Sunday, December 26, 2004

San Jose Mercury News questions patent policy

In an article on December 26, 2004, Paul Jacobs uses the story of Epogen to question aspects of U.S. patent policy. The news story is not unrelated to the Lemley/Moore article in the Boston University Law Review concerning "ending abuse" of patent continuations.

Part of the problem with the story is that the particular abuse ended for applications filed after 1995. The Jacobs' article does mention the change in the law [Effective June 8, 1995, Congress closed the loophole in patent law that allowed companies to splinter patents in order to extend their lives. Under the new law, all related patents expire 20 years from the date of application of the original patent.]

However, the Jacobs does not distinguish issues between DIVISIONAL applications and CONTINUATION applications; from the Jacobs' article:

In December 1983, the company [Amgen] filed its first patent application. But the filing proved to be a work in progress, the opening argument in a lengthy debate between patent office examiners and attorneys representing the company.

Producing Epogen, complained one examiner, didn't deserve a patent because ``only routine genetic engineering was involved.''

A leading protein researcher, unconnected to Amgen or its competitors, recently agreed with that assessment.

``There was nothing in it that was new except that it was Epo,'' said the researcher, Russell F. Doolittle of the University of California-San Diego.

But in the end, the patent examiners not only gave the company the patent protection it sought but extended it far beyond the usual 17 years that was allowed at the time.

In a key decision, the patent office allowed the company to divide its original application into a series of separate ``inventions,'' each with a patent life of 17 years after approval.

Critics say the idea was ridiculous. ``How many times can you invent the same product?'' said Jamie Love, who directs the non-profit Consumer Project on Technology.

However, John Doll, a top official with the U.S. Patent and Trademark Office, said that the practice of dividing applications into separate parts was permitted under the law. And swamped with applications, the office simply did not have the resources to deal with all the parts at once.<--

Divisional patent applications arise from restriction requirements made by the USPTO. The Patent Office is telling the patent applicant that there are separate inventions in the claims of an initial application and the Patent Office requires the separation of the initial claims into different applications, called divisionals. By statute (35 USC 121), the claims of the different divisionals are insulated from obviousness-type double-patenting rejections.

Divisional application practice was not eliminated by the change in the law in 1995. What did change is patent life. Any patent which issues from an application which claims priority to an earlier application has a lifetime of twenty years from the date of earliest application. Effectively, the change in the law created an incentive to file all related applications as soon as possible.

Continuation applications, unlike divisional applications, are not insulated from obviousness-type double-patenting rejections. A key case involving the denial of multiple patents for the "same" invention concerns Lilly's PROZAC.

Separately, one can file a later application without claiming priority. This avoids the issue of the 1995 change in law. HOWEVER, prior work in the area is available as prior art.

If someone wants to complain about multiple patents for the "same" invention, distinction has to be made between divisionals and continuations. In divisionals, the Patent Office is saying that the claims are for different inventions, and the Patent Office is responsible for errors in the assessment. In continuations, the applicant is saying the claims are for different inventions, and a competitor is free to challenge that assessment in court.

The confusion between DIVISIONAL and CONTINUATION applications also permeates the Quillen/Webster work. Although they argue that much burden would be removed from the PTO by eliminating all continuing applications (which include divisionals and continuations), they neglect to point out that it is the PTO (not the applicant) which creates the need for divisional applications. Further, they neglect to point out that the PTO gets added revenue from the divisionals created by restriction requirements AND that the burden of examining divisionals is less than examining unrelated applications.

Jacobs' article continues:

Amgen's original application ultimately resulted in seven patents. The first expired on Oct. 27, 2004. The others expire between 2012 and 2016 -- three decades after the initial discovery.

In contrast, Amgen's European patent for Epogen expired Dec. 12, swinging open the door to potential competitors who want to produce the drug in China and Eastern Europe.

Amgen contends it did not manipulate the U.S. system.

``Extending the patent life has not been part of our strategy and never has been,'' said Amgen spokesman Michael J. Beckerich. Instead, he points to delays caused by a five-year legal battle that pitted Amgen against a rival biotech company, Genetics Institute, over which company was the first to create a genetically engineered Epo.

The added years of patent life have meant a continuing bonanza for Amgen and its partner, Johnson & Johnson, which sells the same product as Procrit for treating anemia in cancer patients. Combined sales make it the second-biggest drug in the country.<--

Jacobs does bring up a different issue, that of FDA approval of generic "equivalents" of biotech products. This is a different problem from the "multiple patent" issue.

-->Even when biotech patents expire, companies have used the legal system to keep out generic competition.

The biotech and pharmaceutical industries argue that biotech drugs are different from other prescription drug products because they are difficult if not impossible to copy exactly. The companies are thus challenging the authority of the FDA to approve knock-off versions without requiring the same expensive and time-consuming testing required of the originals.

The result: A year after the patents expired on human growth hormone, one of the most expensive medications ever sold, there is still no generic version. The drug, used for treating short stature in children who don't make enough of the hormone themselves, costs as much as $30,000 for a year's supply.

Five companies, including Genentech of South San Francisco, are selling brand-name human growth hormone in the U.S. market -- a result of settlements of bitter patent disputes.

But there's little price competition among the brands, said Dr. Selna Kaplan, a University of California-San Francisco growth hormone researcher. ``You can shift from one to the other, but that doesn't help because they're all the same price,'' Kaplan said.

Recently it looked like that might change. Before he stepped down as FDA commissioner early this year, Dr. Mark McClellan said the agency was considering approval of generic versions of human growth hormone and two other major biotech drugs whose patents have expired, insulin and interferon.

But the biotech industry has deluged the agency with legal petitions to stop those plans.

Genentech's top lobbyist, Walter Moore, argues that there can be small but important differences in different versions of biotech drugs. He cites the example of Eprex, a genetically engineered version of Epo, manufactured and sold in Europe by Johnson & Johnson for treating kidney dialysis patients. A small change in the manufacturing process in 1998 has been linked to potentially deadly complications in 175 patients, who simply stopped making any red blood cells at all.

The generic drug industry says that such fears are unfounded.

``I believe there will have to be clinical trials. They just don't need to be that big,'' said Dr. Carole Ben-Maimon, president of Barr Research, a subsidiary of generic drug-maker Barr Laboratories.

The FDA has put off considering any biotech generics until it completes a series of public workshops on the subject, set to continue next year.

The final decision on how to move ahead could be affected by the current controversy over the safety of several non-biotech drugs, including Vioxx, the arthritis drug that was pulled from the market by manufacturer Merck because of a study showing that the drug increased the risk of heart attacks and strokes.

Going forward, the FDA may require the industry to provide more data or studies prior to product approval, said Kathleen Jaeger, chief executive of the Generic Pharmaceutical Association, which maintains that large-scale testing is unnecessary.

Unless generic versions of the biotech drugs are allowed into the market, Jaeger said, the companies producing the original brand-name products will continue to enjoy ``what no other industry has, which is an indefinite product monopoly.''<--


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