I was largely oblivious to the processes of prescription and generic substitution before my internship at Teva Pharmaceuticals. Little did I know that pharmacists had the discretion of substituting generics for brand name medicines, unless the prescriber had indicated ‘no substitution’ on the prescription, which might occur if a patient had experienced an adverse reaction to an alternative brand. Little did I know that the price of patented medicines is capped on a case-by-case basis by the federal Patented Medicine Prices Review Board. And little did I know that every provincial/territorial jurisdiction in Canada is party to a Tiered Pricing Framework that also places ceilings on generic drug prices relative to the reference brand price. I was fortunate to have a patient and knowledgeable supervisor in Ben Gray with whom to discuss a number of patent issues involving litigation strategy, biologics, skinny labeling, and means by which pharmaceutical companies seek to extend their commercial monopolies.

My internship at Teva afforded me the opportunity to connect with members of the inhouse legal team, including counsel and a law clerk, as well as external counsel to gain a clearer picture of the division of labour on legal matters. In-house counsel oversaw matters on the macro level, sometimes handling matters independently, but also procuring and providing instruction to external counsel and allocating resources across files. External counsel were assigned to individual files, but in-house counsel kept abreast of developments through regular updates to their litigation reports, which provide an overview of ongoing litigation from claims to timelines. The management of intellectual property, having its own dedicated counsel and litigation report separate from all other legal matters, is unsurprisingly a priority for Teva.

While I did encounter a trademark issue pertaining to licensing the use of Teva’s brand materials, the IP matters I was exposed to mostly concerned patents. Though I have completed a handful of undergraduate courses in chemistry, that information has since laid dormant in my brain—so it was to my relief when Ben assured me that a PhD in chemistry is not a prerequisite to the in-house work that he does. I don’t know that the same can be said for the work of external counsel having now reviewed a couple lengthy Notices of Application pursuant to the PM(NOC) Regulations. Admittedly, I took numerous detours while reading to refresh my memory on the meaning of various terms describing chemical groups and molecular structure.

As Teva markets both brand name and generic products, it also both defends and challenges the validity of patents. I found it valuable to be placed with an entity whose interests lie on both sides of the social bargain in patent law. Updating litigation reports on intellectual property and non-intellectual property matters with law clerk Lynn Chacra allowed me to survey a range of legal issues that can arise for a pharmaceutical company. The matters I engaged with in more depth, though, were IP-related. In the
course of my work, I became more familiar with the Patent Act, the Patented Medicines (Notice of Compliance) Regulations, and the Rules of Civil Procedure. But my takeaways were not limited to hard skills.

Future dealings with most corporate adversaries, co-plaintiffs and co-defendants is to be expected in an oligopolistic industry like pharmaceuticals. As I allude to in the title of this blog—it’s a small world in big pharma. Aside from a firm grasp of the relevant substantive law and procedural frameworks, the importance of soft skills cannot be overstated in building respectful working relationships with adversaries and colleagues alike. For instance, favourable procedural arrangements and even settlements can sometimes be reached on consent of the parties. Co-plaintiffs or co-defendants may also pursue joint litigation to pool resources. It was my pleasure to be placed with an office that exemplifies professionalism from the technical to the relational. Owing to my positive experience with the Teva team, I have arranged to virtually observe an appeal hearing after the formal conclusion of my internship, so I can say with complete sincerity that I would choose this internship again.

The post It’s a Small World in Big Pharma - My Internship at TEVA Canada Ltd. appeared first on IPOsgoode.

Due to the international and extra-jurisdictional aspects of enforcing and administrating patent law in general, and similarities between Canadian and European patent regimes, the concerns and issues raised in her are relevant in Canada and could trigger similar discussions regarding the Canadian patent system.

Patent law and Language

Is there anything inherent in patent law that makes it more susceptible to ambiguities than other fields of law? Dr. Thambisetty posits that patent law works as an intermediary between law and other fields of knowledge, such as science and commerce, which have their own dialects and languages. One can think of patent law as an interdisciplinary field, whose dialect is the common denominator of many mutually exclusive technical languages. This interaction leads to the creation of non-standard terms in patent law. Further, due to this unique position of patent law, the scale of non-standard terms that are used in this field is considerably larger than any other field of law.

Guidelines on Writing Patent Applications and Expectations��

The are written by one branch of the (“EPO”) to aid the EPO in its examining role. Guidelines are often used and quoted in the EPO’s . But they are not considered to be law and therefore are not binding. The EPO follows the guidelines in its decisions, however, it can also refrain from following them, on the basis that guidelines do not constitute law.

While the guidelines are not legally binding, patent applicants are expected to follow them in drafting their applications, and as a consequence, there is an expectation imposed on the applicant by the EPO.�� How does the EPO justify this inspirational role of its non-binding guidelines? According to Dr. Thambisetty, the EPO's institutional power over the��administration of patent law enables them to evade justifying their decisions.

Purpose of Ambiguity: Illusion of Legitimacy

One important role that ambiguity plays is that it adds to the legitimacy of the institution. Dr. Thambisetty argues that ambiguity is like an "endowment" to the office to give it legitimacy. The EPO, by exercising their power over rhetoric and language of the legislation, has kept the provisions ambiguous to give the appearance that special knowledge and expertise is required when dealing with the legislation.�� According to Dr. Thambisetty, this appearance serves two important and intertwined purposes which when combined, gives the institution the illusion of legitimacy.

First, it gives the EPO authority to exercise a relatively unlimited power over applicants and agents. This provides a possible answer as to why the EPO can impose expectations and not abide by them itself.

Second, it solidifies the EPO's position amongst other governmental institutions.��No other governmental institution can compete with the EPO, as they lack sufficient expertise and knowledge when dealing with patent legislation.��Therefore the EPO faces no competition in the regulatory sphere.

Dr. Thambisetty concluded her talk by emphasizing that an institution, which navigates ambiguity, can exercise a great deal of power over those who come within its jurisdiction. As long as this power can be enforced and harnessed, that institution��has an incentive to continue its ways. In her opinion the change has to come from inside the institution.�� So the question is, how much ambiguity are we willing to accept?

Nazli Jelveh is an IPilogue Editor and a JD candidate at Osgoode Hall Law School.

The post Examining Ambiguities in Patent Examination Guidelines by Dr. Siva Thambisetty appeared first on IPOsgoode.

When an considers subject matter of an application to be an aggregation, the defect is identified under section 28.3 of the Patent Act as being obvious. Obviousness subject matter is broadly described as lacking an . Aggregations are believed to lack an inventive step since the absence of integration between elements makes their results predictable. However, since the patent system is founded on incentivizing the dissemination of knowledge for the advancement of society, should aggregations that lead to advances in social utility be considered defective simply because there is no integration of elements?

A well-known English states that "necessity is the mother of invention". This implies that the driving force for invention is need. In response to this proverb, author stated “I don’t think necessity is the mother of invention – invention, in my opinion, arises directly from idleness, possibly also from laziness. To save oneself trouble.” Neither of these quotes incorporate any consideration of the patent system; however, they point to a flaw in the way obviousness is used to invalidate an application.

(1875) is a U.S. Supreme Court decision on the validity of patent for an eraser fixed to one end of a wooden pencil. In the decision, Justice Hunt writes that “a combination, to be patentable, must produce a different force, effect, or result in the combined forces or processes from that given by their separate parts. There must be a new result produced by their union; otherwise it is only an aggregation of separate elements.” Consequently, the application of a piece of rubber to one end of a pencil was ruled an aggregation. When the eraser is removed from the pencil, the pencil and eraser continue to function as intended. Strictly speaking there is no integration of elements; however, the eraser and pencil when manufactured together produce a product that has a utility greater than the utility of the elements by themselves. In other words, the aggregation produces “a utility step”. A pencil with an eraser attached saves oneself trouble.

As indicated in Article 27 of the agreement, an inventive step is necessary for patent eligibility in member states. Member states adopt their own tests for determining the presence of an inventive step. In the U.S., the use of “” allude to the imperfect nature of its test for obviousness. Secondary considerations may include evidence of commercial success, long-felt but unsolved needs, failure of others, copying by the industry and unexpected results. Evidence of secondary considerations can prove an invention is non-obvious even though, in theory, it appears to be obvious.

The ingenuity of an invention is often inextricably linked to its utility. Consequently, separate tests for utility and obviousness present a problem. Utility, after all, is what society needs for the patent system to have value. The current Canadian test for obviousness provided in does not contemplate utility advancements because utility occupies a separate requirement. The test for obviousness contemplates only whether differences between the state of the art and the inventive concept of the claim would have been obvious to the person skilled in the art. Prior to Sanofi, the most recent Canadian comprehensive obviousness checklist was that of Justice Sharlow from , the levofloxacin infringement case. The list incorporates many of the secondary considerations used in the U.S. and is still used in Canadian patent law. However, I believe law on obviousness remains inadequate for to its failure to incorporate utility analysis as a secondary consideration to prove non-obviousness.

Aggregations which produce a utility step suffer from hindsight bias when undergoing the obviousness test. An useful aggregation will tend to look obvious after the fact. Hindsight bias is thought to be safeguarded by viewing prior art through the eyes of a person not having knowledge of the claimed invention. An additional safeguard from hindsight bias requires the Examiner or judge to articulate why it would have been obvious to combine prior art to arrive at the claimed invention. I believe these safeguards to be overly idealistic.

There is a small, but significant, number of that offer protection (also known as petty patents or innovation patents). In the utility model, the stringent requirement of non-obviousness is lowered, or absent altogether, for protection that lasts between 7 and 10 years (depending on the country). I believe the utility model represents a strong compromise between the desire to incentivize improvements for the benefit of society while offering shorter terms of protection to indicate the level of inventiveness does rise to that of a patent. I believe they are a practical solution for utility step aggregations. Canada currently does not offer utility model protection.

Justin Philpott is a JD Candidate at Osgoode Hall Law School. Justin is currently enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

The post Utility Emphasis Lacking in the Examination of Aggregations appeared first on IPOsgoode.

The United States Patent and Trademarks Office (USPTO) has released an updated set of Eligibility Examination Guidelines to provide guidance to examiners on when to reject claimed inventions as ineligible abstract ideas. These guidelines give a sense of what computer-implemented subject matter the USPTO considers to be ineligible for patent protection.

Developing guidelines was difficult for the USPTO as the courts have provided little explanation of when patent claims are invalid for defining ineligible abstract ideas, or even what abstract idea means, and the USPTO lacks the authority to craft its own definitions. The USPTO is largely limited to telling examiners that patent claims cover abstract ideas if they cover subject matter that is similar to what the courts have determined to be abstract ideas. Given the absence of general concepts or principles for identifying the kinds of abstract ideas that are not eligible for patent protection, practitioners and applicants need to be aware of all of the Federal Circuit and Supreme Court case law on patent subject matter eligibility, and to craft patent claims with arguments in mind as to why the subject matter covered by the claims is materially different from subject matter determined to be ineligible in any of this case law.

The original 2014 Interim Guidance on Patent Subject Matter Eligibility¹ document (“the Guidance”) defines steps to be taken by an Examiner to assess subject matter eligibility.�� Steps 2A and 2B apply the two-part analysis from Alice² and Mayo³.��In step 2A the Examiner determines whether the claim is directed to a statutory exception to patent protection: a law of nature, natural phenomenon or an abstract idea.��If not, then the claim is eligible for protection (although the Examiner must still determine whether the claim meets the other requirements for patentability, such as novelty and non-obviousness).��If the claim is directed to a law of nature, natural phenomenon or an abstract idea, then step 2B applies and the Examiner determines whether the claim as a whole represents “significantly more”.�� Claims that do not cover significantly more than a law of nature, natural phenomenon or abstract idea are ineligible for patent protection and are to be rejected under 35 U.S.C. § 101.

The posting of the Guidance in 2014 provoked much comment and criticism, some critics alleging that under the Guidance virtually nothing was eligible for patent protection. The July 2015 Update on Subject Matter Eligibility⁴, (“the Update”) responds to these comments and criticism.

The Update provides an updated set of subject matter examples, and also divides the case law into different categories of abstract ideas, which are useful both as a credible attempt to organize the case law, and to provide insight into the USPTO’s perspective on this case law and arguments they may find persuasive.�� It also provides reassurance that the USPTO is addressing criticism that under the current rules post-Alice⁵ there is not a clear path forward for software patent applications because of the difficulties encountered with subject matter objections. The Update makes it clear that examiners should not determine a claimed concept to be an abstract idea unless the claimed concept is similar to at least one concept that either the Federal Circuit or the Supreme Court have identified as an abstract idea. In other words, applicants should be able to avoid having their claims rejected, at least in the USPTO, on subject matter eligibility grounds by defining concepts in the claims that differ sufficiently from claim concepts invalidated on these grounds by the Federal Circuit or the Supreme Court.

Of course, much will depend on how aggressive and creative examiners are in determining that claimed concepts they are considering are similar to a concept determined to be an abstract idea by the courts. Further, the Update makes it clear that this determination of similarity does not require evidence: examiners can ground such a rejection by merely explaining, clearly and specifically, why the claimed concepts are similar to concepts determined to be abstract ideas by the courts, and are thus ineligible for patent protection.

New Examples

In the Update, several new examples are provided in addition to those found in the original Guidance document and include:

21. ��Transmission of Stock Quote Data – modeled after the claims at issue in Google Inc. v. Simpleair, Inc.⁶, (Claim 1 ineligible, Claim 2 eligible).
22. ��Graphical User Interface for Meal Planning – based on Dietgoal Innovations LLC v. Bravo Media LLC⁷ (Claim 2 ineligible).
23. ��Graphical User Interface for Relocating Obscured Textual Information (Claims 1,4 eligible, Claims 2-3 ineligible).
24. ��Alerting System for a Catalytic Chemical Process --�� based on Parker v. Flook⁸ (Claim 1 ineligible).
25. ��Temperature Control of Rubber Molding --�� based on Diamond v. Diehr⁹ (Claims 1-2 eligible).�� Claim 1 is the actual claim 1 from Diamond v. Diehr, Claim 2 is a hypothetical claim in the form of computerized instructions.
26. ��Exhaust Gas Recirculation in an Internal Combustion Engine – based on technology from U.S. Pat. 5,533,489 (Claim 1 eligible).
27. ��A method of loading System Software (BIOS) into a computer – based on technology from U.S. Pat. 5,230,052 (Claim 15 eligible).

In each example, the Update evaluates the hypothetical claims based on steps 2A and 2B, and discusses how an Examiner might determine patent eligibility for patent claims covering an analogous technology.

Example #25 – Diamond v Diehr

An interesting example in the Update is #25, since it introduces hypothetical claims modeled after the technology in the 1981 case Diamond v. Diehr, 450 U.S. 175 (1981).�� This case dealt with a patent involving a computerized process controlling a rubber molding press.��The invention offered significant advantages over the prior art at the time, as it enabled in situ temperature monitoring and automatic recalculation of the optimal cure time.��This calculation involved using the temperature inputs and the Arrhenius equation, long used to calculate the cure time of rubber molding processes.

The reasoning in the Update for Diamond v Diehr differs from the reasoning provided by the Supreme Court. In the 1981 decision, the Supreme Court obliquely refers to the machine or transformation test in determining subject matter eligibility:

“A mathematical formula, as such, is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U. S. 63 (1972), and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v. Flook, 437 U. S. 584 (1978). Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable process. ��To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101. Because we do not view respondents' claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.”¹⁰

In example #25, according to the Update, Claim 1 from Diamond v. Diehr involves a repeated calculation of the Arrhenius equation, a mathematical relationship held to be representative of a law of nature, and therefore Step 2A is met. Next, analyzing the claim as a whole using the Guidelines, the combination of steps taken together amount to significantly more than just the abstract idea of the Arrhenius equation (Step 2B). ��Thus, claim 1 in Diamond v Diehr is patent eligible, satisfying the “significantly more” step of the test.

The USPTO may have seen fit to rewrite the justification for this case to bring it into accord with the Alice framework.��The Court in Diamond v Diehr determined that the structure claimed, considered as a whole, was the kind of structure and performed the kind of function the patent laws were designed to protect. In making this determination, the Court refers to the machine or transformation test to establish the patentability of the claimed invention. However, after the decision of the Supreme Court in Bilski, the machine or transformation test is no longer the definitive test, although it remains a helpful indicator of subject matter eligibility.

Categories of abstract ideas outside the scope of patentable subject matter

The US courts have provided little explanation of when and why patent claims are invalid for covering abstract ideas.��Since the USPTO lacks the authority to create its own definitions, and it is difficult, perhaps impossible, to discern principles from the case law, the USPTO has instead focused its efforts on helping examiners to determine if the concepts defined in claims are similar to what the courts have determined to be abstract ideas, and are thus invalid.��The Guidelines and Update construct several different categories of ineligible abstract ideas based on the case law.�� Each category covers many different examples, taken from the case law, of concepts defined in patent claims that have been invalidated by either the Federal Circuit or the Supreme Court as abstract ideas. Clearly, patent applicants should do whatever they can to define their inventions using claim language and concepts that fall outside these categories.

These categories are the closest the USPTO gets to general concepts or principles for subject matter eligibility. These categories include the set of “judicial descriptors” associated with software based subject matter that has been identified by precedent in the Federal Circuit and the Supreme Court as patent ineligible, including

1. “Fundamental economic practices” including concepts dealing with the economy and commerce including contracts, legal obligations and business relations.
   1. Mitigating settlement risk -- Alice¹¹.
   2. Mitigating hedging risk -- Bilski¹².
2. “Certain methods of organizing human activity” including concepts dealing with personal and intrapersonal activities including relationships, transactions involving people, social activities and behaviour.
   1. Managing human behaviour, specifically meal planning -- Dietgoal¹³.
   2. Advertising, marketing and sales – Ultramercial¹⁴.
3. “An idea ‘of itself’” i.e. an idea standing on its own including a bare concept, plan or scheme, and
   1. Methods of comparing data that could be done mentally -- Cybersource¹⁵.
   2. Concepts relating to organizing, storing, and transmitting information – Cyberfone¹⁶.
4. “Mathematical relationships/formulas” including algorithms, mathematical relationships, formulae and calculations.
   1. Converting binary coded decimal values to pure binary values -- Benson¹⁷.
   2. A mathematical formula for hedging – Bilski¹⁸.

It is difficult to find recent cases where software related patents have survived subject matter eligibility analysis by the Federal Circuit or the Supreme Court. Given the numerous examples of ineligible subject matter in the Update and Guidelines combined with the rejection statistics¹⁹ from the USPTO and invalidation statistics²⁰ at the Federal Circuit, it is reasonable to ask whether any claims have recently survived challenge on subject matter eligibility grounds. ��One example outside of the scope of software subject matter is Myriad²¹, where the Supreme Court allowed claims for complementary DNA.

While the Supreme Court invalidated all of the claims in both Bilski and Alice; there is one case related to software subject matter that has survived scrutiny, at least at the level of the Federal Circuit:�� DDR Holdings v Hotels.com²².

DDR Holdings v Hotels.com²³

The Guidelines discuss this case. This is the first Court of Appeal for the Federal Circuit case to uphold the validity of a software subject matter patent since Alice.�� In this patent, the claims were directed to managing the look and feel of an e-commerce website to provide “store within a store” functionality.

The claims in DDR covered a software solution to a problem, which, according to the judgment but not the dissent, was unique to the internet.��The claims dealt with the problem of retaining website visitors at an ecommerce site and offered a solution anchored in software that addressed a challenge unique to the web.�� Specifically, in the prior art a user clicking on an advertisement would be taken away from the host website to the advertising merchant. The claimed invention involves presenting a hybrid page generated by the host website to include a composite of the host website and advertising merchant’s product information. The decision was based, at least in part, on the grounds that the claimed concept lacked a non-technological analog.

Takeaways

When drafting new applications for software-based inventions, it is important to keep in mind the judicial descriptors of ineligible subject matter, and to draft the claims to avoid categorization under any of these judicial descriptors if at all possible.��However, it is also important to keep in mind that this area of law is in flux, and will almost certainly see significant change over the next few years.��In particular, the categories of ineligible subject matter constructed by the USPTO may evolve or grow in number over the next few years as more cases are decided. Eventually, as the courts grapple with more and more cases, clear principles may start to emerge from the present chaos. One day, it may again be possible to rely on general principles to distinguish patent eligible subject matter from ineligible subject matter. At present, that day seems far distant, and for the foreseeable future it will be even more important to keep up-to-date on the latest Federal Circuit and Supreme Court precedent, mostly to know what kinds of subject matter to avoid claiming, but also to keep an eye out for the occasional beacons of hope, such as a DDR.

��is a partner,��lawyer and patent agent in��Bereskin & Parr's Patent Group in the Mississauga��Region. He��is active with the Intellectual Property Institute of Canada (IPIC) and has contributed extensively to patent education in Canada. is a JD candidate at Osgoode Hall School and was a summer student in��Bereskin & Parr's��in��Toronto.��Twitter: .

The post The View Ahead for Software Patent Applications: USPTO Releases Update to Guidance on Patent Subject Matter Eligibility appeared first on IPOsgoode.

A new business that plans to bring a new and innovative product or service to market ought to address patents right from the first draft of their business plan.

Patents provide time-limited monopolies for the disclosure of inventions. If you’re ready to start a new business around a new and innovative product or service, you’ve likely invested time and money into research and development already. Patents allow you to profit financially from this investment. in the United States puts the average monetary value of a United States patent at over $500,000 Canadian dollars (using today’s USD-CAD exchange rate).

Patents can also deter competitors from copying your product or service and allow you to claim monetary damages from competitors who do. This gives security to new businesses which enables them to grow notwithstanding larger competitors with more resources.

The fundamental requirements for a patentable invention are that it be new, non-obvious (inventive) and useful. There are also rules around eligible subject matter, the boundaries around which are often in flux and won’t be addressed further in this piece.

For most new businesses who believe that they may have a patentable invention, the first decision is whether to obtain a patentability assessment or to file a provisional patent application. Some new businesses with greater initial capital will proceed directly to a non-provisional or regular patent application filing. I describe each of these options in more detail below.

Patentability Assessment

A patentability assessment includes a patent search, an analysis of the references uncovered which constitute prior art to the proposed invention, and a written report on patentability.

This written report gives a detailed and generally reliable assessment of the likelihood of obtaining a patent and for what scope of invention. It will also identify many of the potential barriers that may be encountered in pursuing a patent so that a business decision can be made as to whether it is worthwhile to incur the more substantial expenses to do so.

Often, if the patentability assessment indicates little to no chance of obtaining a patent, the decision will be made not to pursue a patent thereby likely saving the new business several thousands of dollars in patent application costs. On the other hand, if obtaining a patent seems likely, the favourable assessment gives confidence to the new business and potential investors and licensees that exclusive patent rights will ultimately be obtained.

Provisional Patent Application

A provisional patent application refers specifically to a United States provisional patent application. It is an informal application that can be prepared and filed at a lower cost than a non-provisional or regular patent application.

A provisional application is not examined by a patent examiner and cannot itself issue to a patent. Rather, it may serve as a priority document for a subsequent non-provisional or regular patent application filing in the United States, Canada, or elsewhere around the world. This application is typically required to be filed within 12 months of the filing date of the provisional application, or earlier where there has been a prior public disclosure of the invention.

In this subsequent application, you have the opportunity to add additional detail and refinements, which often fits in well with the development cycle in a new business. For instance, a provisional patent application may be filed with the initial product design, then prototypes built over the next 6-9 months, and a non-provisional or regular patent application filed by the 12-month deadline incorporating all the additions, changes and refinements made to the design in the first year.

In addition, a provisional patent application, like a non-provisional or regular patent application, allows you to use “patent pending” in marketing your new product or service as described in the patent application. Advantageously, this conveys to potential customers or licensees that your product or service is innovative and warns competitors that you’re in the process of obtaining exclusive patent rights.

Non-Provisional or Regular Patent Application

Filing a non-provisional patent application within 12 months from the date of the provisional application is usually the next patenting step following the filing of a provisional patent application.

At this stage, you need to identify the jurisdictions you want to pursue a patent in, or decide to file a Patent Cooperation Treaty (PCT) patent application which is discussed below. I use the term jurisdiction because although patents are ultimately national rights, regional patent applications may be filed for centralized filing and prosecution in certain groups of countries.

If the non-provisional or regular patent application is the first-filed patent application for the invention (i.e. there was no provisional application) and there was no prior public disclosure of the invention, you can file an initial non-provisional or regular patent application in only one jurisdiction and file in other countries or regions within 12 months (or later if a PCT patent application is filed).

Patent Cooperation Treaty (PCT) Patent Application

Many new businesses will not be in a position to make the substantial expenditures to file patent applications in a large number of countries either initially or within 12 months of the initial patent application filing. This is where a PCT patent application may be useful.

A PCT patent application is an international patent application that can’t itself issue to a patent, but preserves the right to file national or regional phase patent applications in most PCT countries or regions until 30 or 31 months from the initial provisional or non-provisional patent application filing. This extra breathing room can be quite helpful if a new business needs additional time to raise investment money or is trying to grow its revenues to bear these patenting costs itself.

While a PCT patent application has its own cost, it also provides an international search report and an optional international examination process, which may give the applicant further information about the likelihood that a patent will be obtained.

Non-Infringement of Third Party Patents

It is also important to consider whether your new product or service infringes on other patents as neither applying for nor obtaining a patent for your product or service precludes it from infringing patents owned by third parties.

It is usually outside of the budget of most new businesses to hire a patent lawyer or patent agent to conduct a comprehensive patent clearance search for each jurisdiction in which the product or service will be sold, but some degree of patent searching on competitive products or services is often advisable. Ideally this is done before the product or service is offered for sale in the particular market.

Conclusion

Patents are a critical part of the business plan for most innovative new businesses. Aside from the standalone asset value of patents, they also can protect the business against competition as it grows. Understanding and planning the sequence of patent application filings ahead, as discussed above, will enable you to better plan your new business’s cash flow needs for patents so that you can get the patent protection you want to optimally grow your business.

is a Toronto IP lawyer, registered patent agent and registered trademark agent at . He is one of a select few intellectual property lawyers designated by the Law Society of Upper Canada as a certified specialist in patent law.

The post Patent Strategies in Your First Few Years of a New Business appeared first on IPOsgoode.

Although this decision primarily turned on the facts, there are some notable points of interest for infringement, claims construction and expert evidence.

The Invention

Omeprazole decreases gastric acid secretion by inhibiting proton pumps. Thus, omeprezole is useful to treat a variety of conditions associated with low stomach pH such as dyspepsia, peptic ulcer disease and gastroesophageal reflux disease.

The activity of omeprazole was known at the time of patent filing, however, the instability of the compound posed challenges to commercialization. Omeprazole had to be stable under two distinct conditions: (1) when exposed to gastric acid and (2) for storage. Unfortunately, traditional enteric coats, which would provide gastric acid resistance, would also react with the omeprazole core to cause degradation under storage conditions.

AstraZeneca solved the stability conundrum in the ‘693 patent through “an inert sublayer … disposed on said core region” (see e.g. ). By separating the omeprazole core from the enteric layer with a subcoat, degradation could be avoided, permitting stable storage.

The Issue

The Apotex omeprazole formulation also contained a subcoat between the omeprazole core and the enteric coat. However, this subcoat was the product of an in situ reaction between the omeprazole core and the enteric coat. This method for creating a subcoat was not contemplated by the patentee at the time of patent application.

Does the scope of the claims capture products that result from an unanticipated method of production?

Justice Barnes held that for novel product claims, the scope of the claims are not limited to the methods identified or contemplated by the patentee [182]. Furthermore, Justice Barnes rejected the notion that a patentee has any obligation to teach its competitors how to avoid infringement [185]. Therefore, infringement does not require either party to be able to anticipate the infringement prior to the act. Such a legal conclusion is well grounded in the strict liability nature of patent infringement.

Claim Construction

Given that the method of infringement need not be anticipated, infringement in this case hinged on the meaning of “inert” and “disposed upon”. Through the assistance of expert witnesses, Justice Barnes preferred the nuanced approach to construe “inert” to mean the absence of “reactions that adversely affect the functionality of the formulation” [194]. Expert witnesses, however, provided no assistance to the construction of “disposed upon”, as this was not a term of art in the world of the formulator [170]. Absent a clear meaning to a formulator, Justice Barnes held that “disposed upon” does not signify a process limitation [189].

Of general interest, Justice Barnes cautioned against “the danger of relying too heavily on the disclosure as an interpretive guide to claim language”. In the disclosure, the patentee contemplated direct application of the subcoat layer to the omeprazole core. However, this statement in the disclosure cannot be read into the claims as process limitation when there is no language in the claims to support such a limitation [179].

The ‘693 Patent was previously and similarly construed by Justice Rothstein for a unanimous Federal Court of Appeal in Apotex Inc v AB Hassle, , in the context of a PM(NOC) proceeding between the same parties. While PM(NOC) decisions are not binding for subsequent infringement actions, Justice Barnes held that the construction taken by FCA to “carry some persuasive weight”, especially where the issue of construction does not require specialized knowledge [175].

Patent Infringement

There was little dispute that the Apotex formulation contained a subcoat. Rather, the issue of infringement turned on whether that sublayer was continuous or inert. These issues were resolved largely through technical evidence produced by the expert witnesses.

Expert witnesses for both parties provided diametrically opposing opinions on whether there was structural continuity in the subcoat. Justice Barnes preferred the evidence offered by the AstraZeneca witness, suggesting that the subcoat was continuous [342]. Furthermore, given the fact that the subcoat swells in the presence of water, any gaps that appear when the capsule is dry may very well be sealed once the capsule gets wet [312]. AstraZeneca’s witness also produced data that ruled out the likelihood of significant quantities of omeprazole degradants or other reactive compounds in the Apotex subcoat [364].

Justice Barnes took particular note of the fact that Apotex’s experts chose to attack the experimental methodology and limitations of AstraZeneca’s expert, rather than conduct their own independent tests [298]. In particular, Justice Barnes noted that “[a]n argument that other tests or controls could have been used loses much of its strength where a party chooses not to employ those same suggested methods in its own responding analysis to see if the results differ” [361].

This approach to resolving conflicting expert opinion is consistent with the law of burdens of proof and general approach to ascribing weight to evidence. AstraZeneca had both the persuasive burden and evidentiary burden on the issue of infringement. By adducing evidence to the satisfaction of Justice Barnes, AstraZeneca had discharged its evidentiary burden to raise the issue of a continuous subcoat. Whether AstraZeneca had met its persuasive burden depended on the reliability of the evidence and the cogency of the interpretation of the data. Apotex’s decision to challenge the data meant that the scope of the dispute for infringement was on the reliability of the evidence. It is therefore logical that Apotex’s argument would lose considerable force because those attacking experimental methodologies and limitations “should not benefit from any uncertainty that could easily have been dispelled” [348].

Lou Chang is a JD Candidate at Osgoode Hall Law School and a fan of JRR Tolkien.

The post An Unexpected Infringement: There and Back Again appeared first on IPOsgoode.

A ) Gilead's Problem

The Drug & The Patents

Viread is a drug that is used to and (in combination with other anti-retrovirals) has also been used to . ��The Chinese patents ( & ) were each filed in 2004 and 2005 respectively and have been challenged�� by Shanghai-based generic manufacturer .

The Validity Challenge

Aurisco has argued that the Viread patents lack novelty because the active ingredient () was disclosed by Czech scientist Antonin Holy when he filed for a US patent for the compound in . Thus the information contained therein is already in the public domain contravening of the . ��The Patent Review Board appears to have accepted�� this argument and has cancelled the Viread patent.

��This comes as a blow to US-based Gilead.�� In recent years, its Viread patent has struggled to fend off opposition in developing markets -- having been rejected in����and��, and subjected to compulsory licencing in��. ��Aurisco's chairman, Peng Zhi'en, was recently ��to have said that he expects the Chinese market to amount to��CNY 1billion even with the onset of locally produced generics sold at one-twentieth of the price of Viread.

B) Chinese Context

The Social Context

The Chinese government's push to make Viread more readily available likely reflects the .�� China is home to over (one-third of the world total) with the cost of treatment breaching CNY100 billion (160 million USD) annually. The incidence of HIV/AIDS is also , causing 11,575 deaths in China in 2012. Given that ��from the last year, it is not surprising that the Chinese government is seeking out ways to lower the cost of treating these diseases.

It is worth noting however that in 2011 Gilead made Viread and other anti-retrovirals to developing economies through the ��(MPP). While China was not party to the MPP at the time -- it has since been admitted and appears to have .

The Legal Context

While SIPO’s Patent Review Board (PRB) is the highest level of appeal in the Chinese patent system, like most other countries, Gilead can sue the PRB as a matter of administrative law at one of .�� If this is unsuccessful, Gilead can appeal to the High People’s Court for a final ruling.�� This was the strategy employed by ��in 2007 to ��reinstate its patent for Viagra.

But would Gilead succeed if it challenged SIPO in the Chinese courts today?�� And what does Aurisco’s invalidation strategy imply about the new compulsory licensing scheme? ��I sat down with Hong Kong University’s ��to discuss these and other issues.

C) Policy Discussion with Dr. Li

Beatrice Sze:�� Given your research on patents and their affect on the Chinese biotech and pharma industries, in your opinion, would Gilead succeed if they sued today? Do you think it could pull a "Pfizer”?

Dr. Li:�� Without doing a validity analysis of the Viread patents it’s hard to say.�� However, technical merits of the patents aside, I would say that the social, political, and economic environment is tougher today for Gilead than it was for Pfizer seven years ago.

The year before the People’s High Court released its decision on Viagra, the State Council issued its . If you look at China’s IP goals for the next 5 years (Beatrice: of the English version provided) you will see that --first and foremost-- the government wants to cultivate domestic IP. ��In other words, they are looking to foster Chinese innovation.

Moreover, Gilead's Viread drug faces a particularly difficult social challenge. ��However one might feel about the validity of the patent, we are talking about the treatment for a disease that– as you pointed out – stands to cripple the Chinese healthcare system. ��Regardless of how one might feel about protecting the rights of the patent holder, when a state is responsible for providing healthcare to a third of the world’s chronic Hepatitis B sufferers one can see why it might want to cultivate a steady supply of domestically controlled medicine for its people.

Beatrice Sze:�� Where is compulsory licensing in this story? Why do you think Aurisco went straight for infringement-invalidation rather than design-around then compulsory licensing? ��

Dr. Li: ��The reality is the Chinese government (not even during the height of SARS outbreak in 2003). ��For Chinese generic drug manufacturers, the cost of infringement-then-invalidation is currently much lower than manufacturing and applying for a compulsory license.

Part of the problem is that the process is still very complicated and it takes about three years to go from application to approval by the state. ��Even after approval, companies will still have to pay licensing fees. ��So Aurisco probably adopted this strategy to maximize its drug's time on the market while minimizing its legal costs.

That said, Chinese language news sources indicate that Aurisco plans to apply for compulsory licensing after the patent has been invalidated. ��If it does so, it will be interesting to see how quickly the license is granted given the importance of this drug to the Chinese market and Beijing's current IP Strategy.

Beatrice Sze: What would you say to foreign innovators looking to enter China's pharmaceutical market?

Dr. Li: ��To foreign innovators looking to establish pharmaceutical IPRs in China I would say: do not be discouraged. ��You may experience more resistance from SIPO given Beijing's current IP Strategy but if the Viagra case teaches us anything, it is that the Chinese government can be persuaded to honor patents if they are well-drafted and cover truly novel and inventive subject matter.

Beatrice Sze:��So it sounds like good advocacy made on behalf of good patents can still succeed in the Chinese legal system.

Dr. Li:����Yes, I'd agree with that statement.

Beatrice Sze: Thank you for your time, Dr. Li.��

Dr. Li:�� A pleasure, as always.

Dr. Yahong Li is an Associate Professor and Deputy Head at the Department of Law at HKU. She is also an Associate Director at HKU Technology Transfer Office.���� Read more of Dr. Li ‘s research in her book “” (Edward Elgar, 2010).

Beatrice Sze is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

With thanks to HKU's Chi Shan for her assistance in searching for primary sources at SIPO and within the Chinese court system.
Unfortunately at this time not all courts decisions or patent prosecution rulings are made publicly available by the PROC.

The post China’s Bitter Medicine for Gilead: SIPO Cancels Viread Patent appeared first on IPOsgoode.

The US doctrine of inequitable conduct is on “clean hands” - parties acting in bad faith should not be entitled to an equitable remedy. As presently interpreted by the US Federal Circuit, (1) an intent to deceive the Patent and Trademark Office, and (2) materiality in the misrepresentation made, information submitted, or information omitted. Significantly, a finding of inequitable conduct can render granted patents unenforceable. The USPTO’s Patent additionally provides for a general “duty of candor and good faith in dealing with the [Patent] Office.” Under this rule, a patent will not be granted on an application “with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or intentional misconduct.” Prior to the case, materiality was interpreted in line with the 1992 revision of USPTO’s Rule 56, under the standard of “importance to a reasonable examiner.” Therasense separated the close relation between the judicial doctrine and USPTO rule, and applied a to inequitable conduct.

The case giving rise to this comment, , concerned the alleged infringement of patents involving wireless transmission of caller identification. The defendant countered by alleging the patents were invalid due to the inventor’s inequitable conduct during prosecution. To overcome a prior art challenge, the inventor had made false declarations that the claimed invention had been reduced to practice at a certain earlier date. Although the declarations were later amended, the false statements were never removed, corrected, or called to the attention of the PTO. Applying the standard, the US Court of Appeals agreed with the defendant and found the patents, although for a novel invention, invalid for the inventor’s “affirmative egregious misconduct” in filing the false declaration.

Canadian patent prosecution law currently lacks a doctrine of inequitable conduct or a general duty of good faith, although provisions do punish some acts of bad faith. Thus, under of the Patent Act, a patent is void if an application willfully, for the purposes of misleading, makes “material allegation in the petition of the applicant in respect of the patent is untrue” or omits or adds information to the specification that is either more or less than necessary. A patent must also demonstrate utility, and therefore must . Canada does have a narrowly defined duty of good faith: of the Patent Act requires applicants to “reply in good faith to any requisition made by an examiner in connection with an examination.” Although the Federal Court of Appeal to introduce a general duty of good faith, it declined to extend the duty past the boundaries of section 73.

There is a significant limit to the duty under s.73: its breach will not invalidate a granted patent. The section applies only to requisitions made by an examiner during examination. The patent becomes abandoned if an applicant does not meet this duty during examination, but it can later be reinstated under section 73(3). By contrast, in the Intellect Wireless case, the inventor’s “affirmative act of egregious misconduct” was sufficient to invalidate the granted patents, without regard to the characteristics of the inventions or the manner in which they were described.

The US case raises once again the question of whether a general duty of good faith should be introduced into patent prosecution in Canada. The inequitable conduct doctrine reflects a moral principle that no benefit should be obtained by misrepresentation. that the doctrine can also reduce the rate of low quality patents. But should the actions of the applicant matter more than the value and quality of the application? If such a duty were introduced, Canada should take account of the U.S. experience. Practitioners heaved a of when the Federal Court of Appeal of Canada declined to expand the specific duty in section 73(1) into a general duty of good faith. The doctrine as a plague on the U.S. system due to the prolific use of the doctrine as a defence in “” situations, causing increased litigation costs. It may also by encouraging inventors to disclose more than necessary. A general Canadian duty of good faith should not be created if it results in increased costs to users of the patent system, regardless of the moral imperative behind it.

Mark Bowman is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program.�� As part of the program requirements, students were asked to write a blog on a topic of their choice.

The post Inequitable Conduct in Canadian Patent Prosecution appeared first on IPOsgoode.

And as has been common in commentary, he also draws parallels to the demise of previous research and development (R&D) powerhouse Nortel. As Yakabuski wrote,

“If Blackberry is sold – as seems likely after the board announced a strategic review and hired investment bankers – it will most likely be carved into pieces. That stands to make Canada’s innovation situation worse. The company, which benefited from government grants and loans in its early days, has given back by nurturing the countless startups for which BlackBerry is a customer or mentor. Nortel played a similar role in its day. The loss of an anchor can compromise an entire ecosystem of innovation, making it even harder for startups to make the leap to commercialization.”

The Globe and Mail has been reporting extensively on the company’s future, seen in articles like “” and “”.

Breaking Down the Issues

A quick scroll through the on any of these articles – or casual listening across our country’s proverbial water coolers – makes it clear that the future of Blackberry is a hot button issue. There are camps, there is rhetoric, and there is emotion. But using Blackberry’s current situation as either a symbol of contemporary innovation challenges or as a canary-like indicator for the future of Canadian innovation is problematic.

In unpacking the link between Blackberry’s future and its impacts on Canadian innovation, there are two distinct arguments. From the perspective of critics, the hypotheses are that Blackberry is struggling because it lacks innovation; also, the sale of Blackberry will reduce the amount of innovation in Canada. In my opinion, both are logic leaps.

Is Blackberry Struggling Because it Lacks Innovation?

Ongoing , device operating system reviews and the controversial but creative idea to – as well as the decision to – are clear signs of innovation.

There may be better reasons to explain Blackberry’s loss of market share and sinking stock price. These include that the innovations were not to maximize appeal with the , that , or that or product have faltered with growth. All of these claims seem to hold some truth to them. To say that Blackberry has lacked innovation, however, is, in my opinion, fundamentally inaccurate.

Will the Sale of Blackberry Reduce Innovation in Canada?

It’s difficult to predict whether any sale or breakup of Blackberry will result in quantitatively less innovation than if the company retains its current corporate structure. If we judge innovation by R&D investment, it would be hard to have mathematical certainty about what Blackberry would have spent over its company future in the event of a sale, and vice-versa. As a result, I would contend that outright, quantitative prediction is a mug’s game.

In my opinion, a more intelligent, nuanced response is that R&D is a blunt and sometimes indeterminate measurement of innovation. The Council of Canadian Academies recently completed an at the request of Industry Canada to assess innovation in Canada. Though it did find many benefits to industrial R&D (IR&D) investment, it’s not the same thing as innovation.

“IR&D and innovation are not synonymous. IR&D consists of any scientific research or technology development undertaken by Canadian businesses. Innovation, on the other hand, is the broader concept that can be defined as ‘new or better ways of doing valued things.’”

The panel listed four key areas of R&D strength in Canada, including:

• Aerospace products and parts manufacturing,
• Information and communication technologies,
• Oil and gas extraction, and
• Pharmaceutical and medicine manufacturing.
  
  

And here’s where the argument that a sale of Blackberry will reduce innovation in Canada begins to sound particularly weak. Even if a sale results in reduced R&D spending by the new corporate form or forms – which is difficult to prove – and even if a reduction in R&D spending guarantees a reduction in innovation (also difficult to prove), it stands to reason that a single company should never dramatically impact Canada’s overall innovation agenda. Blackberry is one company in one of the four areas of R&D strength in Canada.

The Big Picture

R&D and innovation in Canada have bigger problems than Blackberry’s future. A recent Conference Board of Canada shows that even by a broad array of 21 different indicators, Canada lags. According to their findings,

“Despite a decade or so of innovation agendas and prosperity reports, Canada remains near the bottom of its peer group on innovation, ranking 13th among the 16 peer countries / Countries that are more innovative are passing Canada on measures such as income per capita, productivity, and the quality of social programs.”

that, from a digital communications technology perspective, the temptation for entrepreneurs to sell out too early or join the brain drain to Silicon Valley is part of the problem.

“And the magnetic allure of Silicon Valley means people with qualifications are migrating en masse to the Bay Area. An estimated 350,000 Canadians live and work in the Valley – an entire lost generation. It’s no exaggeration to say that much��of the world is in the midst of a global brain drain of engineering talent.”

Eli Lilly president and CEO John Lechleiter believes that, from a pharmaceutical perspective, .

Michael Bloom, vice-president of organizational effectiveness and learning for the Conference Board of Canada, believes that companies need to.

There are many key contributing causes of and prescriptions to Canada’s innovation lag, but none of them truly involve Blackberry. At most, Blackberry is the symptom - not the diagnosis.

Conclusion and Insights

Using Blackberry’s current challenges to strike up a national debate on R&D or innovation is thorny. In rifling through the waves of press coverage, it seems like media outlets are using an innovation angle to give legs to one of its favourite corporate narratives.

The obsession with Blackberry fortunes is natural because mobile devices are deeply personal products that are highly integrated into our daily lives, whether consumer, student, or professional. Also, Blackberry’s is a reverse underdog story, and some people love watching a former market leader struggle.

Unfortunately, when we bring larger public policy debates around innovation into heated discussion around controversial companies like Blackberry, it can unnecessarily politicize or bias the national discourse. As well, I worry that such politicization may allow other Canadian companies that aren’t doing their part on the innovation front, but are in less prominent or popular industries than mobile devices, to escape the same amount of media scrutiny.

The post What a Potential Blackberry Sale Says About Canadian Innovation appeared first on IPOsgoode.

What is a Reverse Payment Agreement (RPA)?

As has , an RPA is a settlement agreement that has come to be known as a “pay-for-delay deal”.�� In such an agreement, a patent holder pays the allegedly infringing generic drug company to delay entering the market until a particular date, thus delaying litigation on the patent. The payment is “reverse” because the money flows in the opposite direction from a typical exchange between licensee and patent holder.

In some ways, RPAs make economic sense for all companies involved. "Brand-names" can maintain market exclusivity, while "Generics" potentially generate more revenue than if they had released the product into the market.�� Consumers, however, are arguably short-changed because the prices of pharmaceuticals remain high as a result of this delayed competition.

The AndroGel “Reverse Payment”

In 2000, Solvay’s patent for a formulation of testosterone - AndroGel - was approved.�� In 2003, Watson and Paddock filed their intent to manufacture generic versions of AndroGel with the FDA, alleging that Solvay’s patent was invalid.�� In response, Solvay sued for patent infringement.�� . The settlement involved a payment from Solvay to Watson of $19-30 million annually until 2015.�� During that time, Watson would not sell its version (unless another generic entered the market) and would assist Solvay in marketing AndroGel to urologists.

The FTC Argument: RPAs Illegally Allow "Brand-Name" Manufacturers to Extend Patent Monopolies

The FTC argued that these agreements had little actual value to Solvay, and that the real purpose of the settlement was to protect Solvay’s patent from being challenged and delay generic entry into the market. As a result, the FTC believed that Solvay had unlawfully extended its monopoly on AndroGel through payments to its competitors.�� This sort of agreement is a prima facie violation of US antitrust laws, because the agreement between Solvay and the generic manufacturers resembled a horizontal agreement to suppress competition and extend a monopoly.�� Thus, the FTC argued that settlements involving RPAs should be made presumptively illegal.

The "Brand-Name" Response: A Valid Patent Should Immunize RPAs from Antitrust Scrutiny

In response, the pharmaceutical companies argued that the existence of a valid patent should immunize settlements involving RPAs from antitrust scrutiny.�� Since the settlement agreement allowed Watson to enter the market 65 months��before��Solvay’s patent ended, and since patents are legitimate exercises of market exclusivity, the "Brand-names" argued that RPAs are a legitimate exercise of their patent rights and there should be no concern about abuse of monopoly power.

They further argued that unless the companies took action outside the “scope of the patent” (for example, by extending market exclusivity past the patent expiration date or expanding the scope of the exclusivity beyond the patent claims), the fact that Solvay held a valid patent should allow it to choose to exclude others from the marketplace at its discretion, including by settling cases with potential competitors using RPAs.

The Supreme Court’s Decision in FTC v Actavis: The FTC Has the Right to Prove Antitrust Claim

, Justice Stephen Breyer held that a broad allowance of all RPAs under a registered patent was an improper outcome given that the patent itself may be invalid.�� At the same time, Justice Breyer did not find RPAs to be so unjustifiable that they should be evaluated under the “presumptively illegal” framework proposed by the FTC.�� Instead, Breyer J struck a balance and held that the FTC has the right to be given an opportunity to “prove its antitrust claim.”

The Dissent

In a dissenting opinion, Chief Justice John Roberts supported the "Brand-name" position.�� He argued that so long as the parties held a valid patent, the patent itself��gave the owner the right to choose who could use their property. ��This right includes the use of reverse payments to settle litigation.�� While Chief Justice Roberts acknowledged that antitrust laws are intended to encourage competition, he��worried that the majority opinion would discourage settlements in patent litigation.�� He wondered whether the costs of protracted litigation would lead fewer "Generics" to challenge "Brand-name" patents in the first place.

The Impact of the Decision

While the majority decision seems to strike a balance between two extreme positions, one wonders if SCOTUS has not opened a new can of worms with this decision. By allowing the FTC to make an antitrust case against RPAs, courts are now faced with the difficult task of deciding which agreements are anti-competitive. Justice Breyer does provide some guidance on this assessment by stating that the anti-competitive nature of an RPA would be based on “its size, its scale in relation to the payor’s anticipated future litigation costs, its independence from other services for which it might represent payment, and the lack of any other convincing justification.” He also warned against “large and unjustified” RPAs. It is worth noting, however, that the merits of the patent were not part of Breyer’s consideration.

Only time will tell if this decision will prevent truly anti-competitive practices or if it will prevent legitimate agreements that would have allowed innovators of beneficial drugs to recoup their costs.

The post Splitting the Difference Between Antitrust and Intellectual Property: FTC v Actavis appeared first on IPOsgoode.