The Myth of Industry Differences

1. The Myth of Industry Differences Robert A. Armitage Eli Lilly and Company

2. The fundamental notion of “industry differences” is merely an artifact of a patent system in need of substantial reforms.

3. What makes an invention patentable? • Eligible subject matter. • Practical utility. • Possession-verifying written description. • Commensurate enablement. • Reasonable definiteness. • Novelty (over express & inherent disclosures). • Non-obviousness (to POSITA). • The application of these criteria to any particular technology is not self-evident.

4. What makes any patent system work? • Rigorous application of patentability rules. • Consistent application of the rules. • Highly predictable outcomes. • Prompt examination of an inventor’s claims. • Objective requirements for patentability. • Patentability assessments dependent only on publicly accessible information. • Certainty in enforcement of valid IP rights. • What “works” is not technology dependent.

5. When does a patent system fail? • Patentability rules not well developed. • Patentability rules not consistently applied. • Enforcement of valid patent rights is difficult. • Testing of questionable patents is arduous. • Patentability determinations are— • Unpredictable – with prolonged uncertainty, • Dependent upon non-public information, and • Based on subjective elements. • Common “fail” factors for all technologies.

6. How do the criteria for “success” and “failure” for patent systems differ by area of technology? • No evidence whatsoever that a “successful” patent system for any one area of technology would have different factors for success compared to any other area of technology. • Abundant evidence exists that some technology areas are more failure-tolerant. • Pharma/Bio tolerate more “false positives.”

7. Differences among industry groups in their focus on patent reform elements: • Pharma-Bio: Reduce the number of “false positives” by increasing “patent quality.” • IT/Financial Services: Reduce the impact of “false positives” through “civil justice” reforms. • These agendas have elements that collide and elements producing synergies. • The rub resides in reducing remedies.

8. What needs doing in all technology areas? • National Academies recommendations: • Eliminate subjective elements from patent litigation. • Eliminate non-public information in determining patentability (first-inventor-to-file/best-mode). • Institute “open review” of issued patents. • Provide PTO with adequate resources. • Goal: Pick up any patent, read it, reference only publicly accessible information, and be able to determine its validity with finality.

9. Case Study: Biotechnology Patenting • What is required for possession-verifying “written description”? Enablement? Utility? • U. of California v. Lilly, 119 F.3d 1559 (Fed. Cir. 1997) – Human insulin gene written description. • Noelle v. Lederman, 355 F.3d 1343 (Fed. Cir. 2004) – antibodies decision contradicts U.C. v. Lilly. • In re Fisher, 421 F3d 1365 (Fed. Cir. 2005) – EST utility finally addressed. • Do we yet know how to apply the basic rules of patentability to biotechnology inventions?

10. U.C. v. Lilly barred patenting all vertebrate genes: • “A recombinant plasmid replicable in procaryotic host containing within its nucleotide sequence a subsequence having the structure of the reverse transcript of an mRNA of a vertebrate, which mRNA encodes insulin.” • Noelle v. Lederman has dicta that permits patenting all mc antibodies to an known antigen: • “A monoclonal antibody, which specifically binds and forms a complex with the 5c8 antigen located on the surface of activated T cells and thereby inhibits T cell activation of B cells … .”

11. U. of Rochester v. G.D. Searle & Co., 375 F.3d 1303 (Fed. Cir. 2004), dissenting (J. Newman): “The issue of whether patent law contains a separate written description requirement has percolated through various panels of this court, on a variety of facts. The differences of opinion among the judges of the Federal Circuit, are, in microcosm, the ‘percolation’ that scholars feared would be lost by a national court at the circuit level. Percolation is the great justifier of conflict among the regional circuits. In the words of the Supreme Court: We have in many instances recognized that when frontier legal problems are presented, periods of “percolation” in, and diverse opinions from, state and federal appellate courts may yield a better informed and more enduring final pronouncement by this Court. Arizona v. Evans, 514 U.S. 1, 24 n.1 (1995). “This question has percolated enough; it is ripe for en banc resolution.”

12. What was the Rochester decision about? • “1. A method for selectively inhibiting [COX-2] activity in a human host, comprising administering a non-steroidal compound that selectively inhibits activity of the [COX-2] gene product to a human host in need of such treatment.” • Plain English: “Having found a COX-2 gene, we hereby patent the use of anything and everything that can block its activity.”

13. In re Nuijten – What is patent eligible? • “A signal with embedded supplemental data, the signal being encoded in accordance with a given encoding process and selected samples of the signal representing the supplemental data, and at least one of the samples preceding the selected samples is different from the sample corresponding to the given encoding process.” • What is this “invention” all about?

14. Is the following signal patent-eligible? • “He said to his friend, ‘If the British marchBy land or sea from the town to-night,Hang a lantern aloft in the belfry archOf the North Church tower as a signal light, -One if by land, and two if by sea;And I on the opposite shore will be,Ready to ride and spread the alarmThrough every Middlesex village and farm,For the country folk to be up and to arm.’” • H. W. Longfellow, noted American inventor?

15. Why apply unitary patentability principles to diverse technology areas? • Cross-pollination effect – ideas from one technology area inform application to others. • Acceleration effect – “chemical” patent law accelerates “biotechnology” patent law development, et cetera. • Ultimate “litigation reform” is only issuing patents in rigorous compliance with well-developed patentability criteria.

16. Conclusions: • Application of patentability criteria to emerging technology areas is unacceptably slow. • The prolonged uncertainty generated bedevils all fields of technology equally. • Comprehensive patent law reforms are needed to accelerate development of a deep understanding of patentability requirements. • The fundamental notion of “industry differences” is merely an artifact of a patent system in need of substantial reforms.