Global IP in Age of Shrinking IP Rights - Len Smith, BioNetwork East, March 2009

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Presentation title March 16, 2009

Global IP Issues and Strategiesin the Age of Shrinking Patent Rights

Len S. Smith

Senior Intellectual Property Counsel

Novo Nordisk Inc.

BioNetwork East 2009

March 16, 2009


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Len Smith Global IP Strategies in the Age of Shrinking Patent Rights Slide no 2March 16, 2009

Branded Pharma Business Model A Tale of Two Exclusivities


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Patent law in a minute

5 basic requirements (3 legal, 2 to the document) Useful (industrial utility/applicability)

New (novel)

Nonobvious (represent/possess an inventive step)

Described (Written description/definiteness - - sufficiency) Enabled

Other national requirements US best mode; duty of candor

Negative right

Limited right Defined by claims (like a deed)


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A Patent Attorneys View of the World


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The Future?


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BRIC Patent Scorecard Brazil (#3)

Good news Patent infringement actions tripled in 1990s

Only BRIC not on USTR watch list Bad news

Notoriously tough on pharma w/ compulsory licensing Least frequently examined of BRIC for patenting

Russia (#4) Unclear criteria for remedies; weak remedies; rampant pirating of IP; remains

high on USTR list; can be surprisingly challenging (i.e., independent - - is that abenefit?) bright spot a new code in 2008

India (#2) Good news Product patents allowed as of 2005

Bad news Many unresolved issues (patentable subject matter (very hard on new forms, salts), no

patent term extension, compulsory licensing, no/little data protection). No methods of treatment (not even Swiss claims) Infrastructure not present for enforcement Strong generic lobby - - poor branded pharma enforcement track record

China Good news (#1)

Moving quickly to develop IP and allowing some victories for Western countries; USTRrecognizes progress

Bad news Special section on USTR list (!); compulsory licensing risk; remedies currently

limited, arbitrary; expensive and challenging system shortage of lawyers, law(nothing pre-1984); cultural challenges (emperor owns it all; whats mine is yours)

Mixed bag? Utility models


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China and Patent Licensing Local patent filing requirements (~ foreign filing licenses)

Cloud over US assignments??

Requirement to register licenses/patents

Practically necessary or required to enforce (e.g., China) Provided for in agreement - - OK with confidentiality provisions?

Other national law/antitrust policy issues - - CN law voids any contract that: grant backs improvements without compensation restricts ability to challenge licensed IP restricts rights to improve technology or use improvements includes disclaimer of liabilities in association with licensed technology

Licensor must guarantee licensed technology is complete, correct, effective, andthat it will reach the specified technological target!! If the Chinese licensee infringes on another party's right by using the licensed

technology pursuant to the license agreement, the licensor is required to bearresponsibility for such infringement.

restricts licensee/transferee from obtaining similar/competing technology is a technology agreement that induces infringement of 3rd party rights Others

involves tying or misuse (licensing of invalid/expired patents) (cf. USA)

restricts use of resources, production, or export channels (unreasonably) NB! Licensor be liable to pay for agreement without any benefit of K

Jurisdiction Does partner have assets in US, EU, etc.? Have jurisdiction objections been waived? Line up local jurisdiction/venue

China International Economic and Trade Arbitration Commission (CIETAC)


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Theres [Still] No Place Like Home


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or is there?

Has the American patent right shrunk?

KSR There is a lot more that is obvious now

MedImmune

Its easier to license and challenge now!

eBay Its less likely you are going to get an injunction now

Seagate

You probably will not get enhanced damages now


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US vs. Europe and Japan

EPO and JP - significantly tougher disclosure rules Actual data a must May sometimes be supported, but difficult

Ipsis verbis description of embodiments to be claimed Smaller applications; less claims

15 claims in EPO

movement to limit size of applications in EPO

EPO has tough standards on utility

EPO has tough standards on inventive step e.g., humanized antibody composition

compare Kubin in the US

EPO examination generally more rigorous


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Key Features of Pharma Patent Law

Little/no direct infringement for method claims

Cases depend on inducement (marketing monopoly)

DSU Medical specific intent is required for inducement

271(g) products produced by a patented process Afford important protection

High risk in US of liability for inequitable conduct

A patent attorneys view of regulatory law? [much more] law by folklore law by relationships


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Freedom to Operate Regulatory Exemptions Expanded

Compare Europe Bolar exemption working its way through EU

Research exemptions in EU


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MMA and FDA rule changes 2002/2003

Mandated listing of certain patents Polymorphs; product-by-process claims

Limited patents that can be listed in OB

No metabolites, intermediates, packaging claims, ornon-approved indications

30 month stay limitations

one stay per ANDA

only for patents listed prior to ANDA filing

Listings under penalty of perjury

Permits filing DJ if no action taken in response to para. IV

OB listing has become a less versatile and powerfulweapon against generic entry


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What Does It All Mean?

Less opportunities for patent exclusivity

Limited injunction abilities

Limited willful damage remedies Limited Orange Book protections

Patents more vulnerable to attack

Status quo strategies may no longer work


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Claim the Label


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Tie Label Claiming Strategy toSafety/Efficacy!

FDAs general position

Under the statutes, regulations, and applicable case law,the carve-out of patent protected labeling is generallypermittedas a permissible difference ifthe omission

does notrender the proposed product less safe oreffective for the conditions that remain in the labeling.

Nearly every citizens petition has been a loser

but, most to date not so clearly tied to safety/efficacy

and most CPs have bought significant time to entry

something FTC is considering closely


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Claim [and Set] the Standard


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A New Patent Portfolio Paradigm?

Think of securing exclusivity in terms of probabilities, incrementalgains, rather than big/quick wins

Need a major management re-education program!

Dump everything that does not (or will not potentially) add value Quit letting research run patenting strategies in a vacuum

Critically analyze claim components of each application bullet proof against inequitable conduct, DJ, etc.

Apply risk/benefit analysis to disclosures Is FoO the priority? Are there competitors? If not, should disclosure

be more staged (keeping in mind best mode, etc.)?

Harmonize clinical, regulatory, and marketing Get data needed in a post-KSR world Better acquire inventions that matter


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Aspects of a winning portfolio

A large mix of claims in a number of patents Do not fall into the broad claim-only trap!

Protect against inequitable conduct, inherency, etc.

Some Integra-proof claims? Secure royalties as a minimum Easier to defend

Include psychological (business impact) claims Functional (or mixed) claims

Means-plus-function claims


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Regulatory (Data/Market) Exclusivity

Type Duration Scope

New indication 3 years Market exclusivity(Prevent FDA approvalofANDA/505b2)

NCE 5/4 yrs Market exclusivity

(Prevent FDA acceptance ofANDA/505b2)

180-day marketing 6 months Delay entry of 2nd/3rd genericsexcept for innovator

Orphan (


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More Strategies for Promoting Exclusivity

Authorize generic entry by contract

by subsidiary/affiliate

Do not limit approach to patent/FDA strategies Trademark Nexium

Trade dress

Viagra

Trade secret Post-KSR, may be a more attractive option


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Effective due diligence

Danger of contamination and misappropriation high TS litigation on the rise in the US

Conduct ownership aspects of IP due diligence upfront Patent ownership

Patent status Claims

Acquire other aspects of intelligence upfront Security interests; financial condition (if available)

Prepare for pre-collaboration disclosure

Other upfront suggestions Scientific diligence (should be in the first instance!) Business modeling (personal plea)


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Wise Licensing

Ensure target has something to license Consultancy agreements

Ensure you are not licensing know how indefinitely! Handle patent extension (restoration, SPC)

In US, can be only one Not same rights - - royalty rates?

In EU, others can acquire Another reason to control?

Include adequate litigation provisions No enforcement, no exclusivity Venue/jurisdiction?

Are you really exclusive (have standing)? Handle bankruptcy risks Consider data reference rights, non-patent

exclusivities, and data transfer costs


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Take Aways

The globe is still largely defined by US, EU, and JP US is still most important, but less than in 1990s

Patent rights in US have shrunk Probably will expand again long term (cyclical)

Reliable patent protection in BRIC is yet to be realized Lots of traps for the unwary

Factor in regulatory exclusivities

Approach to business as usual will probably not work Difficult challenge for two industries (licensing and patents) tied to

tradition and risk adverse by nature

Business leaders should understand IP What it is they are buying; how their business model works


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Thank You!

Len S. [email protected]
mailto:[email protected]:[email protected]

Global IP in Age of Shrinking IP Rights - Len Smith, BioNetwork East, March 2009

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