Presentation title

March 16, 2009

Global IP Issues and Strategies in the Age of Shrinking Patent Rights

Len S. Smith Senior Intellectual Property Counsel Novo Nordisk Inc. BioNetwork East 2009 March 16, 2009

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 2

Branded Pharma Business Model A Tale of Two Exclusivities

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 3

Patent law in a minute

5 basic requirements (3 legal, 2 to the document)
Useful (industrial utility/applicability) New (novel) Nonobvious (represent/possess an inventive step)
Described (Written description/definiteness - - sufficiency) Enabled

Other national requirements

US best mode; duty of candor

Negative right Limited right Defined by claims (like a deed)

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 4

A Patent Attorneys View of the World

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 5

The Future?

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 6

BRIC Patent Scorecard

Brazil (#3)

Good news Bad news

Patent infringement actions tripled in 1990s Only BRIC not on USTR watch list Notoriously tough on pharma w/ compulsory licensing Least frequently examined of BRIC for patenting

Russia (#4)

India (#2)

Unclear criteria for remedies; weak remedies; rampant pirating of IP; remains high on USTR list; can be surprisingly challenging (i.e., independent - - is that a benefit?) bright spot a new code in 2008 Good news Bad news
Product patents allowed as of 2005 Many unresolved issues (patentable subject matter (very hard on new forms, salts), no patent term extension, compulsory licensing, no/little data protection). No methods of treatment (not even Swiss claims) Infrastructure not present for enforcement Strong generic lobby - - poor branded pharma enforcement track record

China

Good news (#1)

Bad news

Moving quickly to develop IP and allowing some victories for Western countries; USTR recognizes progress Special section on USTR list (!); compulsory licensing risk; remedies currently limited, arbitrary; expensive and challenging system shortage of lawyers, law (nothing pre-1984); cultural challenges (emperor owns it all; whats mine is yours)

Mixed bag?

Utility models

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 7

China and Patent Licensing

Local patent filing requirements (~ foreign filing licenses) Requirement to register licenses/patents
Cloud over US assignments?? Practically necessary or required to enforce (e.g., China) Provided for in agreement - - OK with confidentiality provisions?

Other national law/antitrust policy issues - - CN law voids any contract that:
grant backs improvements without compensation restricts ability to challenge licensed IP restricts rights to improve technology or use improvements includes disclaimer of liabilities in association with licensed technology

restricts licensee/transferee from obtaining similar/competing technology is a technology agreement that induces infringement of 3rd party rights Others

Licensor must guarantee licensed technology is complete, correct, effective, and that it will reach the specified technological target!! If the Chinese licensee infringes on another party's right by using the licensed technology pursuant to the license agreement, the licensor is required to bear responsibility for such infringement.

NB! Licensor be liable to pay for agreement without any benefit of K Jurisdiction
Does partner have assets in US, EU, etc.? Have jurisdiction objections been waived? Line up local jurisdiction/venue

involves tying or misuse (licensing of invalid/expired patents) (cf. USA) restricts use of resources, production, or export channels (unreasonably)

China International Economic and Trade Arbitration Commission (CIETAC)

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 8

Theres [Still] No Place Like Home

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 9

or is there?

Has the American patent right shrunk? KSR

There is a lot more that is obvious now

MedImmune
Its easier to license and challenge now!

eBay
Its less likely you are going to get an injunction now

Seagate
You probably will not get enhanced damages now

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 10

US vs. Europe and Japan

EPO and JP - significantly tougher disclosure rules
Actual data a must Ipsis verbis description of embodiments to be claimed Smaller applications; less claims
15 claims in EPO movement to limit size of applications in EPO

May sometimes be supported, but difficult

EPO has tough standards on utility

EPO has tough standards on inventive step
e.g., humanized antibody composition
compare Kubin in the US

EPO examination generally more rigorous

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 11

Key Features of Pharma Patent Law

Little/no direct infringement for method claims
Cases depend on inducement (marketing monopoly)
DSU Medical specific intent is required for inducement

271(g) products produced by a patented process

Afford important protection

High risk in US of liability for inequitable conduct

A patent attorneys view of regulatory law?

[much more] law by folklore law by relationships

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 12

Freedom to Operate Regulatory Exemptions Expanded

Compare Europe
Bolar exemption working its way through EU Research exemptions in EU

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 13

MMA and FDA rule changes 2002/2003

Mandated listing of certain patents
Polymorphs; product-by-process claims

Limited patents that can be listed in OB

No metabolites, intermediates, packaging claims, or non-approved indications

30 month stay limitations

one stay per ANDA only for patents listed prior to ANDA filing

Listings under penalty of perjury Permits filing DJ if no action taken in response to para. IV OB listing has become a less versatile and powerful weapon against generic entry

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 14

What Does It All Mean?

Less opportunities for patent exclusivity
Limited Limited Limited Patents injunction abilities willful damage remedies Orange Book protections more vulnerable to attack

Status quo strategies may no longer work

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 15

Claim the Label

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 16

Tie Label Claiming Strategy to Safety/Efficacy!

FDAs general position
Under the statutes, regulations, and applicable case law, the carve-out of patent protected labeling is generally permitted as a permissible difference if the omission does not render the proposed product less safe or effective for the conditions that remain in the labeling.

Nearly every citizens petition has been a loser

but, most to date not so clearly tied to safety/efficacy and most CPs have bought significant time to entry
something FTC is considering closely

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 17

Claim [and Set] the Standard

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 18

A New Patent Portfolio Paradigm?

Think of securing exclusivity in terms of probabilities, incremental gains, rather than big/quick wins
Need a major management re-education program!

Dump everything that does not (or will not potentially) add value
Quit letting research run patenting strategies in a vacuum

Critically analyze claim components of each application

bullet proof against inequitable conduct, DJ, etc.

Apply risk/benefit analysis to disclosures

Is FoO the priority? Are there competitors? If not, should disclosure be more staged (keeping in mind best mode, etc.)?

Harmonize clinical, regulatory, and marketing

Get data needed in a post-KSR world Better acquire inventions that matter

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 19

Aspects of a winning portfolio

A large mix of claims in a number of patents
Do not fall into the broad claim-only trap! Protect against inequitable conduct, inherency, etc.

Some Integra-proof claims?

Secure royalties as a minimum Easier to defend

Include psychological (business impact) claims

Functional (or mixed) claims Means-plus-function claims

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 20

Regulatory (Data/Market) Exclusivity

Type New indication Duration 3 years Scope Market exclusivity (Prevent FDA approval of ANDA/505b2) Market exclusivity (Prevent FDA acceptance of ANDA/505b2) Delay entry of 2nd/3rd generics except for innovator

NCE

5/4 yrs

180-day marketing

6 months

Orphan (<200,000 patients)

7 yrs

Market exclusivity blocks approval of same drug for same indication; blocks BLAs, NDAs;

pediatric

6 months

Extension of other exclusivities (for all indications, dosages, etc.) (if patent, para III delays
approval and poss. also for para iv)

Obtain pediatric; orphan (breaking orphan, biologics) De facto extensions due to FDA backlog US/EU similar mechanisms w/ significant differences
e.g., orphan 200,000< vs, 5:10,000; 7 yr./10 yr., etc.

Off-label, similar marketing exclusivity problems as use patents

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 21

More Strategies for Promoting Exclusivity Authorize generic entry

by contract by subsidiary/affiliate

Do not limit approach to patent/FDA strategies

Trademark
Nexium

Trade dress
Viagra

Trade secret
Post-KSR, may be a more attractive option

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 22

Effective due diligence

Danger of contamination and misappropriation high
TS litigation on the rise in the US

Conduct ownership aspects of IP due diligence upfront

Patent ownership Patent status Claims

Acquire other aspects of intelligence upfront Prepare for pre-collaboration disclosure Other upfront suggestions

Security interests; financial condition (if available)

Scientific diligence (should be in the first instance!) Business modeling (personal plea)

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 23

Wise Licensing
Ensure target has something to license
Ensure you are not licensing know how indefinitely! Handle patent extension (restoration, SPC) In US, can be only one Not same rights - - royalty rates? In EU, others can acquire
Consultancy agreements

Include adequate litigation provisions

Another reason to control?

Handle bankruptcy risks Consider data reference rights, non-patent exclusivities, and data transfer costs

No enforcement, no exclusivity Venue/jurisdiction? Are you really exclusive (have standing)?

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 24

Take Aways
The globe is still largely defined by US, EU, and JP
US is still most important, but less than in 1990s

Patent rights in US have shrunk

Probably will expand again long term (cyclical)

Reliable patent protection in BRIC is yet to be realized

Lots of traps for the unwary

Factor in regulatory exclusivities Approach to business as usual will probably not work
Difficult challenge for two industries (licensing and patents) tied to tradition and risk adverse by nature

Business leaders should understand IP

What it is they are buying; how their business model works

Len Smith Global IP Strategies in the Age of Shrinking Patent Rights

March 16, 2009

Slide no 25

Thank You!
Len S. Smith LSmt@novonordisk.com