Month: January 2018

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Citation –  339 U.S. 605 (1950)

Facts:
§ There are two electric wielding compositions or fluxes: the patented composition (Unionmelt Grade 20) and the accused composition (Lincolnweld 660).
§ The patent under which Unionmelt has made a claim is essentially a combination of alkaline earth metal silicate and calcium fluoride (silicates of calcium and magnesium)
§ Licolnweld’s composition is similar to Unionmelt’s, except that it substitutes silicates of calcium and manganese-the latter not an alkaline earth metal – for silicates of calcium and magnesium. In all other respects, the two compositions are alike.
§ The mechanical methods in which these compositions are employed are similar. They are identical in operation and produce the same kind and quality of weld.

Procedural History:
§ The plaintiff (Linde Air Products Co.) owned a patent for an electronic welding process, and sued defendants including the Graver Company for infringing the patent.
§ The defendants asserted that they were not infringing the patent because the patented welding process used a welding composition made of alkaline earth metal silicate and calcium fluoride (usually expressed as silicates of calcium and magnesium), while the purported infringers substituted a similar element, manganese, for the patentee’s magnesium.
The United States district court found infringement, and the Court of Appeals affirmed the infringement claim.

Issue: Whether the substitution of the manganese, which is not an alkaline earth metal, for magnesium, which is, under the circumstances of this case, and in view of the technology and the prior art, is a change of such substance as to make the doctrine of equivalents inapplicable; or, conversely whether, under the circumstances, the change was so insubstantial that the trial court’s invocation of doctrine of equivalents was justified?

Holding:
§ Court raised the doctrine of equivalents. It noted that if another party could use a process exactly the same as one that is patented, but escape infringement by making some obvious substitution of materials, it would deprive the patentee of the exclusive control meant to come with a patent. This would undermine the profitability of the patent, which would go against the policy of encouraging inventors to invent by giving the opportunity to profit from the labor of invention.
§ Court also outlined how the doctrine should be used, noting that “what constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case.”

Rationale: Court laid out two possible tests to determine equivalency. Under the first of these (“triple identity” test), something is deemed equivalent if:
– It performs substantially the same function
– in substantially the same way
– to yield substantially the same result.
Under the second test, something is deemed equivalent if there is only an “insubstantial change” between each of the features of the accused device or process and the patent claim.
In this case, the Court gave particular weight to the determination of “whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was.” Finding that the substitution of magnesium for manganese was both obvious to anyone working in the field, and was an insubstantial change, the Court upheld the finding of patent infringement.
In the current case, disclosures of prior art made it clear that manganese silicate was a useful ingredient in welding compositions. Also specialists familiar with the problems of welding compositions understood that manganese was equivalent to, and could be substituted for magnesium in the composition of the patented flux and their observations were confirmed by the literature of chemistry. Hence the substitution in the accused composition of manganese silicate for magnesium silicate, where the two compositions were substantially identical in operation and result was so insubstantial in view of technology and prior art, that the patent was infringed under the doctrine of equivalents.

Rule: Doctrine of Equivalence.

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Citation – 2013 Indlaw IP AB 20

Facts:  The petitioner (Bayer) is a corporation incorporated under the laws of United State of America (U.S.A.). Subsequent to its research and development (R & D) activities, the petitioner invented and developed its patented drug to enable its administration to human beings. The patented drug is used in the treatment of patients suffering from Kidney cancer i.e. Renal Cell Carcinoma (RCC) and liver cancer i.e. Hepatocellular Carcinoma (HCC). The aforesaid patented drug acts more as a palliative i.e. relieves patients from pain and to an extent also slows down the spread of cancer by restricting the speed with which the cancer cells grow. Bayer Corp. had acquired the patent for the salt/compound Sorafenib Tosylate in 2008 in India. The market name of the medicine/drug was Nexavar.
Natco, a drug manufacturer in India, approached the petitioner for grant of voluntary license for the purpose of manufacturing and selling the patented drug in India. The respondent (Natco) sought a voluntary license to manufacture and sell in India the patented drug under its brand name at a price of less than Rs. 10,000 per month of therapy as against the price of Rs. 2,80,428 per month of therapy charged by the petitioner. The purpose behind obtaining the voluntary licence by Natco was to make the patented drug accessible to the public at an affordable price. When applying for the voluntary license, Natco also stated the fact that the petitioner had neither met the reasonable requirement of public nor was it reasonably priced nor had it worked in the territory of India. Eventually, the petitioner rejected Natco’s application for grant of voluntary license.
Thereafter, on 29 July, 2011 i.e. after the expiry of three years from 3 March, 2008, Natco applied to the Controller for a grant of Compulsory License under Section 84 (1) of the Act. In its application, Natco pointed out that all the three conditions for the grant of Compulsory License were fulfilled/satisfied. It was also set down that they proposed to sell the patented drug under their brand name (Nexavar) at Rs. 8,800 per month of therapy. On 9 March, 2012 the Controller via his order gave authorization to Natco to manufacture and sell the patented drug and directed to pay to the petitioner royalty at 6% of its net sales of the patented drug under its brand name which was allowed to be sold at the price of Rs. 8,800 for 120 tablets for a month of treatment. Besides, the grant of Compulsory License to Natco was non-exclusive, non-assignable and for the balance term of the patent.

Issue: Whether a compulsory license can be granted in favour of Natco for the production of the patented drug?

Law Involved: What is a compulsory License?
Section 84(1) of the Patents Act allows any interested person to make an application to the Controller for the grant of Compulsory License after the expiry of three years from the date of grant of patent on any of the following grounds:
a) That the reasonable requirements of public with respect to the patented invention have not been satisfied
b) That the patented invention is not available to the public at reasonably affordable price
c) That the patented invention is not worked in India.

Discussion/Rationale:
a) Did the applicant (Natco) make efforts to obtain voluntary licence from the patent holder (Bayer)?
The first condition precedent to consider an application for compulsory license is that three years should have elapsed from the grant of the patent. The petitioner urges that the second condition precedent to entertain the application viz making efforts to obtain voluntary license from the patent holder on reasonable terms and conditions as mandated by Section 84 (6) of the Act has not been satisfied i.e. the applicant has not made efforts. On the basis of examination of evidence i.e. exchange of letters between the parties in the context of Section 84 (6) of the Act, both the authorities concluded that effort was made by Natco to obtain the voluntary license. The Court said that it found no reason to interfere with the findings of the authorities under the Act and held that the second condition precedent for consideration of application for compulsory license namely an effort to obtain a voluntary license has been satisfied by Natco.

b) Have the reasonable requirements of the public been satisfied?
The Court held that in the scheme of the Act it for the applicant while filing an application for Compulsory License in terms of Section 87 of the Act to make out a prima facie case that one or all the grounds stated in Section 84 (1) of the Act are prima facie attracted/applicable in respect of a patent for which the Compulsory License is sought. The petitioner then submitted that the reasonable requirement of the public has to be considered by the authorities in the context of number of patients requiring the patented drug. It is submitted by the petitioner that it is not in every case that a person suffering from HCC or RCC Cancer is required to be administered the patented drug. The occasion to administer the patented drug arises only during the last stages of a patient’s illness and even in that case the Doctor may opt for a line of treatment requiring measures other than the intake of the patented drug. The Court held that the aforesaid exercise can never be carried out on a mathematical basis. It has to be on a broad basis and this broad exercise has been done on the basis of the evidence produced by the parties. In fact, authorities under the Act have considered the rival statistics of the patients before it and on that basis determined the reasonable requirement of the public.

c) Whether the supplies by infringers of the patented drug is to be considered/taken into account to determine the satisfaction of the reasonable requirement test?
It was contended by the petitioner that while determining the satisfaction of the reasonable requirement of the public for the patented drug, the supplies made by the infringers i.e. Cipla have to be taken into account. The authorities have held that the supplies by infringers of the patented drug cannot be taken into account as the supply of the patented drug by the infringer is uncertain. The Court noticed from the record that the petitioner had filed an infringement suit against the infringer viz Cipla. It was the petitioner’s contention before the Court that the suit filed before the Delhi High Court against Cipla, the alleged infringer for injunction should be ignored as no injunction has yet been granted. The Court declined to accept this argument as an injunction could be granted at any time as the suit continues to be pending. Therefore, the infringer’s quantity of goods cannot be taken into account only because it could stop on any day. It is only where the patent holder accepts the infringer’s participation in the market and in fact grants him defacto licence could the infringer’s supplies be taken into account. The meaning to be given to the words “adequate extent”.
Section 84 (7) of the Act provides a deeming fiction which deems that reasonable requirement of the public is not satisfied if the demand for patented article is not met to an adequate extent. The aspect of adequate extent would vary from article to article. So far as luxury articles are concerned, the meeting of adequate extent test would be completely different from the meeting of adequate extent test so far as medicines are concerned. In respect of medicines, the adequate extent test has to be 100% i.e. to the fullest extent. Medicine has to be made available to every patient and this cannot be deprived/scarified at the altar of rights of patent holder.

d) Was the patented drug available to the general public at a reasonably affordable price?
It is mandated by Section 90 (1) (iii) of the Act that the Controller should ensure that the patented drug is available at reasonably affordable price. This reasonably affordable price has to be determined on the basis of the relative price being offered by the patent holder and the applicant. In the present case, the price at which the petitioner is selling the patented drug is at about Rs. 2,84,000 per month of therapy and the applicant was offering the same at Rs. 8,800 per month of therapy. Noticeably, the petitioner’s price of sale did not look reasonable.
The petitioner asserts that the price of the patented drug is to be arrived at taking into account not only the research and development costs for the patented drug but also the costs incurred in respect of research and development on failed drugs thereby making the price at which it is selling the patented drug a reasonably affordable price. Before the Controller, the petitioner had protested at the calling for the Balance Sheet. The figures enclosed therein would establish the total costs incurred by the petitioner on research and development of the patented drug which could have formed the basis to decide the reasonable price at which the petitioner could make the drug available to the public in India. Hence, no fault can be found with the impugned order holding that the patented drug is not available to the public at a reasonably affordable price.

e) Has the patented drug been working in the territory of India?
The petitioner submits that the patented drug had worked in the territory of India by importation of the same. Article 27 of the TRIPS agreement inter alia provides that there would be no discrimination in respect of patented product whether legally manufactured or imported. In Form 27, the patent holder while giving details of patented drug in India, has to make a declaration of the patented product having worked in India under two classifications namely manufacture in India and imported from other countries. The petitioner maintains that there is no requirement in the Act that for the purpose of patented drug being worked in the territory of India, it should necessarily be manufactured in India. The Union of India alleges to the contrary.
The Court looked through the prism of Section 83 of the Act which contains the legislative guidelines to govern the meaning of the words ‘worked in the territory of India’. The guidelines pronounce that the patent is not conferred upon the patent holder so as to enable him to enjoy a monopoly with respect to the importation of the patented article. On that account, it is safe to presuppose that some efforts to manufacture in India should also be made by the patent holder. Section 83 (f) of the Act provides that patent holder should not abuse his patent so as to inter alia adversely affect international trade. It would, therefore, follow that when a patent holder is faced with an application for Compulsory License, it is for the patent holder to show that the patented invention/drug has worked in the territory of India by manufacture or otherwise. Where a patent holder satisfies the authorities, the reason why the patented invention could not be manufactured in India then the patented invention can be considered as having been worked in the territory in India even by import.

f) Whether the application for compulsory license ought to have been adjourned by the Controller?
It was contended that in any view of the matter the Controller ought to have adjourned the consideration of the application for compulsory licence filed by Natco. This would have given petitioner time to work the patented drug on commercial scale in India. The Court found no merit in the aforesaid submission. Two conditions must be satisfied so as to adjourn the application for a compulsory license:

• The time which has lapsed since the patent was granted and when an application for compulsory license was made was insufficient to enable the patent holder to work the patented drug in India on a commercial scale; and
• Patent holder should have taken steps towards working the patented drug in India on a commercial scale with promptitude. The petitioner was granted the patent in India in 2008. The petitioner also has manufacturing facilities available in India. The petitioner has led no evidence before the authorities to indicate what steps they have taken and with what promptitude the same have been taken for the purposes of working the patent in India after 2008.

In these circumstances, the Court found no fault with the order of the Controller refusing to
adjourn the application for compulsory license.

Holding:  The Court saw no reason to interfere with the orders dated 9 March, 2012 and 4 March, 2013 of the Controller and the Tribunal respectively granting compulsory license under Section 84 of the Patent Act to Natco. Accordingly, the petition was dismissed. Petitioner must be paid royalty raised from 6% to 7% of the net sale of Natco as remuneration for the compulsory license granted to Natco. This royalty was fixed keeping in view the fact that the petitioner had led no evidence to show the expenses incurred by it to invent the patented drug.

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Citation – Corp. 3 F. Supp. 3d 1213

Facts:  The plaintiffs are the University of Utah Research Foundation, The Trustees of the University of Pennsylvania, HSC Research and Development Limited Partnership, Endorecherche, Inc., and Myriad Genetics, proclaimed encroachment of three of their patents. The University of Utah is the co-owner of three of the patents issued Patents. The patents cover the BRCA1 and the BRCA2 genes. The respondents, Ambry Genetics are a clinical diagnostic and genomic services company, they offer medical tests which claim to possibly detect genes that show breast and ovarian cancer related risks.

Procedural History:  Myriad appealed from a decision of the District Court for the District of Utah denying Myriad’s motion for preliminary injunction, which was requested with a view to stop Ambry’s sale of the cancer test kits. The District Court denied the said Preliminary injunction because it stated that the subject matter in question was patent ineligible.

Issue: Whether the subject matter is patent eligible and therefore, whether Plaintiffs can prevent Ambry Genetics from selling the kits on the basis of infringement of patent?

Reasoning and Judgment: In the case Association for Molecular Pathology v. Myriad Genetics (2013), it was established that Myriad and its partners discovered the precise locations and sequences of the BRCA1 and BRCA2 genes, mutations of which are linked to hereditary breast and ovarian cancers. The Supreme Court held that “genes and the information they encode are not patent eligible simply because they have been isolated from the surrounding genetic material.” The court stated that the subject matter is ineligible because they are isolated DNA strands, which are naturally occurring and distinguished from the rest of the human genome, and thus, are natural phenomena.
Primers do not alter the underlying, naturally occurring DNA sequence that is being read. Therefore, they do not alter the underlying DNA’s functional properties or identity for the purposes of genetic testing. The primers in question, in this case, were not found to be very different from the isolated DNA found to be patent ineligible in the Association for Molecular Pathology v. Myriad Genetics case.
In the present case, the Court first observed that Myriad did not “create or alter”: 1) “any of the genetic information encoded in the BRCA1 and BRCA2 genes,” as the “location and order of the nucleotides existed in nature before Myriad found them”. Hence, the Court held that the subject matter in question is patent ineligible because it is not ‘inventive’ in nature. Thus, all the asserted claims were held to be patent-ineligible.
In regards to the methods claims, the Court cited Mayo Collaborative Services v. Prometheus Laboratories Inc. case, ‘a that a process focusing on a law of nature, natural phenomenon, or an abstract idea may be patent eligible, but only if it incorporates another “inventive concept”’. In the present case, the Court held that the method claims were ineligible – because they encompassed the detection of any BRCA1/BRCA2 mutation for any purpose did not recite significantly more than a patent-ineligible “abstract idea’. The two method claims involved comparisons between the wild-type BRCA sequences with the patient’s BRCA sequences. The court reasoned that these method claims were ineligible because “the only ‘inventive concepts’ in the method claims are the patent ineligible naturally occurring BRCA1 and BRCA2 sequences themselves.”
The Court also cited the case Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014), laws of nature are not the only implicit exception to patentable subject matter identified by 35 U.S.C. § 101. Natural phenomena and abstract ideas are also not patentable.

Conclusion: The claims on appeal are directed to ineligible subject matter in violation of 35 U.S.C. § 101. Therefore, the district court properly denied Myriad’s motion for preliminary injunction. We remand to the district court for an entry of an order consistent with this opinion;
Affirmed and remanded.

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Citation – 134 S. Ct. 2347

Facts: Alice Corporation was the assignee of several patents that contain a scheme for mitigating “settlement risk”. This risk means that only one party to a financial exchange will satisfy its obligation. The computer acts as a third party in this transaction. The computer creates shadow debit and credit records for each stakeholder party. It obtains a start of the day balance and only allows for transactions according to the amount available as shown on the shadow records. In this way, it mitigates settlement risk by only allowing for transactions which both party have funds for.

Issues: Alice Corporation, as assignee of several patents, seeks infringement on three grounds:
1) Methods Claims (the foregoing method for exchanging obligations).
2) System Claims (a computer system configured to carry out the method for exchanging obligations)
3) The media claims (a computer readable medium containing program code for performing the method of exchanging obligations).
Or
Whether the claims were patent eligible under 35 U.S.C.S. § 101, or were instead drawn to a patent ineligible abstract idea?

Procedural History:  CLS bank filed a suit against Alice Corporation, arguing that the patent claims at issue are unenforceable and invalid. Alice Corporation counterclaims, stating that CLS bank had infringed those copyrights. The district court affirmed that the patents were ineligible because they were related to an abstract idea. The United States Court of Appeals reversed it stating that it is not evident that the patent is tied to an abstract idea. The en blanc federal Court affirmed the decision of the District Court.

Laws involved: 35 U.S.C. § 101- “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

Analysis: The Court held that the patents are ineligible and then discusses the first claim of method claims. The Court begins by stating that there are three exceptions to patent protection which is Laws of Nature, Natural Phenomena and abstract ideas. These cannot be patented. This is an implicit exception to Section 101 which provides for patent protection.

The Court then derives the framework to decide how to reach the conclusion if anything falls within the exception by using Mayo Services v. Prometheus Laboratory. First, the patentable concept has to be directed to one of the three patent ineligible concepts. Second, it is necessary to check if anything has been added to the concept. The second step is to search for an “inventive concept” to see if the concept has transformed the patent ineligible idea into something that can be protected.
In the first step, the claims at issue are directed to the patent ineligible concept of an “abstract idea”. The court used Parker v. Flook, which stated that a mathematical formula for computing alarm limits in a catalytic conversion process was an abstract idea. In Bilski v. Kappos, the claims at issue related to hedging which is an abstract idea and cannot be patented. The courts agreed that hedging was a fundamental economic practice and long prevalent in the system of commerce and finance. Drawing from this, the court held that using a third party intermediary, like the concept of hedging, is a fundamental economic practice and has long been used in commerce. They discuss the use of “clearing house” as an intermediary to reduce such risk and use literature to substantiate. The Petitioners argued that abstract idea have to be “pre-existing fundamental truth that exist in apart from human action” but the court dismissed this stating no such requirement is necessary.
The Court then stated that the patent failed to transform the concept into something patentable, thereby failing the second step of “inventive concept”. The Court again uses the Mayo Case to further its analysis. It states that additional features are required to transform the concept and simply adding conventional steps, which are highly generic, is not enough to be inventive. In the Flook case, the use of a computer for automatic alarm controlling was highly conventional and did not add to the abstract idea. Thus, limiting the use to a particular technological environment is not enough. In contrast, the Diehr Case 450 U.S. 175, which required the use of a computer for curing rubber was considered to be patent eligible. This was not because it used a computer but because the use of a thermocouple to record temperature measurements was not available beforehand. This improved an existing technological process and not just because a computer was used. In this case, the use of a computer is conventional as this is mere electronic bookkeeping. All these uses of obtaining data, adjusting balances are conventional uses of a computer. They do not add anything significant and merely apply an abstract idea of intermediated settlement using a generic computer.
The Petitioners concede that the third claim (media) rises or falls with the first claim (method). The court does not look into it. Whereas the second claim, system claim, is concerned the court says it is similar to the first claim of media claim. The specific hardware is concerned, for example a data storage unit, are generic.
Thus, the Court affirms the decision of the federal Court.

Rule:  While applying the §101 exception, it is important to distinguish between patents that claim the ‘building blocks’ of human ingenuity and those that integrate the building blocks into something more, thereby “transforming” them into a patent-eligible invention. The former “would risk disproportionately tying up the use of the underlying” ideas and are therefore ineligible for patent protection. The latter pose no comparable risk of pre-emption, and therefore remain eligible for the monopoly granted under our patent laws.
First, the courts determine whether the claims at issue are directed to one of those patent ineligible concepts. If so, then the courts ask, “what else is there in the claims before us?” To answer that question, we consider the elements of each claim both individually and “as an ordered (as in, step-wise) combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application. This step two of this analysis is a search for an “‘inventive concept'” i. e., an element ‘or combination of elements that is “sufficient” to ensure that the patent in practice amounts to significantly more” than a patent upon the ineligible concept itself.

Holding:  The claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent eligible invention.
Specifically, the concept of intermediated settlement was a fundamental economic practice, and the use of a third party intermediary was a building block of the modern economy. The method claims, which merely required generic computer implementation, failed to transform the abstract idea into a patent eligible invention. The computer components of the patent’s method added nothing that was not already present when the steps were considered separately. The assignee’s claims to a computer system and a computer readable medium failed for substantially the same reasons.

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Citation – 133 S. Ct. 2107 (June 13, 2013)

Facts:  Myriad Laboratories discovered the existence of genes BRCA 1 and BRCA 2 on the Human Chromosomes, the mutations of which can cause breast cancer, amongst approximately 15 million genes in the human genome. In addition, it synthesized a gene called the BRCA cDNA, which is a synthetic product that mirrors the coding sections of the BRCA genes, and “primers” used in diagnostics gene and applied for a composition patent on it. Myriad’s patents would, if valid, give it the exclusive right to isolate an individual’s BRCA1 and BRCA2 genes (or any strand of 15 or more nucleotides within the genes) by breaking the covalent bonds that connect the DNA to the rest of the individual’s genome. The patents would also give Myriad the exclusive right to synthetically create BRCA cDNA. In Myriad’s view, manipulating BRCA DNA in either of these fashions triggers its “right to exclude others from making” its patented composition of matter under the Patent Act.

Issues:
1) Whether Myriad’s claimed invention BRCA 1 and BRCA 2 and BRCA cDNA, the sequence of certain human genes in both isolated and purified forms, falls within the scope of inventions for which a patent may be granted.
2) Whether the product patents obtained by Myriad Laboratories on the discovery of genes, BRCA 1 and BRCA 2 and BRCA cDNA, on the human genome valid under the provisions of 35 U. S. C. §101 and in consonance with the relevant jurisprudence on the matter.

Rule:35 U. S. C. §101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

Analysis:  The Supreme Court considered the argument made by both the sides and held that, “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring”. So, the discovery by Myriad Laboratories, of the position of BRCA 1 and BRCA 2 genes was not patent eligible under the provisions of 35 U. S. C. §101. Although the section makes patents eligible for a new composition of matter, but “laws of nature, natural phenomena, and abstract ideas” ‘are basic tools of scientific and technological work’ ” that lie beyond the domain of patent protection, and hence these naturally occurring genes were not patent eligible under the provision of the law.
Myriads discoveries falls within the law of nature exception. The primary work of the plaintiff was to discover the already existing location of the genes BRCA 1 and BRCA 2. Mere discoveries cannot be made patent eligible even though there are ground breaking discoveries.  Finding the location of the BRCA1 and BRCA2 genes does not render the genes patent eligible “new . . . composition[s] of matter,” §101. Myriad’s patent descriptions highlight the problem with its claims: They detail the extensive process of discovery, but extensive effort alone is insufficient to satisfy §101’s demands.
However, the court agreed to grant patent to the composition of cDNA because, it was clear that this was not a “product of nature”, in the sense that it did not exist in nature, Its creation results in an exons-only molecule, which is not naturally occurring. Its order of the exons may be dictated by nature, Human intellect and skill had to involved to produce this matter in the laboratory. Its order of the exons may be dictated by nature, but the lab technician unquestionably creates something new when introns are removed from a DNA sequence to make cDNA.
The court differentiated this case from the Diamond. The case in diamond was that the plaintiff had created a living organism by changing the strains in it through a laboratory process and hence, it was not naturally occurring and patent eligible. Whereas in the present, with the exception of cDNA, the others were naturally occurring and the plaintiff did not have to put in any work, intellectual and skill, in the production of the DNA.

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Citation – SC Civil Appeal No. 2706-2761 of 2013

Facts: In this case, sequence of events with prior art are as follows:
§ The Zimmerman patent in ’93, which disclosed the imatinib free base – this patent was not granted in India because India did not provide for pharmaceutical patents prior to 1995;
§ A publication in 1996, which referenced imatinib mesylate;
§ The 1998 patent application before the Indian Patent Office, which claimed the betacrystalline form of imatinib mesylate.
Novartis filed for patent of its “Beta Crystalline” form of “Imatinib Mesylate” in 1998 as per the TRIPS agreement of WTO. The application was processed in 2005 and was rejected in 2006 on the grounds that it failed to satisfy the requirement of novelty and non-obviousness as per the amended Indian Patent Act. Novartis appealed against the decision in Madras High Court that was then transferred to the IP Appellate Board. The IP Appellate board rejected the application on the grounds that the invention was not a new substance but an amended form of a known substance and that Novartis was unable to show the increase in efficacy as laid down in section 3(d) of the Indian Patent Act.
Novartis appealed before the Madras High Court that Section 3(d) violated Article 14 of the Constitution as the requirement of ‘enhanced efficacy’ under section 3(d) was vague and gave unrestricted power to the patent examiner. The High Court rejected the application and held that the object of section 3(d) was to prevent intellectual monopoly privileges and evergreening of patents.
Appealed to the Supreme Court

Issues:
1)What is the ‘Known Substance’ for the purpose of section 3(d)?
2) What is the meaning of ‘efficacy’ in section 3(d)?
3) Does an increase in bioavailability qualify as increase in therapeutic efficacy under Section 3(d)?
4) Was the claimed invention by Novartis more efficacious than the substance that it was derived from?

Analysis:
1)After the 2005 amendment, Section 3(d) required the claimed invention to be more efficacious than the ‘known substance’ from which the claimed invention was derived. In this case, Novartis was keen to have ‘Imatinib Free Base’ to be identified as he ‘known substance’ instead of ‘Imatinib Mesylate’ since it would be easier to prove greater efficacy in comparison to Imatinib Free Base. Supreme Court shot down this argument on the grounds that “Imatinib Mesylate” was anticipated by prior art (publication in 1996) and existed before the claimed invention hence it was a known substance.
Therefore, Imatinib Mesylate was presumed to be the known substance in this case.
2) While Novartis was arguing for a broader interpretation of ‘efficacy’ in Section 3(d) which would include other beneficial properties such as increased stability, etc., Supreme Court made it crystal clear that ‘efficacy’ in Section 3(d) only means therapeutic efficacy. The court held that “not all advantageous or beneficial properties are relevant, but only such properties that directly relate to efficacy, which in case of medicine, is its therapeutic efficacy.
3) Bioavailability is the increased ability of the drug to dissolve into the bloodstream of the patient. The Supreme Court on this issue ruled that such an increase of 30% in bioavailability can qualify for protection under 3(d) if evidence is provided to establish that such an increase leads to greater therapeutic efficacy.
4) The Court compared the efficacy of the claimed invention with the known substance (Imatinib Mesylate) with reference to its flow properties, better thermodynamic stability and lower hygroscopicity and concluded that none of the three properties identified will qualify under section 3(d) as it doesn’t contribute to an increased therapeutic efficacy. Conclusion: The Supreme Court rejected the appeal filed by Novartis and concluded that since there was no substantive & conclusive material and evidence to prove that beta crystalline form of Imatinib Mesylate will produce an enhanced or superior therapeutic efficacy, therefore failed to meet the requirements under section 3(d).

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Citation – (2002) I.P.L.R. 255 (Cal)

Facts and Procedural History:
§ The Appellant, Dimminaco A.G, filed for a patent application for an invention relating to a process for preparation of the bursitis vaccine. The vaccine was useful for protecting the poultry against the contagious bursitis infection. However, the process to prepare the vaccine contained a living virus in the end product.
§ The patent application filed by Dimminaco A.G. was examined by the Patent Officer Examiner under Section 12 of the Patent Act, 1970. On such examination, the Examiner gave a finding that the said Patent Application did not constitute an invention under Section 2 (j) (i) of the Patent Act, 1970.
§ Dimminaco A.G. further appealed against this rejection to the Controller of Patents & Designs.
§ Acting under delegated authority by the Controller, the Assistant Controller of Patents and Designs too refused to accept the Patent Application and upheld the objection.
§ Hence, the appellants approached the Calcutta High Court with this appeal.

Issues:
1) Is there a statutory bar to accept a manner of manufacture as patentable if the end product contains a living organism?
2) Will a process of preparing a vaccine that contains a live virus be considered to be ‘methods or process of manufacture’ under the Patent Act, 1970? If yes, will it be construed to be an invention as under Section 2 (j)(i) of the Patent Act, 1970?

Rule and Law Applicable:Section 2 (j)(i) of the Patent Act, 1970 stated –
“(j) ‘Invention’ would mean any new and useful –
i. Art, process, method or manner of manufacture;
ii. Machine, apparatus or other articles;
iii. Substance produced by manufacture and includes any new and useful improvement of any of them and an alleged invention;”
Section 5 of the Patent Act, 1970 stated – “Inventions where only methods or process of manufacture patentable –

1) In the case of inventions –
a) Claiming substances intended for use, or capable of being used, as food or as medicine or drug, or
b) relating to substances prepared or produced by chemical process (including alloys, optical glass, semi-conductors and intermetallic compounds),
No patent shall be granted in respect of claims for substances themselves, but claims for the methods or processes of manufacture shall be patentable.
2) Notwithstanding anything contained in sub-section (1), a claim for patent of an invention for a substance itself intended for use, or capable of being used, as a medicine or drug may be made and shall be dealt, without prejudice to the other provisions of this Act, in the manner provided in Chapter IV-A.”

Analysis:
§ The Court held that there is no statutory bar to accept a manner of manufacture to be patentable if the end product contains a living organism. In this case, the process claimed in the patent application was a new and novel process for the preparation of vaccine that involved chemical steps under specific scientific conditions. Therefore, the Court held that it was a new process and was patentable under Section 5 of the Patent Act. In other words, since the end product was a new article, the process leading to its manufacture was held to an invention, and thus patentable.
§ To decide whether in a particular case, the process of manufacture that is involved in the invention ought to be patented or not, the vendibility test can be used.
§ A vendible product is one that can be passed on from one man to another upon the transactions of purchase and sale. Therefore, the vendibility test is satisfied if:
* the invention results in the production of some vendible product; or
* if it improves/restores former conditions of a vendible product; or
* if its effect is the preservation and prevention from deterioration of some vendible product.
§ Since ‘manner of manufacture’ is not defined in the statute, the dictionary meaning of the word has to be used. The Court held that the dictionary meaning of the word ‘manufacture’ includes the process of preparing a vendible commodity which contains a living organism.
§ The Court also rejected the Patent Office’s understanding of the lyophilizing. It held that the as a result of the process of lyophilizing, nothing is killed or destroyed – the biological activity of the material is retained and not wasted. Therefore, as a matter of practice, patents had been granted by various Patent Offices, to processes that involved living organisms.

Conclusion and Ratio Decidendi:
§ There is no statutory bar to accept a manner of manufacture as patentable if the end product contains a living organism.
§ Since the claim process for patent, that is, the bursitis vaccine, led to a vendible product, it was certainly a substance after going through the process of manufacture. Therefore, the process was an invention, and thus patentable.

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Citation – 561 U.S. 593

Facts: The petitioner’s patent application sought protection for an invention that claimed a procedure for instructing buyers and sellers how to protect against the risk of price fluctuations in a discrete section of the economy. It explained how commodities buyers and sellers in the energy market can protect, or hedge, against the risks of price changes which happen every now and then. The key claims were claimed 1, which described a series of steps instructing how to hedge risk and claim 4, which placed the claim 1 concept into a simple mathematical formula. The remaining claims explained how claims 1 and 4 can be applied to allow energy suppliers and consumers to minimize the risks resulting from fluctuations in market demand.

Procedural History: The Patent and Trademark Examiner rejected the application on the grounds that the invention is not implemented on a specific apparatus, merely manipulates an abstract idea, and solves a purely mathematical problem. The Board of Patent Appeals and Interferences agreed and affirmed. The United States Court of Appeals of the Federal Circuit, in turn, affirmed. It produced five different opinions.

Laws Involved: 35 U.S.C. § 101: Whoever invents or discovers any new and useful process, the machine, manufacture or composition of matter, or any new and useful improvement, thereof, may obtain a patent, therefore, subject to conditions and requirements of titles.

Issue: Whether the petitioner’s invention patentable under the above-mentioned law?

Analysis: The Patent and Trademark Examiner rejected petitioners’ application, explaining that
“it is not implemented on a specific apparatus and merely manipulates an abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts.”
The Board of Patent Appeals and Inferences affirmed, concluding that the application involved only mental steps that do not transform physical matter and was directed to an abstract idea. The United States Court of Appeals for the Federal Circuit heard the case en banc and affirmed. They reject the prior test for determining whether the invention produced a ‘useful’, ‘concrete and tangible result.’ They referred to the case of State Street Bank & Trust Co. Ltd. v. Signature Financial Group Inc., 149 F.3d 1368 and held that a claimed process is patentable if:
§ It is tied to a particular machine or apparatus, or
§ It transforms a particular article into a different state or thing

The Court also held that business methods are not patent-ineligible per se, they are patent ineligible because they describe a method of doing business that is not a process under §101 and, therefore, rejected the idea that business method patents should be outside the scope of patent eligibility per se, saying at least some business patent method should be patent eligible. SC said that the “machine and transformation test” isn’t the sole standard. Thus, so long as the business method claims otherwise meet the requirements of §§ 102 (invention be novel), 103 (non- obvious), and 112 (fully and particularly described), those claims are patentable. Instead of applying the “machine-or-transformation” test, the Court simply looked to its precedent in Benson, Flook, and Diehr case and concluded that Applicants’ claims were drawn to “abstract ideas” and thus not patentable.

Conclusion: Therefore, concluding that this machine or transformation test is the sole test for determining patent eligibility of a process under §101, the Court applied the test and held the application wasn’t patent eligible.

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Citation – 2002 4 S.C.R 45

Facts: The respondent applied for a patent on an invention titled “transgenic animals” which they claimed to be suitable for animal carcinogenic studies. They injected oncogene which is a cancer-promoting gene into fertilized mouse eggs as close as possible to one cell stage which were further implanted into a female host mouse. They tested for the presence of oncogene upon the development and delivery of the offspring which are further mated with the ones who are not genetically altered. This whole process led to a mice (founder mice) genetically altered and named as oncomouse. This has susceptibility to cancer and hence was a useful means to bring out a cure for cancer. Respondents claimed patent protection for both the process by which oncomice are produced and the end product of the process. Patent examiner granted patent only for the process and not for the product which was further confirmed by the appellant commissioner.

Issue:Whether higher forms of life are inventions as ‘manufacture’ or ‘composition of matter’ within the meaning of inventions under The Patent Act?

Rule:  Section 2 of the present Patent Act (Canadian Law) now provides as follows: “Invention” means 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.”

Holding:  The Court noted that biological inventions were living and self-replicating, incredibly complex, incapable of full description and contained important characteristics that had nothing to do with the invention. These issues clearly show that patenting higher life forms raise serious concerns which are not covered by the scheme of the Patent Act. The Court acknowledged that the two central objects of the Patent Act were to advance research and development and to encourage broader economic activity. However, these objects do not imply that “anything under the sun that is made by man” is patentable. Instead, he found that the language and scheme of the Act is not well suited to higher life forms and as such he surmised that Parliament did not intend for patent rights to extend to higher life forms.

Dissent: The decision of the majority was opposed by a strong dissent. Justice Binnie argued that it is an extraordinary scientific achievement to permanently genetically alter the genes of an animal where that alteration did not arise in nature. He rationalized that just as other forms of invention such as moon rockets, antibiotics, telephones, e-mail or hand-held computers, which would not have been anticipated at the time the Patent Act was drafted, would be considered inventions, so too should genetic engineering of higher life forms.

Analysis:  ‘Manufacture’ (considered in context of the act) is a non-living mechanistic product or process, and not a higher life form and neither is the composition of matter. While fertilized eggs are injected and may constitute to be a mixture of ingredients, the oncomouse itself doesn’t consist of ingredients that have been combined or mixed together by a person, as it is biologically grown and doesn’t require any human intervention. Further denying the contention that inventions which precede patent laws are unanticipated and hence should be considered a patentable subject matter the court said that not all of them to be necessarily patentable as may be parliament didn’t intend them to be covered under patentable subject matter or they regarded these to be mere discoveries. Further referring to the Plant Breeder’s Rights Act, the court said that these higher life forms (plants) have been covered under a special legislation specifically for the rights of plant breeders which demonstrates that higher life forms were never intended by the parliament to be covered under the Patents act and hence suggested that until Parliament creates an applicable legislation it is appropriate to let the patent commissioner forbid this kind of patent of higher life forms.

Conclusion: Higher life forms are not inventions under the meaning of S.2 of the Patent act as it does not qualify as a “composition of matter” or a “manufacture” and hence does not meet the subject matter criteria of the patent act. Hence patent cannot be given to the product oncomouse.

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Citation – 447 U.S. 303 (1980)

Facts: In 1972, respondent Chakrabarty, a microbiologist, filed a patent application for a genetically engineered bacterium developed by him capable of breaking down multiple components of crude oil. Due to the properties of the invention it is believed to have a significant value in the treatment of oil spills. Chakrabarty’s patent claims were of three types:
1) Process claims for the method of producing the bacteria.
2) Composition of the slurry of bacteria, its carrier liquids and its application.
3) Claims over the bacteria itself.
The patent examiner (Sydney A. Diamond) allowed the claims falling into the first two categories but rejected the third claim for patent over the bacteria. His decision rested on two grounds:
(1) that micro-organisms are “products of nature,” and
(2) that as living things they are not patentable subject matter under 35 U.S.C. 101.

Issues:
1) Whether genetically engineered bacterium being living things are patentable subject matter under the statute?
2) Whether respondent’s micro-organism constitutes a “manufacture” or “composition of matter” within the meaning of the statute (Under Title 35 U.S.C , Section101).

Procedural History:
The patent examiner allowed the claims falling into the first two categories, but rejected the third claim for patent over the bacteria. Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals and the Board affirmed the examiner on the second ground. The United States Court of Customs and Patent Appeals overturned the case in Chakrabarty’s favour, writing that “the fact that micro-organisms are alive is without legal significance for purposes of the patent law.” Sidney A. Diamond, Commissioner of Patents and Trademarks, appealed to the Supreme Court.

Law Applicable:  Title 35 U.S.C., Section 101, which provides: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

Judgment /Ratio Decidendi:

• The Supreme Court (affirmed the decision of The United States Court of Customs and Patent Appeals) held that a live, human-made micro-organism is patentable subject matter under Section 101.
  § Respondent’s micro-organism constitutes a “manufacture” or “composition of matter” within that statute.
  § Court has read the term “manufacture” in Section 101 in accordance with its dictionary definition to mean “the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.”
  § Similarly, “composition of matter” has been construed consistent with its common usage to include “all compositions of two or more substances and all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids.”
  § The patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His invention is not a discovery but a result of human intervention and research.
  § Also, it is a non-naturally occurring manufacture or composition of matter thus making it a patentable subject matter.
  
  Conclusion:The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to “include anything under the sun that is made by man.” This is not to suggest that Section 101 has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable under the U.S.C. Respondent’s micro-organism qualifies as patentable subject matter as it is not an unknown natural phenomenon. It is a non-naturally occurring manufacture or composition of matter marked with different characteristics from any found in nature and one having the potential for significant utility. His invention is not a discovery or nature’s handiwork, but a result of human ingenuity and research.

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