Tag Archives: 2007



November 29 / All Articles, Patent

Was The FDA Exemption To Patent Infringement, 35 U.S.C. § 271(e)(1), Intended To Exempt A PHarmaceutical Manufacturer’s Activities In The Development Of New Drugs?

The general rule of patent infringement, 35 U.S.C. § 271(a), states: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” Congress created the so-called FDA exemption with the Drug Price Competition and Patent Term Restoration Act of 1984 (“1984 Act”), later codified in 35 U.S.C. § 271(e)(1), which states: [i]t shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. [1]

 

Attached as Appendix A. The FDA exemption was created as a part of a legislative package intended to speed generic pharmaceuticals to the market in hopes of reducing the price of pharmaceuticals and increasing access. [2] Included in the legislation was a compromise between the interests of the brand and generic pharmaceutical industries. In order to speed generics to the market, the generic pharmaceutical companies were given the ability to file an ANDA, an abbreviated application for marketing approval, and the FDA exemption from patent infringement. [3] The ANDA allows a generic manufacturer to file for FDA approval prior to the expiration of the brand patent. The FDA exemption allows the generic manufacturer to do the studies necessary to prove bioequivalence, a requirement of the ANDA, while the brand medication’s patent is still in force. In exchange, the brand pharmaceutical industry received the ability to extend the terms of their patents to compensate for the long regulatory approval process.

 

The legislative history of the FDA exemption clearly shows that it was intended to apply only to generic pharmaceuticals. The legislation, in part, was meant to cure the unfair patent term extension that resulted when a generic manufacturer had to wait until the expiration of the brand patent before applying to the FDA for regulatory approval. [4] It was hoped that the legislation would get generic drugs to the market around two years earlier than under the prior system. [5]

 

Both the Supreme Court and the Federal Circuit have interpreted the text of the FDA exemption. In Eli Lilly and Company v. Medtronic, Inc., the Supreme Court interpreted the exemption to include medical devices. [6] In Intermedics, Inc. v. Ventritex Co., Inc., the Federal Circuit held that an intent to commercialize prior to the expiration of the patent did not violate the exemption. [7]

 

In the subsequent Merck v. Integra case, the Supreme Court and the Federal Circuit considered the meaning of the phrase “solely for uses reasonably related to the development and submission of information under a Federal law.” [8] At first instance, the Federal Circuit interpreted this language narrowly. [9] In the majority opinion, Judge Rader focused on the word “solely” in the statute and viewed it as limiting. [10] Applying the statute narrowly, the court found that the Scripps experiments, which were designed to identify a new drug candidate, did not fall within the exemption. [11] Judge Rader also held that if the FDA exemption were interpreted broadly so as to include the Scripps experiments then the exemption may unintentionally destroy the patent protection for all research tools. [12]

 

On appeal, the United States Supreme Court interpreted the exemption as including “all uses of patented compounds ‘reasonably related’ to the process of developing information for submission under any federal law regulating the manufacture, use, or distribution of drugs.” [13] This interpretation creates a vast exemption to patent infringement that goes well beyond the scope of Congress’s intent and well beyond reason.

 

The FDA exemption was not created to assist in the generation of new drug candidates, which are included in the broad interpretation of the “reasonably related” language by the Supreme Court in Merck. Applying the Supreme Court’s interpretation to the facts of Merck means that a pharmaceutical manufacturer may use the patented products and methods of another manufacturer to identify new drug candidates and not infringe. In fact there is almost no limit to what can be considered “reasonably related” to the development of information for submission to the FDA since a great deal of the research and development in the natural sciences is directed at identifying new drugs. Patented research tools are particularly vulnerable because they are often used in basic research that may now be considered “reasonably related” to submission to the FDA. Arguably, any use of the two research method patents at issue in Merck, the ‘997 and ‘237 patents, could be considered “reasonably related” under the Supreme Court’s broad interpretation. [14] Such development of new drugs using others’ patented technology was not meant to fall under Congress’s exemption to patent infringement….

 

Paul Wiegel, Esq.

 

September 26 / All Articles, Other Intellectual Property

Transcript Of 2006 Telecommunications Federalism Conference: Intro And Opening Remarks

THE FEDERALIST SOCIETY

 

Presents its

 

2006 TELECOMMUNICATIONS FEDERALISM CONFERENCE

 

Introduction by The Honorable David M. McIntosh And Opening Remarks by The Honorable John M. Engler

 

The Honorable David M. McIntosh, Mayer Brown Rowe & Maw, and former Member, United States House of Representatives

The Honorable John M. Engler, President, National Association of Manufacturers, and former Governor of Michigan

 

September 26 / All Articles, Other Intellectual Property

Transcript Of 2006 Telecommunications Federalism Conference: Role of Public Utilities Commissions

THE FEDERALIST SOCIETY

 

Presents its

 

2006 TELECOMMUNICATIONS FEDERALISM CONFERENCE

 

The Role of Public Utilities Commissions

 

Panelists:

The Honorable Kathleen Q. Abernathy, Akin Gump Strauss Hauer & Feld LLP, and former Commissioner, Federal Communications Commission

The Honorable Larry S. Landis, Indiana Utility Regulatory Commission

The Honorable Connie Murray, Missouri Public Service Commission

The Honorable Gregory E. Sopkin, Chairman, Colorado Public Utilities Commission

Mr. Randolph J. May, Senior Fellow and Director of Communications Policy Studies, The Progress & Freedom Foundation, Moderator

September 11 / All Articles, Trade Secret

Saving Trade Secret Disclosures On The Internet Through Sequential Preservation

Soft Corporation is a leading maker of software and operating systems. It undertakes great measures to protect the secrecy of its new products under development, plans to launch new products, technical product specifications, and product source codes, all of which it considers company trade secrets. A disgruntled employee, John Sneaky, one of the few persons with access to the source code to Soft’s soon to be released operating system, Win100, posts the source code (labeled “Confidential & mdash; Soft Proprietary Information”) on a members-only website critical of Soft, Softsucks.com.

 

Soft discovers the posting within six hours of its appearing on the site, and after informing the site operator that the information is a stolen Soft trade secret, it is immediately removed. Prior to its removal, however, Sam Quickbuck, had downloaded the source code. When he realized the next day that the source code was no longer available on Softsucks.com he decided to capitalize on the opportunity.

 

He posted a notice on his website offering the code for sale: “Win100 source code, original, (jacked from inside) available for sale. Get it here before it’s even released and stick it to Soft. If you wanna buy it ($50) I’ll give you a password to download it.”

 

Soft sues Quickbuck for misappropriation of trade secrets, seeking a preliminary injunction to prohibit his use and sale of the source code. After a hearing, the court denies relief to Soft, reasoning that despite Soft’s best efforts to keep the source code secret, it has lost its trade secret status by virtue of it appearing on the Internet, and that Quickbuck cannot be enjoined from using it. Soft now faces widespread use of its source code by other competitors and a resulting loss of market share for its Win100 operating system. As a result of the ruling, it can no longer claim the source code as a trade secret.

 

This hypothetical [1] introduces the problem and accompanying questions tackled by this Article. When, for instance, an employee discloses an employer’s trade secrets to the public over the Internet, does our current trade secret framework appropriately address the consequences of that disclosure? What ought to be the rule which governs whether the trade secret owner has lost not only the protection status for the secret, but any remedies against use by third parties? Should the ease with which the Internet permits instant and mass disclosure of secrets be taken into consideration in assessing the fairness of a rule which calls for immediate loss of the trade secret upon disclosure?

 

Elizabeth A. Rowe*

May 10 / All Articles, Copyright

An Exploration Of Rights Management Technologies Used In The MUsic Industry

In April 2006, a Judicial Panel on Multidistrict Litigation consolidated claims from three separate districts in a lawsuit against Sony BMG Music Entertainment for a piece of software that the corporation included on four million CDs sold in retail outlets. [1] The software, eXtended Copy Protection (XCP2), buried what is often called a “rootkit” in low level areas of the end user’s personal computer, presumably without notice by the end users. [2] This software attempts to monitor and control the consumers’ use of the CD, preventing them from illegally copying the CD and disseminating its contents on the internet. The result, as alleged in the lawsuits, was higher susceptibility to computer viruses and other damage. [3] Sony BMG eventually recalled millions of copies of fifty-two albums that contained XCP2 software from record store shelves amidst a storm of media activity around the issue. [4] Sony BMG’s use of XCP2 software, made by British firm First 4 Internet, first came to public attention on October 31, 2005 when a blogger posted detailed information about the software on his website including a warning for people to avoid Sony BMG CDs for the time being. [5] On November 10, 2005, the first virus exploiting XCP2 software was announced. [6] On November 16, 2005, United States Computer Emergency Readiness Team [hereinafter US-CERT], a division of the Department of Homeland Security, issued an advisory on the XCP2 Digital Rights Management System, including a warning about putting affected discs in computers. [7]

 

On November 19, 2005, the Attorney General of the State of Texas filed a lawsuit against Sony BMG. [8] This action was followed promptly by class action lawsuits in California and New York. [9] Nine actions from New York, one from California, and one from New Mexico were involved in the consolidation action of April 2006. [10] Elsewhere, a complaint to the Federal Government was filed in Italy against Sony BMG. [11]

 

With this flurry of lawsuits, the term, “Digital Rights Management” was thrust into the court system. As the consolidated action settles and the term “Digital Rights Management” makes its way into common parlance as well as legal nomenclature, an opportunity arises to discuss the history of rights management systems in the audio industry that has led to the current situation.

 

This comment will analyze the complex history of rights management in the music industry over the past 100 years. This history includes a technical look at the difficulties in enforcing copy controls, various music release formats and the rights management systems on which those formats relied, and the struggle with adding ex post facto rights management systems to formats that are already pervasive. This comment then discusses the various reasons why rights management systems are not only desirable, but necessary in today’s environment. With a thorough background of the issues relating to rights management, recommendations are provided as to how to remedy the various problems that plague the music industry and set a more appropriate path as technology continues to affect the rights of copyright holders….

 

Nika Aldrich