prior art. In assessing the nonobviousness of an invention, the applicable standard should be flexible and cognizant of the realities of the commercial world, addressing each invention on a case-by-case basis. That said, a wealth of case law from the pharmaceutical arts provides an ample foundation for application of the standard in a reasonably consistent manner as new technologies emerge.
In most cases, a finding of obviousness is based on two or more prior art references that, in combination, disclose the elements of a purported invention, and a determination that a PHOSITA would have been motivated to make that combination in order to achieve some desired outcome. Significantly, in order to be patently obvious, the prior art must have provided, prior to the inventor's efforts, a reasonable expectation that the proposed combination would succeed. If there was no reasonable expectation that the combination would succeed in providing the anticipated benefits, then the invention will generally be deemed patentable. In particular, a pharmaceutical invention that is found to provide unexpected benefits will generally be deemed nonobvious. In many cases, so-called secondary considerations, which are objective, non-technical indicators of nonobviousness, can be used to rebut an allegation of obviousness. These objective indicators of nonobviousness include commercial success, acclaim for the invention, previous failed attempts by others, and success in the face of prior art teaching away from the invention.
In the following subsections of the article, we discuss a number of aspects of the nonobviousness inquiry, particularly as they are (or at least should) be applied to follow-on pharmaceutical inventions.
3.4.1. The problem of hindsight bias
With respect to inventions in general, and follow-on pharmaceutical inventions in particular, it is extremely important to be vigilant regarding the well-recognized phenomenon that, in hindsight, there is a strong tendency to improperly assume that an invention would have been obvious. It is only human nature to think “well, I could have thought of that,” after the value of an invention has been demonstrated, but the appropriate inquiry is whether the invention would have been obvious prior to the inventor's activities. Both European and U.S. courts, as well as European Patent Office (EPO) and United States Patent and Trademark Office (USPTO) examinations guidelines, have long recognized this concern and sought to address it in a number of ways, including by requiring that the prior art provide some motivation, at least implicitly, to pursue the line of inquiry leading to the invention.97 Objective indicators of nonobviousness such as commercial success and unexpected results are also useful in this regard.
The problem of hindsight is particularly likely with respect to follow-on pharmaceutical inventions. Once the value of a follow-on invention, such as a newly purified enantiomer or polymorph, or a particularly effective timed-release formulation, has been thoroughly established by clinical testing, it is easy for one to retrospectively conclude that it would have been “obvious to try” making and testing the invention. But one must bear in mind that, given all the independent variables involved in pharmaceutical development, there are an astronomical number of possibilities with respect to that which it might have been “obvious to try.” It would be impossible for pharmaceutical companies to pursue every possible alternative, and in those circumstances where an inventor has persevered against the odds and successfully pursued a course of research that ultimately results in useful pharmaceutical innovation, a patent will in many cases be justified.
In this regard, it has been pointed out that the standard for patentable nonobviousness is whether the inventor “would” have attempted the combination of prior art elements, not whether she “could” have done so. As mentioned above, there are an astronomical number of possible follow-on inventions that a pharmaceutical inventor could choose to pursue, but the invention is not obvious unless the prior art would have motivated a PHOSITA to proceed in this particular direction of research. Significantly, to avoid the problem of hindsight bias, it is important to ensure that the motivation for attempting the invention resides solely in the prior art, uninfluenced by the fact that now in retrospect, after the attempt has been made and proven successful, it appears like it would have been obvious to make the attempt.
The EPO has for many years also followed this approach, finding that an invention is not obvious merely because the average skilled person with access to the entire state of the art at the time of priority could have achieved the same invention by adapting, modifying or combining the closest prior art,98 but because he would have done so because the prior art incited him to do so in the hope of solving the objective technical problem or in expectation of some improvement or advantage.99 As mentioned above, this distinction is very important, since there are often a variety of methods which inventors could have used in order to arrive at an invention. The “could-would” approach, however, makes clear that the fact that a solution is technically feasible does not mean that the person skilled in the art actually would have used these methods and that it would have been obvious for the skilled person to get to that solution.
3.4.2. A reasonable expectation of success
In order to render an invention obvious, the prior art must not only provide the motivation for one of skill in the art to attempt the invention, it must also create a reasonable expectation that the attempt will succeed. For example, a new method of treatment is not obvious if the prior art does not create the expectation that use of the product will be successful in treating the new indication. The disclosure of a genus of chemical compounds sharing some structural core does not render obvious a species within that genus which is found to provide some unexpected and beneficial functionality. And new formulations of a known drug are not obvious, even if they would be predicted to have some beneficial property, if there is no reasonable expectation that a PHOSITA would succeed in producing the formulation absent undue experimentation.
A newly characterized enantiomer is a good example of a follow-on invention that will often be nonobvious based on the uncertainty involved in the methodology necessary to successfully purify it from the racemic mixture. Courts around the world have repeatedly upheld the nonobviousness of patents directed to enantiomers based on the unpredictability and difficulty associated with identifying a successful approach to purifying an enantiomer with improved functionality.
One U.S. court, for example, described the separation of any enantiomer as a “paradigm of trial and error.”100 For similar reasons, a UK court upheld an enantiomer patent, finding that the “resolution of a racemate by separation into its enantiomers is not a straightforward matter,” particularly given that enantiomers have virtually identical physical characteristics, thus rendering many separation methods ineffective. Given the unpredictability associated with both the purification of the enantiomers, and the likelihood that any given enantiomer will have superior characteristics justifying its development into an approved drug, the test for nonobviousness should assess whether the prior art would have suggested that pursuit of the enantiomer would be justified in view of this unpredictability.101
In Sanofi-Synthelabo v. Apotex, Inc., experts testifying before U.S. courts for both the patent owner and the patent challenger agreed that, as a general matter, separating enantiomers from one another can be a very technically challenging proposition.102 This difficulty arises from the fact that enantiomers share the exact same chemical structure and chemical formula—the only difference between a pair of enantiomers resides in the three-dimensional arrangement of molecular constituents around a single carbon atom in the compounds.103 This high degree of similarity makes it very difficult, as a general proposition, to separate the two from each other, since for the most part they tend to have identical physical and chemical properties.104 There is no general methodology for separating enantiomer—each separation problem must be solved on a case-by-case basis, in an unpredictable process of trial and error experimentation.
In Europe, a series of mostly biotech-related decisions by the EPO's Technical Board of Appeal, such as T 0877/90,105 T 694/92,106 T 296/93,107 T 923/92,108 T 386/94,109 and T 207/94,110 also provided a more precise definition of what is to be understood as a “reasonable expectation of success” in the biotechnological field. For example, in T 0877/90, “Hooper Trading Co. N.V. / T-cell growth factor,” the Board found that an invention was not obvious where the skilled worker required skills beyond common general knowledge and where the amount of trial and error which could be expected of the skilled worker was excessive. Then, in T 296/93, “Hepatitis B virus antigen production/BIOGEN,” the Board underlined that trials in a new, uncertain region are seldom accompanied by “reasonable expectation of success” and that the mere “hope to succeed” should not be misconstrued as a “reasonable expectation of success”:
The fact that other person (or teams) were also working on the same project might suggest that it was “obvious to try” or that it was “an interesting area to explore,” but it does not necessarily imply that there was a “reasonable expectation of success.” “A reasonable expectation of success” which should not be confused with the understandable “hope to succeed” implies the ability of the skilled person to reasonably predict, on the basis of the existing knowledge before the starting of a research project, a successful conclusion of the research project within acceptable time limits. The more unexplored a technical field of research is, the more difficult is the making of predictions about its successful conclusion and, consequently, the lower the expectation of success.111
The Board's case law also confirms that a competition between different groups of researchers hoping to succeed with a specific project, sometimes in the context of a “race to the patent office,” does not necessarily allow for the conclusion that there must have been a reasonable expectation of success. In other words, whether there was a race and who won it is basically irrelevant.112
In T 923/92, “Human t-PA/Genentech,” the Board had to decide whether the skilled person would have attempted, with reasonable expectation of success, to produce cDNA coding for human t-PA (tissue Plasminogen Activator) or whether, in this instance, he would have known from his technical knowledge, before even embarking on the research, that he would be able to complete his project within acceptable time-limits. Referring to its previous decision in T 816/90, the Board held that: “[e]ven when it is possible to theoretically conceive a straightforward approach to solve a specific technical problem, the skilled person might be confronted with unexpected difficulties when trying to put the conceived strategy into practice.”113
The Board continued that, although hoping to succeed, the skilled person embarking on this project would have known that its successful conclusion depended not only on technical skill in putting into practice the sequence of precise steps of the theoretical experimental protocol, but also to a large extent on the ability to take the right decisions along the way whenever a difficult experimental situation so required.114 Under these circumstances, the skilled person could not be said to have had a “reasonable expectation of success.” Moreover, where there is some prejudice against following a particular course or something negatively influences the degree of confidence of the skilled person in a successful outcome of an experiment, the invention may not be obvious.115
On the other hand, the Board also made clear that the mere fact that a claimed biotechnological invention was the result of work requiring a considerable amount of time and money does not necessarily imply that the hypothetical person skilled in the art would not have arrived at the same solution. This is particularly true if the necessary work was comparatively uncomplicated or routine and the person skilled in the art had from the start a “reasonable expectation” to (at one point) succeed with this work.116
Under such circumstances, a patent applicant could neither sensibly argue that he or she had no particular expectations of any sort when going through the stages that finally led to the claimed invention, but was merely curious to see whether a result could be achieved. Such a “try and see” attitude does not equate to an absence of reasonable expectation of success, as clarified by the Board in T 333/97 “Somatic changes/Monsanto.”117 In denying an inventive step the Board held:
The suggestion in … and the optimistic tone of … (the prior art) would have given the skilled person an incentive to try to introduce in a plant a DNA to be transcribed into a negative strand RNA having sufficient complementarity to a given target pathogenic RNA strand. These are exactly the measures proposed. … (in the claim at issue) … as a solution to the underlying technical problem, and performing them merely required the application of techniques and knowledge available at the time of the invention, no particular ways or strategies being proposed by the patent in suit. In the absence of evidence of real difficulties which would be encountered, the skilled person, when following the indicated route, would have had either some expectations of success, or, at worst, no particular expectations of any sort, but merely the curiosity to see whether a result could be achieved. The latter situation, however, does not equate with an absence of reasonable expectation of success.118
Last but not least, the “reasonable expectation of success” test might be held to be inapplicable in the inventive-step assessment of a claimed invention relating to predominantly uncontrollable experiments. This can be derived from the decision in T 737/96, “Astaxanthin/DSM.”119 Considering the inventiveness of claim 1 in the main request concerning a method of preparation of a specific yeast cell (Phaffia rhodozyma) through mutagenesis,120 the Board opined that an attempt to evaluate the “expectation of success” of a random technique, such as mutagenesis where results depend on chance events, was not appropriate.121 The Court explained further that:
This is because the skilled person knows that, unless a specific selection method can be developed, which is not the case in the patent in suit, perseverance and chance play a key role in the achievement of success, as no form of control can be exerted over the mutation events. Under these circumstances, like e.g. in a lottery game, the expectation of success always ranges irrationally from nil to high, so it cannot be evaluated in a rational manner based on technical facts. This is at variance with technical situations in which more predictable methods are relied upon to solve a particular problem, such as the methods of genetic engineering like cloning and/or expressing a DNA sequence. In such situations, it is often possible to make rationally predictions about the possibilities of success, and the evaluation of the “reasonable expectation of success” is then a meaningful and reliable tool in the assessment of inventive step.122
This statement certainly does not allow the conclusion that every technical contribution that is the result of research, where mere chances or coincidences are decisive automatically, involves (or precludes) an inventive step. Instead the Board seemed to focus on a more general, overall examination in order to determine the inventiveness of the claimed preparation method. In doing so, the Board particularly evaluated the extent to which the claimed method actually contributed to the progress of the scientific and technical state of the art.123 In summary, the Board held in this case that the measures adopted by a skilled person would have included the claimed method as covered by claim 1 in the main request. Thus, the Board decided that claim 1 lacked an inventive step and was not allowable under Article 56 EPC.124
3.4.3. “Obvious to try” is not necessarily obvious
In KSR v. Teleflex, the U.S. Supreme Court explained that, under some circumstances, an invention can be found obvious by showing that it is nothing more than an “obvious to try” combination of known elements.125 But the Court was careful to note that obvious to try establishes obviousness only under certain conditions—that is, when “there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, and under circumstances in which these solutions are within the technical grasp of one of ordinary skill, and one of skill in the art would anticipate success.”126
Significantly, in many cases involving follow-on pharmaceutical inventions, these criteria are not present, especially the existence of a finite number of identified, predictable solutions. The fact that a particular solution might appear in hindsight to have been obvious to try is not sufficient to render the claim invalid for obviousness.
In the case of pharmaceuticals, there are so many parameters that can be varied that the number of possible solutions rises to a level that exceeds any reasonable definition of, to use the words from the U.S. Supreme Court, “a finite number of identified solutions.” Furthermore, chemistry and biology are highly unpredictable areas of technology, very different from the mechanical and electronic technology at issue in KSR (i.e., an adjustable foot pedal for an automobile having an electronic sensor). With respect to pharmaceuticals inventions, this unpredictability substantially undercuts the notion that obvious to try generally renders an invention obvious. And even if one of skill in the art might recognize the potential for success, it is unlikely that one of skill would “anticipate” success in the case of many follow-on pharmaceutical inventions, given the unpredictability and risk associated with commercializing these types of inventions. All in all, pharmaceutical inventions are generally poor candidates for a determination of obviousness based on a conclusory, hindsight-based assertion that the invention involves nothing more than an optimization of parameters that would have been “obvious to try.”
As stated by the Federal Circuit in Sanofi v. Apotex, for example, “[w]hether or not it may have been ‘obvious to try’ separating the enantiomers of PCR 4099[,] the wide range of possible outcomes and the relative unlikelihood that the resulting compound would exhibit the maximal increase in antiplatelet aggregation activity in the absence of neurotoxicity make clopidogrel bisulfate non-obvious.”127
Any assumption that creating an improved drug formulation is inherently obvious fails to take into account the large number of variables that can be modified in a formulation, and the unpredictability as to the impact in terms of efficacy. As correctly observed, again by the Federal Circuit, in Intendis GmbH v. Glenmark Pharmaceuticals, “swapping ingredients in complex chemical formulations is anything but ‘routine.’”128 Similarly, in Purdue Pharma, the Federal Circuit upheld the validity of a patent directed to a new timed-release formulation of a drug, finding the nonobviousness of the formulation strongly supported by the testimony of experts in drug formulation, who described the large number of independent parameters that can be varied in designing and optimizing the formulation of a drug.129 The Guidelines fail to take into account the extremely large number of potential reformulations that are possible, and the sometimes-dramatic improvements in safety and efficacy that can be achieved by an innovative new formulation of an existing drug.
In Purdue Pharma, an expert testified that one of skill in the art would have found it very challenging to arrive at the patented formulation at issue in that case “due to the plethora of structural complexities controlling polymer properties” and “[t]he extraordinarily complex set of structural variables leading to a large set of ‘formulation considerations’ affecting matrix properties.”130 He went on to explain the different formulation considerations that come into play in attempting to develop a beneficial controlled-release product, including molecular weight, chemical substitution, particle size, hydration rate effects, polymer content, dosage form, dosage size, [and] manufacturing processes. In particular, he noted that “[b]ecause of the complexity of this multidimensional combination of structural, compositional and formulation variables, it would be uniquely challenging for a person of skill in the art to formulate a particular dosage form that remains ‘substantially intact’ following immersion in gastric fluid until substantially all of the drug is released.”131
The EPO's case law also recognizes that in some instances it might be much more difficult to actually succeed in a process or make a specific substance available than in other cases. This is particularly true in highly unpredictable, relatively unexplored and complex technologies.132 Various complicated phenomena, such as complex interactions of proteins and DNA, as well as other biological mechanisms that are involved in cellular expression, imply that scientists are often confronted with many possible solutions with the prior art pointing only very vaguely in one direction.133 Thus, in many cases uncertainty still remains as to which path would lead to success. In other words, the process of finding the right solution often involves a combination of many intermediate steps. Although working with or combining previously known processes or methods within a new field of application might have been “obvious to try,” the process might still have involved many difficulties. Some chosen paths, which later proved to be successful, might previously have been considered by the majority of scientists to be the least attractive or most improbable route to success. Therefore, the EPO generally finds a technical solution obvious only if it would have been obvious to combine, or obvious to try to combine, the documents representing the previous state of the art, and if the successful combination of the features was foreseeable and/or lead to previously expected results.
3.4.4. Unexpected results
Even under circumstances where it might appear that it would have been obvious to try a particular combination of elements at the time of invention, an invention is not obvious if it produces results that would not have been expected prior to the inventor trying and testing the invention. Unexpected results will often be the basis for the nonobviousness of a follow-on pharmaceutical invention. For example, in Sanofi-Synthelabo v. Apotex, a district court upheld the validity of a patent directed to a purified enantiomer, based in part on the unexpected finding that the claimed enantiomer was responsible for all the therapeutic activity of the racemate, and that the other enantiomer was responsible for all of the neurotoxic effects. The Federal Circuit affirmed the district court's conclusion that “[w]hether or not it may have been ‘obvious to try’ separating the enantiomers of PCR 4099 the wide range of possible outcomes and the relative unlikelihood that the resulting compound would exhibit the maximal increase in antiplatelet aggregation activity and the absence of neurotoxicity makes clopidogrel bisulfate non-obvious.”134
Some combination products, when developed and tested, are found to have unexpected additive or even synergistic effects, which can weigh heavily in favor of patentability. Sanofi-Aventis Deutschland GmbH v. Glenmark Pharmaceuticals Inc., provides an example of a case where the Federal Circuit upheld a district court's determination that a drug combination that showed surprising synergistic effect was not obvious.135
Similarly, a claim to a newly discovered or characterized polymorph of a known drug should be considered nonobvious if that polymorph has unexpected properties relating to functionality. Even though a polymorph comprises the same active ingredient as prior art crystal forms, a different crystal structure can provide substantial benefits that enhance efficacy, such as increased bioavailability, improved stability, or amenability to a superior route of administration. For example, in Glaxo Group Ltd. v. Apotex, Inc., the Federal Circuit upheld the validity of patent claims directed towards a polymorph with substantially improved bioabsorption characteristics that permitted oral administration of the drug, a potentially huge benefit for patients.136 The court applied the appropriate test for nonobviousness, concluding that the prior art did not suggest that the claimed polymorph would have the improved characteristics in terms of bioavailability and stability that were found only after Glaxo scientists engaged in the necessary research.
Sometimes a different salt form of a known drug can provide unexpected and important benefits. For example, in Pfizer v. Apotex, the identification of a new salt form permitted a pharmaceutical company to overcome long-standing problems of earlier salt forms such as stickiness, instability, low solubility, and hygroscopicity, which tend to render it difficult to develop an optimal formulation.137 In view of the complexity of the interaction between a drug active ingredient and a salt counterion, identification of a particular salt form with unexpectedly improved characteristics should generally warrant patent protection. Similarly, the ester or ether derivative of an active ingredient can have unexpected and highly valuable clinical advantages compared with the base compound, and should not be considered lacking in invention and ineligible for patent protection.
The glaucoma drug Lumigan, discussed above, provides another good example of a “secondary” pharmaceutical innovation with unexpected effects that represents a breakthrough for patients and clearly warrants patent protection. Allergan scientists found that by increasing the amount of benzalkonium chloride (BAK) in the formulation from 50 PPM to 200 parts per million (ppm) they could substantially reduce the tendency of the drug to cause hyperemia. This was not an obvious solution to the problem: BAK is a cytotoxic agent used as a preservative that can damage the cells on the ocular surface and cause other undesirable side effects. In Allergan v. Sandoz, the Federal Circuit affirmed a district court's decision upholding the validity of a patent directed towards the improved formulation, based in part on the fact that the success of the new formulation was not only unexpected, it was actively discouraged by the teachings of the prior art.138 For example, the prior art taught that the use of BAK as a preservative should be minimized in ophthalmic formulations to avoid safety problems, and the infringer's own expert, in summarizing the prior art's widespread concern regarding the chemical's toxicity, described BAK as “a natural-born killer” that was “from Satan.”139
In Europe, the EPO also accepts “surprising properties” as an indicator of an “inventive step.” In T 247/97, “Augmentation materials from the placenta/INSTITUT CLAYTON DE LA RECHERCHE,” the Board pointed out very clearly that in the case of a product claim, any properties relied on for establishing inventive step must really be unexpected and advantageous.140 This conclusion was already supported by the Board in T 886/91, “Hepatitis B virus/ BIOGEN INC.,” and it is also in line with the EPO's practice in the field of chemistry.141 Moreover, the Board has held that if it would have been obvious for a skilled person in light of the state of the art to arrive at something falling within the terms of a claim (e.g., due to a lack of alternatives thereby creating a “one-way street” situation), the unexpected additional effect is merely a bonus effect that does not confer inventiveness on the claimed subject matter.142
3.4.5. Prior art teaches away
In some cases, the fact that the prior art teaches away from an invention provides a strong basis for a finding of nonobviousness. If the prior art would have suggested to a PHOSITA that it would not even be worth trying to pursue the invention because of a perceived likelihood that it would not result in a positive outcome, the inventor's perseverance in going against the conventional wisdom and ultimately succeeding will often be found deserving of a patent.
This principle was at play in Sanofi-Aventis Deutschland GmbH v. Glenmark Pharmaceuticals Inc., a case before the Federal Circuit involving a patent claim reciting trandolapril, an ACE inhibitor with a two-ring structure.143 At the time of the invention, it was widely believed that ACE inhibitors acted by binding to a pocket structure in the ACE protein that is too small to accommodate a molecule having a two-ring structure like trandolapril. Other researchers were focusing their efforts on smaller single-ring ACE inhibitors. The Federal Circuit upheld a trial court's determination that the patent claim was not obvious, based in part on the fact that the prior art taught away from trying a two-ring ACE inhibitor like trandolapril.
Allergan v. Sandoz, discussed above, represents another example in which the court upheld the nonobviousness of a follow-on pharmaceutical patent based on prior art teaching away from the invention. The increased concentration of BAK which resulted in an improved safety-efficacy profile was contraindicated by the prior art, given the known toxicity of BAK and the conventional wisdom that the concentration of BAK should be minimized (rather than substantially elevated) in an ophthalmic formulation. In the absence of effective patent protection for new formulations of existing drugs, there would likely have been insufficient incentive to bring this sight-saving formulation to market.
Similar arguments are also expected by the EPO, as it was already demonstrated two decades ago in T 500/91, “BIOGEN/Alpha-interferon II.” In this decision, the Board reiterated that a person skilled in the art would not have been able to isolate the specific DNA molecules by application of the common general knowledge. Furthermore, the Board held that because the prior art suggested using a mixed probe, not a unique probe as used by the inventor, the prior art did not promise success to a skilled person faced with the technical problem set out in the patent. Therefore, the claimed invention involved an inventive step. Hence, beside the factual difficulties involved in the modified isolation method, the skepticism of skilled artisans before the invention and the contradicting teaching in the prior art, or teaching away, apparently served as secondary evidence in the Board's decision.
3.4.6. The identification of a problem can be the invention
In some cases, the inventive act resides in the identification of a previously unappreciated and unrecognized problem.144 While the solution to the problem might be obvious once the problem has been identified, the invention might nonetheless be nonobvious, given that the relevant inquiry is whether the invention would have been obvious to a PHOSITA before the inventor identified the problem.
For example, in Novartis Pharmaceuticals v. Watson Laboratories, the Federal Circuit found that: “[a]lthough the addition of an antioxidant would have been an obvious solution for a formulation with known oxidation problems, . … without the knowledge of a problem, one of skill in the art would not have been motivated to modify GB '040 with antioxidants as purportedly disclosed in the '807 patent or the Elmalem article.”145
In Leo Pharmaceutical Products v. Rea, a unanimous panel of the Federal Circuit rejected the argument that a patent on a new formulation of a drug was obvious, based in part on the fact that prior to the invention, those of skill in the art did not even recognize the existence of the problem, let alone provide a practical means for solving it.146 The drug at issue was a combination product comprising a vitamin D analog and a corticosteroid, used in the treatment of psoriasis, which the Federal Circuit described as a “painful and socially debilitating disease.”147 Prior to the drug's invention, it was known that the speed and efficacy of corticosteroid treatment could be improved by combining it with vitamin D treatment.148 However, at that time no one knew how to create a storage-stable combination of vitamin D and corticosteroid in a single formulation.149 Due to the unavailability of a storage-stable combination product, physicians prescribed a two-drug regimen that required patients to apply one drug in the morning and another at night, the difficulty of which resulted in patient non-compliance.150
The Federal Circuit found that the prior art of record “either [1] discouraged combining vitamin D analogs and corticosteroids in a single formulation, or [2] attempted the combination without recognizing or solving the storage stability problems associated with the combination.”151 Although there was some prior art that described attempts to combine a vitamin D analog with a corticosteroid, the authors of this prior art had failed to recognize or address the consequent stability problems.152 In fact, when other researchers attempted to produce the combinations proposed by this prior art, they were found to be unstable.153 Furthermore, the court found that, because this prior art did not even recognize or suggest the existence of a stability problem, it would not have motivated other researchers to attempt to find an improved formulation with better stability.154
The Federal Circuit in Leo Pharmaceutical Products found it particularly significant that the prior art of record was available for more than a decade prior to the invention, undercutting any suggestion that it would have been obvious to make the combination.155 The court found “the intervening time between the prior art's teaching of the components and the eventual preparation of a successful composition speaks volumes to the nonobviousness of the … patent.”156
This has also been recognized by the EPO. In T 764/12,157 the technical contribution of the patent in suit resided in identifying a problem which was hitherto not recognized in the prior art, namely the need for protection during storage at ambient environmental conditions of a chewing gum base comprising environmentally degradable polymers. The arguments of the opponent that the claimed invention lacked inventive step because coating was well known to reduce degradation over time were not relevant. Referring to T 2/83 (OJ 1984, 265), the Board acknowledged an inventive step because the perception of the problem had to be considered as being the main contribution to the inventive merits of the solution claimed.158
3.4.7. Objective indicia of nonobviousness
The nonobviousness inquiry is not limited to a technical inquiry focused on a comparison of the claimed invention with the prior art from the perspective of the PHOSITA. Courts and patent offices must also consider and give weight to non-technical, objective indicia of nonobviousness, sometimes referred to in the U.S. as “secondary considerations.” As recently observed by Judge Dyk of the Federal Circuit, these objective indicia of nonobviousness “focus attention on economic and motivational rather than technical issues and are, therefore, more susceptible of judicial treatment than are the highly technical facts often present in patent litigation.”159
These non-technical indications of nonobviousness, which look to inferences based on incentives and economic evidence, can lend themselves to a more objective assessment of the level of invention, and can prevent a decision maker from improperly slipping into a reliance on hindsight, and the natural tendency of even the most significant inventions to appear in retrospect to represent nothing more than an obvious reconfiguration of prior art elements. As noted by the Federal Circuit, “evidence of secondary considerations may often be the most probative and cogent evidence in the record. It may often establish that an invention appearing to have been obvious in light of the prior art was not.”160
The list of objective indicia of nonobviousness recognized by U.S. courts include (1) commercial success, (2) long-felt but unsolved need, (3) failure of others, (4) copying by others, (5) industry praise, (6) unexpected results, (7) industry skepticism, and (8) licensing acquiescence.161 The Federal Circuit has stated that “in determining the question of obviousness, inquiry should always be made into whatever objective evidence of nonobviousness there may be.”162 Significantly, objective indicia can provide strong evidence of the nonobviousness of a follow-on pharmaceutical invention, which must be properly weighted and taken into account when assessing the inventive contribution of the invention in view of the prior art.
For example, in Ferring B.V. v. Watson Laboratories, Inc.-Florida, the Federal Circuit found in the prior art a long-felt need for a reduced-release rate formulation of tranexamic acid, used to treat heavy menstrual bleeding (menorrhagia), based in part on the FDA's decision to approve the formulation for commercialization on an expedited “fast track” basis.163 “Fast track” is a process designed to facilitate the development, and expedite the review, of drugs to treat serious conditions and fill an unmet medical need, in order to get important new drugs to the patient earlier.164 In granting the new formulation fast-track status, the FDA recognized that it avoided adverse events associated with the drug that the prior art had failed to adequately address.
In In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., the Federal Circuit found a patent on an extended-release version of a pain medication to be nonobvious, based in part on evidence that the immediate-release formulation of the drug had existed for decades prior to the invention, and it had long been recognized by physicians that the required multiple daily doses of the immediate-release formulation resulted in poor patient compliance.165 The court found that not only was there a long-felt need for a therapeutically effective, extended-release cyclobenzaprine formulation, but that others had tried but failed to develop an extended-release version of the drug. For example, the patent owner presented evidence that another pharmaceutical company had lost $10 million in an unsuccessful attempt to develop an extended-release formulation that ultimately was found in clinical trials not to be therapeutically effective.166 The patentee took a materially different approach and succeeded. The court found that “[e]vidence that others were going in different way is strong evidence that the inventor's way would not of been obvious.”167
And in Alcon Research v. Apotex, the Federal Circuit upheld a district court's decision holding that a claimed pharmaceutical formulation would not have been obvious, based in part on the court's finding that the commercial embodiment of the invention was “an outstanding commercial success,” achieving nearly 70% market share within two years of its launch [and] accounting for nearly $2 billion in sales within ten years.168 The Federal Circuit noted that “the commercial success was caused by the merits of the invention as distinct from the prior art.”169
As indicated in T 249/88, “Monsanto/Milk Production,”170 EPO case law further acknowledges secondary indicia, which in certain circumstances could be regarded as a sign of inventive step. Such indicia may be referred to in order to strengthen or weaken arguments in the problem and solution approach. Yet, as indicated by their name, their significance is, at least formally, of a secondary nature.171 Secondary indicia alone do not suffice to show inventive step but may principally point towards the possible presence of an inventive step, e.g., by properly forming a basis for the definition of the problem that the claimed invention sets out to solve. Consequently, any argument in support of an inventive step should start with an examination of the prior art by a person skilled in the art, not with secondary indicia.172
Current case law, however, illustrates that secondary indicia nevertheless play a “primary” role when arguing for the inventive step of DNA-related inventions at the EPO. One reason for this is that the EPO has consistently considered “structural non-obviousness” arguments alone to be insufficient for successfully arguing for the inventiveness of the provision of a particular DNA sequence that could have been isolated without inventive effort and with a reasonable expectation of success (i.e., according to routine cloning and screening methods).173 In such a case, the inventor must also demonstrate some unexpected advantageous properties of the claimed compound such as a claimed DNA sequence.174 Because isolation methods have become ever more routine due to rapid technological development, the importance of “secondary indicia” has gradually increased in the past years. Similarly, in Europe the secondary indicia that may be considered include factors175 such as a long-felt need, more-simple solutions without sacrificing quality, contrary prejudices in the art, and, under certain circumstances, even commercial success176 and the immediate adoption of the patent's teaching by market competitors.177
4. Discussion
4.1. Should the inventiveness standard reflect the high cost and risk associated with drug development?
The high nonobviousness standard promoted in the Guidelines are unabashedly policy-driven; in the view of their author, the extreme importance of immediate access to pharmaceuticals justifies a uniquely rigorous nonobviousness standard for follow-on pharmaceutical inventions. However, the underlying premise that healthcare would be improved by effectively reducing the availability of patents for pharmaceutical inventions fails to account for the high risk, cost, and uncertainty attendant to the development of an approved drug capable of delivering potentially huge improvements in health. When the entire drug development process is properly considered, some commentators actually argue in favor of a relatively permissive standard of nonobviousness that accounts for the unusually high cost and risk associated with drug development, compared to other types of patent eligible innovations. In that regard, it is important to bear in mind that while a reduction in the availability of patent protection for pharmaceuticals might promote access in the short term, the resultant decrease in the incentive for pharmaceutical development will ultimately harm medium and long-term access.
Numerous scholars have concluded that under a patent regime optimized along utilitarian policy lines, patents will be available for, and only for, inventions that would not likely be made available to the public in the absence of the patent.178 For example, in 1992 Professor Robert Merges argued that, under an ideal patent system, the obviousness determination would be based upon “the social benefit of the invention … weighed against the cost of creating it and the social cost accompanying exclusive rights to it.”179 Given the high social benefit of pharmaceuticals and the high cost of bringing them to the market as approved products for which safety and efficacy have been established through rigorous clinical testing, if anything, Merges's proposed policy considerations would weigh in favor of a relatively permissive nonobviousness standard for pharmaceuticals. And as explained above, the social cost of follow-on pharmaceutical innovations has been greatly over-estimated by those who assume that follow-on patents result in an extended patent term for already approved products, i.e., evergreening, given that the follow-on patent does not in any way preclude generic competition in the case of the originally approved product.
In his article, Professor Merges observes that, as a practical matter, one of the best ways to assess the degree of risk associated with bringing an invention to market is “to look at the cost.” In his view, if development of the technology is very costly relative to other technologies, it is a good candidate for an extra “risk bonus,” i.e., a lowered nonobviousness standard.180 He goes on to note that courts tend to uphold the validity of “high-cost inventions” in the face of obviousness challenges, and explains that economic and policy considerations “confirm[] the wisdom of this practice.”181 Merges also emphasizes that he is not suggesting that legislatures should change the statutory standard for nonobviousness, rather he is suggesting “an interpretation of the current standard that would recognize the central place of uncertainty.”182 In his view, nonobviousness functions as “a test of whether an invention entailed a high degree of technical uncertainty at its outset.”183
The appropriateness, in terms of public policy, of patent protection for an invention should not be judged solely by the likelihood that experimentation will show that the invention works in the laboratory, but instead more holistically on the likelihood that the invention will succeed commercially. The decision as to whether to conduct the initial experiment will be based on the “perceived payoff” (to use the words of Merges), and the payoff will occur only if a follow-on pharmaceutical innovation can be brought to the market. Merges explains that because humans are inherently risk-averse, there is a clear relationship between predictability and cost, especially when cost is very high. The high cost associated with verifying that a follow-on pharmaceutical invention is a safe and effective drug will dissuade a researcher from conducting the first experiment that might lead to a patent, and this high cost is an important component of the risk associated with pharmaceutical inventions, which he believes would justify a relatively permissive standard of nonobviousness.
Merges argues that the preferred standard for nonobviousness rewards one who successfully invents when “the uncertainty facing her prior to the invention makes it more likely than not that the invention will not succeed.”184 He correctly observes that, prior to beginning any experimentation, a rational researcher will make an initial estimate of the potential returns from the inventive process, which in the realm of follow-on pharmaceutical inventions will always include the risk and uncertainty of bringing the invention to market as an approved pharmaceutical. In the case of pharmaceuticals, in the absence of a patent, the potential returns will normally not justify the necessary investment, which will lead the rational researcher to devote her energies elsewhere.
It is important to remember that patents de facto incentivize more than just invention and the disclosure of inventions; they also play a crucial role (along with test data protection, when available) in incentivizing the commercialization of inventions that have already been made. This is the logic behind the Bayh-Dole Act, which facilitates patenting and licensing of inventions made using federal dollars, including university inventions. Prior to the passage of the Act in 1980, universities were inventing, but in the vast majority of cases the inventions were never commercialized, largely because there was no patent to incentivize the private sector to invest in commercialization activities, and also because universities are generally not in the business of commercializing upstream inventions.185 Pharmaceuticals are generally the technology most in need of a huge amount of investment to bridge the gap between initial discovery of a pharmaceutical lead and an approved product: this gap has often been referred to as the “valley of death” since so many potentially promising pharmaceutical inventions are never able to cross it.186 The nonobviousness standard plays a critical role in determining which inventions receive the incentive that could make the difference between crossing the “valley of death” and remaining just another unfulfilled promise. As Merges points out, the nonobviousness standard is highly relevant to the decision of whether to engage in research and development, particularly in costly areas such as pharmaceuticals.187
Yet, as technology progresses and renders pharmaceutical chemistry more predictable, and as new (clinical trials) data transparency legislation greatly increases the publication of clinical data and hence pushes the levels of common general knowledge,188 this predictability could increasingly result in an effective heightening of the nonobviousness bar, as a consequence of which the “valley of death” will become more and more of a problem. Useful and potentially lifesaving therapeutics might never be developed for lack of patent protection on technologies that might appear relatively predictable at the level of invention, but nonetheless require a great deal of risky investment to confirm via rigorous clinical testing. A number of scholars have made note of this potential for advances in technology resulting in a reduced availability of patent protection, and a consequent diminution of new pharmaceutical therapies. Brenda Simon, for example, warns that advances in technology that result in a raised obviousness standard will preclude the patenting of many useful inventions that will never be brought to market without a patent.189
In light of the above, it is not surprising that companies are increasingly turning to alternate forms of IP such as trade secrets. But at what price? The patent laws require public disclosure of the invention and its enablement.190 Nevertheless, patents are not the sole mechanism used by the pharmaceutical industry, nor do patent disclosures encompass all aspects of the commercialization of diagnostic methods or medicinal products that must be disclosed to public health authorities. Trade secrecy, for example, takes the public disclosure aspect of the patent bargain out of the public domain and may become as least as problematic for innovation as the blocking function of patents. Trade secrecy deprives the scientific world of the positive externality of accessing knowledge through a public disclosure process.191 Disclosures may motivate invention around a patent, but that spur is missing when it is a secret. Notwithstanding the debate over more pronounced roles for alternatives to patents or particularized complementary incentives, it is clear that this shift towards trade secrets may have chilling effects for data sharing in scientific collaborations, the development of biologic drugs and personalized medicine,192 and biosimilars and the development of innovative (manufacturing) processes.193
The Guidelines' approach to nonobviousness could substantially exacerbate this problem by arguing for an even higher nonobviousness bar at a time when an increasing number of substantial, yet still predictable, scientific advances already fail to pass the already well-established nonobviousness/inventive step criteria in the U.S. and EU. Such criteria are applied in a technical manner, without discrimination as to subject matter or consideration of the level of investment.
4.2. Alternative solutions to bridge inventive step/nonobviousness gaps?
It might be argued that the current situation should first be constantly monitored, and that more profound evidence would still have to be gathered before any drastic measures should be adopted. However, in the light of the above described potential for increasing problems that have been recognized by academics194 and in powerful statements from leading patent judges in both Europe and in the U.S.,195 it seems indeed appropriate to at least consider how the current system could be improved in a proactive way.196
Recognizing that any ideal solution model must not undermine utilitarian goals and should carefully consider the ratio that underlies the patent and innovation system, one could discuss a great variety of reform proposals. These could include, for example: (1) increased indirect or direct government funding for pharmaceuticals, (2) fee solutions,197 (3) a more prominent role for small- and medium-sized entity (SME)-friendly utility models,198 or (4) modifications of the current regulatory data and market exclusivity regimes, resulting in more flexible exclusivity periods to be granted after market approval of non-patentable bio-pharmaceuticals.199
It is noteworthy that in recent years, this particularly exciting debate, which unfortunately cannot be discussed in more detail since it falls outside the scope of this study, has been invigorated in the U.S. by the introduction of a 12-year exclusivity period for biologic reference products200 and various market exclusivities for the first interchangeable follow-on biologics (FOBs),201 by the 2010 Biologics Price Competition and Innovation Act (BPCIA). In particular, the stipulations on the 12-year regulatory exclusivity for biologic reference products under the BPCIA, which differ considerably from the five years of data exclusivity that is generally available for small molecule drugs under the Hatch-Waxman Act, has (perhaps on purpose) been very vaguely phrased. In light of strained health systems and increasing competition in the pharmaceutical sector due to the paradigm shift in pharmaceutical R&D, this has led to a stunning battle over different recommendations and interpretations of the exclusivity provisions involving various stakeholders, U.S. senators, members of the House of Representatives, academics, the FDA, and even the White House.202
Although the more generally applicable European system for regulatory data exclusivity203 differs in many aspects from the currently available data exclusivity periods under the U.S. Hatch-Waxman Act and the BPCIA, debates over the appropriate design of regulatory exclusivity periods (as well as the extensions to pharmaceutical-related patent terms provided by Supplementary Protection Certificates) have also been revived in Europe. As in the U.S., the discussions are stimulated by economic, legal, and scientific developments, such as patent cliffs and the increasing significance of second and further medical applications of old or obvious products. These new applications might not always be patentable, or they may receive only insufficient protection that does not economically justify further private investment in potentially very beneficial areas of technology. In the absence of sufficient governmental involvement, it is therefore debatable as to how far the current system for data exclusivity might be refined.204
Be that as it may, another possible solution could be another substantial patent law reform that would enable more technology-specific solutions with regard to the patentability requirements.
In light of the limited focus of this article, we cannot go deeper into these extremely exciting discussions, which are excellent and important matters for future research. But it is astonishing that the Guidelines appear to disregard these important problems relating to inventive step/nonobviousness gaps.
5. Concluding Remarks
If the checks and balances already existing within the current patent system are properly and coherently applied, and operate within a sufficiently funded and well-designed procedural framework, an overly strict approach with regard to follow-on pharmaceutical innovation, or even categorical exclusions of such inventions, is not necessary and will most likely do more harm than good.
It is our firm belief that an appropriate application of the patentability requirements, and in particular the inventive step or nononbviousness requirement, contributes to achieving desirable outcomes, such that the protection granted for an invention corresponds to the inventors' actual contribution to the state of the art, and that it should be based on sufficient innovative activity. This, in turn, provides justification for the patent system as such in both Europe and the U.S.
Considering the increasing attacks on the patent system, it appears to be crucial to communicate the importance of international harmonization, as well as the rationales and positive effects of appropriately and coherently applying patentability criteria to the public and research communities. At the same time, it should also be recognized that the system should be well-balanced. Either an overly restrictive or lenient application of the requirements for patents may entail risks for an effective and coherent innovation system that builds upon emerging technologies, incremental scientific steps, and legal certainty, as well as practicable and predictable rules for prosecution, administration, and litigation.
While a stringent and coherent application of the inventive and nonobviousness criteria is necessary for patent quality and an appropriate scope of protection, patent law alone should not and cannot solve problems that it was never intended to solve. In that context, it is important to understand that while patents on follow-on pharmaceutical innovation can certainly be interrelated with pressing issues such as health care, democratic and ethical concerns, access to medicine (an issue that encompasses both patented and unpatented medicines), and human rights205 or competition law, etc., patent law is primarily concerned with rewarding and enhancing the creation of useful inventions. It is not an instrument that has been specifically designed to address crucial problems relating to ethics, access, health, competition, fraud, criminal abuse,206 and human rights policies. This is particularly true for the bio-pharmaceutical sector, which is troubled by multifaceted and inherently complex debates that go beyond the horizon of what the patent system should and could achieve.207
It has further been revealed that by focusing on the protection of nonobvious inventions, even a more sophisticated application of the patentability requirements will inevitably leave gaps in the innovation and R&D process that, in absence of patents, would need to be filled by complementary forms of incentives or regulatory protection.
Rather than proposing radical changes that categorically exclude potentially valuable improvements from patent protection, reasonable sustainable solutions can in our view therefore be achieved only if reforms in patent law and procedure, which are coherent with the rationales underlying the patent system and absolutely indispensable for a well-functioning innovation system, are complemented by well-balanced changes at the post-grant level. This requires taking into consideration a more predictable interpretation of the research and the so-called “Bolar” exemptions,208 competition law,209 procedural changes in patent litigation, and the multiple instruments provided by pharmaceutical regulatory law, as well as more elaborated guidelines on new models of cooperation, such as Public Private Partnerships, patent pools, standard setting, clearinghouses, or other user-generated ordering and licensing solutions.210
If these changes are conducted carefully, and in a manner that respects the costs and mechanisms that drive successful innovation systems, then modifications of the legal rules on the post-grant and regulatory level might give us an efficient “surgical” tool to carefully counterbalance some of the critiques211 to the current system. Conducting this surgery requires thinking in larger dimensions, both in terms of the multiple issues involved and with regard to the timeframes required for innovation and access to medicine, and ultimately patient-benefit. Only then will it be possible to close the innovation gap—sometimes also referred to as the “valley of death”—and to minimize the risk of technological wells running dry for future generations.212
In light of the current paradigm shift in pharmaceutical R&D, and the massive challenges that the traditional “closed innovation” model of Big Pharma is currently facing, a vigilant re-consideration of all the aforementioned factors both inside and outside the patent law box appears to be more important than ever.
Footnotes
1
Benjamin N. Roin, Unpatentable Drugs and the Standards of Patentability, 87 Tex. L. Rev. 503, 517–31 (2009).
2
James Bessen and Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (Princeton University Press, 2009).
3
G. Lee Skillington and Eric M. Solovy, The Protection of Test and Other Data Required by Article 39.3 of the TRIPS Agreement, 24 Nw. J. Int'l L. & Bus. 1 (2003).
4
See id. at 25–28, explaining that the concept of “new chemical entity”—which is the term used in Article 39.3 of the TRIPS Agreement to describe, at a minimum, the scope of products for which data protection must be provided by World Trade Organization (WTO) members—has a very different meaning than “new” or “novelty” in the patent sense and as used in Article 27.1 of the TRIPS Agreement. Specifically, the phrase “new chemical entity” refers to the status of the chemical entity within the marketing approval system at issue.
5
Mark Lemley, Expecting the Unexpected, 92 Notre Dame L. Rev. 1369 (2017).
6
Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 106 (2017).
7
Carlos M. Correa, Guidelines for Pharmaceutical Patent Examination: Examining Pharmaceutical Patents from a Public Health Perspective, UNDP (2015) [hereinafter Guidelines].
8
Carlos M. Correa, Guidelines for the Examination of Pharmaceutical Patents: Developing a Public Health Perspective—Working Paper (Int'l Ctr. for Trade and Sustainable Dev., Word Health Org., and U.N. Conference on Trade and Dev.) (Jan. 2007), http://www.ictsd.org/sites/default/files/research/2008/06/correa_patentability20guidelines.pdf [hereinafter Working Paper].
9
Id. at vii.
10
Id. at vii–viii.
11
High-Level Panel on Access to Health Technologies, Report of the United Nations Secretary-General's High-Level Panel on Access to Medicine: Promoting Innovation and Access to Health Technologies at 23 (Sept. 2016). See also Germán Velásquez, Guidelines on Patentability and Access to Medicines (S. Ctr. Working Paper No. 61, 2015) (citing commentary from parties such as the Minister of Health of Argentina, Secretary-General of Thailand's Food and Drug Administration, and the Minister of Health of Brazil, expressing gratitude, appreciation, and congratulations to the World Health Organization (WHO) for drafting and publication of the Guidelines).
12
Guidelines, supra n. 7, at 12.
13
Christopher M. Holman, In Defense of Secondary Pharmaceutical Patents: A Response to the UN's Guidelines for Pharmaceutical Patent Examination, 50 Ind. L. Rev. 759 (2017) [hereinafter Defense of Secondary Patents].
14
Guidelines, supra n. 7, at 9–10.
15
Guidelines, supra n. 7, at 42.
16
Id.
17
U.S. Patent No. 4,418,068.
18
U.S. Patent No. 6,906,086.
19
Zyprexa 2.5mg, 5mg, 7.5mg, 10mg, 15mg, and 20mg Coated Tablets. Zyprexa Velotab 5mg, 10mg, 15mg, and 20mg Orodispersible Tablets, emc, https://www.medicines.org.uk/emc/medicine/614
20
See, e.g., Int'l Ass'n for the Prot. of Intellectual Prop., Selection Inventions—The Inventive Step Requirement, Other Patentability Criteria and Scope of Protection 3 (2009), https://aippi.org/download/commitees/209/GR209germany.pdf
21
Glaxo Grp., Ltd. v. Apotex, Inc., 376 F.3d 1339, 1342 (Fed. Cir. 2004).
22
Id.
23
Id. at 1342–43.
24
Id.
25
Allergan, Inc. v. Sandoz, Inc., 796 F.3d 1293, 1298 (Fed. Cir. 2015).
26
Id.
27
Id.
28
Id.
29
Id. at 1298–99.
30
Id. at 1307.
31
Mathew Herper, The Truly Staggering Cost of Inventing New Drugs, Forbes (Feb. 10, 2012, 7:41 AM), https://www.forbes.com/sites/matthewherper/2012/02/10/the-truly-staggering-cost-of-inventing-new-drugs/#52cdd6b64a94
32
In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, 676 F.3d 1063, 1081–82 (Fed. Cir. 2012).
33
See generally Ajay K. Gupta et al., Compliance, Safety, and Effectiveness of Fixed-Dose Combinations of Antihypertensive Agents: A Meta-Analysis, 55 Hypertension 399 (2010), and David S. Bell, Combine and Conquer: Advantages and Disadvantages of Fixed-Dose Combination Therapy, 15 Diabetes Obesity & Metabolism 291 (2013).
34
Id.
35
See World Intellectual Property Organization (WIPO), Executive Summary of Ritonavir, http://www.wipo.int/export/sites/www/patentscope/en/programs/patent_landscapes/reports/documents/ritonavir_exec_summary.pdf. See also International Federation of Pharmaceutical Manufacturers & Associations, Incremental Innovation: Adapting to Patient Needs 8–14 (2013), http://www.ifpma.org/wpcontent/uploads/2016/01/IFPMA_Incremental_Innovation_Feb_2013_Low-Res.pdf (discussing these examples and overall benefits of incremental innovation as improving therapeutic quality, safety, and efficacy of existing medicines).
36
Robert P. Merges, Uncertainty and the Standard of Patentability, 7 High Tech. L.J. 1, 33 (1992).
37
Guidelines, supra n. 7, at 30.
38
Id.
39
Apotex, 488 F.3d at 1382 (Lourie, J., dissenting).
40
Id. at 1382.
41
Working Paper, supra n. 8, at 8.
42
Guidelines, supra n. 7, at 30.
43
Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 106 (2017) (“Granting patents on improvements to prior formulations of a product encourages pharmaceutical companies to innovate, creating new products with improved safety and/or effectiveness over existing pharmaceutical products, but without removing older and less expensive variants from the market.”).
44
Lundbeck v. Generics, [2008] EWCA (Civ) 311 [1].
45
Id. at 29–30.
46
See, e.g., Sanofi-Synthelabo, Inc. v. Apotex, Inc., 550 F.3d 1075, 1088–89 (Fed. Cir. 2008) (stating “the scientific literature listed eighty acids as candidates for forming salts with basic drug compounds”).
47
Guidelines, supra n. 7, at 6, 9–10.
48
21 U.S.C. §§ 355(b)(2), 355(j) (2012).
49
See, e.g., Pfizer Inc. v. Dr. Reddy's Labs., Ltd., 359 F.3d 1361, 1364 (Fed. Cir. 2004).
50
Giles S. Rich, Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 402 (1960).
51
See, e.g., Upsher-Smith Labs., Inc. v. Pamlab, L.L.C., 412 F.3d 1319, 1322 (Fed. Cir. 2005) (“A century-old axiom of patent law holds that a product ‘which would literally infringe if later in time anticipates if earlier.’ Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Bristol–Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1378 (Fed. Cir. 2001))”).
52
See, e.g., Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1379 (Fed. Cir. 2003), and Abbott Laboratories v. Geneva Pharmaceuticals, 182 F.3d 1315 (Fed. Cir. 1999).
53
Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, 1869 U.N.T.S. 299, 33 I.L.M. 1197.
54
Least developed countries (LDCs) that are WTO members are still permitted a transition period, until 2033, to protect patents on pharmaceutical products. See TRIPS Agreement, Article 66.1, as extended most recently by Council for Trade-Related Aspects of Intellectual Property Rights, Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least Developed Country Members for Certain Obligations with Respect to Pharmaceutical Products, WTO Doc. No. IP/C/73 (Nov. 6, 2015).
55
TRIPS Agreement, Art. 27.
56
Id.; see also Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 96 (2017).
57
Id. at 89.
58
Id. at 90.
59
Id. at 103.
60
(2013) S.C.R. 1 (India).
61
Patents Act, No. 15 of 2005, § 3(d) India Code (2005); see also Working Paper, supra n. 8, at 10.
62
In addition, Articles 27.2 and 27.3 of the TRIPS Agreement provide certain limited exceptions that members can rely on to deny patents on certain subject matter. Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 108–111 (2017).
63
See, e.g., Mayo v. Prometheus, 566 U.S. 66 (2012), and Association for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013).
64
Id.
65
Cf. Robert M. Schwartz and Timo Minssen, Life After Myriad: The Uncertain Future of Patenting Biomedical Innovation and Personalised Medicine in an International Context, 3 Intell. Prop. Q., 189 (2015). (noting that European legislation and case law appears to be more restrictive with regard to the scope of protection granted to patents utilizing isolated (human) DNA sequences, but that this is not addressed under patent eligibility standards).
66
Guidelines, supra n. 7 at 12.
67
Mayo v. Prometheus, 566 U.S. 66 (2012).
68
Department of Health and Human Services, Hoechst Marion Roussel, Inc., and Baker Norton Pharmaceuticals, Inc.; Terfenadine; Proposal to Withdraw Approval of Two New Drug Applications and One Abbreviated New Drug Application; Opportunity for Hearing, 62 Fed. Reg. 1889 (Jan. 14, 1997).
69
Id.
70
Seldane Pulled for a Safer Allergy Drug, Los Angeles Times (Dec. 30, 1997).
71
In re Fisher, 421 F.3d 1365 (Fed. Cir. Sept. 7, 2005).
72
TRIPS Agreement, Article 27.1 and footnote 3.
73
Patent Cooperation Treaty (PCT), June 19, 1970, 28 U.S.T. 7645, 1160 U.N.T.S. 231 (1970), art. 33(4).
74
See, e.g., Rule 29(3) of the Implementing Regulations to the European Patent Convention (EPC), stating: “The industrial application of a sequence or a partial sequence of a gene must be disclosed in the patent application.”
75
In re Brana, 51 F.3d 1560 (1995).
76
Guidelines, supra n. 7, at 37.
77
See, e.g., 35 U.S.C. § 102.
78
Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 101–103 (2017). The ordinary meaning of “new” is “differs from what existed in the past … ; [was] not existing before.” New, OED Online (Oxford University Press, June 2017). The term “novelty” had been expressly defined in the PCT before the TRIPS Agreement was concluded. Specifically, Article 33 of the PCT provided that “a claimed invention shall be considered novel if it is not anticipated by the prior art as defined in the [PCT] Regulations.” PCT, art. 33(2).
79
35 U.S.C. § 102.
80
Id. at 23.
81
Id. at 25.
82
European and U.S. cases.
83
See Defense of Secondary Patents, supra n. 13.
84
In re Baird, 16 F.3d 380, 382–83 (Fed. Cir. 1994).
85
See, e.g., Int'l Ass'n for the Prot. of Intellectual Prop., Selection Inventions, The Inventive Step Requirement, Other Patentability Criteria and Scope of Protection 3 (2009), https://aippi.org/download/commitees/209/GR209germany.pdf
86
European Patent Office (EPO) Guidelines for Examination (Nov. 2017), at Part G, Chapter VI, section 8, available at http://www.epo.org/law-practice/legal-texts/html/guidelines/e/g_vi_8.htm (accessed Feb. 10, 2018) [hereinafter EPO Examination Guidelines].
87
TRIPS Agreement, footnote 5 (“For the purposes of this Article, the terms ‘inventive step’ and ‘capable of industrial application’ may be deemed by a Member to be synonymous with the terms ‘non-obvious’ and ‘useful’ respectively”).
88
See Vienna Convention on the Law of Treaties, May 23, 1969, 1155 U.N.T.S. 331; Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 82–89 (2017).
89
See PCT, art. 33; see also PCT Examination Guidelines, 35 PCT/GL/3 (Mar. 1, 1993), at 37–38 (“In considering inventive step or non-obviousness, the examiner should take into consideration the relation of any particular claim to the prior art as a whole. He should take into consideration the claim's relation not only to individual documents or parts thereof taken separately but also to combinations of such documents or parts of documents, where such combinations are obvious to a person skilled in the art.”).
90
The Oxford English Dictionary defines “obvious,” when used as a legal term related to “an article, system, etc., for which a patent application is made,” as follows: “conceptually apparent, without substantial research, to any expert in the field (and hence not capable of being protected by a patent).” Obvious, OED Online (Oxford University Press, June 2017).
91
Eric M. Solovy and Pavan S. Krishnamurthy, TRIPS Agreement Flexibilities and Their Limitations: A Response to the UN Secretary-General's High-Level Panel Report on Access to Medicines, 50 Geo. Wash. Int'l L. Rev. 69, 103–104 (2017).
92
Article 52(1) EPC, which has now been brought into compliance with the formulations in the TRIPS Agreement (EPC 2000) stipulates, “European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.”
93
Although a Community patent system has been debated for many years, there is still no EU patent system available. Yet, the EPC not only mandates a harmonized substantive law on patent validity issues throughout Europe, but also provides a system through which a bundle of identical national patents can be sought via a single prosecution process which is administered by the EPO. Most patents for chemical compounds are granted via the EPO route. The validity of such patents can be challenged in central oppositions at the EPO. National patents can also be sought in national proceedings, which might proceed faster than via the EPO. These patents, including those granted by the EPO, can then be enforced and challenged in national courts.
94
Cf. EPO Examination Guidelines (2017), G-VII, available at http://www.epo.org/law-practice/legal-texts/guidelines.html (last visited Dec. 15, 2017).
95
Cf. EPO Examination Guidelines (2017) at G-VII-17 (exempting aggregation or juxtaposition of features from this general principle).
96
See Derk Visser, The Annotated European Patent Convention (15th ed., H. Tel Publisher, 2017), Article 56, note 1. Another significant difference is that, for the purpose of examining inventive step, the prior art does not include other European patent applications as referred to in Article 54(3) EPC. Thus, the second sentence of Article 56 provides further that, “if the state of the art also includes documents within the meaning of Article 54, paragraph 3, these documents are not to be considered in deciding whether there has been an inventive step.”
97
See, e.g., In re NuVasive, Inc., 842 F.3d 1376, 1384 (Fed. Cir. 2016), and Personal Web Technologies, LLC v. Apple, Inc., 848 F.3d 987, 993–94 (Fed. Cir. 2017). As for the EU, see infra note 99; see also EPO Examination Guidelines (2017) at G-VII-8, on “ex post facto” analysis.
98
What matters with a combination is not whether the individual features of the combination are known or obvious, but the examination of the combination as a whole. Compare EPO Case T 37/85, Mannesmann, OJ 1988, 86: “In assessing the inventive step involved in an invention based on a combination of features one must consider whether or not the state of the art was such as to suggest to a skilled person precisely the combination of features claimed. The fact that an individual feature or a number of features were known does not conclusively show the obviousness of a combination.” Yet, a combination of two documents of the state of the art is obvious if one document makes a clear, unmistakable reference to the other. Also, as a rule, it is obvious to combine the teaching of one or more documents with the common general knowledge of the average skilled person, e.g., as documented in a well-known specialist book or dictionary with a prior art document. Further, no inventive step is present if, for lack of other alternatives, the prior art leads the skilled person to the claimed teaching in a “one-way street situation” (cf. Case T 192/82, Bayer, OJ 1984, 415).
99
This significant difference between could and would is part of the established case law of the EPO's Boards of Appeal. See Cases T 2/83, “Simethicon Tablet/Rider,” OJ EPO 1984, 265; T 455/91, “Expression in Hefe/GENENTECH,” ABl. 1995, 684, nr. 5.1.3.3 and 5.1.3.4 of the reasons; P. Lançon, Die Rechtsprechung der Beschwerdekammer des EPA 1994 bis 1996—ein Überblick, GRUR 227, 229 (1998).
100
Sanofi-Synthelabo v. Apotex Inc., 492 F. Supp. 2d 353, 370 (S.D.N.Y. 2007), aff'd, 550 F.3d 1075 (Fed. Cir. 2008).
101
See generally [2009] EWCA (Civ) 646, http://www.bailii.org/ew/cases/EWCA/Civ/2009/646.html [https://perma.cc/6HRH-6YSB].
102
550 F.3d 1075, 1080–81 (Fed. Cir. 2008).
103
Id.
104
Id.
105
Case T 0877/90, “Hooper Trading Co. N.V. / T-cell growth factor,” [1993] EPOR 6.
106
Case T 694/92, “Modifying Plant Cells/MYCOGEN” (8 May 1996), 1997 OJ EPO 408 (In this case, a prior publication disclosed unsuccessful attempts and continuing attempts to achieve a particular result. The claimed subject matter was considered inventive despite the prior art because “reasonable expectation of success” is not to be confused with “the understandable hope to succeed.”).
107
Case T 296/93, “Hepatitis B virus antigen production/BIOGEN” (28 July 1994), 1995 OJ EPO 627. Cf. Sven J.R. Bostyn, Patenting DNA Sequences (Polynucleotides) and Scope of Protection in the European Union, An Evaluation (Background Study for the European Commission, Luxemburg, European Communities 2004), at 19 (stating that T 296/93 illustrated that “the standard is whether an invention is obvious or not, and not whether it is obvious to try”).
108
Case T 923/92, “Human t-PA/Genentech” (8 November 1995), 1996 OJ EPO 564.
109
Case T 386/94, “Chymosin/UNILEVER” (11 January 1996), cf. the summary in section II.B.1.
110
Case T 207/94, “Human beta-interferon/BIOGEN” (8 April 1997), 1999 OJ EPO 273, see headnote (“In case the expression of a cloned DNA in a chosen foreign host constitutes the subject-matter of the claimed invention, reasonable expectation of success may be evaluated only by taking into account real difficulties related to that step. Hence, in order to be considered, any allegation of features putting in jeopardy reasonable expectation of success must be based upon technical facts.”) See also at para. 31 (“the hope to succeed” should not be misconstrued as a “reasonable expectation of success”).
111
Case T 296/93, para. 7.4.4.
112
See Hans-Rainer Jaenichen, Leslie McDonell, James F. Haley, and Yoshinori Hosoda, From Clones to Claims: The European Patent Office's Case Law on the Patentability of Biotechnology Inventions in Comparison to the United States and Japanese Practice (4th ed., Carl Heyman's Verlag, 2006), para. 17.1.3. (referring to case T 386/94, “Chymosin/UNILEVER” (11 January 1996), para. 43, and adding that “[T]his issue came up again in another cloning case where the Board stated that obviousness of a DNA sequence cannot be judged on the basis of whether or not one or more teams were working in parallel at the same project or whether or not a team was working under more favorable conditions than another team; T 637/97 … ”; cf. case T 296/93).
113
Case T 923/92, para. 51.
114
Id. at para. 57 (stating further: “All the above factors would have influenced the degree of confidence of the skilled person in the successful conclusion of cloning and expressing human t-PA. Knowing that a cDNA library could not be better than the mRNA from which it was derived and faced with the various uncertainties depicted above, the skilled person would not have expected the theoretically straightforward route (cf. point 55 supra) to be easily put into practice.”).
115
Case T 694/92, “Modifying plant cells/MYCOGEN” (8 May 1996), 1997 OJ EPO 408.
116
See Case T 1396/06, “HLA Binding Peptides/EPIMMUNE” (31 May 2007). See also Case T 386/94, in the headnote (“Inventive step may be acknowledged in the field of gene technology if there is no reasonable expectation of success that the cloning and expression of a given gene can be carried out. However, in a case where, at the priority date, a skilled person can expect to perform the cloning and expression of a gene in a fairly straightforward manner, and the cloning and expression, although requiring much work, does not pose such problems as to prove that the expectation of success was ill-founded, inventive step cannot be acknowledged.”).
117
See Case T 333/97, “Somatic changes/Monsanto” (5 October 2000).
118
Id. at para. 13 (the inventive step was then denied at para. 14). See also the confirmation of this principle in Case T 1045/98, “Eosinophilia/SCHERING,” para. 17 (22 October 2001), and in Case T 1396/06, para. 7, concerning recent cases where the Board acknowledged an inventive step since a person skilled in the art adopting a “try and see” attitude would not have arrived at the invention. Cf. Case T 759/03, FIV/St. Vincent's Institute, et al. (17 August 2006); and Case T 1599/06, “Mycobacterium vaccinating agent/UNIVERSITY OF CALIFORNIA” (13 September 2007).
119
Case T 737/96, “Astaxanthin/DSM” (9 March 2000).
120
Id. at paras. 1–10.
121
Id. at para. 11.
122
Id.
123
Id. at paras. 8–10, 12.
124
Id. at para. 13 (subsequently, however, the Board acknowledged the patentability of the auxiliary requests relating to product claims on specific mutants. The Board found at paragraph 17 that these mutants, albeit achieved by routine mutagenesis techniques, had surprising properties (i.e., they were capable of producing astaxanthin with yields above 600 μg per g of yeast dry matter) which justify the recognition of an inventive step).
125
KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007).
126
Id.
127
Sanofi v. Apotex, 550 F.3d 1075, 1089 (Fed. Cir. 2008).
128
822 F.3d 1355, 1366 (Fed. Cir. 2016).
129
Purdue Pharma L.P., 643 F. App'x 960, 966.
130
Brief for Appellee at 16, Purdue Pharma L.P., 643 F. App'x 960 (Nos. 2015-2029, -2030, -2032).
131
Id. at 17–18 (quoting Dr. Hopfenberg's trial testimony).
132
However, as it will be demonstrated in the following, this technology has, during recent years, become more predictable than it was just 10 years ago.
133
Timo Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 114 ff.
134
Sanofi v. Apotex, 550 F.3d 1075, 1089 (Fed. Cir. 2008).
135
748 F.3d 1354, 1356 (Fed. Cir. 2014).
136
376 F.3d 1339, 1342–43 (Fed. Cir. 2004).
137
488 F.3d 1377 (Fed. Cir. 2007).
138
796 F.3d 1293, 1298 (Fed. Cir. 2015).
139
Id. at 1305.
140
Case T 247/97, “Augmentation materials from the placenta/INSTITUT CLAYTON DE LA RECHERCHE” (29 January 2002), at paras. 3–9.
141
Case T 886/91, “Hepatitis B virus/ BIOGEN INC.” (16 June 1994).
142
Guidelines for Examination in the European Patent Office (2012), G-VII-10 referring to Case T 231/97, “Emissionsarme Dispersionsfarben/CLARIANT” (21 March 2000), and Case T 192/82, OJ 9/1984, 415 (22 March 1984). For further case law references see Visser, The Annotated European Patent Convention (25th ed., Veldhoven, H. Tel Publisher, 2017), at para. 7.4 (explaining that in a “one-way street” situation the skilled person only has one available approach for modifying the closest prior art to choose from).
143
748 F.3d 1354 (Fed. Cir. 2014).
144
Leo Pharmaceutical Products v. Rea, 726 F.3d 1346, 1353–54 (Fed. Cir. 2013) (“an invention can often be the recognition of a problem itself”) (citing Cardiac Pacemakers v. St. Jude Med., 381 F.3d 1371, 1377 (Fed. Cir. 2004)).
145
611 F. App'x 988, 996 (Fed. Cir. 2015).
146
726 F.3d 1346, 1353–54 (Fed. Cir. 2013).
147
Id. at 1348.
148
Id. at 1349.
149
Id.
150
Id.
151
Id. at 1353.
152
Id. at 1354.
153
Id. at 1356–57.
154
Id.
155
Id. at 1354.
156
Id. at 1359.
157
See T 0764/12, “Coated Degradable Chewing Gum with Improved Shelf Life and Process for Preparing Same.”
158
See Case Law of the Boards of Appeal of the European Patent Office (8th ed., July 2016) available at http://www.epo.org/law-practice/legal-texts/html/caselaw/2016/e/clr_i_d_9_10.htm
159
Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 1074 (Fed. Cir. 2016) (citing 2–5 Chisum on Patents § 5.06 (2015) (“The nonobviousness requirement of Section 103 is the most important and most litigated of the conditions of patentability.”)).
160
Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538–39 (Fed. Cir. 1983).
161
2–5 Chisum on Patents § 5.05 (2015).
162
Vandenberg v. Dairy Equip. Co., a Div. of DEC Int'l, 740 F.2d 1560, 1567 (Fed. Cir. 1984) (“They should be considered as a fourth factual inquiry under Graham before coming to a conclusion concerning obviousness.”).
163
Ferring B.V. v. Watson Laboratories, Inc.-Florida, 764 F.3d 1401 (Fed. Cir. 2014).
164
21 U.S.C. § 356(b)(1); See also U.S. FDA, Fast Track, available at https://www.fda.gov/ForPatients/Approvals/Fast/ucm405399.htm (last visited Feb. 22, 2018).
165
In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1083 (Fed. Cir. 2012).
166
Id. at 1081.
167
Id. at 1082.
168
Alcon Research, Ltd. v. Apotex Inc., 687 F.3d 1362, 1371 (Fed. Cir. 2012).
169
Id., citing In re Kao, 639 F.3d 1057, 1069 (Fed. Cir. 2011).
170
Case T 249/88, “Milk Production/MONSANTO” (14 February 1989), [1996] E.P.O.R., 29 at 29, 30.
171
Cf. Visser, The Annotated European Patent Convention (25th ed., Veldhoven, H. Tel Publisher, 2017). The Annotated European Patent Convention (19th ed., H. Tel Publisher, 2011), Art. 56, note 7.
172
Id.
173
See Hans-Rainer Jaenichen, Leslie McDonell, James F. Haley, and Yoshinori Hosoda, From Clones to Claims: The European Patent Offices's Case Law on the Patentability of Biotechnology Inventions in Comparison to the United States and Japanese Practice (4th ed., Carl Heyman's Verlag, 2006), para. 17.1.4.
174
Id. (emphasizing that these properties must be truly surprising and adding that “because of the explained evident context care has to be taken in the defense of inventive step so as to avoid providing a basis for lack of enabling disclosure attacks, see section 9.1.2, supra. Thus when an animal model is relied on for providing experimental evidence for a second medical use of a substance, related animal models in the prior art may well render the second medical use invention obvious; T 1045/98 (section 18.10.22, infra).”).
175
A more comprehensive overview of various potential secondary indicia that might be considered by the Board is provided in the EPO's Case Law of the Boards of Appeal of the European Patent Office (5th ed., 2006), at I.D.9. See also Kroher, Artikel 56, Rdnr. 68–115 (commentary in German).
176
As in the U.S., commercial success alone is not by itself an indicator of inventive step. It needs to be coupled with a long-felt need and evidence that the commercial success derives from technical features and not from other influences such as advertising, cf. headnotes in Case T 1212/01, “Pyrazolopyrimidinones for the treatment of impotence/PFIZER LIMITED ET AL” (Feb. 3, 2005).
177
See the recent decision in Case T 252/06, “Flaschendispenser” (6 May 2008, in German).
178
Mark A. Lemley, Expecting the Unexpected (“T]he essential purpose of obviousness law … is to ensure that we grant patents only on inventions that the world would not otherwise obtain[,] because if it is obvious to do something we should not need the grant of a patent to induce people to do it.” Citing Michael Abramowicz and John F. Duffy, The Inducement Standard of Patentability, 120 Yale L.J. 1590 (2011).). See also Benjamin N. Roin, Unpatentable Drugs and the Standards of Patentability, 87 Tex. L. Rev. 503 (2009). Robert P. Merges, Uncertainty and the Standard of Patentability, 7 High Tech. L.J. 1, 19 (1992) (patents should only be awarded “to those inventions that would not have been made without the availability of a patent.”).
179
Robert P. Merges, Uncertainty and the Standard of Patentability, 7 High Tech. L.J. 1, 30 (1992).
180
Id. at 47–48.
181
Id. at 48.
182
Id. at 48.
183
Id. at 49.
184
Id. at 34–35.
185
The Patent and Trademark Act Amendments of 1980, Pub. L. No. 96-517 94 Stat. 3019 (1980) (commonly referred to as the Bayh-Dole Act after its legislative sponsors and codified in relevant part at 35 U.S.C. §§ 200–212). See generally, Joshua D. Sarnoff and Christopher M. Holman, Recent Developments Affecting the Enforcement, Procurement, and Licensing of Research Tool Patents, 23 Berkeley Tech. L.J. 1299 (2008).
186
Quinn Eastman, Getting New Drugs Through the “Valley of Death,” Emory News Center (2014), available at http://news.emory.edu/stories/2014/02/hspub_drugs_valley_of_death/campus.html
187
Robert P. Merges, Uncertainty and the Standard of Patentability, 7 High Tech. L.J. 1, 11 (1992).
188
See, e.g., Regulation EU 536/2014 of the European Parliament and of the Council of 16 April 2014 on Clinical Trials on Medicinal Products for Human Use and Repealing Directive 2001/20/EC, OJ 2014 (L 158) 1; European Medicines Agency Policy on Publication of Clinical Data for Medicinal Products for Human Use, EMA/240810/2013 (2 October 2014), p. 4 (“In general … clinical data cannot be considered [commercially confidential information]”).
189
Brenda M. Simon, The Implications of Technological Advancement for Obviousness, 19 Mich. Telecomm. & Tech. L. Rev. 331 (2013).
190
See, e.g., 35 U.S.C. §§ 111 and 112.
191
See also Brief of Professor Timo Minssen and Robert M. Schwartz with 10 European and Australian Law Professors as Amici Curiae in Support of Petitioner, Sequenom v. Ariosa Diagnostics, No. 15-1182 (April 20, 2016), available at https://goo.gl/iD59nh
192
See, e.g., Dan L. Burk, Patents as Data Aggregators in Personalized Medicine, 21 B.U. J. Sci. & Tech. 233, 233–49 (2015).
193
See, e.g., W. Nicholson Price II and Arti K. Rai, Are Trade Secrets Delaying Biosimilars?, 348 Science, 188,188–189 (2015).
194
Benjamin N. Roin, Unpatentable Drugs and the Standards of Patentability, 87 Tex. L. Rev. 503, 517–31 (2009); Timo Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 300 ff.
195
See, e.g., Sir Hugh Laddie, Patents—What's Invention Got to Do with It?, in Intellectual Property in the New Millenium (D. Vaver and L. Bentley, eds., Cambridge University Press 2004), Chapter 6, at 93; Jacob, J. in Teva Pharmaceuticals and Others v. Istituto Gentili SpA and Others, [2003] EWHC 5 (Pat).
196
Timo Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 315–320.
197
Kevin Outterson, Death from the Public Domain?, 87 Tex. L. Rev. 45 (2009).
198
For a brief description and summary of this and other academic reform proposals, cf. recent New York Times article by Charles Duhigg and Steve Lohr, The Patent, Used as a Sword, (Oct. 7, 2012), available at http://www.nytimes.com/2012/10/08/technology/patent-wars-among-tech-giantscan-stifle-competition.html?pagewanted=1&_r=2&smid=fbshare; see also Richard Posner's recent comment, Do Patent and Copyright Law Restrict Competition and Creativity Excessively?, Becker-Posner Blog (Sept. 30, 2012), available at http://www.becker-posner-blog.com/2012/09/do-patent-andcopyright-law-restrict-competition-and-creativity-excessivelyposner.html (arguing for another substantial reform of the copyright and patent system in particular in software and telecom-related technology. Furthermore, he acknowledges the special relevance of strong patents in the pharma sector); as for the ideas of a broader application of a specific utility model protection see also Jeremy Phillips, Three Cheers for Two Tiers? It's Time to Welcome the Nimbus, CIPA (Aug. 2010), available at http://www.cipa.org.uk/download_files/CIPA-2010-08-pp453-520.pdf (last visited Feb. 10, 2011). Note also that in Germany, e.g., the so-called “Gebrauchsmusterschutz” has for various reasons a rather limited relevance for biotechnological inventions. However, limited possibilities for protections still exist, cf. Martin Grund, Erik Richly, and Stacey J. Farmer, Gebrauchsmusterschutz—Das “kleine Patent” für biotechnologische Erfindungen, 13 Biospektrum 2 (2007), at 211. For an excellent, very detailed comparative analysis of the German and Scandinavian debates, cf. Pia Björkwall, Nyttighetsmodeller—Ett ändamå lsenligt innovationsskydd, Publications of the Hanken School of Economics Nr. 196, Doctoral Thesis (Helsingfors 2009).
199
Timo Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 315–320.
200
Biologics Price Competition and Innovation Act (BPCIA), 42 U.S.C. § 262(k)(7)(A); section 351(k)(7) (A) of the Public Health Service Act (PHSA).
201
BPCIA, 42 U.S.C. § 262(k)(7)(B); section 351(k)(7)(B) of the PHSA.
202
Ron Leuty, Obama Budget Plan Puts Biotech Drug Protection on the tTable, San Francisco Bus. Times Feb. 15, 2011), available at http://www.bizjournals.com/sanfrancisco/blog/2011/02/obama-budget-throws-biotech-drug.html; cf. Kevin E. Noonan, Data or Market Exclusivity? (Perhaps) Only Congress Knows for Sure, Patent Docs (Jan. 26, 2011), available at http://www.patentdocs.org/2011/01/data-ormarket-exclusivity-perhaps-only-congress-knows-for-sure.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PatentDocs+%28Patent+Docs%29. Some authors stress, however, that regulatory data exclusivity is only one of several factors for reducing drug costs, cf. David E. Adelman and Christopher M. Holman, Misplaced Fears in the Legislative Battle Over Affordable Biotech Drugs, 50 IDEA 565 (Jan. 14, 2010). As for conventional drugs, cf. Dana P. Goldman et al., The Benefits from Giving Makers of Conventional “Small Molecule” Drugs Longer Exclusivity Over Clinical Trial Data, 30 Health Aff. 1, 84–90 (2011).
203
Cf. Article 10 of Directive 2001/83/EC of 6 November 2001 on the Community Code relating to medicinal products for human use; EC Regulation No. 726/2004 of 31 March 2004 providing for new Community procedures for the authorization and supervision of medicinal products for human and veterinary use and establishing the European Medicines Agency, reg. 14.
204
As for Europe, see, inter alia, Trevor Cook, Pharmaceuticals, Biotechnology and the Law (2d ed., London, LexisNexis, UK, 2009), at 418–419 (“However, as it stands the regulatory data protection system for medicinal products at least in Europe and as mandated by Article 39.3 TRIPS only provides limited compensation for the shortcomings of the patent system, in that regulatory data protection is only available for data filed in support of a new active, and not, with one exception only recently introduced, that filed in support of a new indication, new formulation or new dosing schedule of an already authorized active. The exception […] extends the total period of data protection for all uses of a medicinal product by one year if one or more new therapeutic indications are authorised which are ‘held to bring significant clinical benefits in comparison with existing therapies.’ But there is no protection for data filed, for example, in support of a yet further new indication or a new formulation or dosing schedule of an already authorized active, which can hardly encourage development work on existing medicinal products, and instead encourages work on new medical products which may in practice be no better than those which they come to replace, and whose benefit lies not in their contribution to public health but in the potential that they provide to attract better protection, both in terms of regulatory data and by the patent system”). Cf. Philip W. Grubb and Peter R. Thomson, Patents for Chemicals, Pharmaceuticals, and Biotechnology: Fundamentals of Global Law, Practice and Strategy (5th ed., Oxford, Oxford University Press, 2010), at 269–270 (recognizing a related flaw in the current system that arguably raises the question of how to most efficiently involve the probably most competent companies or institutions in the identification and development of novel uses. They note that if a different entity, not related to the entity that developed the earlier indication of the same ingredient and received the first market authorization (MA), develops independently a new indication of an authorized medicinal product and submits it to the European health authorities as a full stand-alone dossier to get an MA, it would seem that a full ten-year data exclusivity period for the product with the new indication would be granted by the European Health authorities. Conversely, if the MA holder for the earlier indication, or a person related to that holder, would conduct exactly the same work for developing and testing the new indication, the new indication would be simply regarded as an extension of the earlier MA dossier and, accordingly, the authorities would only grant a one-year extension but no separate data exclusivity period).
205
In that context, it is important to observe that the very sensitive “access to medicines” issues do not only concern the development or transfer of lifesaving medicines between the most-developed countries and the less-developed countries. It also concerns access within developed countries.
206
As exemplified by Martin Shkreli's infamous activities, including unjustified price increases for crucial (and notably generic, unpatented) drugs and fraudulent behavior, which have led to criminal convictions, see https://www.forbes.com/sites/eriksherman/2018/03/09/martin-shkreli-real-crime-stealing-from-the-wrong-people/#15c824ba122c (accessed Mar. 12, 2018).
207
Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 347.
208
Cf. Keith E. Maskus, Intellectual Property Rights, Technology Transfer and Development: The Case of Compulsory Licensing, in Sustainable Technology Transfer—A Guide to Global Aid and Trade Development, (Hans Henrik Lidgard, Jeffery Atik, Tu Thanh Nguyen, eds., Kluwer Law International, 2011), at 89 ff.
209
See e.g., M.S. Sinha, G.D. Curfman, and M.A. Carrier, Antitrust, Market Exclusivity, and Transparency in the Pharmaceutical Industry, JAMA (published online May 07, 2018), doi:10.1001/jama.2018.3478.
210
Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 347. One major dilemma that will have to be addressed in this context relates to the fact that the costs, uncertainties, and risks involved in biopharmaceutical R&D often still seem to require the possibility of exclusive licensing. While further debates over these post-grant solution-models are surely necessary, their application might sometimes have to be curtailed for particular fields of technology or should be limited to very special or extreme situations. Cf. Timo Minssen, Patents and Technological Progress in a Globalized World—Liber Amicorum Joseph Straus, 2(2) IP Law Book Review 83–102 (2012), available on SSRN at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920810 (referring to Joseph Straus et al., Genetic Inventions and Patent Law: An Empirical Survey of Selected German R&D Institutions (Munich, Verlag Medien Design, 2004), at 22–25).
211
See, e.g., the recent comment by Paul Krugman in the New York Times: What's Good for Pharma Isn't Good for America (Wonkish) (May 12, 2018), https://www.nytimes.com/2018/05/12/opinion/whats-good-for-pharma-isnt-good-for-america-wonkish.html (accessed May 13, 2018).
212
See also Minssen, Assessing the Inventiveness of Bio-Pharmaceuticals Under European and U.S. Patent Law (Lund University/INEKO 2012), at 347.
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Biotechnology Law Report
Volume 37 • Issue Number 3 • June 2018
Pages: 131 - 161
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Published ahead of print: 5 June 2018
Published in print: June 2018
Published online: 1 June 2018
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