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SPOTLIGHT: SCHERING CORP. V. GENEVA PHARMACEUTICALS INC. Applying the doctrine of inherency, the U.S. Court of Appeals for the Federal Circuit held that prior art on a method of treatment anticipates a later patent claim to a chemical compound formed within a patient because of the treatment. The later claim is anticipated, and thus invalid, so long as the in vivo formation inevitably flows from the treatment, even if one of skill in the art does not know it and the prior art does not explicitly disclose it. In Schering Corp. v. Geneva Pharmaceuticals Inc.,the Federal Circuit on Aug. 1 held that an expired patent for Schering’s drug Claritin, which disclosed the active component loratadine, anticipated a later Schering patent claiming the compound descarboethoxyloratadine (DCL). How could this happen when the expired patent contained absolutely no disclosure of DCL? The facts show that if a person ingests Claritin, the body will inevitably metabolize DCL. Consequently, the Federal Circuit held that the expired patent inherently anticipated claims broad enough to cover DCL when formed in vivo. Typically, if a reference does not disclose subject matter, it cannot anticipate a patent later claiming that subject matter. But in some circumstances, courts find that the missing subject matter is implicitly contained and thus inherent in the reference. In the past, courts appeared to use the doctrine of inherent disclosure only to fill in missing gaps in a reference. But in affirming the District Court’s grant of summary judgment of invalidity, the Federal Circuit stated that it saw no reason to limit the doctrine thus. Writing for the court, Judge Randall Rader explained, “Because inherency places subject matter in the public domain as well as an express disclosure, the inherent disclosure of the entire claimed subject matter anticipates as well as inherent disclosure of a single feature of the claimed subject matter.” (His opinion was joined by Senior Judge S. Jay Plager and Judge William Bryson.) Inherency as to chemicals formed in vivodoes have boundaries. The court instructed that patent applicants can claim a chemical compound in a substantially pure form even where the compound can be formed in vivo. (Presumably, a substantially pure form is not metabolized in the body.) Applicants can also claim the compound as part of a pharmaceutical composition, again excluding in vivoformation. And applicants can claim a method of treatment by administering the pure form or the pharmaceutical composition. As an example, the court noted that Schering’s expired patent did not inherently anticipate narrower claims in the later patent covering methods of administering DCL. Scheringmay have its greatest impact on drug-makers seeking de factoextension of a patent on a blockbuster drug. It won’t be the circuit’s last word on inherency. An en bancpanel will soon address the issue in Elan Pharmaceuticals Inc. v. Mayo Foundation for Medical Education & Research. Robert Krupka of the Los Angeles office of Kirkland & Ellis represented Schering. Douglass Hochstetler of Chicago’s Schiff, Hardin & Waite argued for Geneva Pharmaceuticals. THE OTHER NINE CASES Board of Education, et al. v. American Bioscience Inc. 333 F.3d 1330 Decided June 23, 2003 Holding that the District Court had erred in determining inventorship, the Federal Circuit reversed the addition of three names and the removal of two others from the patent, and affirmed the removal of another. The court found that the added scientists did not contribute to the conception of the claimed taxol-related compounds. It declared, “Having in mind specific portions of a claimed compound is not the same as conceiving the compound with all of its components.” The court also vacated a conclusion that the patent was unenforceable for inequitable conduct. Judge Alan Lourie’s opinion was joined by Judges Randall Rader and Richard Linn. For appellees:Jeffrey Thomas, Gibson, Dunn & Crutcher, Irvine, Calif. For appellant:Martin Sipple, Ausley & McMullen, Tallahassee, Fla. Abbott Laboratories, et al. v. Baxter Pharmaceutical Products Inc., et al. 334 F.3d 1274 Decided July 3, 2003 Vacating a grant of summary judgment of noninfringement, the Federal Circuit held that the District Court had erred in its claim construction. Abbott argued that Baxter’s generic sevoflurane would infringe its issued patent on compositions and methods of preserving sevoflurane. The appellate court ruled that the mere disclosure of potentially material prior art to the Patent and Trademark Office did not automatically limit the scope of the claimed invention. Judge Randall Rader’s opinion was joined by Judges Arthur Gajarsa and Timothy Dyk. For appellants:R. Mark McCareins, Winston & Strawn, Chicago. For appellees:Constantine Trela Jr., Sidley Austin Brown & Wood, Chicago. SunRace Roots Enterprise Co., et al. v. SRAM Corp. 336 F.3d 1298 Decided July 17, 2003 Reversing a declaratory judgment of noninfringement of a patent for bicycle gear-shifting devices, the Federal Circuit found the District Court’s construction of the term “shift actuator” to be unduly restrictive. The patent examiner’s general statements referring to a cam mechanism embodiment in relation to all the claims did not require reading the cam mechanism into specific claims that did not expressly recite it. Judge William Bryson’s opinion was joined by Judges Alan Lourie and Arthur Gajarsa. For appellees:Darin Snyder, O’Melveny & Myers, San Francisco. For appellant:Richard Walsh, Lewis, Rice & Fingersh, St. Louis. Minton v. National Association of Securities Dealers Inc., et al. 336 F.3d 1373 Decided July 29, 2003 Affirming the District Court, the Federal Circuit held a patent for a computerized securities trading system to be invalid because of an on-sale bar. The court found that the lease of a program that would practice the claimed process to a commercial customer before the patent application’s critical date was an “offer for sale.” The lease constituted a sale of the invention, not of know-how or patent rights. Judge Alan Lourie’s opinion was joined by Judge Richard Linn; Judge Arthur Gajarsa concurred. For appellant:Peter Brewer, Moser, Patterson & Sheridan, Houston. For appellees:Randall Sarosdy, Akin Gump Strauss Hauer & Feld, Austin, Texas. Forest Laboratories Inc., et al. v. Abbott Laboratories 339 F.3d 1324 Decided August 7, 2003 Reversing the District Court, the Federal Circuit held that while a patentee’s bad-faith business conduct toward an accused infringer prior to litigation may have sufficed to establish equitable estoppel, it did not establish that the case was “exceptional,” thereby warranting an award of attorney fees and expenses to the alleged infringer. The court also held that the patentee did not engage in bad-faith litigation because its suit was not “vexatious, unjustified, or frivolous.” Judge Alan Lourie’s opinion was joined by Judges Randall Rader and Timothy Dyk. For appellees:Kenneth Herman, Fish & Neave, New York. For appellant:Thomas Durkin, Mayer, Brown, Roe & Maw, Chicago. Hewlett-Packard Co. v. Mustek Systems Inc., et al. 340 F.3d 1314 Decided August 7, 2003 The District Court erred in granting judgment as a matter of law under the doctrine of equivalents because the issue had not been presented to the jury. The Federal Circuit held: “When issues of claim construction have not been properly raised in connection with the jury instructions, it is improper for the District Court to adopt a new or more detailed claim construction in connection with the JMOL motion.” Judge Timothy Dyk’s opinion was joined by Judge Alvin Schall; Chief Judge H. Robert Mayer dissented. For cross-appellant:John Allcock, Gray Cary Ware & Freidenrich, San Diego. For appellants:Joseph Re, Knobbe, Martens, Olson & Bear, Newport Beach, Calif. Nystrom v. Trex Co. Inc., et al. 339 F.3d 1347 Decided August 8, 2003 The Federal Circuit dismissed an appeal for lack of jurisdiction because the District Court had expressly stayed a counterclaim of invalidity and unenforceability pending appeal of a summary judgment of noninfringement. Because the lower court did not certify the summary judgment under Rule 54(b) or dismiss the counterclaim without prejudice, there was no final judgment. Judge Richard Linn’s opinion was joined by Judge Arthur Gajarsa; Chief Judge H. Robert Mayer concurred in the judgment. For appellant:Joseph Presta, Nixon & Vanderhye, Arlington, Va. For appellees:Patrick Coyne, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C. Electronics for Imaging Inc. v. Coyle, et al. 340 F.3d 1344 Decided August 18, 2003 Reversing the District Court’s dismissal for lack of personal jurisdiction in an accused infringer’s declaratory judgment action, the Federal Circuit held that jurisdiction over the nonresident defendants was proper based on their contacts directed at the forum state. The residency of the lawyer who notified the accused infringer about the patent application’s progress was relevant. Judge Arthur Gajarsa’s opinion was joined by Judges Randall Rader and William Bryson. For appellant:William Rooklidge, Howrey Simon Arnold & White, Irvine, Calif. For appellees:Steven Gibson, Santoro, Driggs, Walch, Kearney, Johnson & Thompson, Las Vegas. Bayer AG, et al. v. Housey Pharmaceuticals Inc. 340 F.3d 1367 Decided August 22, 2003 Affirming the District Court, the Federal Circuit held that importation of information obtained using a research process patented in the United States or of products manufactured based on such research data does not constitute infringement. The scope of 35 U.S.C. §271(g) as to method patents is limited to importation of physical articles where the claimed process was directly used in their manufacture. Judge Timothy Dyk’s opinion was joined by Chief Judge H. Robert Mayer and Judge Sharon Prost. For appellees:Jeffrey Bove, Connolly Bove Lodge & Hutz, Wilmington, Del. For appellant:Joseph Grear, Stanheim & Grear, Chicago. Robert A. Matthews Jr. and Vincent P. Kovalick are partners at the intellectual property law firm of Finnegan, Henderson, Farabow, Garrett & Dunner in Washington, D.C., and Reston, Va. They can be reached at [email protected]and [email protected], respectively.

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