On May 18, 2023, the Supreme Court of the United States issued its opinion in Amgen, Inc. v. Sanofi, clarifying the standard of satisfying the enablement requirement, in particular, for broad functional genus claims. The Court, in a unanimous decision affirming the Federal Circuit’s holding, focused on whether the specification enabled the full scope of the invention to be practiced.
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Parties in the discovery phase of litigation often exchange confidential documents and information, which may contain proprietary information such as the technical aspects and know-how behind a party’s intellectual property. To facilitate the exchange of confidential information and prevent its misuse by parties to the litigation, courts often use an agreed protective order, which outlines the disclosure and dissemination of confidential information, proper use of such information (e.g., prosecuting or defending the instant action) and the return of confidential information following the conclusion of litigation and any appeals taken.
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The backlog of pending patent applications at the USPTO is growing. As of May 2022, the USPTO estimates an average pendency of approximately 20 months from filing to the mailing of a first office action. Applicants may be tempted to take advantage of and exploit the patent system to unreasonably delay prosecution and extend the patent term of a patent family member far beyond the lifetime of the original parent application. To prevent this gaming of the patent system in the hopes of extending patent term and to prevent prejudice to others, the equitable affirmative defense of prosecution laches may be raised to render an asserted patent unenforceable.
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What liability does a parent company have when a subsidiary’s actions allegedly constitute patent infringement?
That is the question answered in a recent patent infringement case, Akoloutheo, L.L.C. v. System Soft Technologies, Inc., No. 4:20-cv-985, 2021 WL 1947343 (E.D. Tx. May 14, 2021). In particular, Akoloutheo sheds light on the application of Rule 12(b)(7) in a situation where a subsidiary of the defendant parent company is the primary participant in the acts giving rise to the infringement action and could not be joined to the present infringement action. Based on the court’s determination, parent companies should not expect to escape infringement liability by pinning the blame on a subsidiary and seeking a dismissal via a 12(b)(7) motion when the subsidiary cannot be joined due to it being viewed as a joint tortfeasor and thus does not need to be joined to the present action under Rule 19. Further, the infringement statute may impute infringement liability on the parent through an inducement or contributory theory. Thus, despite the protection offered through the creation of separate corporate entities, parties should be aware that infringement liability may extend to both the parent and subsidiary under the theories of induced infringement or contributory infringement, even if the subsidiary is the primary participant in the alleged infringing acts.
In Abbott Laboratories v. Grifols Diagnostic Solutions Inc., the U.S. District Court for the Northern District of Illinois opined as to patent-eligible subject matter in the context of a biological invention. The case presents another situation in which the law of nature and natural phenomenon judicial exceptions have come to the forefront in the analysis of patent-eligible subject matter.
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Duane Morris LLP
Pharmaceutical branded drug developers interested in obtaining trademark protection should take note of the Supreme Court holding in Helsinn v. Teva that patent eligibility can be defeated by a private sale of a pharmaceutical drug from a manufacturer to a drug distributor (Helsinn Healthcare S.A., v. Teva Pharmaceuticals USA, INC. (139 S.Ct. 628 (2019)). Trademark protection via registration is often sought for branded pharmaceutical drugs when seeking to establish a market for new pharmaceutical therapies.
Trademarks for pharmaceutical drugs are subject to the requirements of two entities – the U.S. Patent and Trademark Office (“USPTO”) trademark requirements when seeking trademark registration and those of the Office of Postmarketing Drug Risk Assessment (“OPDRA”). The OPDRA, a sub-group of the Center for Drug Evaluation Research (“CDER”) of the U.S. Federal Drug Administration reviews and either approves or rejects new drug trademarks (also known as proprietary names) before they can be marketed. The OPDRA’s requirements for a pharmaceutical trademark are separate and distinct from those of the USPTO, and are not so impacted by the Helsinn decision as are those of the USPTO.
One of the USPTO requirements for issuance of a trademark registration is the use in commerce of the mark. An applicant must, at time of applying for registration or within a certain time thereafter, prove that the mark is used in commerce. A trademark registration for a pharmaceutical drug will therefore require use in commerce of the pharmaceutical drug, but oftentimes an application for trademark registration will be submitted well in advance of a market launch. Such a requirement can be met by certain pre-market activities, such as, inter alia, by use of the drug in clinical studies, in distribution to clinical sites in preparation for a clinical trial, or even pre-approval sales to a distributor. Distribution or sales, unfortunately, may present a risk to the patentability of the pharmaceutical compound or uses thereof discovered after the date of the transaction.
Enter Helsinn v. Teva
Over 18 months ago, the Supreme Court held that “an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under § 102(a).” The subject sale consisted of two agreements: a license agreement and a supply and purchase agreement. Such commercial transactions could pose a bar to patent applications filed more than a year after the date of the agreements (e.g., for claims directed to effects observed in clinical trials, to dosages, or to combination therapies). For additional details on Helsinn, see our earlier blog on this topic here.
The Helsinn ruling that a secret sale can qualify as a prior sale for purposes of patent law is in tension with the USPTO’s acceptance of trademark specimens from pre-clinical or clinical trials to satisfy the “use in commerce” requirement for trademark protection. A pharmaceutical trademark applicant may face the challenge of avoiding Helsinn while also trying to rely on specimens used in commerce to obtain trademark registration. Should the deciding court find that the trademark standard for “use in commerce” equates to a patent “sale” or “public use”, said use in commerce could potentially defeat patentability. Pharmaceutical companies would face the dilemma: patent or trademark?
However, there may be another method of satisfying the trademark requirements while avoiding patentability-defeating sales or disclosures. The term “use in commerce” for trademark requirements, includes use in connection with “goods [which] are sold OR TRANSPORTED in commerce” (emphasis added).[1] Activities classified from the trademark perspective as “transported in commerce” which do not qualify as an “on-sale” patent bar might therefore be an elegant solution to the dilemma. Of course, facts matter…
It is instructive to pharmaceutical drug manufacturers seeking patent and trademark protection to be aware of the relative timing for applying for pharmaceutical drug trademarks, distributing samples for, and conducting clinical trials, and applying for patents directed to claims identified during the clinical trials. As a takeaway, a trademark applicant may want to (1) evidence the transport of a sample containing packaging bearing the mark across state lines to satisfy the trademark use in commerce requirements, and (2) file a U.S. patent application before commercial activity begins for satisfying trademark registration requirements.
[1] Section 45 of the Trademark Act, 15 U.S.C. §1127, defines “commerce” as “all commerce which may lawfully be regulated by Congress.” Section 45 defines “use in commerce” as follows:
The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this Act, a mark shall be deemed to be in use in commerce–
(1) on goods when—
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and…
