Publications

Updates

Biotechnology & Pharmaceutical Practice Group Newsletter

Welcome to the Spring edition of our newsletter!

Bereskin & Parr is pleased to report to you the launch of the IP Manager's Group. We receive many requests from clients about IP management so we created a regular forum for IP managers that deal with sophisticated IP management decisions. Eventually the group will function independently of our firm. For those of you who cannot attend the meetings, we will keep you posted on the Group's discussions through our web site and newsletters.

Micheline Gravelle
B.Sc., M.Sc. (Immunology)
Bio/Pharma Practice Group Leader

After the transgenic Harvard Mouse received a "failing grade" in patentability from the Supreme Court of Canada, some media and special interest groups hailed the decision as a victory that allowed transgenic life forms to remain in the public domain. At patent firms, the business of protecting private IP rights in transgenic life forms continued as usual. Inventors used other ways to protect their investments in creating transgenic life forms. The Canadian Patent Office continues to allow claims to transgenic cells, vectors and methods used to make the transgenic life forms. Many applicants feel that the current patent law is sufficient to protect their technology, especially since in 2002, a Canadian gene patent was successfully enforced against a farmer that planted engineered canola.

In certain instances, applicants prefer not to patent transgenic animal inventions because the scope of such patents is getting more narrow. Some have found that, patent or no patent, others will pay a reasonable fee for a breeding pair of mice to avoid repeating the work and time needed to create the transgenic mouse. In these situations, material transfer agreements are used to prevent unauthorized breeding and distribution. Controlling IP with a material transfer agreement is particularly useful where the commercial value of a transgenic mouse does not justify the cost of patenting. However, where significant value is at stake through licensing fees or depriving a competitor of a transgenic life form, patenting in major markets is still the best option.

The Harvard Mouse decision appears to have a greater impact on the agriculture industry, where the protection of seeds and plants is important. If a new plant is created by conventional plant breeding, Plant Breeders Rights protection should be considered. Registration of new plant varieties is a useful tool to prevent unauthorized production and sale of seed. Where genetic engineering is used to create new plants, patents provide broader protection against anyone using the protected gene, irrespective of the variety.

The biotechnology industry is requesting new laws to permit patent claims for transgenic life forms. However, in the meantime, a variety of patent claims and other methods to control IP will be used aggressively.

On March 7, 2003, the Federal Court of Appeal in Barton No-Till Disk Inc. v. Dutch Industries Ltd., 2003 FCA 121 partially overturned a lower court decision relating to the payment of maintenance fees in the Canadian Patent Office. The lower court decision stated that the payment of maintenance fees as a small entity when one was not entitled to small entity status was not rectifiable by a simple "top-up" payment, as was the traditional practice of the Canadian Patent Office.

In partially overturning the decision, the Federal Court of Appeal held that:

(i) Entity status of an application only has to be determined once, and that will be when the first fees are payable i.e. upon filing of the patent application;

(ii) If the application qualifies as a small entity at the time of filing, then all future fee payments for that application can be paid at the small entity rate, irrespective of the "actual" entity status at the time of the future payment. In other words, a reconsideration of the entity status for an application or the resulting patent is not required; and

(iii) Simple "top-up" payments for maintenance fees are not possible. Therefore incorrectly claiming small entity status at the time of filing an application can be a fatal error, unless the error is discovered in time to take corrective action.

The Federal Court of Appeal has recognized the difficulty in consistently and correctly monitoring one's entity status and has thus relieved the Applicant from some of this burden. However, the burden of being correct at the time of filing remains and may represent a significant danger for applicants. Irrespective of the Court's decision, for the time being we maintain our previous recommendation to file and maintain all applications as a large entity and avoid the consequences of making an incorrect "small entity" determination.

In effect, the result of the Court's decision is that where an applicant was entitled to small entity status on filing, the application and any resulting patent will be in good standing as long as all maintenance fees are timely paid whether at the small or large entity rate. If however an applicant was or is not entitled to small entity status at filing, all maintenance fees must be or have been paid at the large entity rate and if any errors have occurred the application must be reinstated within 12 months of the date the maintenance fee error occurred. The court did not necessarily deal with any other fees such as the initial filing fee, examination fees, or issue fees.

This case does not affect any applications or patents where the applicants have consistently claimed large entity status. Nor does it affect any applications or patents where the applicant qualified as a small entity at the time of filing irrespective of whether its entity status has changed.

Leave to appeal to the Supreme Court of Canada has been requested.

The Canadian government recently published draft laws to establish a basis for the Canadian Patent Office to act as a PCT international patent application search authority (ISA) and international preliminary examination authority (IPEA). These services will be available to Canadian patent applicants in place of the current European Patent Office services.

The Supreme Court of Canada will be hearing an appeal of Schmeiser v. Monsanto. Schmeiser infringed a Monsanto gene patent by cultivating and replanting genetically engineered canola that blew onto his field.

The inaugural meeting of the Intellectual Property Managers Group took place on April 24, 2003. The breakfast meeting was attended by approximately 30 intellectual property managers. The first meeting was highlighted by a talk presented by Jon Lundy, Vice President, General Counsel and Corporate Secretary of Hydrogenics. Hydrogenics is a Canadian success story and a world leader in fuel cell technology. Jon described how in only 5 years Hydrogenics developed its portfolio from 1 patent application to over 130 applications representing over 50 inventions. Jon emphasized the significance of management understanding of the importance of patents for the success of a company and described how patents played a key role in the success of Hydrogenics. The meeting ended with a discussion on the structure of the IPMG and with the presentation of some key issues for its members to consider before the next meeting.

The next meeting of the IPMG will be Thursday, May 29th, 2003, at the National Club, 303 Bay Street, Toronto, and will run from 8.00 a.m. to 10:00am. Steven Oswald of Hatch Steltech and Stephen Yang of Hydrogenics will both speak on Protecting IP in China. Breakfast will be served.

For more information or to register for the meeting, please go to www.bereskinparr.com/ipmg

Below are some recent US cases of interest to biotechnology and pharmaceutical companies.

Investigators at the University of Rochester discovered a gene encoding the cox-2 enzyme. The investigators determined that selectively inhibiting cox-2, but not cox-1, reduced pain and inflammation without the side effects of stomach upset and irritation. They obtained a US patent with a broad method of treatment claim for selectively inhibiting cox-2 activity. The patent did not disclose any compounds that worked in the method of treatment. The University sued Searle, Pfizer, Monsanto and Pharmacia for infringement of this patent. In March 2003, the defendants were granted summary judgment declaring the patent invalid for failure to satisfy the written description and enablement requirements.

We recommend that inventors also patent broad claims for assay or screening methods. Assay and screening methods are particularly important for inventors that do not have data on modulating compounds.

University of Rochester v. G.D. Searle & Co., Inc., 2003 U.S. Dist. LEXIS 3030 (W.D.N.Y. March 5, 2003)

Housey Pharmaceuticals has 4 patents for drug screening assays. Bayer requested a judgment that the claims in the patents were invalid and not infringed. Housey counterclaimed for infringement under the importation provision 35 U.S.C. §271(g). Under this law, it is an infringement to import into the United States a product which is made by a patented process. The Court limited this law to products made by a patented manufacturing processes. It protects only "methods of actually making or creating a product as opposed to methods of gathering information about, or identifying, a substance worthy of further development."

This decision emphasizes the need to obtain multi-jurisdictional patent protection for screening assays or other drug discovery inventions, such as methods of computer modeling.

Bayer A.G. v. Housey Pharmaceuticals Inc., 169 F. Supp. 2d 328, 61 U.S.P.Q.2d 1051(D.Del. 2001)

Madey was a professor at Duke University and the sole owner of 2 patents for the laser equipment used in his lab. Madey had a dispute with the University and resigned. The University continued to operate the laser equipment in the lab. Madey sued Duke for patent infringement. The University argued that its use of the laser equipment fell within the experimental use exception to patent infringement. At trial, the District Court agreed with the University and held that the use of the lasers fell within the experimental use exception; however on appeal the decision was overturned. The Court of Appeals stated that the University's use of the laser equipment did not fall in the experimental use exception. The Court of Appeals took a narrow interpretation of the experimental use exception. The key criteria was not whether the University was a non-profit entity, but whether the activity at issue was directed towards a business objective. The Court also noted that Duke had a Technology Transfer Office whose objective was to make money based on the research conducted at the University.

Universities should be careful if they are relying on the experimental use exception.

Madey v. Duke University, 64 U.S.P.Q.2d 1737 (Fed. Cir. 2002)

Plant Genetic Systems, N.V. (PGS) sued DeKalb for infringing a patent for herbicide-resistant transgenic plant cells, plants, and seeds. A key issue in the case was whether the claim wording covered both monocot and dicot plants. In the patent, all of the working examples were dicots, such as tomato, potato and tobacco plants. However, DeKalb was making and selling corn, a monocot.

The Court of Appeals decided that the cell claims were invalid on the basis of non-enablement. It was difficult to produce stably transformed monocots when the patent was filed in 1987, and the patent gave no instruction how to do so. The appeals court also said that the plant and seed claims did not include monocots so the claims were not infringed by DeKalb. Referring to the prosecution history of the patent, the appeals court agreed that the plant and seeds claims were only allowed by the Patent Office because the patentee amended the claims in response to an office action to effectively exclude monocots. Since DeKalb's allegedly infringing products were unquestionably monocots, the plant and seed claims were not infringed.

Plant Genetic Systems, N.V. et al. v. DeKalb Genetics Corp. (C.A. Fed. Cir., January 13, 2003)

The USPTO is proposing to raise existing fees across the board. A change to the current fee structure is the creation of separate filing, search and examination fees of US$1000 due upon filing (search and examination fees are partially refundable if the application is expressly abandoned). Other highlights include excess claim fees increasing to US$200 for each independent claim in excess of 3 and US$50 for each claim in excess of 20. Applications of over 100 pages will pay a US$250 surcharge per extra 50 pages.

There are also proposed increases to Canadian fees. If the Canadian fee increases are implemented, the costs of patenting in Canada will remain quite reasonable. Under the new fee schedule, the total fees over the 20-year life cycle will be CA$6,300. The most notable increase is that the fee to request expedited examination will rise from CA$100 to CA$500.

Announcements

We are pleased to announce that Tina Loucaides is joining us as an associate lawyer. Tina has a B.Sc. and a M.Sc. in immunology, both from the University of Toronto. Her law degree is from Osgoode Hall Law School in Toronto. She will be called to the Ontario Bar in July.

In the 2003 Lexpert Directory Bereskin & Parr is ranked as one of the leading intellectual property firms with many of its professionals listed as leading IP practitioners. Micheline Gravelle is ranked as a leading biotechnology practitioner.

Speaking Engagements

Anita Nador will be speaking on patents at The Law Clerks' Forum - Intellectual Property Law Primer presented by Insight Information on May 27th and 28th at the Colony Hotel in Toronto. For more information go to www.insightinfo.com

Micheline Gravelle will be speaking on Advanced Biotech Patent Topics on June 4th at University Health Network.

Edited by Noel Courage. Please send comments or suggestions to Noel at ncourage@bereskinparr.com

Disclaimer

This newsletter is for informational purposes only. These materials constitute general information relating to intellectual property law and our firm. They do not constitute legal advice or other professional advice and should not be relied on as such. While all materials are believed to be current and accurate at the time of writing, they are not guaranteed.