On November 6, 2008, the Supreme Court of Canada released a landmark decision, Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61, involving a Canadian patent for a blockbuster anti-coagulant drug marketed under the brand name PLAVIX by Sanofi-Synthelabo Canada Inc. The Court held that allegations of invalidity of the patent by Apotex Inc. were unjustified. Apotex is a generic pharmaceutical company that sought regulatory approval to market and sell a generic version of the drug. As a result of this decision, Apotex will have to wait until the patent expires before being able to enter the Canadian market with its generic equivalent.
The decision upholds the validity of selection patents in principle and refines the law on anticipation and obviousness in Canada. Though this decision will undoubtedly be heralded as a victory for innovator pharmaceutical companies actively engaged in new drug development, its legal effect will have a bearing on the drafting and prosecution of patent applications and litigation involving patents across all technology sectors.
To read the complete decision, please go to:
http://scc.lexum.umontreal.ca/en/2008/2008scc61/2008scc61.html
Download a full case summary
The United States District Court for the Eastern District Court of Virginia has now issued a permanent Injunction enjoining Jon W. Dudas (Commissioner of Patents) and the United States Patent and Trademark Office (USPTO) from implementing changes to the patent rules that were initially published in August 2007 and had been scheduled to be effective November 1, 2007 (see What’s New article, below, on the interim injunction that issued October 31, 2007).
District Court Judge Cacheris granted Motions for Summary Judgment filed by Glaxo Smithkline (GSK) and Dr. Tafas (an independent inventor) because the USPTO’s proposed limitations to the number of continuation applications and claims per patent constitute improper extensions of USPTO authority:
“Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’ 5 U.S.C. § 706(2).”
Although 35 U.S.C. § 2 permits the USPTO to promulgate rules governing the ‘conduct of proceedings’ before the Office, the Office has no authority to issue “substantive rules”, interpreted by the court as any rule that “affect[s] individual rights and obligations” (Quoting Chrysler Corp. v. Brown, 441 U.S. 281 (1979)).
“The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations.”
The court held that the proposed limitations on the number of continuations and number of claims are substantive rules. The limitation on continuations was held to impose a “hard limit” that “deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right.” Likewise, the proposed limitation on the number of RCE filings is a “clear departure from the plain language” of 35 U.S.C. § 132 that the USPTO “shall … at the request of the applicant …” The proposed rules limiting number of claims were held to be substantive in nature and contrary to established case law stretching back over several decades in which the courts have resisted past USPTO attempts to impose any “mechanical limits” on the number of claims. The court also concluded that the proposed rule requiring submission of Examination Support Documents (ESDs) was substantive because it shifts the burden of examination from the USPTO to the Applicant.
The Order of the Court reads as follows: “Defendants Jon W. Dudas and the United States Patent and Trademark Office and their agents, servants, and employees are permanently enjoined from implementing the Final Rules”.
On November 22, 2007, the Canadian Intellectual Property Office (CIPO) announced that it had entered into an agreement with the United States Patent and Trademark Office (USPTO) to establish a Patent Prosecution Highway (PPH) for a one-year trial beginning in early 2008. Under the program, patent applications in one country will be put on a fast-track when a patent has been granted in the other country.
It remains to be seen if the details of the PPH will be identical to similar PPH programs already established between the USPTO, UK Intellectual Property Office and Japanese Patent Office.
During the trial period CIPO will process requests for advance prosecution under the PPH program free of charge, but has warned that a fee may be required if the program is retained permanently.
On October 31, 2007, the United States District Court for the Eastern District Court of Virginia issued a Preliminary Injunction enjoining the USPTO from implementing changes to the patent rules that were published in August 2007 and scheduled to be effective November 1, 2007.
The proposed rules effectively limit the number of claims filed in each patent application, as well as the number of continuation applications that can be filed for an invention. Please see Continuation Article for a copy of the published final set of rules.
Requests for preliminary injunction were filed separately by an individual inventor, Dr. Tafas, as well as by the pharmaceutical giant Glaxo Smithkline (GSK). Amicus briefs were also filed by several other parties in support of the injunction applications, including briefs from the American Intellectual Property Law Associate (AIPLA) and IBM,.
The court joined the two applications and found for the plaintiffs on the basis that the following four factors favored issuance of the injunction: (1) a likelihood that the plaintiff will succeed on the merits of the case; (2) irreparable harm without an injunction; (3) a balance of hardships weighing in favor of an injunction; and (4) the public interest supporting an injunction. Please see GSK Article for a copy of the decision.
It should be noted that, in spite of the court’s finding that the likelihood of success on the merits weighed in favor of GSK, this preliminary injunction is not a decision on the merits. A full decision on the fate of the rules will likely be delayed until at least early January.
On April 30, 2007 the United States Supreme Court issued two long-awaited decisions that are seen by many as a response to recently expressed public sentiment that the patent system gives an unfair advantage to patent owners.
In KSR Int’l v. Teleflex, Inc., the court addressed the standard of obviousness used in assessing patentability of inventions, while in Microsoft Corp. v. AT&TCorp., the court addressed extraterritorial enforcement of US patents.
Section 103 of the United States Patent Act provides that a patent shall not issue if “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”
In KSR Int’l v. Teleflex, Inc., the Supreme Court considered the question of what is “obvious”? Over the years, the Court of Appeals for the Federal Circuit (CAFC) introduced and developed a test for non-obviousness in the absence of some teaching, suggestion, or motivation (TSM) in the prior art to combine the various parts of an invention together.
The Supreme Court flatly rejected the CAFC’s test for obviousness, stating “We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here.” The Court then refined the particulars of how prior-art can be combined and when a “combined patent” will be seen as obvious.
In the short-term, US courts and the Patent Office will find it easier to invalidate patent claims based on expert testimony and the jury’s concept of obviousness. The longer term consequences will become clearer once the CAFC begins issuing further decisions that take KSR into consideration.
Turning to Microsoft Corp. v. AT&TCorp., the Supreme Court held that Section 271(f) of the Patent Act does not cover foreign duplication of software.
Because patent law is territorial, a US patent provides exclusive rights in the United States but generally disregards extraterritorial activity. The lone statutory exception is Section 271(f) of the Patent Act, relating to infringement liability for the unauthorized “supply” of “components” of a patented invention for “combination” abroad.
AT&Towns a patent covering a computer process for encoding and compressing recorded speech. At trial, it was held that Microsoft Windows when installed on a computer infringes the AT&T patent.
When Microsoft exports software made in the United States, it sends only a few copies to foreign OEM distributors who load the copies of the software onto PCs for sale, rather than loading millions of CDs on a cargo ship for foreign delivery. Thus, the question in this case was whether the foreign installed software can be considered a “component” that is “supplied” from the US, within the meaning of Section 271(f).
The Supreme Court held that Microsoft’s liability for infringement did not extend to computers made in another country when loaded with Windows software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States.
Specifically, as to whether software can be classified as a “component”, the Court held that until it is expressed as a computer-readable “copy” (e.g., on a CD-ROM), software that is detached from an activating medium remains uncombinable. Abstract software code is an idea without physical embodiment, and as such, it is not a component that is amendable to “combination”.
As to whether the foreign-made copy was “supplie[d]” from the US, the Supreme Court held “[T]he very components supplied from the United States, and not copies thereof, trigger §271(f) liability when combined abroad to form the patented invention at issue. Here, as we have repeatedly noted, the copies of Windows actually installed on the foreign computers were not themselves supplied from the United States.”
SUPREME COURT OF CANADA REFINES THE LAW OF ANTICIPATION AND OBVIOUSNESS
On November 6, 2008, the Supreme Court of Canada released a landmark decision, Apotex Inc. v. Sanofi-Synthelabo Canada Inc., 2008 SCC 61, involving a Canadian patent for a blockbuster anti-coagulant drug marketed under the brand name PLAVIX by Sanofi-Synthelabo Canada Inc. The Court held that allegations of invalidity of the patent by Apotex Inc. were unjustified. Apotex is a generic pharmaceutical company that sought regulatory approval to market and sell a generic version of the drug. As a result of this decision, Apotex will have to wait until the patent expires before being able to enter the Canadian market with its generic equivalent.
The decision upholds the validity of selection patents in principle and refines the law on anticipation and obviousness in Canada. Though this decision will undoubtedly be heralded as a victory for innovator pharmaceutical companies actively engaged in new drug development, its legal effect will have a bearing on the drafting and prosecution of patent applications and litigation involving patents across all technology sectors.
To read the complete decision, please go to:
http://scc.lexum.umontreal.ca/en/2008/2008scc61/2008scc61.html
Download a full case summary
UNITED STATES PATENT AND TRADEMARK OFFICE PERMANENTLY ENJOINED FROM IMPLEMENTING NEW PATENT RULES
The United States District Court for the Eastern District Court of Virginia has now issued a permanent Injunction enjoining Jon W. Dudas (Commissioner of Patents) and the United States Patent and Trademark Office (USPTO) from implementing changes to the patent rules that were initially published in August 2007 and had been scheduled to be effective November 1, 2007 (see What’s New article, below, on the interim injunction that issued October 31, 2007).
District Court Judge Cacheris granted Motions for Summary Judgment filed by Glaxo Smithkline (GSK) and Dr. Tafas (an independent inventor) because the USPTO’s proposed limitations to the number of continuation applications and claims per patent constitute improper extensions of USPTO authority:
“Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’ 5 U.S.C. § 706(2).”
Although 35 U.S.C. § 2 permits the USPTO to promulgate rules governing the ‘conduct of proceedings’ before the Office, the Office has no authority to issue “substantive rules”, interpreted by the court as any rule that “affect[s] individual rights and obligations” (Quoting Chrysler Corp. v. Brown, 441 U.S. 281 (1979)).
“The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations.”
The court held that the proposed limitations on the number of continuations and number of claims are substantive rules. The limitation on continuations was held to impose a “hard limit” that “deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right.” Likewise, the proposed limitation on the number of RCE filings is a “clear departure from the plain language” of 35 U.S.C. § 132 that the USPTO “shall … at the request of the applicant …” The proposed rules limiting number of claims were held to be substantive in nature and contrary to established case law stretching back over several decades in which the courts have resisted past USPTO attempts to impose any “mechanical limits” on the number of claims. The court also concluded that the proposed rule requiring submission of Examination Support Documents (ESDs) was substantive because it shifts the burden of examination from the USPTO to the Applicant.
The Order of the Court reads as follows: “Defendants Jon W. Dudas and the United States Patent and Trademark Office and their agents, servants, and employees are permanently enjoined from implementing the Final Rules”.
CANADA-US PATENT PROSECUTION HIGHWAY
On November 22, 2007, the Canadian Intellectual Property Office (CIPO) announced that it had entered into an agreement with the United States Patent and Trademark Office (USPTO) to establish a Patent Prosecution Highway (PPH) for a one-year trial beginning in early 2008. Under the program, patent applications in one country will be put on a fast-track when a patent has been granted in the other country.
It remains to be seen if the details of the PPH will be identical to similar PPH programs already established between the USPTO, UK Intellectual Property Office and Japanese Patent Office.
During the trial period CIPO will process requests for advance prosecution under the PPH program free of charge, but has warned that a fee may be required if the program is retained permanently.
UNITED STATES PATENT AND TRADEMARK OFFICE ENJOINED FROM IMPLEMENTING NEW PATENT RULES
On October 31, 2007, the United States District Court for the Eastern District Court of Virginia issued a Preliminary Injunction enjoining the USPTO from implementing changes to the patent rules that were published in August 2007 and scheduled to be effective November 1, 2007.
The proposed rules effectively limit the number of claims filed in each patent application, as well as the number of continuation applications that can be filed for an invention. Please see Continuation Article for a copy of the published final set of rules.
Requests for preliminary injunction were filed separately by an individual inventor, Dr. Tafas, as well as by the pharmaceutical giant Glaxo Smithkline (GSK). Amicus briefs were also filed by several other parties in support of the injunction applications, including briefs from the American Intellectual Property Law Associate (AIPLA) and IBM,.
The court joined the two applications and found for the plaintiffs on the basis that the following four factors favored issuance of the injunction: (1) a likelihood that the plaintiff will succeed on the merits of the case; (2) irreparable harm without an injunction; (3) a balance of hardships weighing in favor of an injunction; and (4) the public interest supporting an injunction. Please see GSK Article for a copy of the decision.
It should be noted that, in spite of the court’s finding that the likelihood of success on the merits weighed in favor of GSK, this preliminary injunction is not a decision on the merits. A full decision on the fate of the rules will likely be delayed until at least early January.
LANDMARK PATENT DECISIONS FROM THE UNITED STATES SUPREME COURT
On April 30, 2007 the United States Supreme Court issued two long-awaited decisions that are seen by many as a response to recently expressed public sentiment that the patent system gives an unfair advantage to patent owners.
In KSR Int’l v. Teleflex, Inc., the court addressed the standard of obviousness used in assessing patentability of inventions, while in Microsoft Corp. v. AT&TCorp., the court addressed extraterritorial enforcement of US patents.
KSR INT’LV. TELEFLEX, INC.
Section 103 of the United States Patent Act provides that a patent shall not issue if “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”
In KSR Int’l v. Teleflex, Inc., the Supreme Court considered the question of what is “obvious”? Over the years, the Court of Appeals for the Federal Circuit (CAFC) introduced and developed a test for non-obviousness in the absence of some teaching, suggestion, or motivation (TSM) in the prior art to combine the various parts of an invention together.
The Supreme Court flatly rejected the CAFC’s test for obviousness, stating “We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here.” The Court then refined the particulars of how prior-art can be combined and when a “combined patent” will be seen as obvious.
In the short-term, US courts and the Patent Office will find it easier to invalidate patent claims based on expert testimony and the jury’s concept of obviousness. The longer term consequences will become clearer once the CAFC begins issuing further decisions that take KSR into consideration.
MICROSOFT CORP. V. AT&T CORP.
Turning to Microsoft Corp. v. AT&TCorp., the Supreme Court held that Section 271(f) of the Patent Act does not cover foreign duplication of software.
Because patent law is territorial, a US patent provides exclusive rights in the United States but generally disregards extraterritorial activity. The lone statutory exception is Section 271(f) of the Patent Act, relating to infringement liability for the unauthorized “supply” of “components” of a patented invention for “combination” abroad.
AT&Towns a patent covering a computer process for encoding and compressing recorded speech. At trial, it was held that Microsoft Windows when installed on a computer infringes the AT&T patent.
When Microsoft exports software made in the United States, it sends only a few copies to foreign OEM distributors who load the copies of the software onto PCs for sale, rather than loading millions of CDs on a cargo ship for foreign delivery. Thus, the question in this case was whether the foreign installed software can be considered a “component” that is “supplied” from the US, within the meaning of Section 271(f).
The Supreme Court held that Microsoft’s liability for infringement did not extend to computers made in another country when loaded with Windows software copied abroad from a master disk or electronic transmission dispatched by Microsoft from the United States.
Specifically, as to whether software can be classified as a “component”, the Court held that until it is expressed as a computer-readable “copy” (e.g., on a CD-ROM), software that is detached from an activating medium remains uncombinable. Abstract software code is an idea without physical embodiment, and as such, it is not a component that is amendable to “combination”.
As to whether the foreign-made copy was “supplie[d]” from the US, the Supreme Court held “[T]he very components supplied from the United States, and not copies thereof, trigger §271(f) liability when combined abroad to form the patented invention at issue. Here, as we have repeatedly noted, the copies of Windows actually installed on the foreign computers were not themselves supplied from the United States.”