Friday, June 30, 2017

Empty Promise

The Supreme Court of Canada/La Cour Suprême du Canada ("La Cour Suprême") rarely decides patent cases.  However, when it does, it really decides them.  On June 30, 2017, La Cour Suprême handed down a decision in AstraZeneca Canada v. Apotex.  At issue was the "promise of the patent" doctrine, which the Canadian Federal Court of Appeal, and the Federal Court of Canada below, have long upheld and elaborated.  To satisfy the utility requirement, the disclosure of a patent must, for each claim, either demonstrate or soundly predict utility.  But the utility analysis does not end there;  in addition, the disclosure must also fulfill any specific promise of utility by demonstrating or soundly predicting it.

In the Hinterland Who's Who of patent doctrines, the promise of the patent is something of a Canadian endemic.  In fact, its existence in Canadian patent law has been an irritant in trade relations with the United States, and might have been addressed during any renegotiation of the North American Free Trade Agreement ("NAFTA").  La Cour Suprême has now declared it extinct.  In his Federal Court decision, Judge Rennie declared the promise of the patent "the yardstick against which utility is measured".  By constrast, La Cour Suprême held that Section 2 of the Patent Act/Loi sur les brevets did not contain any such requirement. In relevant part, Section 2 defines "invention" as
any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter...
This doctrine, however, is unsound. It is an interpretation of the utility requirement that is incongruent with both the words and the scheme of the Patent Act. 
[37] The Promise Doctrine is excessively onerous in two ways: (1) it determines the standard of utility that is required of a patent by reference to the promises expressed in the patent; and (2) where there are multiple expressed promises of utility, it requires that all be fulfilled for a patent to be valid.
ultimately, every invention pertains to a single subject-matter, and any single use of that subject-matter that is demonstrated or soundly predicted by the filing date is sufficient to make an invention useful for the purposes of [Section 2].

This judicial decision has implications well beyond the immediate parties in the case.  By relaxing the criteria for meeting the utility requirement, more inventions should be patentable.  Applicants for biopharmaceutical patents, in which demonstrating details of efficacy tends to be more challenging than in other arts, may particularly benefit from the demise of promise doctrine.

The effects of the AstraZeneca Canada v. Apotex may be especially inflammatory to the parties involved in the Eli Lilly and Company v. Canada trade dispute, which largely focused on whether or not promise of the patent doctrine was good Canadian law.  Now that the doctrine has gone up in smoke, it make spark a new fire under Eli Lilly and other patent applicants previously burned by what they view as broken promises. 

Thursday, June 29, 2017

Trademark's New Wave

In Matal v. Tam, an instant landmark decision in trademark jurisprudence, the United States Supreme Court ("the Supremes") held, on June 19, 2017, that the Free Speech Clause of the First Amendment of the U.S. Constitution forbids the U.S. Patent and Trademark Office ("USPTO") from denying registration of a mark simply because it may be racially-derogatory.  The Lanham Act includes specific authorization for such a denial in 15 U.S.C. §1052(a), which ostensibly empowers the USPTO to prohibit registration of any otherwise-registerable mark that

Consists of or comprises immoral, deceptive, or scandalous matter; or...which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute...
As the Supremes explain in their decision,
This case concerns a dance-rock band’s application for federal trademark registration of the band’s name, “The Slants.” “Slants” is a derogatory term for persons of Asiandescent, and members of the band are Asian-Americans. But the band members believe that by taking that slur as the name of their group, they will help to “reclaim” the term and drain its denigrating force. 
The Patent and Trademark Office (PTO) denied the application based on a provision of federal law prohibiting the registration of trademarks that may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” 15 U. S. C. §1052(a).
As Simon Tam, the member of The Slants who filed the trademark application, explained to Time magazine, his band's name is meant to convey a triple entendre:
It actually sounds like a fun, 80s, New Wave-kind of band. And it’s a play on words. We can share our personal experiences about what it’s like being people of color—our own slant on life, if you will. It’s also a musical reference. There are slant guitar chords that we use in our music.
The government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others.
Applying strict scrutiny, the CAFC failed to find a compelling governmental interest for abridging the band's speech by denying it a trademark registration.  The Supremes broadly agreed with the CAFC, though several groups of justices filed concurrences to clarify the extent of, and particular reasons for, their decisions.

Nevertheless, the Supremes did all agree to the following droll indictment of government speech:
It is...far-fetched to suggest that the content of a registered mark is government speech, especially given the fact that if trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently.
One of the underappreciated advantages afforded by the Separation of Powers in U.S. government is the delicious opportunity for each branch of government to lampoon the others.  To borrow the title of one of The Slants' songs, whenever one of the three branches of government gets uppity, either of the other branches can say, "I Wanna Break You Down."  A governance feature as cool as that should be trademarked. 

Thursday, June 15, 2017

Selling Patented Goods Is Exhausting

Lexmark International, Inc. "designs, manufactures, and sells toner cartridges to customers in the United States and abroad."  Impression Products refurbished and resold them, so Lexmark sued Impression Products for patent infringement.  The United States Supreme Court decided Impression Products v. Lexmark International on May 30, 2017, that a patentee who sells its patented products has "exhausted" its patent rights in that product.  Moreover, echoing its decision in an earlier copyright exhaustion case, Kirtsaeng v. John Wiley & Sons (U.S. 2016), the Court held that "[a]n authorized sale outside the United States, just as one within the United States, exhausts all rights under the Patent Act."  Now that the Court has decided cases in both the copyright and patent realms, the issue of exhaustion would seem to be, well, exhausted.

However, all is not lost for patent owners.  The Court suggested that patent owners might still be able to control post-sale uses of patented goods via contract.  It would not be surprising if the Court revisited this particular issue in the near future, now that contract law, not patent law, seems to govern post-sale goods.  As emphasis shifts from patents to contracts, there should be a plentiful number of contract disputes taking the place of patent enforcement actions, and some of these cases will surely raise issues of import to the Court.

Tuesday, June 13, 2017

Dancing The Right Away

The history of dance is littered with tragically unhip steps like the funky chicken, the macarena, or the Gagnam Style invisible horse-ride.  On June 12, 2017, in its Sandoz v. Amgen decision interpreting the Biologics Price Competition and Innovation Act ("BPCIA"), the United States Supreme Court made another set of moves, commonly known as the "patent dance", equally unnecessary.  According to research biologic drug company Amgen, the BPCIA entitled Amgen to an injunction ordering generic biosimilar drug company Sandoz to turn over to Amgen the marketing application it had filed with the FDA.  The Court framed the question as follows:
Is an Applicant [generic biosimilar company] required by 42 U.S.C. § 262(l)(2)(A) to provide the Sponsor [reference biologic drug company] with a copy of its biologics license application and related manufacturing information, which the statute says the Applicant "shall provide," and, where an Applicant fails to provide that required information, is the Sponsor's sole recourse to commence a declaratory-judgment action under 42 U.S.C. § 262(l)(9)(C) and/or a patent-infringement action under 35 U.S.C. § 271(e)(2)(C)(ii)?
The Court's answer was unanimous:
If a subsection (k) applicant fails to provide the application and information required under paragraph (2)(A), the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of Title 28, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.
Under this rule, a reference biologic drug company whose FDA-licensed biologic drug entered the market first may seek declaratory judgment for infringement of its patent(s) by any would-be competitor generic biosimilar company failing to provide "its biologics license application and related manufacturing information", but may not seek federal injunctive relief to obtain that application and related information.  Nevertheless, opting out of the patent dance does narrow the options available to a generic biologics company, largely letting the research biologic company decide when and how to initiate litigation.

The Court also addressed two other important issues.  It left undecided questions about whether Amgen might be able to obtain injunctive relief under California state unfair competition law, though such availability might be federally preëmpted.  However, contrary to Amgen's assertion that a generic biosimilar company must provide notice to a relevant research biologics company only after its product has been licensed by the FDA, the Court instead decided that "[a biosimilar drug] applicant may provide notice either before or after receiving FDA approval", suggesting that biosimilar drugs could reach market earlier than six months after licensure.

Perhaps the most important result of the Sandoz v. Amgen decision is clarification about the patent dance.  Just as the whip and nae-nae is decidedly optional, so too, the Supremes have decided, is the patent dance.