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In June 2023, the European Union (EU) will introduce the European Unitary Patent. At the outset, the European Unitary Patent will be enforceable in the 17 States that have ratified the agreement between the EU and the EPO: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Sweden. This type of patent is designed to reduce the complexity and cost of obtaining patent protection across multiple EU countries. Currently, obtaining patent protection in multiple EU countries requires separate applications and payments to each individual country’s patent office. The European Unitary Patent is seen as a significant development that will purportedly simplify the patenting process in the EU.

As more States ratify the agreement, the enforceability of the European Unitary Patent will expand. The European Unitary Patent will eventually be valid in 25 participating EU countries: Cypress, Czech Republic, Greece, Hungary, Ireland, Poland, Romania, Slovakia, and the 17 States listed above. This will enable patent holders to protect their inventions across multiple EU Member States with a single application and a single set of renewal fees. It is important to note that a Unitary Patent will only be valid in the EU countries that have ratified the agreement at the time of application. This system will also provide a single jurisdiction for litigation to challenge or defend the validity of a patent. Therefore, the European Unitary Patent is also expected to reduce the legal costs associated with patent disputes and create a more uniform legal framework for intellectual property rights in the EU.

The process for acquiring a unitary patent involves three steps. First, an applicant must file a European patent application at the European Patent Office (EPO). If the application is deemed to satisfy all requirements, the EPO will grant a European patent. After a European patent has been granted, the patent owner must request the unitary effect of the patent within one month from the grant of the European patent. Once the request for unitary effect has been submitted, the European Patent Office will register the unitary patent and publish a notice in the European Patent Bulletin.

The fees to file a European patent application vary depending on the complexity of the invention, the language in which the application is filed, and the size of the applicant’s company. This usually costs between 110 – 1260 EUR (approximately $121 – $1,385USD). The fees for the examination and grant of a European patent are usually between 580 EUR and 4000 EUR (approximately $638 – $4,397USD). Unitary patents will require the payment of annual renewal fees to maintain the validity of the patent. The renewal fees will have to be paid to the European Union Intellectual Property Office (EUIPO). The EPO states that, on average, an applicant will save almost $7,000 over the 20-year lifespan of the patent by filing a European Unitary Patent as compared to filing patents in four individual European countries.

Overall, the European Unitary Patent is an essential step towards a more integrated EU economy and a more unified patent protection system. As discussed above, this new system is expected to reduce the costs and complexity associated with obtaining patent protection across the EU, support innovation and the development of new technologies, foster economic growth within the region, and provide a single jurisdiction for patent-related litigation. As the EU continues to work towards a more harmonized patent system, the implementation of the European Unitary Patent is likely to have a significant impact on the competitiveness of European industries on the global stage.

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Dawn Jackson is a co-author of this post and is a Summer Associate at Bradley.

The Supreme Court ruled on May 18 that Andy Warhol’s “Orange Prince” work of pop art was not a fair use when licensed to Condé Nast in 2016. Although this landmark copyright decision is hot off the presses, the facts date back to 1981 when the underlying photograph was first shot. Photographer Lynn Goldsmith photographed Prince for Newsweek, when the now-iconic musician was still only an “up and comer.” Goldsmith’s photograph was then licensed to Vanity Fair in 1984 for $400 as a “one time” “artist reference for an illustration.” The artist was none other than Andy Warhol. Warhol created the print that was used in the 1984 Prince article in Vanity Fair, for which Goldsmith received her modest sum and artistic credit.

The Use

Upon Prince’s death in 2016, Condé Nast (the parent company of Vanity Fair) ran a commemorative feature on Prince and used another Warhol-based-on-Goldsmith work. Apparently, Warhol had created an entire series of 15 other works of pop art using Goldsmith’s initial photograph. The magazine cover used the “Orange Prince” work in the series, and Goldsmith contacted the Andy Warhol Foundation (AWF) because she had not received any further money or credit for this new 2016 licensing of another, previously unknown work in the Prince series. AWF proceeded to sue Goldsmith, seeking a declaratory judgment of noninfringement or fair use. Goldsmith countersued, claiming copyright infringement of her photograph.

The Question

Courts weigh the following four factors to determine if a use is fair, and therefore not copyright infringement: (1) the purpose and character of the new use, “including whether such use is of a commercial nature or is for nonprofit educational purposes,” (2) the nature of the copyrighted work, (3) the amount of the copyrighted work that is used in the new work, and (4) the effect of the new use on the copyrighted work’s market or value (17 U.S.C. § 107). Although lower courts disagreed on a number of factors, the sole issue before the Supreme Court was whether the first factor of copyright fair use analysis weighed in AWF’s favor.

The Opinion

The majority held that the first fair use factor did not weigh in AWF’s favor, affirming the Second Circuit decision that the licensing of Warhol’s Orange Prince was not a fair use. Tensions ran high in the 7-2 decision. The majority opinion, penned by Justice Sonia Sotomayor, emphasized that the decision was based on the foundation of previous fair use decisions such as Campbell and Harper & Row. In particular, the majority did not find that the Warhol work was “transformative” in the manner required by the fair use statute but was rather “supplanting” the original work. Crucially, the majority argued that for a “transformative use” to be a fair use required that it take on something more than a merely commercial use or exploitation. In this case, both Goldsmith’s photograph and Warhol’s art are representations of Prince. Warhol’s representation was based on and “transformed” Goldsmith’s photograph in a manner that made it a derivative work, and as such the right to create a derivative work such as the pop art and commercially license it should belong to Goldsmith, the copyright holder.

The Dissent

On the other hand, Justice Elena Kagan’s dissenting opinion (joined by Chief Justice John Roberts) detailed the “laborious” creative process that Warhol undertook to bring the work from photo to silkscreen, and the transformation in character that arose from his artistic vision. The dissent argued that the majority incorrectly disregarded this transformative character in favor of honing in on the commercial purpose aspect, obscuring the broader purpose of fair use as a copyright infringement “escape valve” for creatives. Further, the dissent focused on the dire implications of disavowing fair use in this case. Notably, Justice Kagan wrote that this outcome will “make our world poorer.” In essence, the dissent implied that this ruling will potentially disincentivize and dissuade creatives from making art that builds off of its predecessors, out of fear of litigation for copyright infringement.

One interesting note concerns the tenor of the opinions. While the case involves an important issue in copyright law and two famous artists, it was not expected to be one of the more controversial cases of the Supreme Court’s term. Nevertheless, Justice Sotomayor’s majority opinion contained several pages of long footnotes targeting the dissent in surprisingly blunt terms. Justice Kagan’s dissent responded with a half-page footnote taking issue with the majority’s footnotes and suggesting such footnotes themselves lacked logical rigor.

The Big Picture

The further tweaking of the fair use analysis from the majority may lead to confusion in lower courts as to how to handle cases with different fact patterns, such as when an underdog artist creates a vastly distinct new work from a famous reference point. The conflict of balancing the copyright holder’s right to create derivative works and the fair use right to create a transformative work remains murky and without a clear answer across contexts.

Because Warhol’s commercial power tinged the context here, this ruling against fair use may have unintended implications for the broader artistic community, as foreshadowed by the dissent. Whether the majority or the dissent got it right will be seen in the years to come, in future cases or even corrective legislation.

*Dawn Jackson is not a licensed attorney.

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The questions from the high court during oral argument at the end of March 2023 were fairly telling of the 9-0 ruling that came down yesterday in Amgen, Inc. v. Sanofi (No. 21-757). In fact, it did not come as much of a surprise when the Supreme Court left intact the lower courts’ invalidity ruling against Amgen and simultaneously affirmed a narrower-than-Amgen-wanted enablement requirement under 35 U.S.C. § 112. 

Just as a quick recap from our latest post on this case, Amgen had asked SCOTUS to find that the Federal Circuit applied too high of a bar under the enablement portion of § 112 by requiring that a patent explain how to make virtually every possible version of the claimed invention that could perform the claimed functions. Amgen fought for a less stringent enablement requirement and contended that a patent need not account for the full range of possible forms the invention might take, but only “enable skilled artisans to ‘make and use’ the invention.”

The opinion — authored by Associate Justice Neil Gorsuch — explains that the claims-at-issue in U.S. Patent No. 8,829,165 and U.S. Patent No. 8,859,741 (which cover Amgen’s PCSK9-inhibiting cholesterol drug marketed as Repatha) do indeed fail to provide enough information allowing a person of ordinary skill in the art to replicate the full scope of the invention without undue experimentation. More specifically, the Court explained that

[i]f a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class.

. . .

That is not to say a specification always must describe with particularity how to make and use every single embodiment within a claimed class.

. . .

a specification may call for a reasonable amount of experimentation to make and use a patented invention. What is reasonable in any case will depend on the nature of the invention and the underlying art.

The Court further warned that “the more a party claims, the broader the monopoly it demands, the more it must enable.” Recall that the asserted claims in the ʼ165 and ʼ741 patents were not limited to the particular antibody used in Repatha (or even the 26 antibodies identified in the ʼ165 and ʼ741 patents). Instead, the claims more broadly require an entire genus of known and unknown antibodies. Using this framework, the Court explained that it had no doubt that the 26 exemplary antibodies identified by their respective amino acid sequences in the specification of the ʼ165 and ʼ741 patents were enabled. But it found the specification lacking with respect to how to make and use every other undisclosed but functional antibody such that a person of ordinary skill in the art would be “forced to engage in ‘painstaking experimentation’ to see what works.” As a result, the Supreme Court justices held that “[t]he courts below correctly concluded that Amgen failed “to enable any person skilled in the art . . . to make and use the [invention]” as defined by the relevant claims.” 

While this marks the end of a nearly decade-old patent dispute, the case certainly provides a real-life example of the answer to the question frequently asked by clients:

“But, how can I be sued on my product when I have a patent that covers my product?”

Indeed, Sanofi (and Regeneron) has its own patents covering its PCKS9-inhibiting cholesterol drug (marketed as Praluent). In fact, while Praluent works similarly to Repatha in that the antibodies block PCSK9 (which inhibits the removal of bad cholesterol from the blood), it achieves the result with a different antibody having its own unique amino acid sequence. Regardless, a patent does not provide the right to make, use, sell or import an invention. Rather, it provides the right to exclude others from making, using, selling, or importing that invention. As such, Sanofi’s patent could not prevent Amgen from suing for infringement to enforce its rights under the ʼ165 and ʼ741 patents. Also, while many patents that are litigated are ultimately found to be invalid, these invalidity determinations typically come after a protracted, expensive battle in court (and possibly before the USPTO as well). After all, issued patents are presumed valid and the burden to overcome that presumption and prove invalidity is high. And, while not necessarily the case here, a patent can be granted on an improvement to an earlier invention that may still be covered by an enforceable patent in one or more countries. In short, Sanofi came out the victor in this fight, but it had to stay in the ring for quite a long time to knock Amgen out. 

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The Federal Circuit passed on Pure Hemp’s ask for attorney fees and sanctions in United Cannabis, Corp. v. Pure Hemp Collective Inc., No. 22-1363 (Fed. Cir. May 8, 2023). Agreeing with the district court, the appellate panel found Pure Hemp’s exceptionality arguments lacking (even referring to Pure Hemp’s appeal as “extremely weak”) and affirmed the district court’s denial of Pure Hemp’s motion for attorney fees.

Almost five years ago in 2018, UCANN filed suit against Pure Hemp in the U.S. District Court for the District of Colorado alleging infringement of U.S. Patent No. 9,730,911. The ʼ911 patent relates to the extraction of pharmaceutically active components and, more specifically, botanical drug substances (BDS), including cannabinoids obtained by extraction from cannabis. The case was stayed in April 2020 when UCANN filed for bankruptcy. Once the bankruptcy petition was dismissed, UCANN and Pure Hemp entered into a stipulation resulting in the dismissal of UCANN’s infringement claims against Pure Hemp. Notably, the stipulation did not address attorney fees, UCANN’s infringement claims were dismissed with prejudice, and Pure Hemp’s invalidity and inequitable conduct counterclaims were dismissed without prejudice.  

Pure Hemp then moved for attorney fees because 1) UCANN’s prosecution counsel had allegedly committed inequitable conduct and 2) UCANN’s litigation counsel took conflicting positions in its representation of UCANN and another client. The district court found that Pure Hemp failed to establish that it was a prevailing party under 35 U.S.C. § 285, that the case was “exceptional,” or that UCANN’s counsel acted unreasonably and noted that dismissal occurred before the record was developed to a point that would have supported an award of attorney fees.

On appeal, the appellate panel first explained that the district court erred in finding that Pure Hemp was not a prevailing party. This is important because only a prevailing party is eligible to be awarded attorney fees under § 285 (one of the three different legal authorities employed by Pure Hemp). In determining whether a party is a prevailing party under § 285, the panel “must consider whether the district court’s decision effects or rebuffs a plaintiff’s attempt to effect a material alteration in the legal relationship between the parties.” The panel explained that here, because UCANN’s claims were dismissed with prejudice, UCANN is prevented from asserting the ʼ911 patent against Pure Hemp in the future and, thus, Pure Hemp successfully “rebuffed” UCANN’s infringement claims. That said, the panel found this error by the district court to be harmless and further found that the district court did not abuse its discretion in finding this case unexceptional because Pure Hemp failed to establish that the case was exceptional (by virtue of the inequitable conduct allegation). In this vein, the panel “reject[ed] Pure Hemp’s invitation to invade the province of the district court and make [its] own findings of fact.” In fact, Pure Hemp voluntarily dismissed the inequitable conduct counterclaim before any findings were made, and it did not seek any further evidentiary proceedings.

So what makes a case exceptional under 35 U.S.C. § 285? How might a party get (and keep) those coveted attorney fees? As explained in Octane Fitness in 2014, the case must “stand out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” Think frivolous, bad motivation, and objective unreasonableness (in both factual and legal components of the case). By way of example, the Federal Circuit took issue with the plaintiff’s litigation tactics in Electronic Communication Technologies, LLC v. Shopperschoice.com, LLC, characterizing them as abusive, for the sole purpose of forcing settlements, and evidence that ECT had no real intention of testing the strength of the patent or the infringement allegations, such that it vacated and remanded the denial of attorney fees by the lower court. That said, the high bar to obtain attorney fees is not one that the Federal Circuit takes lightly. For a more in-depth discussion of what the Federal Circuit looks for to affirm an award of attorney fees on never-adjudicated claims that are dismissed, please click here.   

 

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After years of uncertainty, the USPTO has finally provided insight on how it views applications for cannabis-related marks, suggesting that the use of such marks will be heavily scrutinized.   

In 2016, National Concession Group, Inc. (NCG) filed an application to register the mark “BAKKED” (Serial No. 87168058) and this stylized drop design mark

(Serial No. 87183434) for goods and services related to glass jars and essential oil dispensers. In support, NCG submitted a specimen displaying the respective marks on a device called “The Dabaratus,” which is commonly used for dispersing cannabis oil.

The examiner refused registration because the identified goods (The Dabaratus) were prohibited under Section 863 of the Controlled Substance Act (CSA), and thus could not be used in commerce as required by Sections 1 and 45 of the Trademark Act. On appeal to the TTAB, NCG argued that in addition to dispersing cannabis oil, the device could also be used for dispersing essential oils and, therefore, did not constitute paraphernalia under the CSA. Alternatively, NCG argued that even if it is considered paraphernalia under the CSA, the item was lawful under Colorado state law and registration was proper under Sections 863(f)(1) and 863(f)(2) of the CSA.

The TTAB affirmed the refusal to register in each of NCG’s applications based on extrinsic evidence highlighting that the marks and associated goods were intended or designed primarily for use in connection with inhaling or ingesting a prohibited controlled substance, which is illegal.  The TTAB emphasized the following points in its analysis:

Use in commerce must be lawful.

For every trademark seeking registration, the applicant must demonstrate use of the mark “in commerce” (see15 U.S.C.A. § 1051 (a)(1)). Section 45 of the act defines “use in commerce” as “the bona fide use of a mark in the ordinary course of trade” and encompasses “all commerce which may lawfully be regulated by Congress.” Put simply, “lawful use in commerce” is critical to registration, Gray v. Daffy Dan’s Bargaintown, 823 F.2d 522, 3 USPQ2d 1306, 1308 (Fed. Cir. 1987) (citing 15 U.S.C. § 1052(d)), and if a mark is used on goods that are illegal under federal law, it is ineligible for federal registration(see In re PharmaCann LLC, 123 USPQ2d 1122, 1124 (TTAB 2017)).

The CSA prohibits the sale or distribution of illegal controlled substances in interstate commerce.

The Controlled Substances Act is the federal U.S. drug policy governing the manufacture importation, possession, use, and distribution of certain substances. Section 863 of the CSA presents the most significant hurdle to registering cannabis-related marks because it explicitly prohibits the sale, use of the mail or any other facility of interstate commerce to transport, and the import or export of drug paraphernalia that is defined as “any equipment, product, or material that is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under [the CSA]” (21 U.S.C. § 863(d)). Sections 812(a) & (c) and 841 & 844 identify marijuana and marijuana-based products as controlled substances and prohibit the possession of each. Accordingly, the CSA considers equipment or products primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana into the human body to be drug paraphernalia and, thus, unlawful under the CSA. 

The TTAB pointed out that even though the identification of the goods and services (essential oil dispenser for domestic use) in NCG’s application did not identify an unlawful purpose, other extrinsic evidence, such as NCG’s website, unabashedly promoted the item as a “dabbing” tool for ingesting marijuana. NCG argued that the device was traditionally intended for use with tobacco products, but the TTAB found that none of the items submitted in support of NCG’s historical use resembled the product and that NCG was unable to show that the device was “traditionally” used for tobacco-based oils or substances. By contrast, the TTAB pointed to several articles identified by the examiner describing “dabbing” as a method for inhaling cannabis concentrates for a quicker high. Ultimately, the TTAB concluded that there was no evidence to support a finding that the item was intended for any use other than “dabbing” and the rejection under the CSA was proper. 

NCG also argued that registration of the marks was appropriate because the CSA contains an exception for items where the manufacture, possession or distribution is authorized by state law, as is the case in Colorado. The TTAB rejected application of that exception, noting that NCG’s rights would not be limited to Colorado but would extend beyond the state’s borders and thus run afoul of the CSA’s prohibitions and the requirements of the act.   

How to Weed Out Issues with Your Mark

The TTAB’s decision reaffirms the difficulty in registering a mark purely related to cannabis or cannabis-based products. However, the ruling does not completely preclude an applicant from obtaining trademark protection. The NCG opinion focused heavily on the applicant’s specimen and its marketed purposes, leaving open the possibility for registration under other goods and services that are permitted under federal law.

Often, clients underestimate the breadth of their mark usage and thus limit potential registration opportunities. It is imperative that clients consider registration in classes beyond their core business to maximize protection. 

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Efforts by HIP, Inc. to have David Howard added as an inventor to Hormel’s U.S. Patent No. 9,980,498 (Bacon Patent) were recently scorched by the Federal Circuit. More specifically, in HIP, Inc. v. Hormel Foods Corporation (22-1696), a unanimous panel reversed the District of Delaware’s finding that Howard was a joint inventor of the Bacon Patent and explained that Howard’s purported contribution — preheating with an infrared oven — was insignificant when viewed in the context of the invention as a whole.

A Little Precooking

Bacon is usually precooked before it hits the grocery store shelves. Hormel’s two-step precooking process includes a first cooking step that creates a layer of protective (melted) fat around the bacon to preserve salt and good flavor and a second cooking step that prevents charring. In 2007, Unitherm Food Systems (HIP’s predecessor) entered into a joint development agreement with Hormel to develop an oven that would be used in this two-step cooking process.  During the initial testing phase, HIP alleges that Howard disclosed the infrared preheating concept that appears in claim 5 of the Bacon Patent. More than a decade later in 2018, the Bacon Patent was issued naming four inventors that assigned rights to Hormel. Howard was not named.

In spring 2018, HIP sued Hormel in the District of Delaware alleging that Howard was a sole or joint inventor of the Bacon Patent. The district court found Howard to be a joint inventor based on his purported contribution to the infrared preheating concept. However, as noted by Hormel on appeal, the purported contribution is featured only once in a single claim of the Bacon Patent (independent claim 5) and, at that, in a Markush group including a microwave oven, an infrared oven, and hot air:

A method of making precooked meat pieces using a hybrid cooking system, comprising:

preheating meat pieces in a first cooking compartment using a preheating method selected from the group consisting of a microwave oven, an infrared oven, and hot air to a temperature of at least 140° F. to create preheated meat pieces, the preheating forming a barrier with melted fat around the preheated meat pieces and reducing an amount of condensation that forms on the preheated meat pieces when transferred to a second cooking compartment, the barrier preventing any condensation that forms from contacting the preheated meat pieces under the melted fat and diluting flavor in the preheated meat pieces;

transferring the preheated meat pieces to the second cooking compartment, the second cooking compartment heated with an external heating source, the external heating source being external to the second cooking compartment, the second cooking compartment including internal surfaces, the external heating source assisting in keeping the internal surfaces at a temperature below a smoke point of fat from the meat pieces thereby reducing off flavors during cooking in the second cooking compartment; and

cooking the preheated meat pieces in the second cooking compartment to a water activity level of 0.92 or less to create precooked meat pieces. (Col. 9, line 57 to Col. 10, line 17) 

Turning Up the Heat

As framed by the Federal Circuit, “[t]he burden of proving that an individual should have been added as an inventor to an issued patent is a ‘heavy one’” and requires clear and convincing evidence. Pannu v. Iolab Corp., a 1998 Federal Circuit case, articulates a three-part test that requires the inventor to have:

(1) contributed in some significant manner to the conception of the invention;

(2) made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention; and

(3) [done] more than merely explain to the real inventors well-known concepts and/or the current state of the art.

A unanimous panel of the Federal Circuit found that Howard’s purported infrared heating contribution failed the second Pannu factor. In particular, the panel explained that Howard’s purported contribution — preheating with an infrared oven — to be lacking from the summary, examples, or figures. In fact, outside of claim 5, preheating with an infrared oven is mentioned one time in the Bacon Patent:

Preheating the sliced bacon with a microwave oven, or other suitable heating methods such as infrared or hot air, prior to fully cooking the sliced bacon in a superheated steam oven minimizes condensation on the sliced bacon surfaces. (Col. 5, lines 40-44)

In contrast, the panel found the written description, claims, and figures of the Bacon Patent to be replete with discussion and illustrations of microwave oven preheating disclosure. Accordingly, the panel found Howard’s purported contribution of using an infrared oven to be “insignificant in quality . . . [when] measured against dimension of the full invention.” As a result, the panel did not consider Hormel’s additional argument on the third Pannu factor, i.e., Howard’s purported contribution was well known and part of the state of the art, since failure of one Pannu factor is dispositive on the question of inventorship.

A Little Extra on the Plate

To compare and contrast, a few years ago in Dana-Farber Cancer Institute, Inc. v. Ono Pharmaceuticals Co., Ltd. (19-2050), a majority panel of the Federal Circuit found a significant contribution by two unnamed inventors. The six patents-at-issue (Honjo Patents) claim a method of treating cancer by administering antibodies targeting specific receptor-ligand interactions on T cells, i.e., stimulating a person’s immune system to attack cancer cells. Nobel Laureate Dr. Tasuku Honjo was the sole inventor originally named, and Ono Pharmaceutical Co., Ltd. was the assignee of the Honjo Patents. In 2015, Dana-Farber (potential assignee of rights to the Honjo Patents) brought suit alleging that Dr. Gordon Freeman, a researcher at Dana-Farber, and Dr. Clive Wood, a researcher at Genetics Institute, should be added as inventors in the Honjo Patents. The district court agreed and ordered the USPTO to add Drs. Freeman and Wood as joint inventors to the Honjo Patents.

Judge Lourie, who also wrote the HIP opinion discussed above, explained that “[e]ssential to this determination is a recounting of each researcher’s work and the nature of their collaboration.” In this aspect, Dr. Honjo discovered the PD-1 receptor in the early 1990s, isolated its DNA sequence and began working with the protein in mouse models. In September 1998, Dr. Honjo and Dr. Wood connected to find the PD-1 ligand. Dr. Wood believed that the PD-1 receptor could be a candidate for antibody therapy development. Soon thereafter, Dr. Wood and Dr. Freeman, a researcher at Dana-Farber, began working together to determine whether PD-1 binds to novel B7 ligands. For the next few years, the three scientists collaborated and published on their collective efforts. Somewhere along the way, it seems hurt feelings may have affected this collaboration (or at least recognition of the various contributions in the collaboration). Indeed, after Dr. Honjo became aware of a provisional patent application filed in 1999 by Drs. Wood and Freeman disclosing modulation of the immune response via activating or blocking the PD-1/PD-L1 pathway in 1999 (and not naming Dr. Honjo as an inventor), Dr. Honjo stopped sharing data with Drs. Wood and Freeman. In 2002, Dr. Honjo filed the patent application that eventually spawned the Honjo Patents and did not name Drs. Wood and Freeman.  

So, what was the difference here? Is preheating bacon with an infrared oven less important than methods of treating cancer? Well, sorry bacon lovers, but yes. In addition, the appellate panel undertook a lengthy review of invention timeline and purported contributions by each inventor and referenced the lower court’s 111-page opinion that “considered” Dana-Farber’s eight-point theory justifying Drs. Freeman and Wood’s inventorship reveal the complexity behind the decision. While inventorship is a question of law reviewed de novo, the district court’s underlying findings of fact are reviewed for clear error. Indeed, as stated in the opinion, “[u]ltimately, the decision here rested on the extensive factual determinations made by the district court relating to the work performed together by Drs. Wood and Freeman, and Dr. Honjo that were not clearly erroneous, and the court made no errors of law.”

Oh, and interestingly, when Dr. Honjo won the Nobel Prize in Physiology or Medicine in 2018 (pre-appeal), he credited Dr. Freeman in his acceptance speech as a major collaborator in his work. 

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The NIL arms race continues as states amend their name, image, and likeness (NIL) laws to gain a competitive advantage. The new trend is to allow colleges and universities within the state to be more involved in the NIL process and protect them from NCAA punishment. These moves come after the NCAA’s first NIL-related infractions ruling. However, the various state laws and bills would allow for colleges and universities to be directly involved with NIL deals while avoiding NCAA punishment, despite NCAA rules to the contrary.

Arkansas was the first state to make a move in this direction, with its governor signing an amended NIL bill into law on April 14, 2023. The new law authorizes colleges, universities, and their supporting foundations to “identify, create, facilitate, and otherwise enable opportunities” for student-athletes to earn compensation from the use of their NIL. The law also authorizes 501(c)(3) organizations within the state to compensate student-athletes for the use of their NIL, meaning NIL collectives affiliated with specific colleges and universities can enter into NIL deals.

On April 20, 2023, the Oklahoma Senate passed SB 840, which makes amendments to the state’s current NIL laws. However, on April 26, 2023, Oklahoma’s governor vetoed the bill. Not all hope is lost, as the governor’s veto was not based on any issues with the NIL bill itself, but instead based on unrelated policy issues. SB 840 passed in the Senate by a wide margin, and there is still the possibility for the Senate to override the governor’s veto.

SB 840 eliminates the need for licensed or registered representation and permits colleges to be compensated for the use of their logos or facilities in relation to NIL activities. The bill also permits colleges to establish agreements with third-party entities to facilitate NIL activities and require student-athletes to take courses in contracts and financial literacy. Colleges can also adopt reasonable time, place, and manner restrictions to prevent a student’s NIL activities from interfering with team activities and school operations. However, students are not allowed to use a school’s logo to obtain NIL compensation.

Oklahoma’s NIL bill also includes a provision that appears to prevent the NCAA from punishing a college or university if a student-athlete violates the NCAA’s NIL rules. Furthermore, the bill prohibits the NCAA from investigating or taking any other adverse action against a college or university that participates in any NIL activity protected under Oklahoma’s NIL law.

Texas’s bill, HB 2804, which passed the Texas House on April 26, 2023, is similar to other NIL laws enacted in other states. However, an amendment added on April 12, 2023, mirrors Oklahoma’s playbook. This amendment prevents any group or organization with authority over an intercollegiate athletic program from enforcing a contract term, rule, regulation, standard, or any other requirement that prohibits the institution from participating in intercollegiate athletics or otherwise penalizes the institution or its athletic program for performing, participating in, or allowing an activity required or authorized by the new law.

Coaches and NCAA leaders have voiced concerns that NIL could disguise “pay-for-play” deals orchestrated by collectives before student-athletes sign national letters of intent or enter the transfer portal. While boosters are not allowed to pay players directly or be part of the recruiting process, the NCAA is actively investigating multiple bad actors in the NIL space. The various state laws and bills could raise questions about the NCAA’s ability to enforce its own NIL rules and regulations in certain states.

While state laws attempting to protect colleges and universities from NCAA enforcement of NIL rules may strengthen the NCAA’s push for federal NIL legislation, the prospects for a federal NIL law in the near future seem bleak. A federal NIL bill has not been introduced in the current Congress, and past federal NIL bills have failed to progress through the legislature. However, as has been the trend with state NIL laws, it is likely that more states will introduce similar laws to those in Arkansas, Oklahoma and Texas. If that happens, Congress may then feel the need to step in with federal legislation to prevent the trend of one-upmanship from continuing.

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The construction industry is full of valuable business information including customer lists, pricing information, project budgets, and more. The value of such information may be lost if it becomes known to a competitor or the public at large. That is why it is important to take steps to protect confidential information from disclosure. Such steps may include confidentiality agreements, limiting access on a need-to-know basis, labeling, and other basic security measures. If you fail to take reasonable steps to protect confidential information, then you may not be able to get it back if it falls into the wrong hands.

A federal court in New Jersey explored these issues last week in JRM Construction Management, LLC v. Plescia, 2023 WL 2770479 (April 4, 2023). In that case, two former employees of JRM allegedly kept confidential information and shared it with their new employer, JRM’s competitor. The information at issue included client presentations, estimating procedures, and templates used to prepare final budgets for project bids. JRM sought an injunction to prevent further disclosure and to require immediate return of the information. The court refused to grant an injunction noting that discovery was needed to resolve several key issues of fact.

One of those key issues was whether JRM took reasonable steps to protect the information. While trade secret protection was once the domain of a patchwork of state common law decisions, 48 states (including New Jersey) and the District of Columbia have now adopted a version of the Uniform Trade Secrets Act (UTSA Enactment History), and a federal civil cause of action for trade secret protection was created with the 2016 enactment of the Defend Trade Secrets Act. 18 U.S. Code § 1836(b). Under either regime, the business trying to prevent the unwanted disclosure of its trade secrets will in every instance have to prove that the subject information meets the definition of a trade secret, including that the information was the subject of reasonable efforts or measures (tailored to the circumstances) to maintain the secrecy of the information. See 18 U.S.C. § 1839(3)(A); N.J.S.A. 56:15-2

The employees argued that JRM transmitted budget estimates to clients without any understanding or agreement that the information was confidential while knowing that such estimates were often shared with JRM’s competitors. The employees also claimed that JRM sent Excel file formats instead of .pdfs, so recipients had access to the underlying formulas and calculations. They argued that because JRM failed to protect its information, the information was not confidential or trade secret. As such, they were free to share it with their new employer and could not be required to return it. The court did not rule on whether JRM took adequate measures to protects its information but noted the factual dispute over that issue prevented it from issuing a preliminary injunction.

Whether JRM ultimately succeeds in retrieving its valuable business information remains to be seen. Regardless, the case stands as a good reminder to take steps to protect your confidential information and trade secrets. If you don’t, it could be stolen, and you may not be able to get it back.

Advancing technology and connectivity combined with high employee mobility make it easier than ever to transmit proprietary data. Bradley’s IP attorneys, in partnership with our experienced construction attorneys, can work preemptively to help clients develop appropriate employee agreements, confidentiality agreements, and other strategies and security measures to ensure proper protection of their valuable trade secrets.  

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Last month the Federal Circuit affirmed a PTAB inter partes review (IPR) decision finding that the University of Minnesota’s patent claim directed to the anti-cancer drug sofosbuvir was not adequately supported by the written description in the applications to which it claimed priority. As a result, the appellate court held in Regents of the University of Minnesota v. Gilead Sciences, Inc. that Gilead’s intervening prior art reference invalidated Minnesota’s patent claims. While the case is a straightforward application of written description law, it is consistent with the Federal Circuit’s broader trend towards requiring more of patent applicants to comply with Section 112’s disclosure requirements.

Minnesota’s Claim 1 required a set of compounds having the following structure:

R1 through R7 are each a genus of identified compounds, with the result that the claims are broadly directed to a class of drugs, known as phosphoramidate prodrugs, that target tumor-growing viruses. Suffice it to say that given the number of R groups in these structures, the size of each genus of those R groups, and the options given elsewhere in the claims, the number of potentially infringing compounds was very broad indeed.

The filing date of the patent was March 28, 2014, but it claimed through a chain of priority back to a 2004 provisional patent. In its IPR petition, Gilead submitted that a prior art reference (Sofia), published in 2010, anticipated the claims. The parties agreed that Sofia anticipated claim 1 and all dependent claims. Therefore, the decision turned on whether Minnesota’s claim was entitled to the 2004 priority date of the provisional application (and, thus, made Sofia unavailable for use as prior art based on its later publication date). Because a patent claim must be supported by the written description of the earlier filed application in order to obtain the benefit of its filing date, Minnesota had to show that the claimed compound was adequately supported by the written description of the 2004 provisional application. (The intervening chain of priority claims through an international application and two nonprovisional applications did not materially modify the scope of the disclosure.)

From the above discussion, it would seem that this is a case of whether the genus was sufficiently described in the provisional application to permit Minnesota to claim particular species. In such cases, the Federal Circuit has held that the genus must be described by “either a representative number of members of the genus or structural features common to the members of the genus” such that a person of ordinary skill could visualize or recognize the members of the genus(see Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1350-52 (Fed. Cir. 2010) (en banc). But Minnesota did not argue that it had sufficiently disclosed a genus. Rather, it argued that it had actual support in the provisional application for the claimed set of compounds by either literally describing the claimed compounds or providing “blaze marks” to them. A blaze mark is a colored mark or signpost marking the direction of a hiking trail.

Now, a patent claim is often likened to the “metes and bounds” of a real estate deed, or the fence on a land boundary, marking off what the patentee claims as his own exclusive right. To be granted that right, the patentee must also sufficiently describe the invention and its context within the art to demonstrate his possession of the inventive concept. This is like describing the landscape within the borders of the fence. By blaze marks, then, the parties, PTAB, and Federal Circuit mean that the patentee cannot merely run off an exhaustive list of every subcompound that might conceivably be used with the claimed genus, as if naming every tree in the Minnesota Northwoods property that has been purchased. Something more is required: blaze marks directing the artisan to that particular claimed compound, or that particular tree in the woods, such that the artisan can have a reasonable belief that the person making the patent claim actually recognized it as part of the invention.

Returning to the case, the Federal Circuit affirmed the PTAB’s finding that Minnesota failed to make the necessary disclosures in the provisional application to provide that reasonable belief. First, the Federal Circuit rejected Minnesota’s argument that the claimed compounds were literally described in the provisional application. Minnesota relied on the fact that claim 47 in the provisional application, which claimed “the compound of any one of claims 1-46” wherein R7 was a relevant compound (hydrogen or a particular alkyl group), was the literal equivalent of claim 1 of the later filed 2014 patent. The problem, according to the Federal Circuit, was that the number of dependent claims and the “maze-like path” between them gave no assurance that the inventor recognized in 2005 what the patent claimed in 2014 as being particularly inventive.

Minnesota then claimed that even if this was not a literal description, the claim path did provide the necessary blaze marks. Again, the Federal Circuit disagreed, finding that “even if…. claim 47 blazes a trail through the forest that runs close by the later-claimed tree, the priority applications do not direct one to the proposed tree in particular, and do not teach the point at which one should leave the trail to find it.” The Federal Circuit then affirmed the decision to invalidate the Minnesota patent.

This case is important for patentees and patent lawyers for two reasons. First, it continues a trend dating back about 10-15 years whereby the Federal Circuit has required patentees to be more explicit in the specification about the nature of the inventor’s conception of the invention. It is not enough to describe a small number of compounds and then claim a large genus, or alternatively, to rattle off every potential hypothetical compound to try to support a large genus claim. Rather, the Federal Circuit wants to see that the disclosure reflects what the inventor believed to be his invention. While this case involves the written description requirement of Section 112, it is similar to an analogous question about the enablement requirement currently before the Supreme Court in Amgen, Inc. v. Sanofi. The courts want to see what the inventor knew and when he knew it.

This leads to the second point. Minnesota filed the original provisional application in 2004, and the patent in issue was filed 10 years later. The intervening prior art was only published in 2010. Therefore, if there are questions about the sufficiency of the disclosure, it may be worthwhile to file a new patent application with additional disclosure (either as a completely new case or as a continuation in part application) directing the Office to the particularly desired inventive concepts. Had Minnesota filed an adequately supported patent claim any time between 2004 and 2010, it likely would have survived this challenge.

The Federal Circuit’s trend towards requiring more of patent disclosures is not likely to be reversed any time soon. That means that inventors who are blazing trails in their respective technical fields need to make sure to leave enough marks in their patent disclosures for others to follow behind.

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Phillip Morris can’t seem to catch its breath. As discussed in a previous post, just a few weeks ago the Federal Circuit upheld the ITC’s ban on the importation and sale of Phillip Morris’s line of heated tobacco and electronic cigarette products offered under the brand IQOS. Phillip Morris now has to recharge its battery to fight against other allegations of infringement recently revived by the Federal Circuit. Indeed, a recent Federal Circuit decision provided Healthier Choices Management Corp. (HCMC) a second chance to fire up its patent infringement claims against Phillip Morris and its IQOS products.

In November 2020, HCMC filed suit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the United States District Court for the Northern District of Georgia alleging patent infringement. More specifically, Phillip Morris’s IQOS products are purported to infringe claims related to a combustion electronic pipe in U.S. Patent No. 10,561,170. The asserted claims require a combustion reaction, e.g., claim 1 requires that the “heating element initiat[es] a combustion reaction in the combustible material reservoir” and method claim 5 requires a comparable initiating step. HCMC alleged in its original complaint that, notwithstanding Philip Morris’s claims that IQOS products are combustion-less because the tobacco is heated at a low enough temperature that the tobacco does not burn, the IQOS products do initiate a combustion reaction. In making this allegation, HCMC attached an exhibit that Philip Morris submitted to the FDA arguing the lack of combustion.

Phillip Morris moved to dismiss HCMC’s complaint and argued that the exhibit and portions cited by HCMC conclusively demonstrate that the IQOS products do not initiate a combustion reaction as required by the asserted claims of the ʼ170 patent. In addition, even though the amended complaint submitted with HCMC’s motion to amend removed reference to the exhibit, Phillip Morris argued that the exhibit was so essential to HCMC’s argument that the court should deny HCMC’s motion to amend. The district court ruled in Phillip Morris’s favor on all counts, denying HCMC’s motion to amend its complaint, dismissing HCMC’s original complaint, and awarding attorneys’ fees to Phillip Morris.

HCMC appealed. In addition to arguing that the district court erred in denying its motion to amend its case and dismissing the case, HCMC challenged the attorneys’ fees awarded to Phillip Morris and requested a different judge on remand. Phillip Morris countered that, because the court must accept as true all statements contained in an exhibit that was attached to and relied on by the complaint absent HCMC’s express disavowal of any such statements, and there was no such express disavowal, HCMC’s allegation that the IQOS products initiates combustion was implausible, and the lower court did not err in dismissing the complaint.

The appellate panel disagreed and explained that factual assertions made in an exhibit do not always control over contrary factual assertions on the same subject made in a complaint. The panel further expounded that “[w] here a . . . plaintiff attaches a . . . report to his complaint and alleges that it is false, . . . the contents of the report cannot be considered as true for purposes of ruling on a motion to dismiss.” And, while “a plaintiff seeking to disavow statements in an attachment to its complaint [is not required to] recite certain magic words to do so,” the infringement allegations here were “sufficient to disavow the contradictory statements . . . in which Philip Morris self-reported that its products do not combust”:

[O]n information and belief, while Defendants assert that the Accused Infringing Product does not cause combustion of the IQOS® Tobacco Sticks, Defendants’ own testing concludes that 97%, not 100%, of the harmful chemicals associated with combustion are eliminated by the Accused Infringing Product, and the presence of 3% of the two important combustion markers nitrogen oxides and carbon monoxide indicates that at least some combustion occurs when the Accused Infringing Product is operated as designed and intended by Defendants.

Ultimately, the panel concluded that HCMC’s original complaint plausibly alleged that combustion occurs and, thus, stated a valid claim for infringement.  

With respect to the motion to amend and amended complaint, the appellate panel noted that HCMC’s amended complaint includes “allegations, more explicit than those in its original complaint, regarding how the IQOS system initiates combustion of at least a portion of the HeatStick.” The panel disagreed with the district court that the exhibit was so essential to HCMC’s allegations that the complaint could not be amended to remove the exhibit. The panel also explained that, even assuming the exhibit was so integral to HCMC’s allegations that it should be treated as attached to the amended complaint, HCMC expressly disavowed the exhibit’s statements regarding no combustion and raised a plausible allegation of patent infringement. Finally, the panel further noted that combustion testing by Phillip Morris cannot be the sole determinator of combustion at this stage (before claim construction) because Phillip Morris’s definition of combustion may be too narrow. 

The attorneys’ fees award was vacated based on the reversal of the district court’s dismissal of the original complaint. A good win for HCMC, right? For the most part. But the Federal Circuit did not reassign the case on remand as requested by HCMC. While “the fact that the district judge ruled against [HCMC should be] of little impact,” it may nonetheless take some time for the court to thaw. Also, the Patent Trial and Appeal Board issued a Final Written Determination in December 2022 declaring all of the claims in the ʼ170 patent unpatentable. HCMC has filed a notice of appeal to challenge that determination, but the fate of the ʼ170 patent (and this suit) is unclear.