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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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« The Good Old CombiChem Days | Main | Go With The Er, Flow? »

September 19, 2007

Fixing the Patent System?

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Posted by Derek

For a good long time now, a massive piece of patent legislation has been working its way through Congress. It's cleared the House and is on its way to the Senate, so the number of twists and turns it can take is still substantial. And there's no telling if the President will sign it, since the administration has expressed its worries about the bill as it stands. In its current form, this law would change things around quite a bit.

For one thing, it would finally make the US a first-to-file country, like basically everywhere else in the world. The first-to-invent regime is one of the reasons that chemists throughout the country are harangued to get their lab notebooks witnessed promptly, because if it came down to a notebook-and-calendar fight, the company with the earlier witness date would likely win. First-to-file eliminates that particular worry (while not obviating the need for witness signatures), but could replace them with others. You hear a lot about how this will benefit larger players at the expense of smaller ones, since it makes the trouble and expense of filing a patent the determining factor. I think that this is exaggerated a bit, though. The trouble and expense of proving that you were the first to invent is pretty significant, too. (Admittedly, some of the parts of this bill look to make filing a patent even more expensive than it is now).

But there are many other provisions in this bill, ones which have managed to split the high-tech part of the US economy into camps.. Software companies are mostly lining up for the new legislation, while biotech and pharma are coming down against it. The arguing ground is a set of new rules about how easily patents can be obtained, and how easily they can be challenged after they’re granted.

In short, the computer sector feels victimized by people who get some useful step or technology patented and camp out on it, shaking everyone down for fees. (The real problem, as far as I can see, is that patent quality is just awful in this area, and all kinds of junk gets granted). At any rate, software and hardware companies would like to see fewer such things get patented, and are looking forward to some new tools to get them invalidated in a more timely fashion.

But over here in the drug industry, we’re jumpy about that sort of thing. Many companies in this area feel that their patents are being challenged enough already, thanks very much, and would rather not give the generic companies more new tools to tie things up in court. I think that the overall quality of patents is much higher in the pharma business, which helps to explain the difference of opinion. We generally have fewer, tougher patents protecting our important stuff over here, as compared to more (and weaker) ones in the software world.

It’s not so simple a breakdown, though. The flow can reverse in either industry. We do have some cases of smaller outfits getting some IP that they try to beat everyone up with – Ariad’s NF-kB patent, which I haven’t written about in a while, is a good example. And it’s not like the computer giants don’t ever get their patents challenged, either. Both industries are playing the percentages – this change won’t suddenly remake the whole landscape for either of them.

Overall, even though I’m a drug-industry guy, I think I come down on the side of making patent challenges a bit easier. After all, most of our patents in the industry stand up anyway – we shouldn’t have as much to fear. And I think that it’s easier to do harm by rent-seeking on a patent of dubious validity than it is to do harm by uselessly challenging an existing one. When you get down to it, the argument is about who you fear more: the patent office, for allowing junk to issue, or the courts, for making incorrect rulings when they’re challenged.

It’s a tough call, but I think the patent office is a bit more disgraceful. Frankly, I think if so many bad patents weren’t being granted, we wouldn’t be having this discussion at all. But before I sound like I’m beating up on the PTO, I should note that their funding and staffing has not come close to keeping up with their duties over the years. There are a lot of decent examiners there working under ridiculous conditions, so it’s not surprising that we find ourselves in the shape we’re in.

For more on this bill, I refer you to excellent posts (for example, here and here) at PatentBaristas and at Patently Obvious – those guys are lawyers, while I’m merely a client.

Comments (13) + TrackBacks (0) | Category: Patents and IP


COMMENTS

1. milkshake on September 19, 2007 9:46 PM writes...

Patent trolling is rampant in pharma industry, too. It is exceedingly hard for a patent referee to go after overlaps and unsupported wishy-washy claims in 100+ page patent application that claims the sky, the Moon and few adjactant galaxies just to be sure.

This kind of crap is produced by lawyers and also by people behind startups who want to whip-up their IP to impress the investors.

I would not allow any "prophetic" experimental examples and I would toughen up the standards of what is obvious and what is new and unexpected. If someone claims "new and improved", he should provide some supporting evidence like SAR data, not just spew a pagefull of speculative baloney.

We got recently a very good HTS screening hit with thiazole and our management did not want us to work on it "because lawyers said it was thoroughly covered" by BMS patents (different substitution, different target). It was quite hard to explain that the structure will likely change great deal by the time we get a drug candidate. The point is that BMS covered ALL thiazoles with their overbroad claims, depite the fact that thiazoles are natural compounds and have been known for something like 150 years. My employer is not rich enough to litigate against BMS.

Another problem is patent evergreening, which in my opinion is a dirty trick exploiting a loophole in the current system. When you patent a class of compounds to have it for yourself, the time to the patent expiration should start from that very moment, not later (because of some add-on derivative/narrowed patent that you intentionally delayed to re-patent the best parts and buy yourself extra time). One should not be able to have it both ways - you either have the priority and expiration dates, or not.

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2. MikeS on September 19, 2007 11:23 PM writes...

Well, milkshake, as someone who has just started drafting patents which claim the moon and the sky for clients as well as improvement or selection inventions (which you call evergreening), let me say this about that:

First, with regard to ridiculously broad claims, there is a lot of crap out there in issued patents that is not even close to being valid. These claims end up approved because of weaknesses in the method the PTO uses to examine genus claims - the applicant elects a species within the genus (usually the lead compound), and the examiner searches the chemical space close to that species. This is a decent way to examine the narrowest claims, but it is highly impractical for an examiner (or a patent agent) to search across the entire scope of a broad claim, so it doesn't happen. The PTO is currently promulgating rules that will severely restrict the permissible scope of genus claims, so this may become less of an issue in the future. Hopefully, PTO searching will also improve.

Now, as for your thiazole example, if the BMS claims were really that broad, there should have been freedom to operate, because even if the claims were in an issued patent, they were probably invalid over some extant 102(b) prior art (a single species within their genus disclosed in a printed publication that published >1 year before their filing date) that an STN search would have turned up. So I would suggest that the claim wasn't outrageously broad or your lawyers were doing a poor job looking for invalidating prior art during their FTO analysis. As for your company not being willing to pursue the series because of percieved FTO problems, my limited experience of one data point has shown me that management can be overly risk-averse about IP (which is ironic given the relaxed attitudes towards scientific risk), so that may have been an issue.

Finally, one reason for moon and sky claiming is to broaden the disclosure so that if the medchemists make significant changes to the chemical series, the broad genus in the early patent will serve as an enabling disclosure such that the client can rely on the earlier filing date for coverage of later-synthesized analogs. This gives some assurance that the effort spent prospecting the chemical space is protected, albeit weakly. Of course, it is not actually necessary to claim the broad disclosure used to establish a date, but the attitude seems to be that if you're going to disclose it, might as well try to claim it.

This also relates to evergreening. Sometimes there are improvements within an invalidly broad genus from an earlier patent. The only way to get valid coverage on the new subject matter is through a continuation or continuation-in-part of the first application, or, if the earlier application is not still pending, through a new application on the improvement or a reissue of the original patent. Furthermore, unless the claims in the continuation, continuation-in-part, or new application are not patentably obvious over the earlier disclosure, no extra patent term can be obtained, either because the claim either will not issue or will be subject to a terminal disclaimer - i.e., the applicant agrees to give up some patent term in order to get the claim allowed such that the claim has the same expiration date as the claims in the earlier-filed application. In short, it is hard to get meaningful patent term extension through the method you describe unless you actually invent something nonobvious. There are still Hatch-Waxman strategies designed to get extra time out of things like salt, polymorph, and formulation patents, but that's a whole other ball of wax.

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3. Chrispy on September 19, 2007 11:37 PM writes...


One of the big problems is frankly that the lawyers in big companies have little to gain and much to lose by promoting anything remotely risky. If they say the coast is clear and it turns out not to be then their butt is on the line. If they say DANGER where none really exists then they have lost nothing (but the company has).

This is why at my miracle drug company we continue to dance around Ariad's NfKB claims, as totally discredited as they are. Total waste of time.

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4. milkshake on September 20, 2007 12:18 AM writes...

Evergreening: As you know the Plavix IP go extended by a patent whose sole inventive step is description of salt form of the more active eneantiomer of the best compound - which was disclosed few years before that. In the plavix case the judge ruled that this is non-obvious. The standard was set too low in my opinion - in this case "obvious" step was defined as something that a BS chemist with few years of experience would do as a matter of routine work. But if you ask a medicinal chemist, most of them will tell you: one enantiomer is gonna be better and of course you find a salt form, there is little real inventiveness in it, it is a pure development work that one can contract out and expect >90% chance of success.

Risk-averse lawyers: I made the same argument about the councel of our lawyers why the thiazole compound shouldn't be pursued - about lawyers covering their arses - and I am now labeled as "difficult person" by them. (They did some highly dubious stuff before, relating to the IP and spin-offs, and cutting the collaborators out of the loop so that they would not have to be included as co-inventors, it was a scandal and I fought them hard. The next thing - they "created" two prophetic experimental examples in my patent where I did all the experimental work - and they did not bother to tell me about it).

In the previous company we needed kilos of TFFH, the reagent is very expensive but only two steps to make. We came up with improved scale up one pot procedures, made material worth six figures and everybody was happy - until we submitted a short paper with the improved procedure for approval. Patent lawyers in Aventis were in charge of the IP office that was vetting all publication submissions and they found out that there was a patent application on the TFFH, not yet approved at the time by USPTO. They argued "it would expose us to potential liabilities if we make it known that we are making the reagent for our use instead of buying it from the patent owner." (The same cretins turned down my previous mauscript submission about improved chloranil solid-phase detection test - because it claimed to be about 10 time more sensitive than the previous method. They argued it was too dramatic to share such discovery with the competition and therefore we should keep it a trade secret.)

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5. Patent Person on September 20, 2007 1:43 AM writes...

Thanks for the posts on patents, glad to see the discussion moving along.

Biopharma and their patents are easy targets, but wrong targets.

1. Tech v. Biotech: The "Petty Patent" system of Australia some years ago is instructive. 8-year patent, top-line novelty only examination. Perfect for tech companies. Bolt on to the patent system, problem solved.

2. Evergreening: Faulty premise in the above posts: don't blame the patent if the market converts to the new formulation. People can still use the old version, even if there is a patent on a new version.

3. In terrorem effect of patents: Litigation costs run wild. No wonder. The young PhD-JD's hired in the 80's now are putting their kids through college and planning for retirement. Just as an historical point, see, below, patent litigators wanted since 1987...
NYTimes, Patents Disputed in Biotechnology, March 9, 1987

". . .Hiring Spree by Law Firms

As a result of the mushrooming of litigation, patent law firms across the country have been seeking more litigators. . . . Hundreds of patent lawyers are taking courses to learn the new language and sciences associated with biotech patents. At least one firm, Pennie & Edmonds of New York, has hired people with doctorates in areas such as biochemical engineering and molecular biology, and then paid their way through law school. Others, such as the 140-lawyer Los Angeles firm of Irell & Manella, have merged with smaller firms that specialize in biotech law.

''There is a giant demand for patent attorneys who are experts in biotechnology,'' said Irving Kayton, a professor at the George Washington University National Law Center. There are about 11,500 patent lawyers around the nation, but, according to Professor Kayton, only about 400 of them are ''at least modestly competent'' in biotechnology.. . ."

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6. daveh on September 20, 2007 11:10 AM writes...

Chrispy hit the nail on the head. That is the modus operandi of every patent council (internal or external) that I have delt with.

Another difficulty I've observed, working in the drug delivery field, is the exclusive use of patents as prior art. Most IP council I've had the displeasure of working with fail to search publications other than patents. As a consequence, they actually believe claims of invention that are disclosed in text books and journals. Looking at the literature typically waits until litagation is upon us.

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7. Paul Norman on September 20, 2007 1:16 PM writes...

The quality of software patents is abysmal. You've talked int he past about looking at patents, which I can't imagine doing with software, since you'd not learn anything and just open yourself up to increased liability. Prior art searches are also not done outside of patents themselves, and nothing innovative goes into patents first.

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8. Anonymous BMS Researcher on September 20, 2007 6:33 PM writes...


The average human gene is claimed by something like six patents, I think -- many from biotechs whose business model appears to be extracting royalties from big pharma.

But patent trolls sometimes do get exactly what they deserve: SCO is bankrupt now:
http://en.wikipedia.org/wiki/SCO-Linux_controversies
http://www.informationweek.com/news/showArticle.jhtml?articleID=201806893

Permalink to Comment

9. patent examiner on September 20, 2007 6:54 PM writes...

Milkshake: what is obvious to you and me as organic chemists with post graduate qualifications and what is obvious (and even novel) in the patent world are two entirely different things, something that I found very hard to come to terms with when I started at the (AU) patent office. We are bound by the case law and the test here for obviousness is the 'problem-solution approach' and NOT obvious to try. While it is obvious to try both enantiomers and also salts, it is not obvious which salt out of the many that you could form would be the best.

I am in favour of first-to-file, I may be biased, but there are many advantages, which I shall go into later because I should be examining patents right now :)

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10. patent person on September 20, 2007 8:13 PM writes...

Quote: "One of the big problems is frankly that the lawyers in big companies have little to gain and much to lose by promoting anything remotely risky."

Let's say the patent lawyer told your CEO about the ARIAD patent,

"We had the smartest people we could find study this thing. Looks invalid to me. I have no idea if this patent will stand up in court because litigation is so unpredictable. If we proceed, we'll probably be sued on it regardless. Go for it!"

Would you go for it?

Lots of companies do.

Your management may be waiting on the sidelines for the other lawsuits (Lilly, Amgen) to invalidate that thing, without spending money on lawyers to litigate. More money for your research budget.

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11. xchemist on September 21, 2007 12:13 AM writes...

Pharma patents are indeed a fraught area these days, obviousness being probably the major bugaboo. KSR-Teleflex is shaking up the industry for sure. Another, at least to me surprisingly less remarked-on definition, as Anonymous BMS Researcher aludes to, is who is the agreed-upon chemist "skilled in the art" and what does that mythical person know?

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12. CC on September 21, 2007 8:23 AM writes...

The average human gene is claimed by something like six patents, I think...

That strikes me as wildly unlikely.

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13. Paul Dietz on September 27, 2007 2:34 PM writes...

But patent trolls sometimes do get exactly what they deserve: SCO is bankrupt now:

SCO made no patent claims. Their lawsuits were related to copyrights. Not to say there was any basis to their claims, mind you.

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