Biotech Roundup: Time Frame of Investments, Gap in Funding Proof of Concept, Personalised Medicine and Reverse Payments

Here are various items of biotech news that recently caught our eye. We’ve provided a summary of each trying to show how the news item relates to the bigger picture.

1. Time Frame of Biotech Investments

Advent Capital is setting up a fund to invest in early and midstage European biotechs (see here). The proviso is that they wish to see returns in 6 years. That illustrates the drawbacks of investing in biotech companies developing drugs. It usually takes 10 to 15 years to develop a drug, and that keeps a lot of investors away who want to see returns in around 5 years.

2. The Gap in Funding Proof Of Concept Work

UK non-profit organisations Cancer Research and Leukaemia & Lymphoma Research are funding proof of concept work in treating blood cancers (see here). This illustrates how infrastructure needs to be provided to do ‘basic’ research which won’t see any immediate returns. It remains for government to enter into these funding gaps to make sure research and innovation systems operate effectively.

3. Personalised Medicine

Personalised medicine is a difficult technology to develop as it is proving challenging to identify the appropriate markers. However it clearly has a lot of scope for improving patient care. ‘Incentives, Intellectual Property, and Black-Box Personalised Medicine’ (see here) examines changes needed to the innovation landscape to better develop this technology.

The US Supreme Court Akamai decision makes it harder to find induced infringement for multi-step method claims (see here) as it requires primary infringement by a single party. However for personal medicine the diagnostic part and the treatment parts of the invention could well be performed by different parties. This adds to the difficulties in obtaining patent protection beyond those caused by the Mayo and Myriad decisions.

4. What exits are happening in US biotech?

An article from the Life Sci VC blog (see here) discusses the proportion of IPO versus M&A exits that are happening in US biotech. The ratio is 40% IPO to 60% M&A. It’s therefore important to biotech to keep both options open.

5. Reverse Payments (Pay for Delay)

A recent PatentlyO article (see here) explained the economics of pay for delay settlements where it can be in a patentee’s interests to pay a generics company to stay out of the market, but this risks being anticompetitive.

A slightly old article on the European position can be found here.

 

Pharma Patents in India

These points are from a talk given by Pravin Anand at fieldfisher’s Pharma Patents Seminar on 16 October 2014.

1. There is an anti-patents environment in India where patent protection is provided due to the compulsion of TRIPS rather than to advance innovation. During the Novartis case the Additional Solicitor General called India the ‘Pharmacy of the World’ to justify its stance towards patents.

2. At present new guidelines are being discussed for pharmaceutical inventions at the Indian Patent Office. There have been allegations they show anti-pharm patent bias.

3. The Novartis Gleevec case concerned Section 3(d) of the Indian Patents Act which requires a new form of a therapeutic substance to have enhanced efficacy. Novartis lost because they could not demonstrate the required efficacy. This section is meant to prohibit evergreening.

4. India has used compulsory licencing provisions for pharma patents. There are 3 types of compulsory licensing. Under the normal Section 84 type a licence will be given three years after grant if reasonable requirements of the public are not met, or the product was not available at a reasonably affordable prices or if the invention was not worked in India.

5. India has Bolar provisions which allow making, using and selling of the patented invention in a way which is reasonably related to development and submission of information.

6. Since 2009 Indian practice has changed as to granting of ex parte injunctions. Since then 15 ex-parte injunctions have been granted at a pre-launch stage.

You may also wish to see related articles Top 10 Things You Need to Know about Biosimilars and Top 10 Points on the Trans-Pacific Partnership.

 

Bits and Pieces: Divided Patent System, Expectation of Success, Due Diligence, Access to Medicines

Here are recent articles we wrote or found interesting, as well as blog sites you may find interesting.

1. Lemley’s continuing analysis of US litigation stats now looks at outcomes of litigation in different technology sectors. ‘Our Divided Patent System?’ finds that pharmaceutical patent owners do much better than software or biotech.

2. Our most recent article on IPKat is ‘Obviousness, common general knowledge and expectations of success: Leo gets a mauling’ which reports the UK decision Teva v Leo and asks questions about what this recent case says about the way UK Courts look at inventive step on pharmaceutical cases.

3. Our most recent article on the IPCopy blog is ‘‘Expectation of Success’ as Part of Inventive Step Analysis’ which discusses the need to look at expectation of success when looking at inventive step of biotech inventions and wonders whether the UK Courts are doing this as they should.

4. We think fieldfisher’s IP blog is interesting, see here.

5. IPWatchdog’s article ‘Effectively Sourcing and Diligencing an IP Investment’ provides interesting perspectives on IP in a commercial situation.

6. A report from a South African summit on access to medicines provides a developing world perspective on the issue (see here).

 

Reforming University Tech Transfer

This article is a roundup of recent articles we have read about how to change university tech transfer.

The vast majority of university tech transfer offices do not break even, but some are very profitable. ‘The roadblock to commercialisation’ (see here) discusses new business models that tech transfer offices could adopt. It’s not clear to us that the suggested models adequately protect university interests, but they clearly provide food for thought.

‘Maximising the ROI of intellectual property (see here) discusses how universities could make more money from tech transfer as well as disseminating knowledge and technology better. The article also provides links to interesting reports.

‘Challenges in university technology transfer and the promising role of entrepreneurship education’ (see here) proposes that universities need to focus on entrepreneurship education to know how to make best use of the knowledge they have to offer.

‘Five challenges facing all tech transfer programs’ (see here) briefly discusses the issues faced by university tech transfer offices.

You may also wish to see our other articles on tech transfer:

- 10 Points on Patents and Tech Transfer

- 10 Observations on the Success and Failings of University Tech Transfer

- Problems of Patenting and Commercialising University Research

Our article on the IP Finance blog about ‘Ethics versus Money in University Tech Transfer’ can be found here.

 

Not All Ideas and Not All Data are Patentable

There are a variety of reasons why a new idea or a new finding (i.e. new data) might not be patentable. That could be technical (e.g. points 1 to 3 below), legal (e.g. point 4), policy (e.g. points 5, 6 and 8) or due to the definition of a legal fiction (e.g. point 7).

  1. Finding Out How a Known Invention Works

Often data that explains how something known in the art works will not lead to a patentable invention. For example if one discovers the mechanism of action of a known treatment it will only be patentable if suggests a new way of carrying out the treatment, for example in a new class of patients or by delivering in a particular way. One cannot draft a novel claim based on the new finding which covers carrying out the invention according to the prior art.

  1. Finding of a New Technical Effect in a Known Method

In Europe it is possible to claim a use based on a new technical effect even if the new effect was inherently occurring in the prior art. This was confirmed in decision G2/88 of the Enlarged Board of the EPO which suggested that ‘intention’ can be a limiting feature. However subsequent case law seems to suggest the claim must be drafted in a way where the prior art method is not covered, i.e. that the intention to make use of only the new technical effect is not enough to give novelty. It must be borne in mind that ‘Use’ claims are not available in certain territories, such as the US and India.

  1. Method of Treatment Claims in the US

In the US all inherent treatments that occur when a drug is given to a patient are seen as disclosed when a particular treatment is disclosed in the prior art. That is why the feature of giving the drug to a patient ‘in need thereof’ can be needed to give novelty for a treatment of a new condition with a known drug.

  1. Nature, Natural Laws, Natural Principles

In many territories substances which are found in nature can be patented as long as they are claimed in a way where their occurrence in nature would not be covered. Usually the feature of being ‘isolated’ is sufficient to do this. However the US is presently much stricter on this. According to the USPTO guidelines (see here) which issued after the Mayo and Myriad Supreme Court decisions any substance found in nature is not patentable. In addition claims relating to natural laws and principles are also not patentable. Thus diagnosis based on measuring the level of specific substance in a patient is potentially not patentable. The full impact of the guidelines is unclear but on the face of it they represent a major change in what is patentable in the lifesciences.

  1. Medical Uses

In certain territories the new medical uses of known substances are not patentable or subsequent medical uses might not be patentable. Thus there may be problems trying to patent certain medical inventions. However often the situation is unclear and the policy may change in the future. The Andean region, the GCC countries and India are places where the situation is unclear for medical use invention.

In addition Section 3(d) of the Indian patents act requires new forms of drugs to have enhanced efficacy before they are patentable, which is seen as a measure that prevents evergreening.

  1. In Vivo Diagnosis

In vivo diagnosis inventions are not patentable in Europe, China and India. However it may be possible to obtain protection for substances or devices used in such inventions. In addition it may be possible to obtain protection for devices that conduct analysis of in vivo parameters but do not lead to an immediate diagnosis.

  1. Medical Use Claims in Europe

In Europe medical use claims set up a legal fiction which allows medical inventions to be patented. However such claims only apply to substances, and therefore certain types of medical invention remain unpatentable, such as new uses of known medical devices. In addition it can be uncertain as to whether some multi-step medical inventions are patentable using this claim format, for example where the invention concerns a first step of selecting a patient and a second step of treatment.

  1. Software and Business Methods

In general many territories have some prohibitions on software and business methods. In the US the situation for computer-implemented methods remains unclear after the Alice decision (see here). However it is clear that patentability requirements are now stricter for such inventions. New ‘apps’ often raise complex patentability issues, but on the whole many will be seen as unpatentable software or business methods in many territories.

You may also wish to see related articles 10 Biotech Claims You Can’t Have in Europe and Top 10 Uncertainties in Patents.

The UK Bolar Exemption

These points are from a talk by Phil Bilney at Fieldfisher’s Pharma Patent Seminar on 16 October 2014.

1. A Bolar Exemption allows applicants for generic marketing authorisations under the abridged procedure to be exempt from patent infringement when conducting the necessary bioequivalence and stability studies (see TaylorWessing’s information about this here)

2. There was uncertainty about the scope of the UK experimental use exemption (s.60(5)(b) Patent Acts 1977). Directive 2001/83/EC set up the Bolar Exemption. Article 10(6) of this says:

‘Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary protection certificates for medicinal products.’ [Paragraphs 1 to 4 are concerned with bioequivalents and biosimilars]

This was implemented ‘narrowly’ in the UK, and ‘broadly’ in Germany and France.

3. After a formal consultation new paragraphs 6D to 6G were inserted into s.60 of the UK Patents Act to exclude ‘anything done in or for the purposes of a medicinal product assessment’ for regulatory purposes from infringement. This derisks clinical trial studies required for any regulatory approval, including marketing authorisations and Health Technology Assessments required by the British NHS.

4. This brings the UK into line with the majority of EU member states, and makes the UK a more attractive place for clinical trials.

5. However not all uncertainty is removed. It is unclear to what extent the exemption covers research tools and also third party manufacture and supply of a drug to the party conducting the trial. In addition it is not clear how the exclusion will relate to the Unified Patent Court and how opting in and out of the Unitary Patent will affect matters.

The IPKat discusses this here.

You may also wish to see related articles 10 Points on Regulatory Data Exclusivity and 10 Points on SPC’s (Supplementary Protection Certificates).

US Biotech Claim Drafting

These points are from a CIPA seminar given by Linda Huber on 17 October 2014.

1. The following formats are relevant to biotech cases: methods of medical treatment, therapeutic compositions and diagnostic methods. Method of treatment claims usually refer treating a defined condition, i.e. ‘A method of treating disease X comprising administering compound Y’. However this is not always the case, for example: ‘A method of eliciting an immune response comprising administering immunogen ABC’. Swiss style medical use claims are not allowed.

2. Diagnostic claims are often in the format ‘A method of diagnosing disease X comprising analysing a sample for the presence of Y’. However there can be issues of matter eligibility for this claim as discussed below.

3. In the US ‘inherency’ can be a problematic issue for the novelty of method of treatment claims. A method of treatment claim is anticipated if the prior art inherently discloses the treatment due to a ‘natural result flowing from’ the disclosure. So for example if the prior art discloses drug X to treat high blood pressure in a patient, and if the drug also inhibits hair loss during the treatment, then it would be seen as ‘inherently’ disclosing this (though it does not explicitly do so), destroying the novelty of use of the drug to treat hair loss. One solution to this is to limit the claim to a class of patients that do not appear in the claim, and often this can be done by defining the patient to be ‘in need thereof’. Clearly another way would be to limit using a feature not disclosed in the prior art, such as routes of administration, etc.

4. Written description and enablement can be problematic if a method of treatment claims refers to ‘A method of preventing disease X…’. There is an assumption in US practice that no disease is 100% preventable. One can argue against such objections if there is data to show that 100% prevention is achieved. However amending the claim to refer to ‘A method of reducing the likelihood of disease X…’ can often overcome the objection. Alternatively the term ‘prevention’ can be defined in the specification as not requiring 100% prevention. Written description and enablement objections are often raised against gene therapy claims, especially where the specification does not show actual treatment. Amendment of the claim to instead refer simply to expressing the protein may overcome such objections, i.e. A method of expressing protein Y in a subject in need of treatment for disease X, comprising administering to the subject an expression vector encoding gene Z.

5. Post -AIA ‘best mode’ is still mentioned in the relevant statute, 35 USC § 112(a), but it is no longer a ground for challenging the validity of a patent. However failure to provide the best mode could still render a patent unenforceable as a matter of equity and so best mode should still be disclosed. It was noted that the specification does not need to point out what which embodiment is the best mode.

6. Two recent Supreme Court cases, Mayo v Prometheus and Association for Molecular Pathology v Myriad Genetics, have had a huge impact on biotech patents. Mayo concerned a claim to a method for optimising therapeutic efficacy of a condition by assessing the in vivo level of a particular metabolite to determine the amount of drug to administer. The Supreme Court held the method to relate to a ‘law of nature’ and therefore to be ineligible matter. In addition the ‘application’ of a law of nature is also unpatentable if it merely relies on elements already known in the art. The ‘take home’ message from Mayo is that the invention must not too broadly pre-empt the use of the law, and should include an inventive concept which is significant and separate from the natural law.

Myriad decided that genomic DNA was not patentable since it was part of nature, and separating a gene from the surrounding genetic material (so it is ‘isolated’) does not make it an invention. However cDNA is patentable because it does not occur in nature and its sequence is created in the lab. Part of the logic of the decision is based on the fact that the ‘information’ in genomic DNA is unchanged by isolating it, and therefore it would seem that the logic would not apply to other molecules. However, as discussed below, new USPTO guidelines have applied the Myriad principle of ‘naturally occurring molecules being unpatentable’ to all molecules. It was noted that the Supreme Court’s decision Alice v CLS Bank had little impact on biotech cases.

7. The USPTO issued new guidelines in March of this year in view of Mayo and Myriad. They give examples of what is patent eligible and seem to have broadened the principles set out in Mayo and Myriad. They are also quite unclear as to what is patent eligible. The guidelines provide a 3 part test for patentability which determines whether the invention provides something ‘significantly different’ from a judicial exception (abstract ideas, laws of nature or natural principles, natural phenomena and natural products). The guidelines list ‘factors that weigh toward eligibility’, such as:

- the claim providing meaningful limits on scope so that others can use the judicial exception,

- the claim reciting a particular machine or transformation of an article which integrates the judicial exception into a particular application, or

- the claim recites one or more elements which are more than well-understood, conventional or routine.

8. From the examples given in the guidelines it is clear that the level of ‘generality’ of an invention is important in determining its eligibility. Simply identifying mutant gene sequences in an individual by comparing to wild-type or treating a condition by exposure to sunlight are ineligible. However diagnosis using a specific defined antibody and flow cytometry is given as an example of a patent eligible invention.

9.The guidelines are clearly going to be problematic for diagnostic claims which are normally based on measuring the level of a natural product or characteristic. One possible solution is to refer to specific reagents, such as a novel antibody, in the claim. Alternatively one could introduce a treatment step into the claim. However the recent Supreme Court decision Limelight v Akamai made it more difficult to find infringement where split infringement occurs, and so it could be difficult to enforce claims which had diagnostic and treatment steps as they are likely to be performed by different parties. One way to avoid having these two distinct steps in the claims is to refer to have a first step which refers to ‘obtaining the results of a diagnostic analysis’, rather than performing a diagnosis. Other solutions include having a ‘system’ claim referring to the components of the diagnostic assay, claiming the relevant protein-antibody complex which is formed during diagnosis or writing the claim as a ‘method of selecting a treatment for disease X…’. Narrowing the scope of the claim should be helpful in overcoming eligibility issues.

10. For product claims, it will be important to find ways in which the product is structurally different from nature. Referring to ‘synthetic’ or ‘recombinant’ DNA may work or requiring that the natural sequence is linked to another ‘heterologous’ sequence may also succeed. For cells and organism the feature of being ‘transgenic’ may also be enough to distinguish them from nature.

11. It is not clear how the guidelines will impact method of treatment claims. Some Examiners are taking the view that administering a naturally occurring polypeptide is ineligible matter. Clearly it would be wise to have fallbacks in the specification that could be used to limit the claims, for example specific administration schedules and routes of administration.

You may also wish to see related articles 8 Points on the US Supreme Court Decision Limelight v Akamai and Building a Patent Portfolio.