NEWSLETTER - Life Sciences IP Review

JUNE 2013

NEWSLETTERUS SUPREME COURT BACKS ‘RULE OF REASON’ FOR PAY-FOR-DELAY

IPAB SETS ASIDE SUTENT PATENT REJECTION

MYRIAD: PICKING UP THE PIECES FROM THE US SUPREME COURT

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LSIPR Newsletter 06:13 EDITOR’S LETTER/CONTENTS 3

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Life Sciences IP Review (LSIPR): ISSN 2049-2359 (Print)

Big decisions It’s been a busy month at the US Supreme Court, with two major decisions that could

have long-term ramifications for the life sciences and pharmaceutical industries.

There’s Myriad, of course. Depending on who you ask, the court’s ruling that

isolated DNA is not patentable is a boon for patients, a disaster for industry and,

by extension, patients, or neither. The wheels of justice move slowly, and some

have argued that the decision will not have the huge impact you might expect,

simply because the industry has moved on so far in the past decade that most new

developments are likely to avoid the pitfalls of ‘isolated DNA’.

In this issue of LSIPR, we have a couple of angles on the case, and Janis Fraser of

Fish & Richardson provides an in-depth analysis of the key points.

A week or so after Myriad, and with rather less fanfare, the Supreme Court released

its decision on the Actavis case, in which the US Federal Trade Commission

(FTC) sought to make so-called pay-for-delay patent settlements between brand

pharmaceuticals and generics presumptively unlawful. The court didn’t go that far,

but it did say the courts should adopt a “rule-of-reason” approach to such settlements

and that the FTC should be allowed to challenge them on antitrust grounds.

And if that’s the case in the US, the situation is Europe is arguably even graver for

patent owners. In fining Lundbeck and several generic pharmaceutical companies

for an ostensibly less problematic ‘pay-for-delay’ deal, the European Commission

appears to have decided that any patent settlement of this nature is likely to raise

antitrust issues. That case will surely run and run, and we must hope that the

Court of Justice of the European Union eventually provides firm guidance.

Peter Scott, Managing editor

Contents4 News 4 Teva and Sun stung by $2 billion settlement 4 US Supreme Court strikes Myriad blow 6 Shire settles with Teva over ADHD drug 8 Takeda sues generics over heartburn drug 8 US Supreme Court backs ‘rule of reason’ for pay-for-delay 10 European Commission targets alleged ‘pay-for-delay’ with pharma fines 12 IPAB sets aside Sutent patent rejection 12 Federal Circuit holds Novo Nordisk patent invalid

14 A rare opportunity: aTyr Pharma and orphan drug

18 Patent office focus Quality control: biotech at the EPO

20 Expert comment Personalised medicine: patenting new drugs from old

22 Case report Myriad: Picking up the pieces

Editorial PanelTrevor Cook, partner, Bird & BirdGabriel Di Blasi, partner, Di Plasi & AssociatesPaul England, Taylor Wessing LLPJanis Fraser, principal, Fish & Richardson PCPenny Gilbert, partner, Powell GilbertAndrew Jenner, director of IP innovation and trade, IFPMALars Kellberg, corporate vice president, corporate patents, Novo Nordisk A/SSimon Kremer, partner, Mewburn Ellis LLPNathalie Moll, secretary general, EuropaBioMatthew Nielsen, partner, Marshall Gerstein & Borun LLPCaroline Pallard, partner, Nederlandsch OctrooibureauJosé Trigueros, partner, Leyva Montenegro Trigueros Abogados SCJane Wainwright, partner, Potter Clarkson LLPGordon Wright, partner, Elkington & Fife LLP, on behalf of CIPA

NEWS4 LSIPR Newsletter 06:13


NEW JERSEY, US

Generic drug-makers Teva Pharmaceutical

and Sun Pharmaceutical have agreed to pay

a combined $2.15 billion to settle a patent

infringement case over Pfizer’s heartburn

drug Protonix.

The settlement is understood to be the

highest in history related to a so-called ‘at

risk’ launch of a generic competitor to a

branded product.

‘At risk’ generic launches are so called

because they involve a generic competitor

launching a drug while the originator drug

is still on patent, and patent litigation is

unresolved.

Teva launched a generic version of Protonix

in 2007, with Sun following in 2008,

while the patent covering the drug’s active

ingredient, pantoprazole, expired in 2011.

Pfizer acquired the patent when it took

over Wyeth in 2009, and that company had

previously licensed it from Altana Pharma,

now owned by Takeda, which will benefit

from the settlement along with Pfizer.

In this instance, Wyeth had unsuccessfully

applied for an injunction to prevent generic

sales pending the outcome of litigation. The

settlement occurred soon after a jury trial on

the issue of damages in the case had begun in

the US District Court for the District of New

Jersey, potentially opening Sun and Teva to the

threat of enhanced damages. The court had

found the patent of pantoprazole to be valid.

One US lawyer, who did not wish to be

named, told LSIPR that the size of the

settlement may indicate that Teva and Sun

feared an unpredictable jury trial might

end in an even worse outcome in terms of

damages. The lawyer added that ‘at risk’

launches always involve a trade-off between

the potential benefits of getting to market

early and the risk of a negative decision and

damages award further down the line.

“We are pleased with the settlement, which

recognises the validity and value of the

innovation that led to Protonix,” said Amy

Schulman, executive vice president and

general counsel of Pfizer. “It reflects our

resolve to enforce our patents both in and

out of the courtroom,” she added.

Richard Egosi, group executive vice

president and chief legal officer at Teva, said:

“We are pleased to put this matter behind

us as we continue to focus on delivering safe

and affordable medicines to patients around

the world.”

Both Teva and Sun admitted that their

generic sales infringed the patent that was

held valid by the court.

Teva and Sun stung by $2 billion settlement

WASHINGTON DC, US

The US Supreme Court has ruled that isolated

human DNA is not patent-eligible and has struck

down patents owned by biotech company Myriad,

ending a long-running and controversial case.

But in a mixed ruling, the court said that

complementary DNA (cDNA), which is

synthesised from messenger RNA (mRNA),

can be patented under US law.

The court was ruling on a case between the

Association for Molecular Pathology and

Myriad, the owner of patents directed to

mutations in the BRCA1 and BRCA2 human

genes. With the patents, Myriad can isolate

the genes from the human body and test for a

risk of breast and ovarian cancer.

After Myriad’s patents were challenged in

2009, a district court found them invalid

because they covered products of nature. But

the US Court of Appeals for the Federal Circuit

later reversed the decision, finding that isolated

DNA and cDNA are patent-eligible.

The case, which has generated significant

controversy and has led groups such as the

American Civil Liberties Union (ACLU) to

call for Myriad’s patents to be rejected, made

its way to the Supreme Court.

In a unanimous decision on June 13, written

by Justice Thomas, the court said that “genes

and the information they encode are not

patent eligible ... simply because they have been

isolated from the surrounding genetic material”.

“Had Myriad created an innovative method

of manipulating genes while searching for

the BRCA1 and BRCA2 genes, it could

possibly have sought a method patent. But the

processes used by Myriad to isolate DNA were

well understood by geneticists at the time of

Myriad’s patents,” the court added.

US Supreme Court strikes Myriad blow

A sting in the tail

The court said the ruling does not cover

patents on “new applications of knowledge

about the BRCA1 and BRCA2 genes” and

“nor do we consider the patentability of DNA

in which the order of the naturally occurring

nucleotides has been altered”.

Turning to cDNA, the court said it does not

present the same obstacles to patentability as

naturally occurring, isolated DNA, because the

process of creating a cDNA sequence from mRNA

creates a non-naturally occurring molecule.

The court said: “cDNA retains the naturally

occurring exons of DNA, but it is distinct

from the DNA from which it was derived. As

a result, cDNA is not a ‘product of nature’ and

is patent-eligible”.

Justice Scalia dissented in part, saying he was

“unable to affirm” some of the “fine details” of

molecular biology, but agreed that isolated DNA

is the same as that found in the human body.

LSIPR Newsletter 06:13 NEWS 5


Human genome project created $966 billionAccording to a study released by research advocacy groups United for Medical Research and Battelle, the Human Genome Project has created a 60-fold return on the $14.5 billion initially invested by the US.

The report found that the 13-year project to map the entire human genome, which concluded in 2003, generated the $966 billion return by creating new jobs, drugs and genetic industry.

Biotechnology companies used knowledge from the project in their development of medicines and gene-related diagnostic tests.

Medtronic valve gets win in Germany The German District Court of Mannheim found that medical technology company Medtronic’s aortic valve does not infringe Edwards Lifesciences Inc’s Cribier patent.

The case related to Medtronic’s CoreValve, an artificial device implanted in the heart via a catheter.

According to a Bloomberg report, there are two remaining challenges pending in Germany, which are due to be resolved by the end of this year or in early 2014.

In 2012, the US Court of Appeals for the Federal Circuit upheld a verdict that found Medtronic’s CoreValve infringed a patent held by Edwards.

Verdezyne joins with Malaysian Biotechnology CorporationUS biochemical company Verdezyne Inc has entered into a collaboration with Malaysian Biotechnology Corporation and will open its first biochemical production facility in the Asia Pacific Region.

The collaboration is intended to expand Verdezyne’s presence in Malaysia’s palm oil industry.

The partnership was announced at the 10th Annual World Congress for Industrial Biotechnology, which took place in Montreal in June.

IN BRIEF

Big impact?

Todd Dickinson, executive director of

the American Intellectual Property Law

Association and former head of the USPTO,

described the ruling as predictable but

disappointing. “I’m concerned with the impact

on the biotechnology industry, in which the

US is a world leader,” he said.

He added that “the breadth of an opinion

like this is always a worry ... when you have

definitive statements without clarification”.

Mercedes Meyer, partner at law firm Drinker

Biddle in Washington, DC, said that the decision

may have created a slippery slope. “If it’s naturally

occurring as a gene, it’s not patentable but, for

example, polypeptides are naturally occurring.”

But, she added, “There are ways to work

around it. If you had a commercially important

patent that contains claims like that ... you can

go back and seek a reissue patent in order to

obtain claims to a broader group of cDNAs

that can produce the same protein.”

Meyer highlighted that there are a lot of

patents containing exactly the kind of claims

that the court found invalid, notably because

the USPTO listed examples of such claims in

its patent Utility Guidelines, issued in 2001.

The Supreme Court reasoned that while Myriad’s

efforts to isolate the genes were important,

“separating that gene from its surrounding

genetic material is not an act of invention”.

Commenting on that approach, Meyer said: “I

think people are unconsciously employing the

molecular scissor approach—and that’s wrong.

BRCA1 and BRCA2 took labfuls of postdocs

and grad students to identify where the gene was

and figure out which mRNA was responsible for

the relevant protein (there were a lot of mRNAs

due to different splice products), let alone figure

out which mutation was correlated to a greater

propensity of a specific cancer.”

The impact on the industry will take a while

to fully assess, and will depend on how lower

courts interpret the judgment and how the

USPTO reacts, but Meyer said “it may have

an initial chilling effect both in venture

capital and in disclosure of discoveries as

the community tries to figure out what the

complete implications of the decision are”.

Fraser agreed, adding: “There will be fewer

new gene tests on new mutations developed

because there’s no good way to get broad

claims ... to allow developers to recoup their

investment ... that’s no good for patients.”

In a statement, Myriad praised the court for

upholding the patent eligibility of cDNA and

stressed that the company still has 500 valid

and enforceable claims in 24 different patents

covering its BRAC Analysis test.

The ACLU claimed victory, writing on its

website that “by invalidating these patents,

the court lifted a major barrier to progress in

further understanding how we can better treat

and prevent diseases”.

The US government argued in briefs at the

US Court of Appeals for the Federal Circuit

and Supreme Court that isolated DNA should

not be patented, though the US Patent and

Trademark Office (USPTO) declined to sign

the government’s brief.

Janis Fraser, principal at Fish & Richardson PC

in Boston, said: “The government should have

relied on the experts in the patent office rather

than imposing their own, not-well-thought-

through position.”

She added that the decision was not surprising

“in view of the speculation that’s been going on

since the oral hearings ... a lot of people came

away with the feeling that the court would end

up with a decision like this”.



Finnish Biohit to set up joint venture in ChinaFinnish biotechnology company Biohit Oyj has announced it will establish a joint venture company in China, named Biohit Biotech (Hefei) Co Ltd.

Biohit, which develops diagnostic tests and analysis systems, will partner with Anhui Wisdom-Win Investment Co to manufacture and sell GastroPanel kits to the Chinese market. GastroPanel is a non-invasive blood test used to identify health of the stomach and helps to prioritise patients for further examinations.

Biohit’s chief executive Semi Korpela said: “We are pleased to announce this Joint Venture agreement. Our local partners will provide excellent conditions for Biohit Biotech.”

The general manager of Hefei Medicine Co. Ltd. China, Liu Feng, said: “We are glad to partner with Biohit. China has a massive market for the GastroPanel and its yet untapped potential. We anticipate a collaborative and successful team approach with Biohit.”

Alacrita and Debiopharm collaborateLife sciences consulting firm Alacrita and pharmaceutical company Debiopharm Group have established a partnership to identify oncological, autoimmune, infectious diseases and metabolic in-licensing opportunities in the Massachussetts life sciences cluster.

Alacrita will assist Debiopharm in its search for small molecules, antibody or peptide-based product candidates.

Debiopharm recently in-licensed assets from drug discovery company Mercury Therapeutics Inc and drug development firm Curis Inc, both based in Massachussetts.

Debiopharm’s vice president of business development and licensing David Deperthes said: “Massachusetts hosts global leaders in pharmaceutical innovation. As such, the area represents a strategic priority for us as we source opportunities from around the world to expand our pipeline of novel medicines. We are delighted to be working with Alacrita.”

IN BRIEFDELAWARE, US

Drug-maker Teva must wait until 2015 before

selling generic versions of Shire’s Intuniv

product, according to a patent settlement

between the companies.

Irish pharmaceutical company Shire sued

Israeli generic drug-maker Teva in May

2010 over two US patents directed to Intuniv

(guanfacine), an extended release prescription

medicine used to treat attention deficit-

hyperactivity disorder (ADHD).

The lawsuit, in the US District Court for

the District of Delaware, was filed after

Teva submitted an abbreviated new drug

application (ANDA) to sell generic versions

of Intuniv, which is used to treat children

between six and 17.

Teva was one of several companies sued by

Shire over the two patents, including drug-

makers Actavis and Watson Pharmaceuticals.

On May 31, Shire said it granted Teva a licence

to sell generic versions or authorised versions

of Intuniv in the US, the only country where

the product is sold.

But Teva must wait until at least 180 days after

December 1, 2014, the date on which Actavis

can begin selling generic Intuniv products.

That’s because Actavis, which (along with

Watson) settled its litigation with Shire in

April this year, was the first company to apply

to sell generic versions of Intuniv—and US

law dictates that first ANDA filers have an

exclusive 180-day selling window.

There were no details about the deal with Teva,

but in the Actavis settlement Shire is charging

a 25 percent royalty rate on gross profit made

from Intuniv during the 180-day exclusivity

period.

Dominick Conde, partner at law firm

Fitzpatrick, Cella, Harper & Scinto, said he

wouldn’t expect Teva to pay a 25 percent

royalty rate when it enters the market, because

Actavis won’t be paying any royalties beyond

its 180-day exclusivity period.

Conde said given that Shire’s patents expire in

2021 and 2024, Teva may be happy with deal

because the company is entering the market

several years before it may have otherwise

expected.

“But it’s hard to make generalisations,” he said.

Teva could potentially enter the market before

the 180-day period ends by selling authorised

generics, which would mean paying Shire to

sell the latter’s products.

Companies might agree to this if they have

difficulty making a product, but “Teva has

some of the best chemists”, said Ralph Loren,

partner at Edwards Wildman Palmer LLP.

Actavis and then Teva will be competing for

lucrative Intuniv revenues, which totalled

$288 million in 2012, according to Shire’s

annual report.

The first generic entering the market typically

takes about 50 percent of a drug’s market share

within the first six months, said Loren, with

this figure soon rising to 80 percent but which

is shared between the two generics.

“This is when the real fight starts,” he said.

Brands can still make sizeable sales once

generic rivals are selling products, Loren

noted, owing to brand loyalty and worries that

people might have adverse reactions to non-

active compounds in the generic drugs, which

don’t have to be completely the same as the

original drug’s.

The US Food and Drug Administration (FDA)

is yet to approve the Teva deal.

Shire settles with Teva over ADHD drug

Sealing the deal

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WASHINGTON DC, US

A majority of the US Supreme Court has

ruled that the US Federal Trade Commission

(FTC) should be able to challenge so-called

‘pay-for-delay’ patent litigation settlements

on antitrust grounds.

The court reversed an 11th Circuit Court of

Appeals ruling with a majority of five to three,

Justice Alito having recused himself from the case.

The 11th Circuit had upheld a lower court

decision that threw out the FTC’s attempt

to challenge a settlement between originator

company Solvay Pharmaceuticals (now

Abbvie) and generics manufacturers Watson

Pharmaceuticals (now Actavis), Paddock

Laboratories and Par Pharmaceutical.

As part of that settlement, the generics agreed

to delay their entry to the market and settle

infringement and invalidity litigation over

Solvay’s AndroGel branded testosterone drug

in return for more than $100 million total

payment, permission to bring their generic

to market five years prior to the expiry of the

patent (for Watson) and an undertaking to

promote AndroGel to urologists.

The FTC challenged the settlement, alleging

that it violated section five of The Federal

Trade Commission Act, which deals with

anti-competitive behaviour.

The 11th Circuit had found that the FTC had not

shown anti-competitive conduct that fell outside

the exclusionary scope of the original patent, and

therefore there was no antitrust violation.

But in the Supreme Court’s majority opinion,

Justice Breyer wrote that “Reverse payment

settlements such as the agreement alleged

US Supreme Court backs ‘rule of reason’ for pay-for-delayin the complaint before us can sometimes

violate the antitrust laws.”

While acknowledging that the conduct didn’t

necessarily fall outside the exclusionary

scope of the patent, Breyer said “It would

be incongruous to determine antitrust

legality by measuring the settlement’s anti-

competitive effects solely against patent law

policy, rather than by measuring them against

pro-competitive antitrust policies as well.”

He added: “A reverse payment, where large

and unjustified, can bring with it the risk of

significant anti-competitive effects.”

The court suggested that such settlements be

looked at under a “rule of reason” for possible

antitrust issues, but stopped short of making

such settlements “presumptively unlawful”, as

the FTC has sought.

The case will be remanded to the 11th Circuit

to be considered in light of the ruling.

Paul Bisaro, president and chief executive of

Actavis, was pleased that the court stopped

short of making the agreements presumptively

CALIFORNIA, US

Japanese pharma company Takeda has sued

generic drug-makers Impax and Sandoz for

allegedly infringing a patent directed to its

anti-heartburn drug Dexilant.

The separate lawsuits, filed in the US

District Court for the Northern District

of California, come after the companies

filed ANDAs to market generic versions of

Dexilant.

Dexilant, which was approved by the US

FDA in 2009, is sold in 30mg and 60mg

dosages. It treats gastro-oesophageal

reflux disease, a major symptom of which

is heartburn, releasing medicine in two

different stages.

Takeda’s cited patent protects “methods

of treating gastrointestinal disorders

independent of the intake of food”, and

expires in 2028.

The Japanese company, one of the world’s

leading pharma companies, hasn’t requested

a jury, which is available in ANDA litigation.

This may show that it feels a court can deal

with the case more efficiently on its own,

said Kevin Noonan, partner at McDonnell,

Boehnen, Hulbert & Berghoff LLP.

Noonan said the FDA will have to delay the

generic companies’ ANDA requests for at least

30 months—known as the 30-month stay—

while the litigation continues.

He noted that Impax and Sandoz are trying

to invalidate Takeda’s patent, and will

probably use prior art arguments.

“Generics have to show clear and convincing

evidence that the patent is invalid, which

is a higher burden than proving non-

infringement,” Noonan said.

Takeda sues generics over heartburn drug

US Supreme Court

Generics by the spoonful



unlawful. “The court has established that the ‘rule

of reason’ be applied, and left it to the lower courts

to determine if the benefits of the settlement

outweigh harm to consumers,” he said.

“We believe this decision continues to

provide for a lawful and legitimate pathway

for resolving patent challenge litigation in a

manner that is pro-competitive and beneficial

to American consumers. The court’s ruling

however, does place an additional and

unnecessary administrative burden on our

industry.”

Bisaro added that the company would

continue to defend the settlement in question.

In a strongly worded dissenting opinion,

Justice Roberts wrote that the case was “fairly

straightforward”.

He said: “A patent holder acting within

the scope of its patent does not engage in

any unlawful anticompetitive behaviour;

it is simply exercising the monopoly rights

granted to it by the Government. Its behaviour

would be unlawful only if its patent were

invalid or not infringed. And the scope of the

patent—ie, what rights are conferred by the

patent—should be determined by reference

to patent law.”

Roberts said the majority ruling is likely to

“discourage settlement” of patent litigation.

“The majority today departs from the settled

approach separating patent and antitrust

law, weakens the protections afforded to

innovators by patents, frustrates the public

policy in favour of settling, and likely

undermines the very policy it seeks to

promote by forcing generics who step into the

litigation ring to do so without the prospect

of cash settlements.”

The FTC welcomed the court’s ruling. “The

Supreme Court’s decision is a significant

victory for American consumers, American

taxpayers, and free markets,” chair Edith

Ramirez said. “We look forward to moving

ahead with the Actavis litigation and showing

that the settlements violate antitrust law. We

also are studying the court’s decision and

assessing how best to protect consumers’

interests in other pay-for-delay cases.”

OUR 125TH ANNIVERSARY, A GOOD MOMENT TO CONTEMPLATE THE FUTURE

Lately, the future of innovation has been discussed at length in the media. Serious attention is paid to the significance

of Intellectual Property. Some say protecting ideas, designs and trademarks interferes with innovation.

We believe otherwise. Daily practice tells us IP has a crucial role in the future of innovation. No company will invest in

ideas that can be copied unpunished.

As one of the most prominent IP firms in Europe, we like to take the lead in these discussions. During our jubilee year,

we would like to give advocates and opponents the opportunity to share their ideas about the future of protected

innovations. To be even more prepared for it. And to continue to protect and enrich our clients’ innovations, ideas and

trademarks for yet another 125 years. For more information, please visit our website www.nlo.nl/en

TechAssure report reveals litigation trends affecting life sciencesNon-profit organisation TechAssure Association has released a report detailing what kinds of claims are made against companies in the life sciences sector.

The bi-annual review found that in the first half of 2013 patent cases were the second-most common cases reviewed by life sciences companies, behind products claims. Antitrust cases ranked fifth in the list.

To reach its conclusion, TechAssure reviewed 310 verdicts and settlements in cases in the life sciences industry from January to June of 2013.

The report also noted four “growing litigation categories” in life sciences and technology, which were privacy, network security, data breaches, and whistleblowing.

IN BRIEF



BRUSSELS, BELGIUM

The European Commission’s competition

directorate has levied fines totalling €146

million ($195 million) against originator

pharmaceutical company Lundbeck and

several producers of generic drugs.

The commission said that in 2002, Denmark’s

Lundbeck agreed with generic rivals to delay

the market entry of generic alternatives to its

anti-depressant citalopram in contravention of

Article 101 of the Treaty on the Functioning

of the European Union, which prohibits anti-

competitive agreements.

The patent for the molecule citalopram

had previously expired, and the settlement

related to litigation around process patents

covering the drug. The commission

described these patents as offering “limited

protection” to the drug.

Commission vice president Joaquín Almunia

said: “The practices we are sanctioning are

simply unacceptable. By today’s decision we

are confirming that these so-called ‘pay-for-

delay’ deals constitute severe infringements

of EU competition law. They may cause severe

harm to patients and taxpayers and must be

sanctioned accordingly.”

But in a strongly worded statement, Lundbeck

rejected the allegations, and confirmed it will

appeal against the ruling. The company, which

was fined €93 million, said that it strongly

disagrees with the decision, which “asserts that

any settlement agreements involving a transfer

of value from an originator to a generic

company is a restriction of competition and

the value transfer reflects an understanding

that the patent is invalid or weak.”

The company rejected this approach. “There is

no question about the validity of Lundbeck’s

process patents at issue. Patent settlement

agreements are efficiency enhancing and

legitimate when there are bona fide grounds

for dispute.”

In 2009, well after the settlement in question

had been concluded, the European Patent

Office’s Board of Appeal upheld the validity

of Lundbeck’s patent covering the purification

of citalopram, one of the process patents dealt

with under the settlement.

Lundbeck said in its statement: “Over 600

meticulous analyses of the generic citalopram

demonstrated that they were all produced with

infringing processes. Furthermore, in many

concurrent documents the generic companies

acknowledged that their products violated

Lundbeck’s patents.”

When asked by LSIPR to comment further,

commission competition spokesman Antoine

Colombani underlined that the commission

made its assessment under EU competition

law. “It has not assessed the underlying patent

dispute or taken a stance on that dispute: the

commission’s decision makes no judgment on

the validity of Lundbeck’s process patent,” he

said. “In the decision we conclude that, in light

of the substantial evidence we have, the generic

competitors had a real chance to enter the

market. There were various possible routes to

the market: for example, they could have tried

to offer medicines using different processes or

to overturn the patent in question. They chose

not to do so.”

Ian Forrester QC, competition partner at White

& Case LLP in Brussels who has represented a

large number of pharmaceutical groups, was

surprised by elements of the case, and noted

that when the settlements in question were

concluded 10 years ago, “no one would have

worried that there was a competition issue,”

especially because according to Lundbeck, the

agreements were actually reviewed by antitrust

experts and given a clean bill of health.

He added that the commission’s policy of

challenging so-called pay-for-delay deals “now

appears to extend to settlement of any patent

litigation, even if the patent is a valid patent.”

The commission’s decision follows hard on

a US Supreme Court ruling, released on

Monday, which found that the US Federal

Trade Commission should be able to challenge

pay-for-delay settlements on antitrust

grounds, albeit not on a ‘quick look’ at the case.

The FTC had argued that pay-for-delay deals

should be presumptively illegal, but the court

rejected that approach, saying that a ‘rule of

reason’ should be applied based on the specific

facts of the case.

Forrester added: “I would not agree that the

judgment of the US Supreme Court endorses

the approach adopted by the commission in

Lundbeck.”

EC targets alleged ‘pay-for-delay’ with pharma fines

World Food Prize honours Monsanto VPThe so-called “Nobel Prize for food agriculture” has honoured agricultural technology company Monsanto’s vice president and chief technology officer Robert Fraley in a ceremony at the US State Department.

Fraley was named World Food Prize laureate, along with the founder and chairman of the Institute for Plant Biotechnology Outreach, Marc van Montagu, and Mary-Dell Chilton, founder and distinguished science fellow at Syngenta Biotechnology.

Fraley has worked at Monsanto for more than 30 years. His early work built on the discoveries of Chilton and Montagu. In 1996 he was involved in the introduction of genetically engineered soybeans resistant to the herbicide glyphosate, commercially known as Roundup Ready soybeans.

The soybeans were recently the centre of a Supreme Court case, after an Indiana farmer replanted a crop of the beans in breach of his contract with Monsanto. The court found in Monsanto’s favour.

New York life sciences hub announcedThe New York City Economic Development Corporation (NYCEDC) has announced a partnership with Columbia University faculty member Sam Sia which will lead to the establishment of the Harlem Biospace, a New York-based life sciences facility.

The Harlem Biospace, due to open its doors in November 2013, will be a “life science incubator” providing affordable wet-lab and microbench facilities to start-up life sciences companies.

Sia said: “As a faculty entrepreneur, I am aware of the incredible amount of bioscience research taking place in New York City, but have also experienced the challenges of turning these ideas into products without leaving the city.

“My hope is that Harlem Biospace will facilitate current bioscience researchers as well as the next generation of young entrepreneurs to pursue biotechnologies to improve patients’ health.”

IN BRIEF

Join us next June 23 – 26, 2014, when the BIO International Convention in San Diego highlights California’s vibrant biotechnology industry. Supported by unrivaled amounts of venture capital and NIH funding, California’s 2,300+ biomedical companies lead the industry in collaboration and innovation.

With more than 1,400 biomedical products in the development pipeline, California offers abundant opportunities—so don’t miss out. Mark your calendar today!

Save the Date

San DiegoWe’re

2014!into

Heading

convention.bio.org



WASHINGTON DC, US

The US Court of Appeals for the Federal

Circuit concluded on June 18 that Novo

Nordisk’s patent covering diabetes treatment

repaglinide is invalid.

In the case’s third appearance before the

Federal Circuit, the panel also reversed a

district court finding that Novo’s patent was

unenforceable due to inequitable conduct.

Repaglinide is an oral medicine used to treat

type II diabetes. It is marketed as Prandin in

the US.

Novo holds the patent for the drug, which

covers a method of controlling blood sugar

in diabetics using the repaglinide chemical in

combination with the drug metformin.

In 2005, Caraco Pharmaceutical Industries,

a Sun Pharmaceutical Industries subsidiary,

made an abbreviated new drug application

(ANDA) seeking the US Food and Drug

Administration (FDA)’s approval for a generic

version of repaglinide.

Caraco seeked to market repaglinide as

a therapy to be used on its own, or as a

monotherapy, rather than in combination

with metformin. It claimed Novo’s patent was

invalid or, if valid, would not be infringed by a

generic version of repaglinide.

Novo responded by launching a case at the

US District Court for the Eastern District of

Michigan, claiming Caraco infringed claim

4 of the patent, which covers the method of

combining the use of repaglinide and metformin.

Federal Circuit holds Novo Nordisk patent invalidCaraco then submitted a counterclaim asserting

the patent is obvious and unenforceable.

The district court agreed, finding it could be

predicted that the benefit of combining the

drugs would be at least equal to taking the

drugs separately.

“It was apparently well-known in the art that two

drugs having different mechanisms for attacking

diabetes may be more effective than one, and

so drugs were often tested in combination

therapy after demonstrating effectiveness in

monotherapy,” Judge Prost wrote in the Federal

Circuit opinion.

The efficacy of the combination therapy had

been demonstrated studies conducted by the

inventors of Novo’s patent, though these studies

had been criticised by the district court.

The lower court noted that other tests

contradicted Novo’s findings, that it had failed

to report these other tests, and that it did not

report that for one of the studies, some of

the results were not part of the original test

protocol.

MUMBAI, INDIA

India’s Intellectual Property Appellate Board

(IPAB) has set aside a decision revoking a

Pfizer-licensed patent directed to cancer

drug Sutent.

Pharmaceutical company Pfizer markets

Sutent (sunitinib), a drug used to treat

kidney cancer, the patent for which was

granted to now-defunct drug company

Sugen in 2007.

Indian drug-maker Cipla opposed the

patent in 2008, and the country’s patent

office revoked it in September 2012 on the

grounds of obviousness.

Pfizer later appealed to Delhi’s High Court,

which granted an injunction blocking Cipla

from selling generic versions of Sutent. Cipla

appealed to India’s Supreme Court, and after

the case went back to the patent office, the

controller general affirmed the rejection of

the Sutent patent in February this year. The

injunction against Cipla was lifted.

On appeal by Pfizer, the IPAB has now set

aside the patent office’s ruling and asked it

to re-assess the case because the opposition

board’s recommendations, which the patent

controller relied on to revoke the patent, did

not consider an affidavit filed by Pfizer.

Until recently, patent controllers have been

required to hand the opposition board’s

recommendations to both parties, allowing

them to work out whether the board had

reviewed all of their documents.

During the appeal process in this case, Pfizer

realised that one of its affidavits was not

considered by the board, and argued that the

document is important for resurrecting its

patent covering Sutent.

“According to Pfizer, this is a critical

affidavit,” said Ranjna Dutt, partner at

Indian law firm Remfry & Sagar.

She added: “The IPAB has suggested that the

members of the opposition board should

preferably be different from the ones who passed

the earlier recommendations, but has been

categorical in directing that the same controller

cannot decide the opposition,” she said.

Mohan Dewan, principal at law firm RK

Dewan & Co in Mumbai, said he expects

the patent office to re-hear the case in about

three months. A final ruling, he said, should

be handed down in October this year.

“I do not believe the judgment will be

different,” he said. “This is not a sensationalist

turnaround.”

But Dutt said it was hard to predict what

will happen in the case: “It all depends on

how the new examiner will review all the

documents. There could be more discussion

on the inventive step aspects.”

Neither Pfizer nor Cipla responded to a

request for comment.

IPAB sets aside Sutent patent rejection

Back to the drawing board

Brand name defeat



AstraZeneca enters into agreement with Hanmi in Nexium caseAstraZeneca has entered into an agreement with Korean firm Hanmi Pharmaceutical and its US marketing partner Amneal Pharmaceuticals which settles some issues and leaves others for appeal in its Nexium patent infringement case.

Under the terms of a consent judgment resolving the dispute, Hanmi and Amneal have conceded AstraZeneca’s patents are valid. The agreement also finds that Hanmi’s product did not infringe AstraZeneca’s patents, which AstraZeneca will appeal against.

In addition, if Hanmi receives Food and Drug Administration approval and pursues an ‘at-risk launch’ of its Nexium generic while the appeal is in progress, AstraZeneca may seek injunctive relief from the Federal Circuit.

IN BRIEFHowever, the Federal Circuit agreed with

Novo that their omissions and representations

were not material to the case, and reversed the

initial district court decision.

In the opinion, Judge Newman agreed that Novo

had not engaged in inequitable conduct, though

dissented in part, deeming the company’s

discovery of the synergistic effect of combining

repaglinide and metformin patentable.

Andrew Williams, partner at McDonnell Boehnen

Hulbert & Berghoff LLP in Chicago, said in the

Patent Docs blog: “As Judge Newman pointed out,

the lower court and the majority used the inventors’

exceptional intellect against them, because they had

tried this particular combination.

“However, the proper legal test is not whether it

would have been ‘obvious to try’ for the inventors,

but rather whether one skilled in the art would

have found the combination obvious to try.”

Williams told LSIPR that this particular case was

unique as Prandin has three FDA-approved uses:

one as a monotherapy, one in combination with

thiazolidinediones (a class of diabetes drugs),

and one in combination with metformin.

In 2005, when Caraco filed its ANDA, there

were two patents listed in the FDA’s Orange

Book of approved drugs, one covering the

repaglinide compound and one covering its

use with metformin.

One of the patents expired while the case

was pending, leaving Caraco with just one

impediment to generic approval —the method-

of-treatment patent. When Caraco sought a label

‘carve-out’ with the FDA to obtain approval for

the two approved uses that were not patented,

Novo drafted a new use code to cover all three

uses, Williams explained.

“They probably did this because they knew that

the FDA does not police the use code restrictions.

And, because the use code now covered all three

uses, the FDA would not approve the carve-out.”

He added: “The current opinion will make it more

difficult for patents covering drug combinations

to survive invalidity challenges with regard

to obviousness, even when the combination

provides surprising and unexpected results.”

ATYR PHARMA14 LSIPR Newsletter 06:13


A RARE OPPORTUNITY: aTyr PHARMA AND ORPHAN DRUGSOnce a neglected area of pharmaceuticals, research into rare diseases may offer a window into the mechanisms that drive common ailments. As support for the study of these diseases picks up, how does a good IP strategy bring orphan drugs to market? LSIPR spoke to aTyr Pharma’s chief executive John Mendlein to find out.

In the US, a rare or orphan disease

is defined as a condition that affects

fewer than 200,000 Americans. Europe

recognises rare diseases as those that

affect fewer than one per 2,000 people. While

there is no standard for what defines a rare

disease, it is agreed that they are often genetic,

and usually life-threatening.

An estimated 6,000 to 8,000 rare diseases,

including Huntington’s disease, Crohn’s

disease and Duchenne muscular dystrophy,

affect 25 million people in the US, and 29

million in the EU.

For many years, patients with rare diseases

struggled to get access to treatments, as drug

companies could rarely profit from developing

drugs for such small populations.

The US Orphan Drugs Act of 1983 aimed

to change this, providing pharmaceutical

companies an incentive to create drugs for the

treatment of rare diseases, or orphan drugs,

by providing tax credits and increased IP

protection.

Even unpatented drugs are protected under

the act, which states that once a drug has been

designated for a rare disease or condition, no

other applications to treat the same condition

may be approved for seven years.

The EU introduced a similar directive in 2000.

The Orphan Drug Regulation allowed orphan

drugs marketing exclusivity for 10 years,

regardless of whether or not they have been

patented.

San Diego-based aTyr Pharma develops novel

drugs for the treatment of rare inflammatory

and autoimmune diseases, conditions where

the immune system has been disordered or

is out of balance, either because of genetic

reasons or environmental factors.

LSIPR Newsletter 06:13 ATYR PHARMA 15


Although support for research into these

diseases is increasing, and IP protection for

their treatments has been enhanced, does aTyr

face any challenges when it comes to making

its work commercially viable?

“We’ve had very clear support from investors

and indications of interest from partners on

our approach to the treatment of rare diseases,”

says John Mendlein, PhD, executive chairman

and CEO of aTyr.

“Some rare diseases are more exaggerated,

grave examples of how the immune system

went awry,” he says. “If you can treat the more

“There’s limited value in biological discovery, or novel targets, but there’s a great deal of value in first-in-class drugs that address an unmet medical need.”

aggressive examples, you may be able to treat

some of the other immune-related diseases as

well. We think it’s better for patients to go after

the more severe cases first,” he explains.

aTyr works with physiocrines, fragments of

the tRNA synthetase family of enzymes, to

create treatments for rare inflammatory and

autoimmune diseases.

tRNA synthetases evolved in organisms before

the immune system for the purpose of tissue

recovery. Their role in protein synthesis had

been known for decades, and they were

overlooked as “housekeeping” enzymes

ATYR PHARMA16 LSIPR Newsletter 06:13


until Paul Schimmel of the Scripps Research

Institute in California discovered they create

small protein molecules, eventually named

physiocrines, which are involved in immune

response and tissue recovery.

aTyr is working on therapies based on

physiocrines to treat immune system disorders,

including inflammation and disordered

immunity. The company has mapped a total of

200 physiocrines and is currently looking for

their possible associations with diseases.

Mendlein explains that patients with

autoimmune diseases currently only have

steroids and other immunosuppressants

available as treatments, though aTyr offers an

alternative, which may have less of an adverse

reaction on the body.

“One of the advantages of our drug is that it is

a naturally occurring protein that can be used

to treat the patient,” he says.

“The body has evolved these proteins to be

tailor-made to promote tissue recovery, and

therefore they are potentially more efficacious

than the drugs out there.”

These are new pathways in the treatment of

genetic diseases, Mendlein explains, which

may put aTyr in a more competitive position,

and can inform work for other companies.

“Currently we’re the only company that I’m aware

of that’s working on these pathways,” he says.

Mendlein was involved in creating a partnership

between biotech Aurora Biosciences (now

part of Vertex Pharmaceuticals), and the

Cystic Fibrosis Foundation, an enterprise that

contributed to the development of Vertex’s

Kalydeco, the first drug to treat both cystic

fibrosis and its underlying cause.

As he no doubt understands the workings of

a successful partnership, would he consider

licensing aTyr’s patents to other companies?

It’s not part of the company strategy at the

moment, he says, though it may become

necessary in future.

“IP becomes important because eventually

you need to have a marketed product, and

whether it’s by investors or potential partners

of the company itself we want to be able to

protect those products with composition of

matter claims.

“We’ve already successfully completed two

different patent campaigns to the point of

issuing claims in the US for composition of

matter patent on the proteins,” Mendlein says.

aTyr has 250 filed patent applications in total,

with 205 pending. All of aTyr’s patents are

related to physiocrines.

“100 percent of our efforts are focused on

physiocrine technology and therapeutic

application of that biology,” Mendlein says. He

adds that part of aTyr’s strategy is to have positions

on antibodies to some of the physiocrines also,

which have different applications.

“I think that investments are related to the

strength and breadth of your patents,” he says.

Although it is a novel area of research, does

aTyr ever encounter imitators in its work?

“Part of the reason we have a robust patent

portfolio is that we have a unique opportunity

to own an entire space of biology that really

hasn’t happened since the 1990s,” he says.

“These are all brand new composition of matter

patents for an entire family that wasn’t discovered

until the human DNA sequencing effort.”

He says that while aTyr does not face any IP

challenges that are unique to the company,

protecting IP against companies with very

large IP portfolios, like RNAi therapeutics

company Alnylam, is costly.

“A significant amount of your budget goes

towards prosecuting and defending IP,” he says.

As well as patents and the physiocrine

trademark, aTyr has trade secrets in its IP

portfolio that cover many different aspects of

the company business model, including the

databases it manages related to the activity

of physiocrines. aTyr collects information on

every single one of the proteins it isolates,

which Mendlein is confident no other entities

have in the public domain.

aTyr does not yet have any drugs on the

market, though Mendlein expects it will start

its first round of clinical trials next year.

“In 10 years time we’ll be selling multiple

drugs at different patient populations, and

we’ll have a full integrated capability going

from discovery to patient care,” he says.

“The strongest, most valuable IP comes from developing a therapy or drug, which can then be sold at some commercial value.”

aTyr Pharma’s chief executive John Mendlein

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PATENT OFFICE FOCUS18 LSIPR Newsletter 06:13


Quality control: biotech at the EPOThe European Patent Office grants approximately 6,000 biotechnology patents per year. LSIPR spoke to Victor Kaas, director of biotechnology at the office, about how it faces the unique challenges of the industry.

What is your role and responsibility at the EPO? First, I’m a member of the management

team for the biotechnology cluster. The

operational part of the EPO, which is

called DG1, is composed of 14 clusters of

all different technical fields, and biotech

has its own cluster. It’s composed of nine

directorates, each composed of 25-30 people.

All directorates have specific technical fields,

and I’m one of the nine directors dealing with

biotech in the biotech joint cluster. I coach

and manage a team of qualified engineers

working as patent examiners. The cluster

produces about 10,000 searches per year and

delivers approximately 6,000 granted patents

and hears about 200 oppositions annually.

What is your background?I studied molecular biology at the University of

Strasbourg—I worked there for a bit and very

quickly afterwards I joined the EPO. That was in

1990. I started as patent examiner in Munich—I

did that for 10 years. I did some quality audits for

four years in the field of biotechnology. Then I

became a director in 2006.

The job of a patent examiner is to search,

examine and grant patents. This is done in

three languages: English, French and German.

The examiner applies the regulations of the

European Patent Convention —examiners

are experts in the technical and legal aspects

in the procedure of patent granting. We have

about 230 examiners in biotechnology, spread

between Munich and The Hague.

Is it easy to recruit the quality of the people, given the technical demands?It is a challenging task. The examiners we have

recruited over are very good—the selection was

at a very high level. About 90 percent of our

examiners have a PhD; they are all scientists. The

difficulty is to develop their skill on the legal side

of the patent procedure. We have to train them to

the necessary level on the legal challenges.

What are the other major challenges?One of our key challenges is to continue

improving the operational quality—our

stakeholders say that we offer the best quality—

our office has the reputation of being the best

patent office in the world. Of course, if we are

complacent we are not good enough, so we

always try to improve not only the quality of

our day-to-day work, but our efficiency in core

tasks as well. We have many operational quality

projects, focused on all the different aspects of

the patent procedure. We also have an internal

quality control, and we perform user satisfaction

surveys—with those tools we try to analyse and

detect where improvements can be made. This is

the general policy of the EPO.

We apply the basic principles of ISO9001

quality management. We continuously apply

a loop where we identify shortcomings that

have to be remedied and/or areas that can

be improved, implement the improvements,

verify results and go back to the beginning

of the loop. We also invest a lot in training

examiners. We send them on technical

missions and courses. Our president, Mr

Battistelli, has emphasised improving the

quality. We always try to strive for excellence.

More specifically in biotech, we have many

challenges, because it is well known to be a

very complicated field. We normally have

thicker files, with more claims than in other

fields. In particular, there are a lot of issues

related to the exceptions to patentability,

morality, bioethics and so on. An examiner

who starts working usually has no training

in those aspects, so we have to make sure of

the training. Quite often, when the press talk

about the EPO, they concentrate on what the

biotech cluster is doing, which stresses the

importance of training in these aspects for

the examiners in this field.

On the work itself, we have developed tools

for the search, including those related to

sequence listings; here we invested a lot

to be the most efficient. Also tools for the

examination itself. IT is one of the areas

where a lot of money has been invested over

the years, and this will be the case in the

future. Not only to improve quality, but also

the timeliness to ensure we can deliver in the

expected time. These are the key challenges.

Is it clear in Europe what can be granted in terms of morality and ethics? We are dealing with patent applications, and

new techniques are developed. You never

know what you will get in an application

LSIPR Newsletter 06:13 PATENT OFFICE FOCUS 19


tomorrow. We have to adapt and to seek

clarification if something is not clear in our

guidelines. We have publically available

guidelines for examination, where most

aspects have been dealt with and are clear.

The examiners know what they have to apply,

through the EPC and then the guidelines for

examination. These have been drafted on the

basis of the interpretation of the EPC given

by our Boards of Appeals. When we do not

have a clear indication in the guidelines,

we follow the case law, and then we have

to adjust our practice when required. This

is a constant enterprise for the EPO in the

biotech area particularly. We are faced with

the morality problems, and we sometimes

have to push our boards of appeal to take

decisions in order to clarify the practice we

need to follow. With human embryonic stem

cells, for example, we are lucky because here

there was a decision of the enlarged board

of appeal. This is applied on a case-by-case

basis, and we know what objections we can

raise. This is the way to progress and to apply

the right practice.

Twenty-seven percent of biotech applications result in grant, according to the EPO figures. Does that seem a low figure, or is it to be expected? This is something we can expect. I don’t think

that our examination practice in biotech is too

strict—it’s just that the problems we face in

biotech are often different in other fields. There

is morality, of course, but we are also faced

with many exceptions to patentability, and we

just apply the EPC. We have also integrated the

EU biotech directive into our legal framework

and the EPO practice carefully follows the case

law of the EU Court of Justice. It’s also due to

having many withdrawals in biotech. This

is a field where there are no real commercial

products at application and, due to the financial

crisis, it’s maybe due to the lack of money, or

a policy decision to withdraw claims, especially

more speculative claims in the application.

That combination [difficulty of the field and the

nature of the companies applying, as there are

lots of SMEs] means the rate of withdrawal is

quite high.

Is there a problem with harmonisation in this area, given the different attitudes to the morality question across the world? That is of course what the EPO tries to do.

The concept of morality, of ordre public, which

we have in our convention (in Article 53a),

has been interpreted by our boards of appeal.

The morality concept which is applied at

the EPO reflects the totality of the accepted

norms which are deeply rooted in the culture

inherent in European society and civilisation. It

is generally accepted that the concept of ordre

public covers the protection of public security

and the physical integrity of individuals as

part of society. We apply what is usually

acceptable in European society. According to

the EPC, the assessment of whether or not a

particular subject matter is to be considered

contrary to either ordre public or morality

is not dependent upon any national laws

or regulations. Conversely and by the same

token, a particular subject matter shall not

automatically be regarded as complying with

the requirements of Article 53(a) EPC merely

because its exploitation is permitted in some

or all of our contracting states. Thus, approval

or disapproval of the exploitation by national

law(s) or regulation(s) does not constitute per

se a sufficient criterion for the purposes of

examination under Article 53(a) EPC.

What about on a transatlantic or international basis, with other offices? The ideal situation would be to have the same

approach, but it’s not always the case. Here

work is also done, but now we are talking

about patent practice. We cannot change the

morality concept in those countries. At the

level of patent examination there are constant

consultations between the big five patent

offices to harmonise this. On the question of

morality, this is of course quite challenging.

What advice would you give to applicants? What mistakes do applicants make? I’d come back to quality. We have a lot of work

to deal with the quality of applications that

are filed at the EPO, because of the number

of claims and the way they are drafted. Of

course, most applicants try to file the best

quality application, but especially in biotech

we are faced with problems. The best quality

applications will also provide the best quality

patents that we can grant. If a further effort is

made by our applicants, the easier it makes it

for us to grant the quality patents.

“At the level of patent examination there are constant consultations between the big five patent offices.”

Victor Kaas, European Patent Office

EXPERT COMMENT20 LSIPR Newsletter 06:13


events, can be demonstrated to have

enhanced efficacy.

A good example of a personalised medicine

is gefitinib. In December 2004, gefitinib failed

to show significant benefits in an overall

population of patients with lung cancer in a

Phase III clinical study. It could not therefore

enter the European market and appeared

to be a failure. But gefitinib made a surprise

comeback. The reason is that a sub-population

of about 10 to 15 percent of lung cancer patients

showing tumours with a mutation in the

epidermal growth factor receptor for tyrosine

kinase (EGFR-TK) responded particularly

well to the drug. This is because gefitinib

inhibits the EGFR-TK activity that promotes

the growth of certain lung cancer cells. In

June 2009, gefitinib was granted marketing

authorisation for the treatment of adults with

locally advanced or metastatic non-small cell

lung cancer who present positive for mutations

of EGFR-TK. Shortly afterwards, the drug was

recommended by the National Institute for

Health and Care Excellence (NICE) in the UK

as a first-line treatment option.

The protection challenge for personalised medicinesThere is a key commercial challenge to the

development of personalised medicines.

This arises from the fact that it is not only

development of the drug’s active ingredient that

is necessary, but also the related biomarker or

biomarkers for the disease. The latter can be a

very complex research project in its own right.

This is a challenge for patent protection, because

there is the risk that a considerable period of the

exclusivity of the active ingredient will elapse

before the biomarker is identified and the drug

is useful. In many cases, such as those where

the original patent is not owned by the party

developing the personalised medicine, such as a

Pharmaceutical companies therefore have a

choice: they (i) continue to struggle with a wasteful

and expensive model of drug discovery and

development; (ii) diversify into other, less strictly

regulated and less costly product areas; or (iii) find

a way to improve the efficacy of their existing drug

candidates and reduce their side-effects.

Furthermore, generic companies now form a

mature and sophisticated industry, with many

companies merging with the brand companies

and some moving into products based on their

own research and development, including

adapting and improving off-patent drugs that can

themselves be patented (so-called ‘supergenerics’).

The strategy for improving old drugs by

originators and supergenerics alike is

increasingly being seen as identifying and

targeting for treatment only those groups of

patients who respond to the drug—often called

‘personalised medicine’.

What are personalised medicines? Conventional drugs are used in the treatment of

a population grouped together according to their

symptoms (eg, people with lung cancer). However,

personalised medicine refers to the treatment of

sub-populations within such a group, who suffer

the symptoms of that disease because they all

share a particular biological characteristic—a

‘predictive biomarker’, such as a particular gene

mutation which is causally linked to the disease.

When taken by the general group of patients

with the disease, all of whom do not have the

biomarker, a potential personalised medicine

may appear ineffective, or even the cause of

adverse events. This is because unwanted

effects in people without the biomarker can

mask the true potential of the drug. Therefore,

once the biomarker to which a drug responds

is identified, a drug that is on the face of it

unpromising or even responsible for adverse

The law of patents and SPCs has yet to be tested in the context of medicines which can be used to treat specific groups of patients, as Paul England explains.

An industry under pressureA combination of high research costs and

dwindling opportunities for small molecule

targets has diminished the number of candidates

entering the product pipelines of some leading

originator pharmaceutical companies. At the

other end of the pharmaceutical product life-

cycle, patents on the active ingredients of many

‘blockbuster’ drugs are expiring. This allows

generic challenges to what are often perceived

to be weaker secondary patents and thus

increased competition in the marketplace.

A further pressure on pharmaceutical

pipelines is the need for each new drug

candidate to pass a rigorous approvals

process before it can be authorised for public

use. Added to this is the need to secure a

favourable price and reimbursement from

public funds where the emphasis is on the

need to show that a drug has clear benefits

over and above those already on the market.

In fact, it has been estimated that only one

out of 10,000 compounds at the start of

development actually make it through to

becoming a marketed drug. The ratio only

works commercially if that one drug is a

blockbuster.

Personalised medicine: patenting new drugs from old

LSIPR Newsletter 06:13 EXPERT COMMENT 21


SPC protection to products on the basis of

their first MA only. This meant that no SPC

could be granted for a different therapeutic use

of melatonin based on a subsequent MA for

that use. However, unexpectedly, and without

any reference to the authorities on the strict

interpretation, the CJEU in Neurim held that

SPC protection for a second and subsequent

use of a known active ingredient is permissible.

It does not matter that there is a MA for the

same product for an earlier use.

The CJEU seemed to have based its decision

on a ‘teleological’ approach, which interprets

the SPC Regulation (Regulation (EC) No

469/2009) according to the purpose for which

it was drafted. According to this argument, the

purpose of the SPC Regulation is to protect

the investment made in a product by allowing,

in certain circumstances, the extension of

exclusivity of protection to the patent.

The effect of Neurim appears to be that SPCs

are not necessarily restricted to products per

se, as previously thought, but may extend to

second medical uses of the same product where

these are the result of their own investment.

Doubts have been widely expressed about this

decision and questions are currently being

referred to the CJEU for a preliminary ruling

in another case (GlaxoSmithKline Biologicals

(Case C-210/13)) that may throw further light

on the teleological approach.

But, if Neurim is correct, and its principles are

followed by subsequent decisions of the CJEU

and in national courts, it may have implications

for personalised medicines: if an SPC can be

obtained for a new medical use on the basis that

to do so protects investment, why shouldn’t an

SPC be granted for a drug for treating a sub-

population more effectively than was hitherto

possible? As the gefitinib story illustrates, such

drugs are themselves the result of investment in

lengthy research and development.

The law of patents and SPCs has yet to be

tested in the context of the type of personalised

medicines discussed above, ie, those that target

old drugs at newly identified sub-populations

sharing a biomarker. However, as explained,

there are starting points from which the law

might develop in favour of the protection

of such drugs. With personalised medicine

becoming more important, it should not be

too long before we find out.

Paul England is senior associate at Taylor

Wessing LLP. He can be contacted at

[email protected]

inventive by a hitherto unknown technical effect

which is caused by those structural features which

distinguish the selected compounds from the

wider class of known compounds. Again, although

Agrevo was not concerned with biomarkers,

its facts are arguably analogous to a claim to a

treatment for a selection of patients based on the

disclosed structural feature of a biomarker, in

which the technical effect is improved efficacy.

SPCs on drugs for sub-populations?A further problem arises in respect of extending

protection by a supplementary protection

certificate (SPC): some active ingredients may be

sufficiently effective first time round to receive

a marketing authorisation (MA) for treatment

of a general disease population. However,

if it is later found that the active ingredient

has a greater effect among a particular sub-

population linked by a biomarker, can an SPC

be obtained to protect the active ingredient for

use in the sub-population using a MA granted

for that purpose and despite the earlier MA?

To examine whether an SPC might be available for

a personalised medicine in these circumstances,

it is again necessary to look at European-wide

case law, this time from the Court of Justice

of the European Union (CJEU). The Neurim

Pharmaceuticals case (Case C-130/11) concerned

an application for an SPC to protect melatonin

for the treatment of insomnia in humans on

the basis of the MA granted in 2007 for this use.

This is despite the fact that this active ingredient

had earlier been authorised in 2001 and used for

regulating the seasonal breeding activity of sheep.

At first instance, Mr Justice Arnold in the UK

Patents Court held that the CJEU authorities

were in favour of a strict approach that restricted

supergeneric, expiry of patent protection on the

original active ingredient may be a pre-requisite.

The question then becomes whether a new

patent can be obtained for use of an old drug in

a sub-population identified by a new biomarker.

Patenting drugs for sub-populationsPatents only protect inventions that are new

and non-obvious. This is an inherent problem

for the type of personalised medicines

described above, precisely because they are

using a drug that it is already known as a

treatment for a disease that is already known.

On the face of it, this looks like a novelty

problem. The question is whether patent laws

on selection inventions could assist. The most

recent UK authority on this issue is the Court

of Appeal case of Dr Reddy’s Laboratories

(UK) Limited v Eli Lilly and Company Limited

[2009] EWCA Civ 1362.

In Dr Reddy’s the patent being attacked for

lack of novelty and inventive step protected a

single chemical entity, olanzapine. Olanzapine

is an antipsychotic agent used in the treatment

of schizophrenia. The validity attack was

based on an earlier patent claiming a group

of antipsychotic compounds, including

thienobenzodiazepines. These compounds

were claimed in the form of a so-called Markush

formula to which numerous functional groups

could be substituted to create a group of

compounds within the claim numbering 1019.

There was also disclosed in the earlier patent

a “preferred” class of 86,000 compounds.

Olanzepine was one of the 86,000, although it

was not identified specifically. Did this earlier

disclosure invalidate the olanzapine patent? The

answer from the English Court of Appeal was

that it did not. The court relied on European

Patent Office (EPO) case law, specifically Hoechst

Enantiomers (T 0296/87) for authority that a

compound is not anticipated when it is one of an

earlier class of disclosed compounds, unless it is

disclosed by “individualised description”. While

the facts of this case do not concern the type of

‘new from old’ personalised medicine described

above, a claim to a compound for treatment of

a population described by a specific biomarker

may, arguably, escape anticipation.

As regards inventive step, English law again

looks to EPO case law, in particular Agrevo (T

0939/92). This provides that mere arbitrary

selection from a known class of compounds is

obvious. However, a selection may be justified as

“There is the risk that a considerable period of the exclusivity on the active ingredient will elapse before the biomarker is identified and the drug is useful.”

CASE REPORT22 LSIPR Newsletter 06:13


Myriad: picking up the pieces

With a stroke of the pen, the decision in

Association for Molecular Pathology v Myriad

Genetics, Inc effectively invalidates what are

expected to be many thousands of issued US

patent claims that encompass DNAs or nucleic

acids broadly defined in terms of the protein

they encode, and that attempt to distinguish

over naturally occurring genomic DNA solely

by requiring that the claimed DNA/nucleic

acid be ‘isolated’.

However, to the relief of many in the

biotechnology industry, most claims limited

to cDNAs (‘complementary’ DNAs)—

particularly those cDNAs that are derived

from vertebrate genes—should survive. The

scramble is on for patentees to identify which

of their DNA/nucleic acid claims remain

viable after this groundbreaking decision,

and whether those claims are adequate to

cover important commercial products.

The Myriad case began in 2009 when the

American Civil Liberties Union and the Public

Patent Foundation, acting on behalf of a motley

group of researchers, doctors, patients and

medical institutions, filed suit against Myriad

Genetics, Inc, seeking a declaratory judgment

that Myriad’s patents claiming two isolated

genes associated with breast cancer, BRCA1

and BRCA2, were invalid. The plaintiffs

originally targeted several categories of claims,

including not only composition claims drawn

to DNAs but also method claims drawn to

various uses of those DNAs.

The trial court held that all of the challenged

claims were invalid under 35 USC § 101

because they encompassed subject matter

that did not qualify as eligible for patenting.

Myriad appealed to the Court of Appeals

of the Federal Circuit (CAFC). After the

CAFC’s first holding in Myriad’s favour was

vacated and remanded back to the CAFC

by the Supreme Court, the CAFC ultimately

held that Myriad’s composition claims and

screening assay claims were patent-eligible.

The Supreme Court then granted the plaintiffs’

request to consider the question of whether

human genes are patent-eligible subject matter.

Though the question presented to the Supreme

Court was worded in terms of ‘human genes’,

the impact of the decision does not appear to

be limited to ‘human’ sequences nor to ‘genes’

per se, but instead broadly encompasses any

DNA with a nucleotide sequence identical to

any portion of a naturally occurring genomic

sequence.

The court explicitly considered the patent-

eligibility of two categories of DNA that

were separately claimed by Myriad. The first

category of DNA was claimed as an ‘isolated’

DNA encoding BRCA1 or BRCA2 (which

broadly encompasses both genomic and

cDNA as well as degenerate variants of both),

or a portion of such an isolated DNA at least

15 nucleotides in length. The CAFC had

relied on the ‘isolated’ limitation as adequately

distinguishing these DNAs from the BRCA1

and BRCA2 genes as they occur naturally

in the genome, reasoning that an ‘isolated’

DNA by definition differs from non-isolated

DNA in that ‘isolated’ DNA lacks covalent

bonds linking its two ends to the rest of

the chromosomal DNA. The CAFC also

observed that isolating the DNA by breaking

those two bonds is a significant change

because it makes the DNA useful in ways that

DNA present in the chromosome is not.

The Supreme Court disagreed with the CAFC’s

conclusions, holding that characterising

the DNA as ‘isolated’ is insufficient to

distinguish it from DNA present in a natural

chromosome. The court stated that “Myriad’s

claims are simply not expressed in terms of

chemical composition, nor do they rely in any

way on the chemical changes that result from

the isolation of a particular section of DNA.

Instead, the claims understandably focus

on the genetic information encoded in the

BRCA1 and BRCA2 genes.”

The court dismissed Myriad’s argument that the

US Patent and Trademark Office’s (USPTO’s)

past practice of awarding such ‘isolated DNA’

claims is entitled to deference, pointing to the

fact that the US Justice Department’s amicus

brief submitted on behalf of the US took the

contrary position that the ‘isolated DNA’ claims

should not be eligible for patenting and that

no deference should be given to the USPTO’s

longstanding practice.

The second category of DNA considered by

the court was cDNA. The court characterised

Myriad’s claimed BRCA1 and BRCA2 cDNAs

as ‘synthetically created’ cDNA that contains

the same protein-coding information found

in a segment of naturally occurring genomic

DNA, but omits intervening non-coding

DNA sequences (introns) that are present

“This does not mean the court has endorsed the patent-eligibility of the other categories of inventions, but rather it has simply left that question for another day and another case.”

The US Supreme Court in a landmark decision held that a DNA molecule is potentially eligible for patenting in the US if its sequence does not occur in nature, but is not patent-eligible if its sequence is identical to a naturally occurring DNA sequence. Janis Fraser looks at the major issues in the case.

LSIPR Newsletter 06:13 CASE REPORT 23


in the naturally occurring genomic DNA.

Given that the nucleotide sequences of the

BRCA1 and BRCA2 cDNAs are not found

in nature, the court was satisfied that these

cDNAs are patent-eligible.

However, the court went on to highlight an

important exception to this cDNA holding: if

a particular natural gene has no intervening

introns, so has no sequence that is removed

when creating cDNA, the resulting cDNA

“may be indistinguishable from natural DNA”.

The unstated implication of that statement is

that the latter type of cDNA, and presumably

any other DNA that is ‘indistinguishable

from natural DNA’, would not pass muster

under §101. This calls into question the

validity of claims encompassing, for example,

DNA probes or primers with sequences that

match sequences imbedded in the genome

of any organism. It also appears to invalidate

most claims drawn to bacterial cDNAs, since

bacterial genes only rarely have any introns.

Finally, the opinion makes it clear that

certain topics are specifically not implicated

by the decision: for example, methods of

manipulating genes, methods involving

application of knowledge about the gene

sequences, and DNA in which the order

of the naturally occurring nucleotides has

been altered. According to the court, “We

merely hold that genes and the information

they encode are not patent eligible under §101

simply because they have been isolated from

the surrounding genetic material.” This does

not mean the court has endorsed the patent-

eligibility of the other categories of inventions,

but rather it has simply left that question for

another day and another case.

Of significant concern in the wake of the

Myriad decision are claims drawn to other

types of biological substances that are identical

to naturally occurring substances, including

proteins, antibodies, and antibiotics, as well as

microorganisms and other cells isolated from

nature. These important categories of invention

were not addressed by the court, which appears

to be oblivious to the potentially far-reaching

and devastating implications of its decision.

The full impact of this decision will take years

to be fully realised. Savvy patentees will now

study their issued DNA claims to determine

which seem likely to have been undermined by

this decision, and whether those patents contain

backup claims that adequately protect their

commercially important inventions even if the

broader claims can no longer be relied upon.

One can expect to see a spike in the number of

reissue requests filed at the USPTO, as frantic

patentees attempt to salvage their affected claims

by requesting the claims be reissued in a narrower

form that excludes genomic sequences. Where

the commercialised product is a cDNA

produced from an intronless gene, the patentee

may be forced to rely on claims limited to

vectors, transfected cells, and methods of using

the cDNA or cells, or to cDNA with an artificial

label or heterologous promoter attached.

Claims drawn to DNA probes or primers

derived from genomic sequence should

survive if they specify an attached label or

solid substrate/microarray or some other

feature (other than simply ‘isolated’) that

unambiguously distinguishes them from

what occurs naturally in the cell.

Since at least some other major industrialised

nations do not have a similar prohibition

patenting ‘isolated’ DNAs with naturally

occurring sequences, we may see flight of some

highly affected sectors of the biotechnology

industry to other regions (such as Europe)

with friendlier patent laws. The court left such

policy considerations to Congress.

Janis Fraser is a principal at Fish & Richardson

PC. She can be contacted at: [email protected]

The content of this article is not intended as

legal or financial advice. Views expressed

are those of the author and should not be

construed as necessarily representative of Fish

& Richardson PC.

Organisation: Myriad Genetics Inc

Founded: 1991

Headquarters: Salt Lake City, Utah, US

Business: Molecular diagnostics

2012 revenue: $496 million

Organisation: Association for Molecular Pathology

Founded: 1995

Headquarters: Bethesda, Maryland, US

Business: Not-for-profit industry advocacy group

Case: Association for Molecular Pathology et al v Myriad Genetics Inc. et al

Court: US Supreme Court, Washington DC

Judge: Authored by Justice Thomas

Decision: Isolated DNA is not patent eligible

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